Virgin close to legal action over media JV
VIRGIN?Media is almost certain to take legal action over a controversial video-on-demand venture backed by the BBC.
Project Canvas is a joint venture between media giants including BT, TalkTalk and ITV that will offer video streamed over users’ broadband connections.
It has come under fierce criticism by Virgin and Sky, who say it is bad for competition and will negatively affect internet users.
Virgin is now leading the charge against the service, which sources close to the firm claim will place the UK’s broadband network under too great a strain.
They also said the project is a veiled attempt by the BBC to maintain its power over viewing habits by creating a “closed system” which rivals will be unable to customise. This is in contrast to Freeview, which firms such as Virgin and Sky can kit out with their own branding.
Confirmation of the legal bid is expected in the next few days.
A Virgin spokesman declined to confirm whether legal action was likely but said: “It’s disappointing that what started with seemingly positive intentions has developed into something which wants to dictate how we all watch TV.”
He added: “The BBC Trust has explicitly admitted Canvas will hamper innovation and so damage competition. Companies of all sizes and from so many affected industries have expressed their concerns but, to date, these have been summarily dismissed.”
Last month the Office of Fair Trading ruled Canvas does not qualify for investigation as none of the developers were contributing a “pre-existing business” to the project.
Orange became the latest big name linked with the project. The telecoms firm has been mulling a shift towards TV for some time.
Last week Channel Five dropped out of the project as it seeks to trim costs before its imminent sale.