The Ministry of Communications has announced its intention of abolishing the split between Internet infrastructure and service, from 2022. The ministry has published a position paper for public comment, the main point of which is the intention to abolish the split, subject to conditions that will be imposed on Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and HOT Telecommunication Systems Ltd. (TASE: HOT).
The implementation date of January 1, 2022 was set in order to enable all the Internet service providers (ISP) to prepare for service provision under the wholesale market policy that currently applies whereby ISPs offer subscribers service including infrastructure and service provision on one invoice, so that in effect the subscriber does not know the infrastructure company and receives all services from the ISP.
The Ministry of Communications states in its position paper that the split currently in force, introduced in 2000, causes damage to the tune of NIS 50 million annually to the public, quite apart from the problem that customers are confused and don't know where they are receiving their Internet connection from - whether it is from the infrastructure company or from the ISP.
The ministry says that the planned change will lead to substantial improvement in service to the end consumer by creating a single address for ISP and infrastructure, and that the reform will put an end to disavowal of responsibility for breakdowns and faults, with the ISP and the infrastructure company blaming each other. This, the ministry says, will oblige the company providing services to the consumer to meet higher standards.
The ministry lays down a series of restrictions that will prevent Bezeq and Hot from exploiting their market power on the way to receiving a license to provide Internet services directly to their customers. The transition to the new arrangement will be gradual, with the aim of enabling ISPs to prepare for the change and preventing the large infrastructure companies (Bezeq and Hot) from exploiting their inbuilt advantages and transferring customers to a single service, which would substantially harm the small ISPs and strengthen their own monopoly power. The change will not apply to businesses: the ministry believes that the distinction between infrastructure and service is beneficial in the business market.
Minister of Communications Yoaz Hendel said, "This reform is intended to amend the structure of the Internet market, which was right when it was introduced. After twenty years, the time has come to put an end to the split between ISP and infrastructure, and to create a single product called 'Internet', a single address for installation and fixing faults, end-to-end responsibility, and elimination of the phenomenon of dual subscriptions."
Published by Globes, Israel business news - en.globes.co.il - on October 5, 2020
© Copyright of Globes Publisher Itonut (1983) Ltd. 2020