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RealTime IT News

Spain's Telef´┐Żnica Wins Integrated Services Dispute

In a blow to cable operators, Spain's top telecommunications firm has won authorization to integrate its Internet, telephony and television services.

In response to a joint complaint filed in December against Telefónica, S.A. by Spain's cable operators, the Telecommunications Market Commission (CMT) ruled that integration of the company's services does not constitute unfair competition.

The decision allows the former state monopoly to include its Via Digital satellite television service in a discounted all-in-one package deal along with its Internet and telephony offerings.

The decision comes at a time when the nascent cable industry is trying to win Telefónica customers over to its cable-based Internet and telephony services. Following the liberalization of the Spanish telecommunications market, Spain's Cable Law prohibited Telefónica from offering cable services for two years.

Both the cable operator Madritel and the Association of Cable Operators (AOC) had asked the CMT to block Telefónica's push toward integrated services and accused the company of violating the cable law and of abusing its privileged, post-privatization market position through "direct and disloyal competition."

The CMT ruled that this "does not violate the moratorium imposed on Telefónica against operating in the cable market, since this sector and that of digital television via satellite are two different and distinguishable services ... integration in the marketing or offering of converging services is beneficial to operators, since it lets them act efficiently in the marketplace and allows users to choose all-in-one solutions to their communications needs."

Cable operators vowed to appeal the CMT's decision before the Ministry of the Economy's independent Competition Tribunal, which in the past has fined Telefónica for monopoly practices.

"This is only one battle," AOC managing director Jeszs Pelegrmn stated to the business daily Cinco Dias. "It's clear that Telefónica's sole objective is to block the entrance of competitors."

"At first glance it might seem another case of abuse of power by the old monopoly, but the truth is that cable operators haven't take advantage of the government moratorium meant to help them into the market before the unleashing of Telefónica," said Carlos Solaz, analyst for Noticias Intercom. "The cease-fire begins in a few months, and Telefónica has the cavalry ready to trample operators who've been resting, literally, on their laurels."