Israeli Telco Demands Pay Television License

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Tel Aviv, Israel-Bezeq Ltd., Israel's state-run telco, last week demanded a multichannel-television license in response to Prime Minister Ehud Barak's support for cable operators' efforts to sell telephone service.

"Bezeq thinks [the government] has no legal or moral right to allow the cable monopoly, which has the exclusive right to terrestrial multichannel television, to operate as a provider of fast Internet and telephony without creating full symmetry with Bezeq," the company said in a press release.

That statement followed Barak's Sept. 17 decision to give the country's attorney general one week to grant Israel's three cable companies-Golden Channels, Tevel Israel International Communications Ltd. and Matav Cable Systems Media Ltd.-temporary domestic-telephony licenses until their current TV licenses expire. The move was also meant to give cable a leg up in the race to provide high-speed Internet access.

"We must open the telecommunications market within the next few weeks," Barak told reporters. "We are in the middle of a worldwide battle for markets and the competition is not easy."

Barak insisted the temporary license would be granted on the condition that the cable operators opening their infrastructure to competitors. Now Bezeq, concerned that cable-its only serious telephony competitor-has gained an advantage, is demanding equal treatment.

By giving Bezeq the green light to enter pay TV, while simultaneously licensing the cable operators to roll out telephony and Internet-over-cable to their combined 1.2 million subscribers, the government would create such equality, the telco contends. Bezeq has 2.9 million customers and could provide TV using asynchronous digital-subscriber-line technology.

Separately, Israel has resolved two other pay TV-related disputes. Satellite start-up YES DBS Satellite Services and the cable industry settled a three-month squabble over YES' right to use the cable operators' infrastructure.

YES argued that customers own the cable infrastructure in their homes because they've been paying for it over the last 10 years. YES demanded the right to connect customers who wished to switch to its services through the cable backbone already in place. But cable operators went to court claiming the infrastructure belonged to them.

Under the compromise, YES would pay cable operators 25 cents per month for every customer who receives satellite services using operators' infrastructure.

Cable-industry spokesman Elli Davidovitch said the outcome shows the cable industry's commitment to open competition, and added that the issue was simply one of payment.

In a further boost to competition, Matav and Golden Channels earlier this month were awarded permission to join Tevel and YES in offering pay-per-view channels at a flat rate of $4 per movie.

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