Israeli Cablers Race for High-Speed Licenses

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Tel Aviv, Israel-Israel's three cable operators are expected to file a class-action suit in an effort to launch high-speed Internet service at the same time as monopoly phone company Bezeq.

Plans for the suit followed the Sept. 4 decision by communications minister Binyamin Ben Eliezer to green-light regulations that will open up Bezeq's stronghold on domestic telecommunications to competition, inching the country toward the long-awaited introduction of high-speed Internet service.

The cable industry is expected to provide the only serious high-speed-data competition to Bezeq in the near future. But the cable companies cannot proceed until the Communications Law-which bars them from offering high-speed Internet service-is changed. An interministerial dispute is holding up such a move.

And an independent appraiser who was to have resolved the dispute over how much the cable operators should pay for a high-speed Internet license has still not been appointed despite a Sept. 1 deadline.

The expected suit would aim to force the country's attorney general, Elyakim Rubinstein, to allow the Ministry of Communications to grant a temporary telecommunications permit to the cable companies, providing at least a Band-Aid solution.

Clearly, Ben Eliezer aims to foster competition. Referring to a government decision that allowed direct-to-home platform YES DBS Services Ltd. to launch-breaking cable's pay TV monopoly-he said: "Where we have opened up the market to competition, the client has benefited. The client is going to be the boss, not the government."

Both Bezeq and Israel's three cable companies-Golden Channels, Matav Cable Systems Media Ltd. and Tevel Israel International Communications Ltd., which are expected to merge-claimed they are technically ready to provide high-speed Internet service as soon as they receive the government go-ahead.

Bezeq has an asymmetrical-digital-subscriber-line service to provide high-speed access.

The cable operators have about 1.2 million TV customers collectively. But legal obstacles remain.

Part of the problem involves a demand by the Finance Ministry that cable operators pay up to $1.5 billion for the telecommunications license-an amount Prime Minister Ehud Barak dismissed as too high. Ben Eliezer would prefer to waive the fee in the interests of an early launch of the service.

Meanwhile, Bezeq's opposition to an "unbundling" policy-which would require it to sell access to its infrastructure to its competitors-is delaying Communications Ministry approval of its ADSL service.

Shani Kogan, a telecommunications industry research analyst at Nessuah Zannex Ltd., predicted that the government will "take a shortcut" by offering the cable operators a free temporary license until their current broadcasting licenses expire in two years, then requiring a license fee for a general communications license.

"My feeling is that we'll have an announcement in two to three weeks that both Bezeq and the cable companies will enter the field immediately,"

Kogan said. "Any newcomers will not be ready for at least one year."

But Elli Davidovitch, spokesman for the cable operators, suggested that the "shortcut" suggestion was just one of a number of possibilities, warning that the launch of high-speed Internet service in Israel might be delayed for several months.

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