The Kroll Committee was supposed to propose policy for opening Israel's insular communications market to competition. The panel, headed by former treasury budgets director Ran Kroll, filed its report last week.

The report opens as follows: "The committee sees as a central goal of its work seeking benefits to consumers in the domestic telephony market by increasing the variety and quality of services and preservation of low tariffs."

Yet the report fails to implement its authors' good intentions. The list of committee members, and of people who appeared before it, includes not one single consumer advocate. In contrast, Israel's communications companies, and some of their shareholders, were represented on the committee.

The result is evident in the committee's recommendations. Instead of opening up the domestic telephony market to competition as soon as possible, the committee recommends that the Communications Ministry block the entry of new competitors, other than the to-be-formed merged cable company Gvanim, until at least August 2004.

The committee even rejected Finance Ministry representative Amir Levy's request that the Communications Ministry be directed to open the market to competition on that date.

In other words, the Communications Ministry can, at its own discretion, continue to block new competition even then.

The committee also recommends avoiding opening the long-distance calls market to free competition even though the exclusivity right of the three international carriers expired at the end of 2001.

By giving only one company, Gvanim, the right to compete with the state-run telephone company Bezeq torpedoes competition for at least two years. Gvanim doesn't even exist yet, and will probably act to delay competition with Bezeq's advanced communications services by any means possible.

The committee decision was designed not to benefit consumers, but the cable companies. If and when they unite and decide to provide phone service, they will face only one rival - Bezeq.

Committee members say the assistance they offer the future cable company will help it compete with Bezeq more efficiently.

But the claim that Gvanim is Bezeq's only real competitor is baseless: It doesn't exist, it doesn't have technology to allows frontal competition with Bezeq, and it probably doesn't really want to compete with Bezeq anyway.

The decision to prevent competition in the international communications sector is just as odd. It also contradicts everything the communications minister has said in the last few months.

The delay is designed to encourage consolidation in the telecommunications market, the committee argued.

If so, this amounts to untenable intervention by the committee in natural business processes. It contradicts the position of the antitrust commissioner, who decided to disallow consolidation in this sector until it is competitive.

The delay in opening up the sector to competition hurts business consumers and immigrant and foreign worker populations, whose financial situations are already precarious.

Implementing the Kroll recommendations will allow the international calls companies, which already boast fat operating profits, to continue padding their pockets at the expense of the consumer.

If you liked this article you might like

Nessuah Zannex: Rating cut's main damage is to banks' images to foreigners

Nessuah Zannex: Rating cut's main damage is to banks' images to foreigners

Yes recruitment rate down to 6,000 a month

Yes recruitment rate down to 6,000 a month

Cadence to invest in Israeli startups

Cadence to invest in Israeli startups

Court grants Mentergy 40-day stay of proceedings

Court grants Mentergy 40-day stay of proceedings

Leader & Co sees Discount shifting to profit in Q3

Leader & Co sees Discount shifting to profit in Q3