A channel agreement for Virgin Media to keep non-premium Sky channels ended on 1 March 2007. Virgin Media and Sky failed to reach agreement on the issue, and Sky reacted by posting a letter to the public in major UK newspapers on 28 February 2007. Despite Sky's letter, Virgin Media blamed Sky for tyrannising them and inciting consumers to switch. The companies failed to resolve their differences, and subsequently after midnight on 1 March 2007, Virgin Media replaced the Sky 1, Sky 2, Sky Travel, Sky Travel Extra, Sky Sports News and Sky News channel content with a standard message. Sky attributed part of the rate rise to the fact that the new deal would also include Sky 3, Sky Arts and undisclosed high definition and video on demand content. Sky said the deal would cost only 3p per customer per day (roughly £35,000,000 per year), but Virgin said that a minimum payment guarantee included in the contract meant that the actual amount due would exceed twice the current payment.
On 2 March 2007 the National Consumer Council accused Sky and Virgin of "behaving like children" and stated that it would consider whether or not to raise a super-complaint against them "that will help to knock heads together" by the end of that month. Then on 5 March 2007 Virgin Media threatened to take legal action against BSkyB if the matter remained unresolved in 30 days. On 12 April 2007 Virgin Media filed a legal case in the High Court against BSkyB under the UK Competition Act 1998 and Article 82 of the EC Treaty. BSkyB claimed that Virgin Media made little effort to further arbitration. On 9 May 2008 it was reported that Virgin Media and Sky had held talks to resolve the dispute.
On 4 November 2008 it was announced that an agreement had been struck for Sky's Basic channels – including Sky 1, Sky 2, Sky 3, Sky News, Sky Sports News, Sky Arts 1, Sky Arts 2, Sky Real Lives and Sky Real Lives 2 to return to Virgin Media from 13 November 2008 until 12 June 2011. In exchange Sky would provide continued carriage of Virgin Media Television's channels – Living, Livingit, Bravo, Bravo +1, Challenge, Challenge Jackpot and Virgin1 for the same period. The agreements include fixed annual carriage fees of £30m for the channels with both channel suppliers able to secure additional capped payments if their channels meet certain performance-related targets. As part of the agreements, both Sky and Virgin Media agreed to terminate all High Court proceedings against each other relating to the carriage of their respective basic channels.
On 26 August 2009 the Advertising Standards Authority upheld claims made by Virgin Media in its marketing, despite a complaint from rival broadband provider Sky."