Israel: TMT Comparative Guide

1 Legal and enforcement framework

1.1 Which legislative and regulatory provisions govern the following in your jurisdiction: (a) Telecommunications; (b) Internet; (c) Media and (d) Social media?

(a) Telecommunications

The main laws that govern the Israeli telecommunications sector are:

• the Wireless Telegraph Ordinance, which deals mainly with the equipment itself (such as Internet of Things devices); and
• the Communications Law (Telecommunications and Broadcasting), 1982 ('Telecoms Law'), which deals with the performance of telecommunication operations.

Various regulations have been promulgated in accordance with these laws; but due to their large number, they are not all listed here.

(b) Internet

There are currently no specific laws that govern the Internet in Israel. General legislation applies (eg, intellectual property, consumer protection, libel laws).

(c) Media

The main laws that govern the media sector include:

• the Telecoms Law, which regulates cable and satellite broadcasting;
• the Second Authority for Television and Radio Law, which regulates the commercial broadcast of television channels and local radio stations;
• the Israeli Public Broadcasting Law, which regulates the Israeli Public Broadcasting Corporation, comprised of two public broadcasting channels and a few national radio stations; and
• the Knesset Channel Law, which regulates the operation of the designated channel broadcasting from the Israeli Parliament.

(d) Social media

There are currently no specific laws that govern the Internet in Israel. General legislation applies (eg, consumer protection, libel laws). The Ministry of Communication set up a committee to provide recommendations on the regulation of social media platforms. The committee issued a report setting out its recommendations, but no legislative steps have since been taken.

1.2 Which bodies are responsible for enforcing the applicable laws and regulations in the relevant sectors? What powers do they have?

The main body which is responsible for enforcing the applicable laws and regulations is the Ministry of Communications. It has a wide range of powers, including the power to:

• revoke licences;
• confiscate equipment;
• impose administrative fines;
• issue administrative notices; and
• provide specific instructions regarding certain obligations (eg, investments in local productions, sanctions of time allotted to advertising).

1.3 What is the general approach of those bodies in regulating the relevant sectors?

In the telecoms sector, the main approach has recently changed following a process of 'de-regulation' effected by reforms to the Telecoms Law. The approach has shifted from a licensing regime to a general authorisation regime. In the words of the Ministry of Communications, regulation is now more 'ex-post' than 'ex-ante'.

In the media sector, regulation is still very specific and detailed. The regime includes provisions on matters such as:

• content;
• consumer protection; and
• investments in local productions.

1.4 What other industry codes of conduct or best practices are applicable in the relevant sectors?

There are no specific codes of conduct or best practices that we can point to.

2 Ownership

2.1 Who is eligible to provide services in the following sectors in your jurisdiction? Are there any restrictions on foreign ownership? Do any domicile requirements apply? What other requirements or restrictions apply in this regard: (a) Telecommunications; (b) Internet; (c) Media and (d) Social media?

(a) Telecommunications

Following the recent reforms to the Telecoms Law, in order to provide telecoms services which are subject to a general permit and authorisation or licensing requirement, the service provider must be an Israeli company or a foreign company registered in Israel as such. There are currently no provisions regarding a minimum holding of means of control by an Israeli citizen or resident.

Cellular carriers which are operating in Israel under a licence that was granted before the recent reforms to the Telecoms Law are subject to an additional minimum holding requirement of at least 26% of the means of control of the licensee.

(b) Internet

No such requirements apply to entities that broadcast over the Internet. In relation to the provision of internet services, see question 2.1(a).

(c) Media

A licence for cable, satellite or commercial broadcasting is conditioned upon:

• the applicant being either:
• • an Israeli citizen and resident; or
  • an Israeli company; and
• at least 26% of the means of control being held by an Israeli citizen and resident. 'Means of control' are defined as:
• • the right to vote at the general meeting of the company;
  • the right to appoint a board member or its general manager;
  • the right to participate in the distribution of the company's gains; and
  • the right to participate in the distribution of the company's assets upon its dissolvement.

Additional requirements and considerations may apply when granting a licence. For example, a licence will not be granted if:

• the applicant was convicted of a felony that may render it unfit to receive a licence; or
• grant of the licence would be contrary to the public interest or endanger national security where:
• • the applicant is associated with a political party; or
  • the applicant or an entity possessing means of control of the applicant is a foreign government (exceptionally, the minister of communications can allow for an indirect possession of up to 10% of the means of control by a corporation in which a foreign government possesses some means of control).

Additional provisions aim to substantially limit cross-ownership of media sources.

(d) Social media

Currently no requirements apply to the operators of social media platforms.

