Ministry threatens Bezeq with NIS 11.3m fine for reform flaws
Ministry says telecom firm failed to open fixed line and internet market to competition as required; Bezeq has 30 days to appeal the $3.2m fine
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
The Communications Ministry has warned Israel’s largest telecommunications company it will be slapped with a fine of some NIS 11.3 million, around $3.2 million, for failure to implement telephony reform.
In a filing to the Tel Aviv Stock Exchange on Sunday, Bezeq – The Israel Telecommunication Corp. said it received a report from the ministry alleging that the firm has failed to meet the terms of the wholesale telephony reform and failed to make its infrastructure available to competitors to enable them to supply competing telephony services, as required.
The ministry, in declaring its plans to fine the firm, said that Bezeq must immediately act to bring itself in line with the requirements. The ministry may also take additional punitive steps on the matter, the ministry warned, according to the filing.
Bezeq has 30 days to present its case against the fine, the filing said.
Israel launched its wholesale market reform in 2014 to open up the fixed line telephony and internet market, dominated by Bezeq, to competition. As part of the reform, Bezeq was compelled to lease its infrastructure to telecom competitors such as Partner Communications Co. and Cellcom so they could provide competing fixed line and internet services. According to the plan, Bezeq was supposed to start leasing out its infrastructure for the fixed line telephony wholesale market on May 17, 2017, but has failed to do so, the ministry said.
The threat of the fine comes as Bezeq’s top executives, including controlling shareholder Shaul Elovitch, chief executive officer, Stella Handler, and a director at the ministry are being investigated for offenses under the securities law and breach of trust.
Shlomo Filber, the director general of the ministry, is being investigated for suspicions of favoring Bezeq in his decisions, by withholding information from professional civil servants and legal advisers at the ministry and transferring to Bezeq confidential documents and internal position and other papers.
The Bezeq suspects, including Elovitch and Handler, would give Filber their feedback about the documents, adding adjustments that would help their “strategic, tactical and business needs,” the Israel Securities Authority said in a document presented to court. These adjustments were adopted and used as a basis for continued discussions, the document said.
