Knesset c'tee approves higher royalties from Hot

Despite opposition from the Council for Cable TV and Satellite Broadcasting, royalties will increase 2.5%.

In the presence of just one member of Knesset, MK Carmel Shama, who is also chairman of the Economics Committee, the saga of Hot's increased royalties ended today (Monday.) According to the amendment that was unanimously approved, the state will charge royalties at a rate of 2.5% from July 1 until the end of 2011. The company will continue to pay the same rate in 2012. Nitzan Chen, who is chairman of the Council for Cable TV and Satellite Broadcasting that opposes increasing the royalties, said today, "We recommended not to increase the royalties. This change contradicts decisions made by experts on the various committees. This is a serious mistake."

Hot currently pays the state royalties of 1% of its yearly revenue. The government decided to change the regulations and to increase royalties to 1.75% of revenue this year and to increase it to 2.5% next year. Following a short discussion that lasted only nine minutes, the Knesset Economics Committee approved the increase in royalties from 1% in 2010 to 1.75% for 2011, which will be split into two parts: 1% for the first half of the year and 2.5% for the second half, starting July 1. According to government representatives who were present at the discussion, 2011 was split into two parts so that the state won't begin the increase in royalties retroactively for the first six months of 2011.

The committee also decided that Hot will pay the state royalties of 2.5% for all of 2012. In addition, it was decided that, if during this period seven DTT channels are established, the state will revert to collecting royalties at a rate of only 1%.

Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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