3 Authorisations/licences

3.1 What authorisations and/or licences are required to operate in the following sectors? Do any exemptions apply? Do these vary depending on the service to be provided: (a) Telecommunications; (b) Internet; (c) Media and Social media?

(a) Telecommunications

According to the Telecoms Law, regulation is based on two frameworks, as follows.

Registration in the General Authorisations Registry: Registration applies to three types of services, to the extent that these are provided to the general public or part thereof (rather than to a specific entity) through a telecommunications network for the service provider's business-commercial purposes:

• telephony services, including voice-only services if the origination or receipt of the calls involves numbering resources according to the national numbering plan;
• internet access services – internet service providers (ISPs), internet infrastructure services or both, if they are provided for consideration; and
• data transmission services.

Other services that may also fall within the scope of the registration requirement are services that will be included in the First Schedule to the Telecoms Law, as determined by the minister of communications and approved by the Israeli Parliament's Economics Committee.

Licensing: A licence for specific telecommunications services as set forth in the Telecoms Law is required for four telecommunications services and one telecommunications operation, as follows:

• telecommunications services provided through a cellular system (cellular services);
• telecommunications services provided at a large scale through a telecommunications network;
• telecommunications services provided through an Israeli satellite communications network;
• any telecommunications service provided by a local authority; and
• telecommunications operations in a ground telecommunication facility that connects between a point in Israel and a point outside Israel.

(b) Internet

There are no current regulations in this area (apart from in relation to ISPs, as mentioned in question 3.1(a)).

(c) Media

Licences are required for cable, satellite and commercial broadcasting. There are also special licences for specific areas of operation or specific sectors.

(d) Social media

There are no current regulations in this area.

3.2 What are the key features of such authorisations/licences?

Authorisations and licences usually contain provisions that define:

• the scope of the services provided;
• the required service level;
• consumer protection clauses; and
• general provisions regarding the licence/authorisation itself (eg, limitation on transfers and the creation of pledges).

3.3 What are the procedural and documentary requirements to obtain such authorisations/licences?

Telecoms Law: In order to register in the General Authorisations Registry maintained by the Ministry of Communications, the registrant must be an Israeli company or registered as a foreign company. The registration application requires the submission of a request to register, including:

• an engineering plan for the services to be provided; and
• additional information on various stakeholders in the company.

In order to apply for a licence, the applicant must be an Israeli company or registered as a foreign company. The application requires the provision of additional information regarding the nature of the services, an engineering plan and so on.

Media regime: There are several basic conditions that an applicant must satisfy in order to apply for a broadcasting licence:

• The applicant, or an officer of the applicant, cannot hold additional broadcasting licences in other media tools and channels, including newspapers;
• The applicant must meet the following citizenship requirements:
• • It should be based in Israel;
  • Its general manager should be an Israeli citizen or resident;
  • At least half of its board members should be Israeli citizens or residents; and
  • At least 26% of the means of control of the applicant should be held by Israeli citizens or residents; and
• Additional requirements must be met concerning:
• • the applicant's financial strength and professional experience; and
  • the technological and technical operations proposed.

3.4 What does the authorisation/licensing process involve? How long does it typically take? What costs are incurred?

Telecoms Law: An application to provide services under the general permit is currently free of charge and is usually approved within 10 working days. It requires the submission of very basic information regarding the entity providing the services and an engineering plan for the intended services.

An application for a licence is currently similar to the process above – however, the timeline for approval is several months (no specific time limit has been set yet).

Applications are submitted online.

Under the Wireless Telegraph Ordinance (for a trade licence), technical information must be provided required in order to complete the application. The cost of such a licence is around NIS 1,600 for a period of two years.

Media regime: In the multichannel satellite sector, there are detailed requirements for licence applications. Applications should include:

• detailed information on the applicant, its owners and its affiliates or subsidiaries;
• information on the applicant's:
• • financial and organisational capabilities; and
  • experience and knowledge in the relevant field;
• a specification of the planned channels and services it intends to offer subscribers;
• an engineering plan;
• suggested schedules for the initiation of broadcasts; and
• other information that may vary depending on the nature of the licence sought.

The licence fees are substantial and can amount to NIS 30 million.

For other media sources, the fees and process can be subject to the discretion of the Ministry of Communications or other applicable regulators (some licences are only granted following a tender offer, which sets out specific provisions).

3.5 What are the ongoing rights and obligations of the authorisation/licence holder? How is compliance monitored? What penalties may be imposed for breach?

The rights and obligations will usually refer to matters such as:

• the scope of the services that can be provided;
• the service level;
• the requirement to provide services on an equitable basis; and
• consumer protection.

In the media sector, there are also content-related obligations covering matters such as:

• ethics;
• commercials and advertising; and
• investment in local productions.

