Virgin Media isn't going to take Sky's withdrawal of its basic channels lying down, and has threatened legal action for abuse of a dominant position if Sky doesn't agree to independent arbitration within 30 days.

Virgin pays Sky to carry Sky's channels on its cable network, but Sky also carries Virgin's channels (including Living and Bravo) on its satellite network. It is how Sky compares the value of those channels from which a legal case could be built.

No one is suggesting Bravo is worth the same as Sky One, but Virgin does claim that viewing figures for Sky's channels are falling, while the numbers watching its own channels continue to rise.

Over the last three years, Virgin's figures show a 20 per cent drop in the number of homes with Virgin Media (cable) tuned to Sky channels, while reckoning that the number of Sky (satellite) homes tuned to Virgin channels increased 15 per cent in the same period.

Despite this, Virgin says Sky is asking for more money, while paying less - doubling the former while cutting the latter by 85 per cent, and Virgin claims this is unfair.

Should the matter end up in court we'll be treated to the amusing sight of Sky claiming that Sky One isn't an important channel, and it'll be quick to point out the success Virgin has had getting rights for on-demand delivery of programmes.

It could be that this is just sabre rattling, and a further attempt to portray Virgin as the plucky little-guy being bullied by the bigger corporation - something Virgin has done successfully many times. But in reality this is a competition between two large global companies, and this threat is far from the last act in the developing drama. ®