Cable television company

Matav Cable Systems

(Nasdaq:MATV) is proposing to merge its Internet content subsidiary NonStop with NetVision, an Internet service provider.

Matav's CEO Ofer Yaniv met with Netvision's executives to discuss the merger, but refused to comment.

Matav has meanwhile put development plans for NonStop on hold. Sources near the company says that if the efforts to sell NonStop fail, Matav plans to fundamentally reorganize the subsidiary.

Moshe Gavish, the chairman of Dankner, Matav's parent company, yesterday confirmed that negotiations are underway for a merger or other forms of collaboration with other companies. "NonStop is an excellent company and we are looking into various ways of reinforcing it," Gavish said.

Matav established NonStop in 1999 to provide content for Internet over cable, based on the assumption that at some stage, the requisite permits would be forthcoming from the Communications Ministry.

The main permit Matav needs to provide Internet service is a general communications license. The former Communications Minister, Binyamin Ben-Eliyahu, wanted to fast-track communications licenses for the cable TV companies in order to create competition with the government-controlled phone monopoly Bezeq. But his ambition was torpedoed by the attorney general, Elyakim Rubinstein, who ruled that licenses for the cable TV companies was contigent on amendment of the Telecommunications Law.

The struggles around communications licenses for the cable companies also stalled NonStop's commercial debut.