HOT Under Atias' Collar

From Wednesday night to Thursday at midnight, 35 hours, subscribers to the HOT phone service were cut off from Bezeq (TASE: BZEQ). They couldn't call Bezeq users (the rest of the country) or get calls from them either. The HOT service  centers were paralyzed and couldn't get calls from the 110,000 HOT phone users who wanted to report glitches. Why? Because Shlomo Kfir, the chief of the Bezeq union, decided that's how it woul dbe.

On Thursday morning HOT tried to find succor with Cellcom and Partner Communications (LSE, TASE, Nasdaq: PTNR), hoping the cellular carriers would indirectly connect the HOT systems to Bezeq central, but the two companies - quailing before the Bezeq monopoly ? refused. (There was no point in HOT turning to Pele-Phone, which is a Bezeq subsidiary).

The Bezeq management has been fighting competition tooth and nail. For months it tried to block HOT from providing phone service at all. It failed, so then it started to hinder the HOT hookup to its switching system. Now it's starting to molest Cellcom, which is gearing up to compete as well.

The Bezeq management blames the HOT glitch on disgruntled workers: but it's no miracle that the workers understood what management really wants.

Message over and out

What happened is that two weeks ago, the Bezeq union joined the battle. Kfir declared a labor dispute, claiming that competition in domestic wireline communications will force Bezeq to fire staff. That is how the management always stokes anger among its workers, but all the management and workers managed to achieve is to make it glaringly clear just how badly strong competition is needed.

It is hard to accept the management's claims that it had nothing to do with the HOT disconnection. Why didn't it immediately petition the Labor Tribunal? Why didn't the management immediately obey the Jerusalem District Court order to recommend HOT immediately? How is it that the management didn't know in advance about Kfir's plans?

In any case, Bezeq still behaves like a monopoly. It misses the time when it had no competition anywhere: not in wireline, not in cellular and not in the long-distance sphere either. Do you remember how 15 years ago, it took seven years to get a phone line? Do you remember that calling the States cost an arm and a leg? That buying a cellphone cost a small fortune?

A few days ago, a HOT client filed an NIS 100 million lawsuit against Bezeq and HOT because of this latest affair. He asked that the claim be recognized as a class action, on behalf of all HOT users. One can only hope he succeeds, but it will just be the beginning of the lesson that Bezeq needs to learn.

The regulator should intervene. It should start with the prosecution personally handling the Bezeq management, led by Jacob Gelbard, and Shlomo Kfir. The prosecution - one hopes, with the backing of the new justice minister, Haim Ramon - should press criminal charges against Gelbard and Kfir, because nothing else would deter. Look what's happening to Miki Mazar, the former chairwoman of the Dan Region Association of Cities, who's on trial for letting the cities foul the Mediterranean with raw sewage. Nasty stuff.

The second phase lies with the new communications minister, Ariel Atias. All he's done so far is send a nasty letter to Gelbard, who read it and bust a gut laughing. The first impression Atias has made is not a good one, but he still can demonstrate leadership and courage, instead of waffling and cowardice.

Atias should slap Bezeq with a huge fine, a fine that will hurt its new owners where it counts and force the board of directors to ask the CEO and the union chairman some hard questions. Say, a million shekels for each hour the disconnection lasted, which means - NIS 35 million. That sounds reasonable given the damage they caused.

Atias is our representative, the representative o the people groaning under the burden of their bloated phone bill. If Bezeq manages to trip up HOT and Cellcom, phone service won't drop in price, and that matters a lot more than 25 agorot per loaf of bread. Is Atias made of the right stuff, or not?