The Ministry of Communications is reviewing claims by Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) regarding putting price controls on the company's Internet services after Bezeq's share of the wireline telephony market falls below 85%. The ministry will examine claims that naked ADSL service (an ADSL line with no telephone line) did not exist when the ministry formulated its policy, when Prime Minister Ehud Olmert held the communications portfolio. Now that this service is offered and prices are controlled by the ministry, the issue of price controls on Internet services has become problematic and complicated.
The policy put in place by Olmert states that Bezeq and its subsidiaries would receive breaks, including the right to market triple-play (television, telephony, and Internet) packages. The policy published by Minister of Communications Ariel Atias clarifies that when Bezeq's share of the wireline telephony market falls below 85%, the company and its subsidiaries would be allowed to market triple-play service. Now that Bezeq has reached this threshold, a problem has cropped up, specifically with Internet service provider and international calls carrier Bezeq International Ltd.
So long as triple-play is not included in Bezeq's telephony services, Bezeq International can provide its own telephony service, based on VoIP, and add Internet service, based on naked ADSL and television service from sister company YES satellite broadcaster. This is what Bezeq thought would happen. The problem is differing interpretations and whether prices for naked ADSL should be controlled in the same way as Bezeq's telephony services are controlled.
Published by Globes [online], Israel business news - www.globes-online.com - on July 28, 2008
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