Virgin Media Incorporated

Type	Public: (NASDAQ: VMED)
Founded	NTL: 1991; Telewest: 1984
Headquarters	Corporate: New York City, United States Operational: Hook, England, UK
Key people	James Mooney (Chairman) Neil Berkett CEO
Industry	Cable Communications
Products	Cable television Broadband Telephone Mobile phone
Revenue	$16.5 billion (2008)
Employees	22,500 (2005)
Website	virginmedia.com

Virgin Media Inc. (formerly known as ntl:Telewest, after a merger of NTL Incorporated with Telewest Global, Inc.), became in 2006 the first "quadruple-play" media company in the United Kingdom, bringing together a service consisting of television, Internet, mobile phone and fixed-line telephone services. Virgin Media represents a prime example of telecommunication convergence. As the only major cable company in the United Kingdom, it competes in the market with the major pay-TV operator, satellite-based British Sky Broadcasting which currently has more channels than any other provider in the UK , and with Freeview, the free-to-air terrestrial service. While US-headquartered, Virgin Media only operates in the United Kingdom, with headquarters in Hook, Hampshire and its financial base in Bradford.

Contents 1 History 1.1 Telewest (1984–2006) 1.2 NTL (1993–2006) 1.2.1 NTL Internet 1.2.2 ntl:freedom 1.2.3 Virgin.net 1.3 NTL:Telewest (March 2006–February 2007) 1.4 Virgin Media & ntl:Telewest Business 1.4.1 The merger of Virgin Mobile and NTL:Telewest 1.4.2 Rumoured private equity bid (2006) 1.4.3 ITV merger proposal (2006) 1.5 The Virgin Media era 2 Operations 2.1 Virgin Broadband 2.1.1 Available packages 2.1.2 Bandwidth throttling 2.1.3 Proxy servers 2.1.4 Usenet servers 2.1.5 Crackdown on illegal filesharing of copyrighted material 2.2 Virgin TV 2.2.1 Non-digital areas 2.2.2 Non-cabled areas 2.2.3 PVR and high-definition services 2.2.3.1 High-definition channels 2.2.4 Video on demand 2.3 Virgin Media Television (formerly Flextech) 2.4 Virgin Mobile 2.5 Virgin Phone 3 Corporate affairs 3.1 Arrangements with Sir Richard Branson 3.2 Advertising 3.3 Redundancies 4 Controversy 4.1 Open letter 4.2 Net neutrality 4.3 Data pimping 4.4 Wikipedia censorship 4.5 eBay problems 5 Market share 5.1 Broadband 5.2 Television 6 Notes 7 External links

[edit] History

[edit] Telewest (1984–2006)

Telewest originated in Croydon in 1984 under the name "Croydon Cable".^[1] In 1988 United Cable of Denver, US, acquired Croydon Cable. Franchises extended the company scope in Edinburgh and the south-west and south-east of England. In 1989 United Cable merged with United Artists Cable International. In 1991 United Artists merged with their largest shareholder TCI (now^[update] Liberty Media), to form the largest cable operator in the US. TCI and US West announced a joint venture, and in 1992 the joint venture company became Telewest Communications. In 1995 Telewest merged with SBC Communications, adding franchises in the Midlands and North West serving 1.3 million homes.^[2]

In 1998 Telewest announced a merger with General Cable,^[3] and acquired an outstanding interest in Birmingham Cable, adding a further 1.7 million franchise homes in Yorkshire, west London and Birmingham.^[4] Telewest purchased the remaining 50% stake in Cable London from NTL in 1999, adding 0.4 million franchise homes in north London.^[5] In April 2000 Telewest merged with Flextech,^[6] and in November extended its cable network with the acquisition of Eurobell, taking the total number of homes passed to 4.9 million.^[7] The company later became known as "Telewest Broadband" in a re-brand during 2001.^[8]

In subsequent years Telewest experienced many financial problems due to huge debts incurred as a result of constructing its cable network and of acquiring other cable companies and assets. In 2004 Telewest re-structured itself by swapping its unsecured debt for 98.5% of its shares.^[9] The London FTSE then de-listed the consolidated shares. Major Telewest shareholders included Huff and Liberty Media (run by cable tycoon John Malone). Afterwards the company emerged from financial restructuring and completed a merger with NTL in 2006.^[10]

[edit] NTL (1993–2006)

Barclay Knapp and George Blumenthal, the founders of the cellular network company Cellular Communications, Inc. (sold to Airtouch in 1996), established International CableTel in 1993.^[1] They founded CableTel in order to take advantage of the deregulation of the UK cable market. Initially, Cabletel acquired local cable-franchises covering Guildford, Northern Ireland and parts of Central Scotland and South Wales. In 1996 CableTel acquired National Transcommunications Limited (NTL), the privatised UK Independent Broadcasting Authority transmission-network.^[11] In 1998 CableTel adopted "NTL" as its new name.

