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Tuesday, 24 July, 2001, 17:51 GMT 18:51 UK
Compromise in Israeli porn row
Israeli man in phone booth covered with election stickers for the Shas religious party
Telecoms liberalisation is seen as vital for the Israeli economy
Liberalisation of Israel's telecoms sector has come one step nearer, after a parliamentary committee approved a bill allowing cable TV companies to compete with state-run Bezeq Israel Telecom.

The vote came after a last-minute compromise to placate ultra-religious parties, which had obstructed the liberalisation over fears about pornography.

Under the latest version of the law, adult movies will not be allowed to be shown before 2200 or to be produced in Israel.

The compromise persuaded a number of committee members to drop their objections, and should help the bill leap the final hurdle of parliamentary approval.

Parliament's vote is due on Wednesday, the last day before it goes into summer recess.

Keen interest

A lot is riding on the telecoms bill.

"It's the most important economics law that will have been passed in the last 10 to 20 years," said Haim Israel, telecoms analyst at Nessuah Zannex Securities.

"It's going to open the telecoms market to free competition. It will bring us closer to the Western market."

Despite some progress on opening up the market in recent years, state-controlled Bezeq Israel Telecoms retains a dominant position.

It controls fixed-line telecoms, is the country's only broadband internet service provider and is the major owner of the biggest mobile phone operator.

The new law would introduce competition from cable TV operators, which may offer broadband internet and phone services.

Israel's conservatives were worried at the move, since cable companies have recently began offering erotic channels such as Playboy and Spice on their digital services.

Alongside introduction of competition, the government plans to sell down its 55% stake in Bezeq.

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26 Jan 01 | Business
Israel's economic tightrope
19 Jul 01 | Business
Cairo's summertime blues
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