Telecom giant Bezeq slapped with NIS 30 million antitrust fine

Authority finds carrier blocked rivals from using its underground infrastructure, requiring them to duplicate work

A man walks out from a building belonging to Bezeq on January 25, 2011. (Kobi Gideon/Flash90)
A man walks out from a building belonging to Bezeq on January 25, 2011. (Kobi Gideon/Flash90)

Already embroiled in a major corruption scandal involving its main shareholder Shaul Elovitch and Prime Minister Benjamin Netanyahu, Israel’s biggest telecommunications company Bezeq now faces a multimillion-shekel fine for monopolistic behavior, the Israel Antitrust Authority announced Wednesday.

The move came after a year-long probe found that the company had failed to allow rivals to lay their fiber optic cables through its land-based protected tube lines in accordance with a government reform aimed at increasing competition.

The authority said it would levy a NIS 30 million ($8.67 million) fine on the telecommunications giant.

Stella Handler (L), CEO of the Bezeq telecom company, appears in the Tel Aviv District Court on February 21, 2018. (AFP Photo/Jack Guez)

Bezeq’s CEO Stella Handler — under house arrest in connection with the Elovitch-Netanyahu corruption case, known as Case 4000 — is looking at a fine of NIS 700,000 ($202,000) for her part in the company’s monopolistic policy.

Case 4000 involves suspicions that Elovitch ordered the Walla news site, which he owns, to grant positive coverage to the prime minister and his family, in exchange for the prime minister advancing regulations benefiting Elovitch.

The Communications Ministry decided some years ago that Bezeq should open its countrywide network of pipes, pillars and other infrastructure to competitors to save them the bureaucracy, high costs and huge disruption to the public of having to excavate to create their own networks underground.

But according to rivals Cellcom and Partner, Bezeq was uncooperative.

It allowed rivals to use its pipes, but only on public land, keeping them from linking up to individual buildings. This forced competitors to waste time and money requesting permits from local authorities and permission from homeowners associations to carry out costly excavation works.

Bezeq also forced competitors to cut and reconnect their optical fibers at several points between the manhole and the customer’s house, the Antitrust Authority found — something it did not do in the case of its own wiring, and a measure that not only added costs but affected the quality of the rival networks.

Bezeq workers installing fiber optic cables (Photo credit: Courtesy)
Bezeq workers installing fiber optic cables. (Courtesy)

Bezeq, the authority said in a statement, was “prima facie abusing its status as a monopoly by unreasonably refusing to give access to its monopolistic product.”

“Accordingly, the Commissioner is considering imposing sanctions amounting to NIS 30 million,” the statement read.

The Antitrust Authority was also considering the NIS 700,000 fine against the company’s CEO Handler for having been involved in the alleged breaches.

Stella Handler has been replaced by an interim CEO while she remains under police investigation. Bezeq has the right to appeal the accusations and fine before a final decision is made.

A statement from Bezeq said the findings were “fundamentally wrong” and charged that it had already shown the Antitrust Authority that all of its activities were carried out according to the law and the instructions of the Ministry of Communications.

It said it was convinced that it would succeed in conveying this during its hearing.

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