The company spent heavily on expanding its network and on acquisitions — including the consumer cable division of Cable and Wireless, bought for $10bn, and partly paid for with a $5.5bn investment from France Telecom.^[12] NTL also began to expand outside the UK in 2000, buying into markets on continental Europe and in Ireland.

A collapse of the telecommunications markets from mid-2000 dealt a serious blow to the company. This, combined with NTL's rapid acquisition of local cable-operators, led to severe problems of integration. NTL, struggling to cope with rapid expansion and suffering from significant customer-service problems, then had to contend with the setting up in November 2002 of one of the UK's first consumer lobby-groups, nthellworld, with ntl:hell following shortly after.^[13]

Devalued and struggling with debts of around $18bn, NTL sought Chapter 11 bankruptcy protection in May 2002 in order to organise a refinancing deal.^[14] The company did not emerge from protection until January 2003, having converted around $11 billion of debt into shares. Technically, this amounted to the largest debt default in US corporate history. The company reduced its debt to $6.4bn. A re-organisation split NTL itself into NTL Inc. (covering the UK and Irish markets) and NTL Europe Inc. (for the French, Swiss and German parts of the corporation).^[15] New executives replaced the NTL president, CEO and co-founder Barclay Knapp, as well as Stephen A. Carter, the MD and COO.^[16]

After exiting from Chapter 11 protection, NTL produced an operating profit. In 2004 it announced plans to split its broadcasting division off from the main company. In December 2004 NTL sold its broadcast unit to a consortium led by Macquarie Communications Infrastructure Group (MCG) for £1.27 billion.^[17] (Macquarie renamed the division Arqiva in May 2005.) This sale allowed NTL to focus on its "core businesses" of providing communications packages and cable services.

In autumn 2004 NTL purchased the remaining shares of the Internet service provider (ISP) virgin.net, originally a joint venture between NTL and Sir Richard Branson's Virgin Group.^[18]

By 2005 NTL's UK network consisted of a 7,800 km fibre backbone with the potential to reach 8.4 million residential homes and around 610,000 businesses. In January of that year, NTL started rolling out Video On Demand. With content selected by NTL, this service covered genres including music videos, children's programming and adult entertainment. This provided an extension to the basic "pay per view" services the company offered for film and sport content. The new service allowed customers to rewind, fast-forward and pause content.^[19]

Despite NTL Ireland turning a profit, in May 2005, NTL sold its Dublin, Galway and Waterford cable business—which it had acquired in 1999 for €825 million from the Irish government-owned entities Telecom Éireann (60% of shares) and RTÉ (40% of shares)—to UGC Europe for €325 million; this after having spent in excess of €100 million on network infrastructure.^[20] Thus NTL made a gross loss of €500 million (more than 50%) over what it had paid. Since 2005 Liberty continues to use the NTL brand in Ireland, under license, it has plans to brand their Irish service as UPC but it is currently named Chorus NTL.

By July 2005, NTL had cut its debt to £1.445 billion, with an operating cash flow of £178 million. The company had 3.2 million customers buying at least one service from it, with the 1.4 million subscribers to broadband services making NTL the market leader in this field.

[edit] NTL Internet

After trials in the Guildford area from summer 1999, NTL launched its original broadband services at the same time that NTL acquired the CATV business of Cable and Wireless (Spring 2000). In the "original NTL" (also known as "Langley") areas, NTL has always supplied broadband services via DOCSIS cable modems. In these areas the digital television set-top boxes (STBs) used an incompatible standard, DAVIC.

The roll-out of broadband services in the ex-Cable and Wireless franchises started in mid-2001. Initially, NTL provided ex-Cable and Wireless subscribers with broadband through the set-top box also used for digital television services, adopting the rationale that subscribers could self-install. Accordingly, NTL supplied a "Self Install Kit" consisting of connecting cable, adapters and an installation CD. Following demonstrated problems, NTL gradually introduced cable modems and phased out the self-install approach to set-top box broadband.

Although the set-top boxes had the capability of supporting of higher speeds (up to 4 Mbit/s), NTL did not make speeds higher than 1 Mbit/s available via set-top boxes, due to degradation of the digital television (DTV) service.

NTL eventually replaced the Pace set-top boxes with Samsung models which used a dual-processor architecture, overcoming the shortcomings of the Pace, and which could give much better downstream performance. The Samsung set-top box had its own limitations, with initially only a 10 Mbit/s single duplex connection on the customer side of the device. However, with the advent of higher "Tiers of Service" of 10, then 20 Mbit/s downstream, plus the reducing cost of NTL's cable modems,^[21] NTL came to supply all subscribers with cable modems. A historical view of NTL cable modems appears at the Chetnet site.^[22]

[edit] ntl:freedom

ntl:freedom, an ADSL-based alternative for customers not living in a cabled area, became "Virgin Media Freedom" before being folded into Virgin Media Beyond Cable. In January 2009 it was re branded as Virgin Media National.