3.6 For how long is the authorisation/licence valid? Are variations to the terms possible? How is the authorisation/licence renewed?

In the telecoms sector, generally for a period of two years. Cellular carriers have been granted licences for a period of 20 years, which is renewed from time to time.

Media licences are usually granted for a period of 15 years.

3.7 Can an authorisation/licence be transferred? If so, what is the process for doing so?

No. Licences cannot be transferred, assigned, pledged or foreclosed. In certain cases, the means of control can be transferred, but not the entity holding the licence.

4 Telecommunications

4.1 What provisions apply to the construction of telecommunications infrastructure and the installation of facilities on public and private property?

A telecoms provider can enter a public property for the purposes of deploying a telecommunications network, or inspecting, maintaining, repairing, modifying or replacing it, in accordance with the Planning and Zoning Act.

Private property should be entered in accordance with the Planning and Zoning Act and with the consent of the owner of the property. There are specific provisions regarding the consent which is required where the privacy property is a condominium.

4.2 Do any universal service obligations apply in your jurisdiction? If so, what are they and how are they funded?

Yes – the universal service obligation applies to those operating a public communications network (which applies to companies operating under a general licence to provide fixed-line services within Israel).

Cellular carriers whose services are based on independent infrastructure (unlike mobile virtual network operators) are also required to provide universal services under the terms of their licences.

No funding mechanism has as yet been established to fund these obligations, although the minister of communications has the authority to introduce provisions on such funding.

4.3 How is interconnection regulated in your jurisdiction? What rules and requirements apply in this regard? Are interconnection and network access charges subject to price regulation?

The issue of interconnection is governed by the Telecoms Law, the applicable regulations and the relevant licence terms. The minister of communications has the right to determine the rate of the interconnection fees between different operators and has done so in specific regulations enacted from time to time. The initial rates that were determined have been changed on several occasions over the years, following the recommendations of several committees that reviewed the matter.

There seems to have been a shift in the general approach, reflecting the market's structure and competition, towards the 'deregulation' of rates, and a switch to a 'bill and keep' regime.

4.4 What rules and requirements govern the allocation and use of telephone numbers in your jurisdiction?

Phone numbers are considered a national resource. The allocation and use of phone numbers must accord with the Ministry of Communications' numbering plan. Under this plan, relevant operators are allocated a range of numbers which they can utilise for end users. These numbers cannot be transferred or assigned (although a resale model can be implemented in certain cases).

4.6 Are retail customer charges subject to price regulation in your jurisdiction?

Other than very basic services provided by Israel's major landline operator, Bezeq, the market is based on free competition without price regulation. Each operator can set its own prices subject to its discretion, as long as these are reasonable. The regulator does have the authority to regulate prices under certain conditions, but it has not yet done so.

4.7 Are retail customer terms and conditions subject to regulation in your jurisdiction?

The principle of freedom of contract generally governs the engagement between the operator and the consumer. However, the engagement cannot contradict the terms of the licence, where the operator is acting under one. Also, the general permit and general consumer protection laws set out specific terms and conditions that must be or cannot be included in such an engagement.

5 Spectrum use

5.1 How is spectrum use authorised in your jurisdiction? Do any exemptions apply?

The Wireless Telegraph Ordinance (WTO) regulates the use of spectrum in Israel. The WTO establishes a government committee which, together with the Ministry of Communications and the Ministry of Defence, allocates frequencies for use. The use of wireless devices usually requires a trade licence.

However, under the WTO, the Ministry of Communication has regulated two additional regulatory alternatives regarding wireless devices:

• Wireless Telegraph (Match Permits) Regulations, 5781 – 2021 Match Permit: These provide an alternative to the licensing obligation where the conditions set out in the Match Permits Regulations are met. The schedule to these regulations states the conditions under which an applicable wireless device will be subject to the match permits alternative. These include:
• • spectral features and technical characteristics;
  • the typical uses of devices; and
  • the limitations on the use of devices.
• Wireless Telegraph Regulations (Exemption from Licensing), 5781 – 2020: These set out a separate regime for devices that are completely exempt from the WTO's provisions.

5.2 What is the procedure for allocating spectrum in your jurisdiction?

The allocation of spectrum is governed by the committee mentioned in question 5.1.

The use of wireless devices in spectrum ranges that have already been allocated is subject to a trade licence or any of the exemptions listed in question 5.1.

5.3 How long does it typically take? What costs are involved?

The usual processing time to obtain a trade licence is around 14 business days. The cost of obtaining such a licence is around NIS 1,600 for a period of two years.

To operate a wireless station or system, there are annual spectral fees, which vary based on the type of operation and the frequencies used.

