New bills seek to break up Bezeq monopoly

Opposition MKs picked up where new Public Security Minister Gilad Erdan left off Tuesday, and proposed bills to take apart Bezeq's monopoly in the telecom sector.

By
May 26, 2015 19:09
3 minute read.
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Computer keyboard [illustrative].. (photo credit: ING IMAGE/ASAP)

Opposition MKs picked up where new Public Security Minister Gilad Erdan left off, and proposed bills to take apart Bezeq’s monopoly in the telecom sector on Tuesday.

Last week, when former communications minister Erdan was only an MK with no other title, he vowed to break up Bezeq.

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On Monday night, however, Erdan became public security and strategic affairs minister, which limits him to proposing legislation in those areas, so MKs Aliza Lavie (Yesh Atid) and Miki Rosenthal (Zionist Union) submitted bills to break up Bezeq in his stead.

The bills would have the antitrust commissioner put an end to Bezeq’s control of the broadband infrastructure market by requiring it to sell its holdings in providing services and content so that it will only be an infrastructure company, thus lowering the price of Internet connections and other broadband services.

“It can’t be that such an important process in lowering the cost of living will stop because of political interests,” Lavie said.

According to Lavie, breaking up Bezeq’s monopoly will put an end to its obstacles to creating competition in the telecom market. Lavie accused it of ignoring reforms Erdan instated in the area of broadband, which would have lowered prices, in order to protect its monopoly and prevent competition.

“We must continue fighting to implement reforms that are meant to benefit citizens, even if the big and strong businesses oppose it,” she added.

Rosenthal said taking apart Bezeq is a necessary step in fighting market concentration.

The change to the land-line market would be just the latest in a series of telecommunications reforms that have hit the industry – to the delight of consumers – in the past few years, but the focus on content has a political element to it.

First, then-communications minister Moshe Kahlon passed his famous reform in the cellular market, allowing new companies to lease the infrastructure of legacy players. Prices plummeted as new players entered the market.

Profits from the legacy companies have fallen roughly 90 percent since then.

More recently, Erdan began tackling the fixed-line communication market, which namely targets Bezeq. The plan was to tackle the reform in several parts. The first allowed other companies to lease bits of Bezeq’s line for high-speed Internet, which meant that Internet Service Providers could offer packages of both the service and the infrastructure together. Companies like Xfone and Cellcom recently unveiled such packages at reduced prices, a step they could only carry out once a provision allowing customers to easily switch went into place.

When Prime Minister Benjamin Netanyahu fired the reformist Communications Ministry director-general Avi Berger last week, markets saw it as a move to stall further reforms, including telephone landlines and, crucially, separating out content from Bezeq, which is awaiting approval for its acquisition of Yes Satellite TV (in which it already controls a stake) and Walla! news.

Opposition members have accused Netanyahu of trying to provide backing to content providers that are politically favorable to him, making the particular bill in question more politically significant.

Erdan proposed the same bill just last week when he and Netanyahu were sparring.

“I’m curious to see how Erdan will vote on this bill,” Rosenthal said Tuesday.

On Monday night, Erdan replied via twitter to a report in TheMarker accusing him of double-speak on the matter of Bezeq – that as a minister he bolstered the company, but as an MK he talked tough about breaking up the monopoly. Erdan explained that the Communication Ministry’s legal advisers said forcing Bezeq to sell its service holdings violates the right to property, so he must start the process gradually, which is where the broadband reform came in.

“This week, I understood that Bezeq still believes that the reform can be stopped, and therefore, I clarified that even if I will be a regular MK, I will fight to open the market to competition,” Erdan wrote. “And one more thing – the antitrust commissioner authorized Bezeq’s merger with [satellite TV company] YES, but I, the ‘tycoon-lover’ and ‘coward’ insisted that he not do so, but don’t let the facts confuse you.”


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