[edit] Virgin.net

Virgin.net operated as an Internet service provider (ISP) in the UK from November 1996 onwards. Once a joint venture between NTL and the Virgin Group, the ISP became wholly owned by NTL in 2004.^[18] It sold a range of ADSL broadband packages through BT landlines to those living outside areas served by NTL's cable-television network. Virgin.net broadband customers could receive up to 8 Mbit/s downstream and 400 kbit/s upstream, with usage allowances depending on which package the user took. Virgin.net also offered bundled phone services via Carrier Preselect (CPS) to broadband subscribers. The service offered various usage allowances depending on which package a user took. Virgin.net also offered subscription-based and subscription-free dial-up Internet access. Prior to acquiring Virgin.net, NTL offered a similar package called NTL Freedom.

On 8 February 2007, the services provided by Virgin.net became integrated into the new Virgin Media brand as Virgin Media Beyond Cable. It was renamed as Virgin Media National in November 2008

[edit] NTL:Telewest (March 2006–February 2007)

From late 2003 discussions commenced on a merger between Telewest and NTL. Thanks to their geographically distinct areas, NTL and Telewest had co-operated previously, as in re-directing potential customers living outside their respective areas. On 3 October 2005, NTL announced a USD$6 billion purchase of Telewest, forming one of the largest media companies in the UK. The merger agreement as structured would have left NTL having to negotiate with BBC Worldwide (the BBC's commercial arm) due to a change-of-ownership clause written into the agreement for UKTV, a joint venture with Telewest's Flextech content division. To prevent this, Telewest instead acquired NTL.

The parties completed the merger on 3 March 2006, making the merged company the UK's largest cable provider, with more than 90% of the market. Once merged, the combined company renamed itself to NTL Incorporated, with ex-NTL shareholders controlling 75% of the stock and ex-Telewest shareholders 25%. Nine of the eleven directors of the new board came from NTL and two from Telewest.^[23]

[edit] Virgin Media & ntl:Telewest Business

Whilst the consumer side of NTL Telewest rebranded as Virgin Media, the business division http://www.ntltelewestbusiness.co.uk continued offering telecommunications services to UK businesses.

[edit] The merger of Virgin Mobile and NTL:Telewest

In December 2005 NTL:Telewest and Virgin Mobile announced that talks had taken place regarding a merger. (Note that Virgin Mobile, as an MVNO (Mobile Virtual Network Operator), does not own or operate a mobile phone network: it simply reached a commercial agreement with the T-Mobile GSM 1800 network to resell airtime branded as "Virgin Mobile". The combination proved so successful that T-Mobile quickly added Virgin Mobile's subscriber connections to its own in order to boost network numbers.)^[24]

Virgin Mobile's independent directors rejected the original bid of £817 million ($1.4 billion), taking the view that NTL Incorporated's bid "undervalued the business". Sir Richard Branson reportedly expressed confidence that a re-structured deal could go ahead, and in January 2006 NTL Incorporated increased its offer to £961 m (372p per share). On 4 April 2006, NTL Incorporated announced a £962.4 m recommended offer for Virgin Mobile.^[25] According to reports, Branson accepted a mix of shares and cash, making him a 10.7% shareholder of the combined company.

The takeover completed on 4 July 2006, setting up the UK's first 'quadruple play' media company, bringing together television, Internet broadband, mobile phone and fixed-line phone services. The deal included a 30-year exclusive branding agreement that saw NTL adopt the "Virgin" name after it completed its merger with Telewest. As a result, on 8 November 2006 NTL:Telewest announced it would change its name to "Virgin Media Inc".^[26]

[edit] Rumoured private equity bid (2006)

On 16 August 2006, The Times reported that the ntl Incorporated group could become the subject of a £10bn takeover bid from a private equity firm consortium made up of Kohlberg Kravis Roberts, Bain, Cinven, Blackstone and Providence Private Equity, with a formal approach expected within a fortnight. The £10bn figure would include £6bn worth of debt already on the NTL balance sheet. Additional new banking facilities would probably fund the private equity bid. No such bid ever materialised, however.^[27]

[edit] ITV merger proposal (2006)

On Thursday, 9 November 2006, NTL announced that it had approached commercial television broadcaster ITV about a proposed merger,^[28] after a similar announcement by ITV.^[29] BSkyB effectively blocked the merger on 17 November 2006 when it controversially bought a 17.9% stake in ITV plc,^[30] a move that attracted anger from NTL shareholder Richard Branson,^[31] and an investigation from media and telecoms regulator Ofcom.^[32] On 6 December 2006 NTL announced that it had complained to the Office of Fair Trading about BSkyB's move, and that it would withdraw its attempt to buy ITV plc, stating that it did not believe that it could currently make a deal on favourable terms.^[33]

