Israel's three cable companies are petitioning parliament to prevent the Bezeq phone company was increasing its holdings in satellite television company

Yes

(Hebrew site) from 30% to 50%. They claim Bezeq's investment in the satellite company gives it an unfair advantage in the fast-Internet provision market too.

Acting on behalf of

Matav Cable Systems

(Nasdaq:MATV),

Tevel

, and

Golden Channels

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, Matav Vice Chairman Moshe Gavish today submitted a written request to the Knesset's Economics Committee.

Bezeq, which is controlled by the government, has not yet received final approval to increase its stake in Yes.

The cable companies had a monopoly over multichannel television until mid-2000, when Yes was launched to much fanfare. Having lost their monopoly, they now hope to receive licenses to provide domestic communication services, including fast Internet. While the cable companies squabble with the authorities over the price, Bezeq is the only company licensed to provide domestic communications and fast Internet, a relatively new service.

But the cable companies say they fear that by the time they receive operating permits, Bezeq will have obtained a stranglehold over the market, using taxpayer money.

Right now, only Bezeq and the cable companies have infrastructure deployed throughout Israel. But the cable companies are losing households to Yes, in which Bezeq now owns a stake.

The cable companies claim that Bezeq's aim in increasing its Yes holdings is not financial but strategic. They protest that the phone company's aim is to strangle the potential competition they pose.

The theory is that people choosing to order satellite TV service at the expense of cable service will receive fast Internet from Bezeq by default. "Using public money collected by virtue of (Bezeq) being a government monopoly, Bezeq is bolstering its holdings in the multichannel television market and exploiting the monopoly it has been granted over fast Internet to bolster its holdings in television," Gavish said.

With the state protecting its baby Bezeq and granting it such irreversible advantages, the cable companies cannot compete, Gavish concluded.

With Nurit Sher