Barak Communications, which operates the "013" international line, has for several months been providing erotic and sex calls services as regular overseas calls to French Guyana and the Tuvalu Islands in the Pacific Ocean. It is illegally charging 50% more for these calls than the regular rate to these destinations.
Barak is charging a special rate for the "sex calls". The company's telephone exchange operators were trained to advise callers that the erotic calls carried a high and special rate.
To operate the service, Barak is cooperating with sister company TeleClal, which is responsible for call content and collection of the money from overseas in a circular deal.
Under the deal, Barak charges the customer, takes a commission and transfers the rest of the payment overseas to communications companies. The communications companies of Guyana and Canada (for Tuvalu Island) return the money, after taking a commission, to Israel, to TeleClal via intermediaries. By operating erotic calls in this manner, Barak circumvents Ministry of Communications' directives prohibiting sex services by telephone using "057" lines in Israel, and the Ministry's demand that providers of information services are responsible for the content, according to the regulations.
In response, Barak said it is not responsible for information content, does not know who is supplying the content, and that there is no prohibition on special rates for sex calls.
This response is puzzling, in view of the fact that the company's telephone exchange operators are aware of the erotic content and of the special rate set for the calls.
Also in response, Ministry of Communications deputy director of supervision Haim Haviv said, "Barak is entitled to differentiate between occasional and regular customers in setting its rates. Any other differentiation in setting rates is illegal." Regarding the circular deal, Haviv said, "If this is correct, it's extremely serious."
Published by Israel's Business Arena on November 28, 1999