[edit] The Virgin Media era

NTL Group's services — previously marketed under the NTL, Telewest and Virgin.net brands — merged with Virgin Mobile under the "Virgin Media" brand on 8 February 2007, referred to by Virgin as V Day.^[34]

In February 2007, Virgin Central, an on-demand service, gained the rights to begin showing episodes of the television show Lost (already shown on Sky1), and other shows including Alias and The OC. This service extended the on-demand service previously known as Teleport TV. Teleport TV was renamed TV Choice offering recently-broadcast shows and other shows and series.^[35]

A channel agreement for Virgin Media to keep non-premium Sky channels ended at midnight 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 tyrannizing 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 Sky1, Sky2, 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 Sky3, 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.^[36]

On 2 March 2007 the National Consumer Council accused Sky and Virgin of "behaving like children" and stated that at the end of March 2007 it would consider whether or not to raise a super-complaint against them "that will help to knock heads together".^[37] Then on 5 March 2007 Virgin Media threatened to take legal action against BSkyB if the matter remained unresolved in 30 days.^[38] 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.^[39]

On 1 July 2007 it emerged that the private equity investment firm The Carlyle Group had initiated discussions to acquire Virgin Media Inc.^[40][41]

And then on 20 July 2007 an announcement appeared to the effect that Virgin had struck a deal with Setanta Sports to offer six Setanta channels free of charge to XL- package customers, including 46 live Premier League football matches, 60 live Scottish Premier League games and US PGA Tour golf.^[42]

On 9 May 2008 it was reported that Virgin Media and Sky had held talks to resolve the dispute.^[43]

On 4 November 2008 it was announced that an agreement had been struck for Sky's Basic channels – including Sky1, Sky2, Sky3, 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 will be provided continued carriage of Virgin Media Television's channels – Living, Livingit, Bravo, Bravo +1, Challenge, Challenge Jackpot and Virgin1 for the same period.^[44] 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 have agreed to terminate all High Court proceedings against each other relating to the carriage of their respective basic channels.^[45]

On 26 August 2009 the Advertising Standards Authority (United Kingdom) upheld claims made by Virgin Media in its marketing, despite a complaint from rival broadband provider Sky.".^[46]

[edit] Operations

[edit] Virgin Broadband

The broadband division combines NTL's cable-broadband operations (broadband Internet access connections through cable), Blueyonder (Telewest's cable-broadband operations) and Virgin.net (ADSL; broadband internet access through a non-cable telephone line).

Virgin Broadband in cabled areas is a FTTN home consumer Internet service. Although the service is marketed as "fibre optic broadband," Virgin Broadband is not a true fibre to the home service like Verizon FiOS. Instead, the service uses DOCSIS 3.0 over coaxial cable between the customer's modem and a node (cabinet) on the street. Fibre optic trunk lines are used to connect the cabinets on the street with the area's headend, which is presumably Virgin's justification for the "fibre optic broadband" description.

In August 2009, Virgin Media Broadband came out top in an OFCOM broadband speed test in the UK. OFCOM tested typical speeds of broadband services provided by most ISPs in the UK, including BSkyB, BT, Tiscali, AOL, TalkTalk, Plusnet, O2 and Orange. Since most broadband connections in the UK are provided by ADSL, and the quality of individual phone lines varies according to distance from exchange, most landline broadband services are marketed as being the maximum speed that the individual's phone line will support, "up to 8mb". As a result, actual speeds obtained vary greatly, but are always constrained by the individual phone line - the quality of which is out of the control of the broadband provider. Cable broadband has no such speed variability caused by connection quality as the network is fully owned and controlled by the cable company providing the broadband - any slowdowns are wholly as a result of traffic shaping, or local capacity being over-sold or over-subscribed. For this reason, the results showed that Virgin Media's broadband speed was closer to (although still not 100% of) the "up to" figures it advertised, compared to the other providers tested. While landline broadband providers now offer speeds "up to" Virgin's previous top rate of 20mbps, the recent launch of a 50mbps service (where available) maintains Virgin Media's claim of being "the fastest broadband in the land."

[edit] Available packages

Although existing customers may still use older packages, the current broadband services offered to cabled areas are as follows.

Package	Download	Upload	Throttling threshold (download)
L	10Mbit/s	512Kbit/s	See section Below
XL	20Mbit/s	768Kbit/s	See section Below
XXL	50Mbit/s	1.5Mbit/s	Unlimited

Installation includes a cable modem and a wireless router. XXL packages include a special cable modem and,802.11n router (which both remain the property of Virgin Media), and wireless USB dongle. An installation fee is also payable by any customer purchasing or upgrading to the XXL package.

