The Economy Committee of the Israeli Parliament (the Knesset) has recently approved amendments to the Telecommunication Act to include a few reforms in the telecommunication market in Israel.

These amendments give us a solid indication as to the direction the Ministry of Communications is heading in upcoming years.

The status quo

A few of these amendments deal with the regulatory regime of broadcasting in Israel, and the intention to increase competition in the multi-channel broadcast sector in Israel.

Currently, most Israelis are customers of either the cable company (HOT) or the satellite company (yes). In addition to these two platforms, there is a terrestrial digital television (DTT) platform, which enables viewers to watch a limited number of channels free of charge, including the two main Israeli commercial channels, for a one-time purchase of a designated box for the DTT reception. Currently the DTT is owned and operated by a public authority – The Second Television and Radio Authority (“the Second Authority”).

So what are the changes?

The proposed amendments introduce two major changes to the current regime. The first is that the Second Authority will cease to operate the DTT and a private entity will be nominated by the Minister of Communications and the Minister of Finance to operate the DTT platform.

The second is that the number of channels which are currently transmitted via the DTT platform will be widely extended. The Council for Cable TV and Satellite Broadcasting (“the Council”) will be entitled to grant licenses for the transmission of “concept channels” via DTT, focusing on the following topics: sports, children’s programs, movies, nature, series, documentaries and news.

Except for news programs, each licensee will be able to choose its channel’s topic after it has been granted the license by the Council. It should be noted that according to the current regime, the Council is allowed to grant only three licenses for the transmission of different concept channels – the first one from the beginning of 2014, the second one at the beginning of 2015 and the third at the beginning of 2016. The new decision cancels these restrictions.

In addition to these changes, the proposed amendments propose to grant the Minister of Communications the authority to determine the scope and price for a basic narrow package, which both HOT and yes would be obliged to sell over the next three years.

What’s next?

Clearly, these proposed amendments, which are expected to be enacted before the end of July 2013, demonstrate a firm intention to carry out a dramatic change in the broadcast sector in Israel, while the implications of the amendments on the current players in the market are unknown.

How will the competition in the broadcast sector look in the next few years? Only time will tell.