Principles of the Reform
Amendment to the Communication Law is intended to reduce the regulatory burden on the majority of telecommunications services in Israel and create an easy and quick route to market entry. Pursuant to the amendment, the default will be that, in lieu of obtaining a regulatory license, whoever wishes to provide telecommunications services would register in a dedicated registry managed by the Director General of the Ministry of Communications (the “MOC”). The registry will need to comply with the provision of a General Permit.
Prior to the amendment, under the provisions of the Telecommunications Law, 1982, telecommunications services required a license from the MOC.
The amendment aims to reduce regulatory burdens, reduce market entry barriers and encourage the entry of new players into the telecommunications market.
The amendment applies to the following telecommunications services provided: telephone, Internet service, and data transmission for customers through dedicated networks as opposed to the open Internet (the latter commonly used by business customers).
Whoever provides telecommunications services, by virtue of registration with the managed MOC as described above or by virtue of a license, will be deemed an “authorized provider”. In lieu of the grant of individual licenses to providers, the default process will be registration in the registry, which is intended to be an easy and quick process that can be completed within only ten working days and after confirmation by the MOC that the applicant meets the necessary y minimum threshold conditions.
However, the provision of certain telecommunications services will continue to be subject to obtaining an specific license (in addition to the provision of a General Permit regulations) because they are deemed to be of special importance or demand closer regulation and supervision. These services include cellular phone services, services provided to a large number of users, services provided using a satellite or underseas cable, and services provided by a local authority.
The amendment also contains transitional provisions that allow testing with 5G technology without a need to obtain a license or register in the registry. These provisions apply for a period of nine months from the date of publication of the amendment and apply only if the experimental service is provided to a maximum of 500 subscribers. The experimentation involves providing a paid service to subscribers and will apply increased disclosure according to the service in the framework of the test.
The Amendment will become effective on October 2, 2022. However, if the regulations regarding the General Authorization framework have not been enacted or if the MOC fails to complete by this date, the arrangements for maintaining the Registry, the Minister of Communications is authorized, subject to the approval of the Israeli Parliament’s Economics Committee, to postpone the effective date for an additional period not exceeding six months.
To review the amendment’s text (in Hebrew), click here.
Proposed Regulations Regarding Telecom Services Registry
The Israeli Ministry of Communications (the “MOC”) published regulations that implement a new regulatory approach to most telecommunication services. Pursuant to the regulations, whoever wishes to provide telecommunications services to the public will be required to register in a dedicated registry and comply with the provision of a General Permit. A license from the MOC will no longer be required.
The regulations will become effective after the amendment to the law comes into effect, on October 2, 2022, except for certain provisions specified therein that will become effective at a later date.
In accordance with the regulations, most existing license holders will be automatically transferred to the registry on the effective date of the regulations. Their licenses will be canceled and their activities will be governed by the new regulations. Upon initial registration, they will be asked to update their registration information.
Under the regulations, the following people and entities are eligible for the registry:
- an Israeli citizen;
- a resident of Israel;
- a corporation that was incorporated and registered in Israel; or
- or a corporation that was incorporated outside of Israel and registered as a foreign company according to section 346 of the Companies Law.
According to the regulations, registration in the system will require providing detailed information about the applicant and the type of telecommunications service that the applicant wishes to provide (Broadband infrastructure including national and international transmission service, data communication service, Internet access and Internet switching, mobile telephony services including mobile Internet access and text messages, telephony National and international landline).
Applicants will also have to provide the following details regarding the telecommunications service they wish to provide:
- whether the service will be provided through the applicant’s network, the network of another party, or a combination of the two;
- whether the service has been provided in the past by the applicant, a corporation under its control, a corporation that controls the applicant or a corporation that is controlled by a corporation that controls the applicant.
The application must be accompanied by certain documents relevant to the service applied for as well as an engineering plan.
Licenses of certain existing license holders will not automatically be revoked and will be amended on a case-by-case basis and in a manner that reconciles with the new regulatory approach and the new regulations. This process is expected to conclude in the first quarter of 2023 after the regulations come into effect.
Additionally, the MOC intends soon to publish additional instructions and legislative guidance regarding the regulations, covering matters such as:
- the application fee for the registry;
- conditions for registration; and
- what kind of activities require mandatory registration.
To review the draft regulations (in Hebrew), click here.
For additional information please contact Adv. Yaron Herman (yaron@gkh-law.com) or Adv. Zvika Gilboa (zvig@gkh-law.com).