[edit] Bandwidth throttling

Virgin Broadband employs an unusual form of Bandwidth throttling whereby customer bandwidth is reduced temporarily after a threshold is reached during peak periods. The company has experimented with and revised all parameters involved in the throttling, such as threshold size, peak period definitions, throttling percentage and duration. Separate thresholds are applied to upload and download, and thresholds vary between packages. The XXL package is currently exempt from throttling.

Example of throtting in action (based on May 2009 scheme): Customer has an L (10Mbit/s) package, which has a 3GB threshold during 10am-3pm and 1.5GB threshold between 4pm-9pm with a 75% throttle for five hours. Customer downloads over 3GB on Tuesday morning between 10am-3pm. The customer is then throttled to 2.5Mbit/s for five hours, after which normal service is resumed.^[47]

[edit] Proxy servers

Virgin Media previously^[update] redirected web browser traffic on port 80 through transparent proxy servers with a view to saving on bandwidth costs and improving browsing performance by caching often-visited sites. This did not apply to any other form of traffic. Up to 16 proxy server addresses hosted each area^[48] The use of proxy servers (generally, not specific to Virgin Media) also caused problems for websites which use less sophisticated methods to identify IP addresses to ban and/or track users. Some users of Mac OS X had also experienced incompatibilities when using some sites (including myspace.com).

Virgin Media removed the use of all transparent proxy servers in Spring 2007.^[49]

[edit] Usenet servers

Virgin Media hosts several operational Usenet servers (NNTP) “news.virginmedia.com”. Virgin media also hosts another operational Usenet server previously known as "text.news.ntlworld.com", now "text.news.virginmedia.com", which again has certain restrictions^{[clarification needed]} and limits article size to 50kb.

[edit] Crackdown on illegal filesharing of copyrighted material

On 2 April 2008 The Daily Telegraph reported that Virgin Media were going to start a trial to take action against subscribers who are illegally downloading copyrighted material from internet Peer-to-peer (p2p) services. Information of offenders would be provided by the British Phonographic Industry, and then Virgin Media and the BPI sends a warning letter to the customer.^[50][51] Virgin Media and the BPI have since denied reports of any agreement or pilot scheme and say they are only in talks on the matter.^[52] However, at least one person claims to have received a letter threatening disconnection.^[53] Although the UK government currently backs plans to ban p2p users from the internet, it may soon be overturned by strong condemnation from the European Parliament on the grounds of privacy issues and the importance of internet access.^[54] In July 2008 the BBC reported that 800 Virgin Media customers who the BPI claim are sharing copyrighted files are being sent warning letters in envelopes marked "if you don't read this your broadband connection could be disconnected". At least one recipient of the letter has denied wrongdoing by any authorised user of his broadband connection.^[55]

On 26 November 2009, it was revealed that Virgin Media will trial deep packet inspection technology to measure the level of illegal filesharing on its network.^[56] The CView system, provided by Detica, will look at traffic and identify the peer-to-peer packets. It will then peer inside those packets and try to determine what is licensed and what is unlicensed, based on data provided by the record industry. The trial - which has no scheduled end date - will cover about 40 per cent of Virgin Media's network but those involved will not be informed. Virgin Media emphasised that it is seeking to measure the overall level of illegal filesharing, not to keep records on individual customers. Data on the level of copyright infringement will be aggregated and anonymised.

[edit] Virgin TV

Virgin Television, the digital cable television service from Virgin Media, currently^[update] ranks as the UK's second largest pay TV service, having 3.6m subscribers, compared to BSkyB's 8.2m^[57] as of Q3 2007.

Virgin's digital cable television currently uses Nagravision 1 for encryption. Although a "next generation" conditional access system is currently being trialled in Yorkshire.^[58][59]

Currently^[update] 55% of UK households potentially have access to Virgin's network,^[60] while anyone in the UK with a line-of-sight view of the Astra & Eurobird satellites at 28.2° east has the ability to receive Sky's service. In areas it services, Virgin Television ranks as the number one provider of pay TV^{[citation needed]}. Virgin plans to expand availability in the rest of the UK using DSL technology. It plans to do this both by signing a contract with another telecoms company and by installing its own equipment in BT exchanges.^[60]

As of 2008^[update] Virgin Media functions as a single company; however, it continues to rely on three existing infrastructures: the Langley-based NTL, Bromley-based Cable and Wireless and Knowsley-based Telewest platforms.

In May 2008 Virgin Media began their "long term" region-by-region analogue television service switch off project, beginning with Coventry and Glasgow.^[61][62]

In areas where analogue transmission will be turned off but no digital replacement introduced customers will be offered Virgin's off-network services including a Virgin-branded digital terrestrial television set-top box, with the company looking at developing a television-over-DSL service for areas outside its cable network in 2009. Analogue subscribers in areas where digital cable services are already available will be offered transfers to new packages.

