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Re: Frame-Relay ISPs in Israel.



>Anyway, as it seems, Bezeq had a plan to cut the prices. Somebody
>was against this plan. If Gronau Commitee just decided against this
>plan, it could end up in the middle. So they preferred to recommend
>to RAISE the prices, although it is agreed among all the experts
>that this is the opposite of the needed action now (do you
>understand?  The evarage of -30% and 0% is -15%; If you don't want
>the price to drop by 15%, you will recommend a raise of +30%; The
>evarage of -30% and +30% is 0%. "Compromise"...).

Just to put things into the right perspective: The Gronau committee
was made of professional economy experts and referants. Its decision to
to raise the data comm prices was *not* based on this or that "bargaining"
argument (as presented above). Rather, the rationale was that currently,
according to Bezeq's economical structure, data comm prices are
heavily cross-subsidized by telephone income. As stated, this means
that the telephone user (client of "peimat mone") subsidizes data
comm. This is considered to be a "no-no", especially when deregulation
and open market are on the threshold.

Having said the above does not at all mean that I *agree* with the
bottom line recommendation. Quite the contrary, in fact. However,
you may want to know the real reasoning behind Gronau recommendations.

MoC is still studying the report. I have been (and still am) in contact
with MoC officials regarding this matter. It is not known yet what
parts of the report will be adopted.

Doron Shikmoni