Spain’s Telef�nica 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.”

News Around the Web