The firm has signalled it wants to use the capacity to provide faster broadband internet.

Virgin have announced that they are looking for trialists to test a 'Next Generation Television' service in Kent during 2008, starting with Ashford.^[63][64]

On 11 September 2009, Cisco announced a deal to support Virgin Media's Internet Protocol TV distribution platform and upgrade its legacy digital TV infrastructure. Virgin Media will deploy Cisco Digital Video Headend technology in all of its regional and central headends. Deployed across Virgin Media's national fibre optic network. On completion, the new TV platform will be capable of delivering advanced services to more than 12.6 million UK homes. The infrastructure will help Virgin Media to reduce operating expenses, support the rollout of new conditional-access security services, and accelerate the introduction of new standard- and high-definition services.^[65] A Virgin Media spokesman later clarified that the plan "isn't quite announcing the 'launch of IPTV services'. The agreement with Cisco is to help enhance our existing TV platform, which broadcasts content over DVB-C and then our VoD service runs on IP." ^[66]

On 8 October 2009, it was revealed that Virgin Media will trial delivering its TV and broadband services via copper phone lines as part of plans to expand its footprint beyond the cable network. Residents of Higher Pill, in Saltash, and nearby Hatt will be offered free broadband at up to 50Mbit/s downstream via a VDSL2+ line to a roadside cabinet. The cabinets will be linked to Virgin Media backhaul via new fibre laid by Vtesse Networks through BT's local exchange, 5km away.^[67][68] As well as broadband, Virgin Media plans to offer its full range of TV services, including high definition and on demand, over the new infrastructure. The trial is part funded by NGN Kernow, a consortium of large firms led by Babcock International who have invested in Cornwall.

On 24 November 2009, Virgin Media entered into a strategic partnership with TiVo.^[69] Under the mutually exclusive agreement, TiVo will develop a converged television and broadband interactive interface to power Virgin Media's next generation, high definition set top boxes. The terms of the deal are not disclosed. TiVo will become the exclusive provider of middleware and user interface software for Virgin Media's next generation set top boxes. Virgin Media will become the exclusive distributor of TiVo services and technology in the United Kingdom. Virgin Media currently anticipates its first TiVo co-branded product in 2010.

[edit] Non-digital areas

In a few areas Virgin Media has still^[update] not upgraded its network to offer digital television and broadband. In these areas Virgin Media only offers customers analogue cable television. Parts of London, Bolton, Knowsley, Leicester, Maidenhead/Slough, Radcliffe, Southampton and the BT owned Milton Keynes and Westminster franchises remain analogue-only.

Also the five terrestrial television channels are carried FTA on Virgin's analogue cable television network along with BBC News, CNBC Europe (Ex-NTL)/Bloomberg Television (Ex-Telewest) time shared with E4, Disney Cinemagic (Ex-NTL) & Hallmark Channel (Ex-Telewest). However to view these feeds you need to have a television that is capable of tuning frequencies used for cable television.

[edit] Non-cabled areas

For customers in non-cabled areas, Virgin Media offers a branded set-top box for the Freeview digital terrestrial television service, called "Free TV".^[70] The set-top box is free to any customer taking the Bundle One subscription package or for £40 to other customers, up to five additional set-top boxes may be purchased.

The next phase of this service is a combined IPTV and digital terrestrial television service similar to BT Vision and Tiscali TV. Virgin Media have signed an agreement with Cable & Wireless to become the unbundled local loop (LLU) network provider, providing access to 4 million homes outside of the Virgin Media cable franchise network and would include linear pay broadcast channels and video on demand. This was originally scheduled to be released during 2008 but it has been delayed until at least 2009 and scaled back as Virgin Media concentrate on improving its cable broadband proposition instead of focusing on competing with Sky in the premium television market.^[71][72][73]

[edit] PVR and high-definition services

Virgin TV brands its High-definition Television (HDTV) and Digital Video Recorder (PVR) service as V+. Virgin Media (when branded as Telewest) became the first UK broadcaster to offer HDTV, launching its service several months earlier than that of its chief competitor, Sky Digital. The service uses a PVR set-top box, with three tuners and a 160 GB hard disk for up to 80 hours' recording. The presence of three tuners means that V+ can record two channels at the same time while viewers watch a third. This contrasts with most other PVR systems such as Sky+, which supports only two tuners.

[edit] High-definition channels

Virgin have launched a range of HD channels. These are BBC HD, Channel 4 HD, ESPN HD, FX HD, Living HD, MTVNHD and National Geographic Channel HD.^[74] Virgin are also in talks with UKTV about launching a high definition version of Good Food.^[75]

[edit] Video on demand

Virgin Media ranks as the UK's largest provider of on-demand content, with over 3 million Video on Demand (VoD) customers.

