In Last-minute Push, Erdan Ramrods Through Long-delayed Communications Reforms

Landline connections, mail service and television stations via the Internet among issues communications minister tackled before leaving office

Bezeq Israeli Telecommunication Corp. headquarters in Tel Aviv, Israel.
Bloomberg

Communications Minister Gilad Erdan used his last two weeks in office to push through a number of difficult reforms that have been stuck for years. During his final 10 hours in office Erdan, who ended his term on Monday, signed off on a long list of significant decisions, including a reform for the Israel Post and another one for Israel’s landline market.

However, some of these reforms will need similar dedication from Erdan’s successor.

One such push calls for infrastructure company HOT to offer services to Israelis around the country. For the past 10 years, the Communications Ministry has been giving HOT a pass on this requirement, which is part of its operating license, because HOT offers competition to landline company Bezeq, formerly a monopoly.

Three days ago, Erdan decided that HOT should no longer be receiving exemptions from the universal coverage clause in its license. This means that it will need to offer services to Israelis living in more peripheral locations, who until now could receive Internet infrastructure only from Bezeq. There is a moderate chance that this reform will be put in place.

Another reform, which TheMarker reported yesterday, would force landline company Bezeq to offer its infrastructure to competitors at a government-set price, thus enabling more competition in the landline phone market. This reform is also considered moderately likely to go through; Bezeq has stated in response that it intends to petition the High Court of Justice.

Erdan also signed off on a plan to have public TV channels 1, 2, 10, 99, 33 and the Education Channel aired online. This reform is considered likely to go through.

Another reform tackles the Israel Post, long a source of inefficiency, and now on the brink of bankruptcy. Erdan had appointed a committee to suggest reforms for the mail service. Late Monday night, during his final hours in office, he signed off on a reform to put that committee’s recommendations into practice. These include longer hours and maximum wait times at post offices, alongside removing oversight from bulk mail services. It would also allow for mail delivery only two days a week, down from the current distribution daily or every other day. This would considerably limit the manpower needed for delivery, and needs the support of the Finance Ministry, mail workers and post office management.

This reform has a way to go, as the post office union is considered to be one of Israel’s stronger ones.

Another reform, considered highly likely to go through, is designed to strengthen Israel’s virtual cellular providers. Israel’s cellular market is highly competitive thanks to a reform that introduced virtual carriers, who rent networks from the established carriers.