TV Wars: Infighting Delaying Cheap Channels

Caught in the middle are Israeli consumers, whose only option if they want any cable or satellite offerings at all is to lay out hundreds of shekels every month for a plan that includes dozens of channels.

A plan to force the country's multichannel television providers to offer consumers a basic service package is bogged down as a result of conflicts among the finance and communications ministries, the Knesset Economics Committee and the service providers themselves, HOT and Yes.

Finance Minister Yuval Steinitz
Tess Scheflan

Caught in the middle are Israeli consumers, whose only option if they want any cable or satellite offerings at all is to lay out hundreds of shekels every month for a plan that includes dozens of channels. They have to pay for channels they don't want, in order to have access to a few popular ones that they do.

Finance Minister Yuval Steinitz wants a law that would require HOT and Yes to offer a basic package of 15 channels at a reasonable price. HOT and Yes oppose the idea, fearing a loss of revenues as customers switch to the cheaper, government-mandated plan.

They're also upset about the digital television reform that was passed earlier this year. This law paves the way for consumers to purchase a Digital Terrestrial Television converter that provides access to channels 1, 2, 10, 33 and 99, for a one-time cost of NIS 400. That plan is due to begin in about a year and could cut the multichannel providers' subscriber base significantly.

Then there's the head of the Knesset Economics Committee, MK Ofir Akonis (Likud ), who thinks that giving free access to additional channels, such as 9 (the Russian-language channel ) and 23 (Educational Television ), would be an appropriate alternative to forcing HOT and Yes to offer basic plans.

A committee meeting held more than a month ago that discussed the issue broke up prematurely after participants realized that the two ministries and the committee had very different positions on the matter and MKs became upset that they hadn't been presented an organized proposal. Akonis asked the cabinet to have the justice, finance and communications ministries come to an agreement on the matter, and to pass this opinion along to the committee by mid-May.

The parties seem to be digging in their heels, but government sources said the Finance Ministry is insisting on legislation forcing Hot and Yes to offer basic channel plans if the companies prove incapable of agreeing to do so on their own. The treasury is also demanding, according to the source, that the reform include a clause that would change how Israel's commercial channels are run. Currently they're run by concessions; the Finance Ministry wants a license system.

The committee is scheduled to discuss the matter again tomorrow, and sources said it's not clear that progress will be made.

Akonis' associates fumed in response, "It's outrageous that the Finance Ministry hasn't given the committee a written statement of the government's position."

They, too, aren't budging on their position - making channels 9 and 23 free may be even better than having a reduced-price package, they say. Their opponents argue that one isn't a replacement for the other.

Ronen Regev Cabir, VP-research at the consumer-business organization Public Trust, said the limited package is the most important part of the reform. "This would solve a problem we're all aware of - the basic packages, which are unbelievable in their scope and price. It's sad that everyone aside from the budgets department [at the Finance Ministry] is doing everything possible to block this bit of legislation."

Calling it a "limited package" is misleading, Regev Cabir noted: "The idea is not to create a limited package of channels, but to separate the price of access to multichannel television from the price of the content we consume. When we pay for access to HOT or Yes, we also get access to content that we're already paying for - Channel 1, which consumers fund through television fees; Channel 2 and Channel 10, which we fund by watching commercials; and channels 9 and 24 [a music channel], which target specific audiences."

Deputy Industry, Trade and Labor Minister Orit Noked was more measured. "Clearly the current situation, whereby consumers are forced to pay hundreds of shekels a month for channels they don't even watch, is not ideal, and demands change. But, only a few months ago the DTT reform passed, and we need to examine the implications of the digital converter and its market penetration over time." She also takes seriously the claims by the CEOs of HOT and Yes, who say they'd have to fire thousands of workers should they be forced to offer a limited package of channels.