The company currently^[update] brands its VOD service as "On Demand". In contrast to the Sky Anytime system from Sky Digital, Virgin Media offers a "true" VOD system. The service allows customers to stream programmes as and when they want to watch them from servers at the customer's local head end. As the broadcaster automatically stores content on Virgin Media servers, this removes the need to pre-record many programmes. Users can search through a large library of programmes (called "TV Choice") from content providers including the BBC, ITV^[76], Channel 4, HBO, the Cartoon Network, Disney Channel, Discovery Channel, National Geographic, CBS Paramount, Buena Vista, Alliance Atlantis, Warner Brothers, Viacom (MTV, Paramount, Nickelodeon), Current TV, Teachers' TV , BabyTV and Virgin Media Television; and watch them when they want to. Subscribers to Virgin Media's premier television package, Size: XL, have the content included in their subscription, while other customers can pay £5 per month for unlimited access, or can utilise pay-per-view. In addition, Virgin Media offers a "Catch-up" service, which includes a free 7-day "watch-again" feature for selected television programmes broadcast by the BBC, ITV, Channel 4 and selected Virgin Media Television channels. The service also offers over 500 films (service-branded "FilmFlex"), and more than 1000 music-videos. As of 12 July 2007 the music videos became free for all XL customers: see http://diginews.name/digital/virgin-media-free-music-on-demand/

Additionally, it was revealed that one third of BBC television programmes viewed on its iPlayer service are accessed through Virgin Media's On Demand service ^[77] and that 50% of all Virgin Media customers "regularly" use On Demand services.^[77]

Virgin Media have also recently added access to PictureBox (also available on BT Vision and Tiscali) for an additional £5 per month. It is updated monthly with a collection of films including high definition films available to their V+ customers.

On 25 November 2009, Virgin Media added dynamic advertising using SeaChange International’s AdPulse system.^[78] Ads will appear in thirty second pre-roll and post-roll ads which will be matched to the programme being watched.

[edit] Virgin Media Television (formerly Flextech)

Virgin Media Television, the content subsidiary of Virgin Media (formerly called Flextech), has a number of wholly-owned channels (including Bravo, LIVING, Trouble and Challenge). Additionally, Virgin Media Television has a 50% share in UKTV (with BBC Worldwide).

In June 2007 Virgin announced plans to launch a new television channel on Freeview and cable, replacing Ftn on Freeview. The new channel, "Virgin1" and "Virgin1+1", launched on 1 October 2007 and broadcasts a mix of British and American programming.^[79]

[edit] Virgin Mobile

Virgin Media owns Virgin Mobile mkh, Holdings (UK) Limited, a virtual mobile-network operator in the United Kingdom, with over four million subscribers.^[80]

[edit] Virgin Phone

Virgin Phone offers landline telephone services; it ranks as the number two service behind the former UK state monopoly, BT Group.^[81]

[edit] Corporate affairs

[edit] Arrangements with Sir Richard Branson

Virgin Media have entered into a 30-year licensing agreement with Sir Richard Branson's Virgin Enterprises Limited to licence out all the relevant Virgin sub-brands for a term of 30 years, with a ten year opt-out clause.^[82] Sir Richard Branson's Virgin Entertainment Investment Holdings Limited owns a minority holding of 34,260,959 Virgin Media common stock as of December 2008^{[update] [83]}, making them the second largest shareholder.

[edit] Advertising

Virgin Media launched to much fanfare in February 2007, with a public relations event and an expensive advertising campaign which covered major UK television channels, newspapers and billboards. In an effort to increase awareness of the group and its services, Virgin Media's campaign used bright red colours to portray its brand image. Recent^[update] television advertising featured actress Uma Thurman and comedienne Ruby Wax, and currently^[update] features actor Samuel L Jackson, whilst the print advertising features bold typography. Virgin Media also sponsored the Channel 4 reality TV show Big Brother until the end of the ninth series and they won't be returning for the next celebrity series in 2009.

[edit] Redundancies

In March 2007, 150 workers at Virgin Media's Teesside site received notices of redundancy that went into effect in July. The workers had the option to relocate to other sites, such as in Manchester (approximately 120 miles (190 km) away). Several moved to other departments at the Teesside site.

In July 2007 Virgin Media also axed its "Customer Experience Team" (responsible for coaching staff using call-monitoring and feedback processess).

In September 2007, 60 IBM contract workers at Virgin Media's Swansea site and 60 at its Albert Dock site became redundant.

More recently^[update], approximately 200 "Face-to-Face" sales staff (who procure customers in shopping centres/events) have also received notices of redundancy.

On 3 July 2008, staff in Swansea that support the DTV, telephone and Broadband frontline agents were notified of a potential loss of jobs.

