Israeli Satellite License Bids to Go Ahead

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Tel Aviv, Israel -- Limor Livnat, Israel's minister of
communications, made the surprise move last week of beginning the bidding process for the
country's new direct-to-home satellite services, even though a heated debate between
the government and the cable industry continues to drag on.

Israel's Supreme Court allowed the move on the
condition that no licenses be awarded either until a settlement is reached in the
long-running legal battle between the cable companies and the government, or, in the
absence of an agreement, until a decision by the court is announced.

The dramatic announcement came after a Nov. 8 meeting
between the warring parties that failed to result in an agreement, meaning that the
Supreme Court will likely end up deciding on the matter.

Eli Nissan, senior media consultant to the Israel
Broadcasting Regulatory Administration, said, "We want the bidding process to start
now. When the court decision comes in a few weeks, our timetable needn't be
disrupted."

Bidders can submit applications until Dec. 6, with license
awards promised in January.

Israeli cable operators have argued with the government all
year over the introduction of DTH services, saying that they should be allowed concessions
due to DTH competition being introduced sooner than they anticipated.

The two outstanding areas of disagreement in an
otherwise-agreed-upon package of concessions are exclusivity of channels and ownership of
programs.

The government wants the operators' five
cable-originated channels to be made available to satellite operators.

"We invested a lot in our channels," said a
spokesman for Golden Channels, the largest of Israel's three cable operators.
"We can't just give them to our competitors."

Tammy Friedman, head of the Clal DBS Group -- part of one
of the four consortia that are considered likely DTH-license bidders -- added that her
group is demanding that the government prevent the cable operators from providing new
services, such as tiering, in the first year or so of DTH competition.

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