The Antitrust Authority today halted the marketing of a triple-play plan by Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ). As "Globes" reported, a few hours after the Antitrust Authority learned that the Ministry of Communications had allowed Bezeq to market the triple-play plan through its subsidiary DBS Satellite Services (1998) Ltd. (YES), the Antitrust Authority ordered the step to be delayed.
The triple-play package that the Ministry of Communications allowed Bezeq to sell was agreed upon after months of negotiations. YES asked to market a television, telephony, and Internet plan at a fixed price. The ministry's condition was that the plan could be broken down, in other words, each of its components could be bought at the same price separately, so that Bezeq could not in practice offer a discount for the plan.
This meant that if a customer wanted to receive only Internet access via the triple play plan, Bezeq would have to sell him the service at the same price offered in the plan. The purpose of the requirement was to prevent Bezeq from offering discounts, since its telephony and Internet services are classified as monopolies.
A traditional stance
The Antitrust Authority argued that if YES marketed the plan, Bezeq would prefer to forego entering Internet protocol television (IPTV). In other words, the Antitrust Authority believes that if cooperation between the companies is blocked, Bezeq will ultimately decide to compete against its subsidiary YES, and set up a television company.
This assumption, despite sounding completely illogical, was also the basis for the Antitrust Authority's objections to the merger between the companies several years ago.
The Restrictive Trade Practices Tribunal approved the merger of the companies, subject to certain conditions, but the Supreme Court overturned the decision on appeal by the Antitrust Authority, and the merger was cancelled.
Since then, the Antitrust Authority and Bezeq's parent company Eurocom Group have been in talks to allow the merger, because many market conditions have changed, and IPTV has become an infrastructure for television-on-demand, with the result that Bezeq's control of YES's infrastructure and telephony infrastructure is meaningless.
The Antitrust Authority's position indicates that it is unimpressed by the changes in the market, and it has reverted to its traditional stance.
The Antitrust Authority declined to respond by web posting.
Published by Globes [online], Israel business news - www.globes-online.com - on November 7, 2012
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