On 11 November 2008 Virgin Media has said it plans to cut 2,200 jobs by 2012, about 15% of its workforce, as part of a group-wide overhaul.^[84]

On June 24 2009, approximately 50 staff in the Edinburgh Customer Relations centre accepted a garden leave period which expires on the 11th August 2009. From that date all staff will be made redundant.

[edit] Controversy

[edit] Open letter

A uniquely thorough open letter on LeakedMemo.com, from an inside source has argued that Virgin Media's Installation is far below a reasonable standard expectable by the general public, and that Virgin Media are aware of this but choose to not address it because it is not profitable enough for them to do so.^[85] The letter blames a lack of quality i.e. standard of equippment (sa v+ in particular) and frustration experienced by customers as a by product of Virgin Media contracting other companies to provide a source of morally questionable cheap labour—not unlike that of western companies utilising Sweatshops. The letter states that its UK based installation technicians are grossly underpaid, are forced into completing unsafe and illegal tasks, are consistently given workloads which are unattainable, and forced to lie to customers leaving the workers demoralised. The open letter has received many more comments from other Virgin Media Workers, most agreeing with the original content. The letter is addressed to Sir Richard Branson, but is yet to receive a rebuttal.

[edit] Net neutrality

In April 2008 Acting CEO Neil Berkett sparked controversy when he told Television, a magazine published by the Royal Television Society, “this net neutrality thing is a load of bollocks.” According to the journalist, he claimed that any video content provider that refused to pay Virgin Media a premium for faster access would have to get stuck in “bus lanes,” having their content delivered to end users at much slower speeds than that of paying content providers. ^[86] There has been widespread criticism of this policy expressed on the Internet, large internet communities are requesting that Virgin customers end their subscription and initiate a mass boycott.^{[87] [88] [89]}

According to Virgin Media, the comments in the article were taken out of context and misinterpreted ^[90]. A statement released by the company states: "With Virgin Media rolling out a 50Mb service later this year, we are uniquely equipped to cope with the demand for new bandwidth-hungry services. We strongly support the principle that the internet should remain a space that is open to all and we have not called for content providers to pay for distribution. However we recognise that as more customers turn to the web for content, different providers will have different needs and priorities and in the long term, it's legitimate to question how this demand will be managed. We welcome an informed debate on this issue."

[edit] Data pimping

In early 2008 it was announced that the ISP arm of Virgin Media had entered into a contract (along with BT and Talk Talk) with the former spyware company Phorm (responsible under their 121Media guise for the Apropos rootkit)^[91][92] to intercept and analyse their users' click-stream data, and sell the anonymised aggregate information as part of Phorm's OIX advertising service.^[93][94] The practice, which has become known as "data pimping", came under intense fire from various internet communities and other interested parties who believe that the interception of data is illegal under UK law (RIPA).^{[95][96][97][98]} At a more fundamental level, many have argued that the ISPs and Phorm have no right to sell a commodity (a user's data) to which they have no claim of ownership. In response to questions about Phorm and the interception of data by the Webwise system Sir Tim Berners-Lee is quoted as saying:

"It's mine—you can't have it. If you want to use it for something, then you have to negotiate with me." —Sir Tim Berners-Lee: 2008^[99]

Though Phorm initially claimed that Virgin Media had signed an exclusive contract and were committed to implementing Phorm's Webwise tracking system, Virgin Media have since distanced themselves from this and now state that they have only signed a preliminary contract with Phorm to better understand the tracking technology, and are under no obligation to implement it.^[100] Reports on the Guardian website in May 2008 suggest that Virgin Media may be further distancing themselves from the controversial system.^[101]

[edit] Wikipedia censorship

In December 2008, Virgin Media was one of several ISPs in the UK to attempt to censor its users' access to the Wikipedia article about the 1976 album Virgin Killer by stadium rock band Scorpions.^[102]

[edit] eBay problems

In August 2009, Virgin Media users in certain areas were affected by HTTP 404 errors when using some functions of the eBay website. This can happen when first logging in to eBay, trying to watch an item and trying to access certain pages via the My eBay pages. Virgin Media have yet to comment on the issue.

[edit] Market share

[edit] Broadband

Virgin Broadband currently^[update] ranks as the UK's third-largest broadband supplier, behind TalkTalk and BT. Figures show Virgin to have just over 3.6 Million customers, which would translate as a 35% market share across the UK; its major competitor, BT Broadband, had a 40% market share.^[103]

[edit] Television

Virgin Television has currently^[update] around 3.4 million subscribers.^[104] 3.2 million of them are digital cable customers, and the other 200,000 are analogue cable customers.

Virgin makes up around 30% of the UK's TV distributors, with Freeview having the most, and Sky Digital being second.

[edit] Notes

[edit] External links

• Virgin Media (digital TV, broadband, phone and mobile)
• ntl:Telewest Business

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