5.4 What are the penalties for unauthorised spectrum use or breach of authorisation?

The WTO provides for a wide variety of sanctions:

• The licence or authorisation can be revoked;
• Infringing devices can be confiscated; and
• Administrative sanctions and criminal penalties can be imposed, including imprisonment.

5.5 Can a spectrum authorisation be transferred? If so, what is the process for doing so?

Currently no, but there is a draft bill that would allow those holding a licence for specific spectrum to assign portions of unused spectrum to other entities.

6 Internet

6.1 What provisions apply to high-speed broadband in your jurisdiction? Are there any government incentives to promote broadband penetration?

The Ministry of Communications has invested a great deal of effort in promoting full broadband deployment in Israel.

Its strategy has involved two main approaches:

• The major infrastructure operators – Bezeq and Hot – were given an exemption from the requirement to provide universal service throughout Israel. Bezeq was given an option to choose specific geographic locations in which to deploy the fibres. The other areas were opened up to tender offer and will be financed in part by the fund described below; and
• An investment fund financed by telecommunications carriers to facilitate deployment in the periphery was set up.

6.2 What net neutrality regulations apply in your jurisdiction? Are any exemptions and/or exceptions available?

The Telecoms Law imposes a net neutrality obligation, which prohibits telecoms service providers from limiting or restricting access to services or applications offered on the Internet. Exceptions apply where this is:

• required in order to allow for the ongoing operation of the network;
• approved by the minister of communications under special circumstances, including due to security considerations;
• specifically requested and agreed upon with a subscriber or a group of subscribers in a separate agreement; or
• done in accordance with a court order or another authorised body.

6.3 Are internet service providers (ISPs) obliged to block or restrict access to specific websites or types of content in your jurisdiction?

There are special provisions dedicated to the procedure for issuing a court order to block and restrict access to specific websites. This is usually done for gambling and sexual services websites.

6.4 Is the use of virtual private networks permitted in your jurisdiction?

Yes.

6.5 In what circumstances will ISPs be held liable for offending content carried on their networks? What defences are available?

Internet service providers are regarded as mere conduits and will not be held liable for content carried on their networks.

6.6 How are digital platforms regulated in your jurisdiction?

There are no current regulations on digital platforms.

7 Media

7.1 What rules and requirements apply to public broadcasters in your jurisdiction?

Public, state-sponsored broadcasting is governed by the Israeli Public Broadcasting Law. The main objectives of the law are to:

• allow for the expression of a variety of opinions; and
• encourage local productions.

7.2 What rules and requirements apply to commercial broadcasters in. your jurisdiction?

• The Telecoms Law regulates cable and satellite broadcasting; and
• The Second Authority for Television and Radio Law regulates the commercial broadcast of television channels and local radio stations.

Also relevant are regulations and decisions of the applicable regulators – that is:

• the Second Authority for Television and Radio; and
• the Cable and Satellite Broadcasting Council.

These address various issues, such as:

• content restrictions and classification;
• engagement with consumers (for multi-channel platforms);
• commercials and advertising; and
• licensing requirements.

7.3 Do any 'must-carry' obligations apply in your jurisdiction? If so, what are they and how are they funded?

Yes – the Telecoms Law imposes a 'must-carry' obligation on multi-channel platforms of channels that are lawfully broadcast in Israel and that are transmitted over the air. This is currently done without cost.

7.4 Do any local content requirements apply in your jurisdiction? Do any restrictions apply to foreign content? What exemptions and/or exceptions are available?

Yes. There are requirements which mandate that:

• a specific amount of screen time be dedicated to local productions; and
• a certain percentage of the revenues of broadcasters be invested in local productions.

Foreign content is generally not restricted; but additional obligations may apply, such as an obligation to provide subtitles or dubbing for specific types of content.

7.5 What other content requirements and restrictions apply in your jurisdiction? Do these vary depending on the distribution channel (eg, traditional broadcast media versus new media)?

Additional limitations may stem from other, more general legal and regulatory frameworks. Content is usually protected under the freedom of speech, with exceptions regarding:

• libel and slander; or
• expressions which could be considered racist or hateful, or to violate privacy, endanger homeland security or similar.

There are also:

• general ethical codes regarding fairness in broadcasting; and
• additional requirements regarding accessibility, content classification and so on.

New media, such as over-the-top (OTT) broadcasting, are not currently regulated.

7.6 How is advertising regulated in your jurisdiction? Does this vary depending on the distribution channel?

Multi-channel platforms and public broadcasting channels are prohibited from broadcasting commercials and ads.

Commercial channels can broadcast ads, which are regulated by various rules. For example, ads relating to alcohol, financial products, health services and certain other products are either prohibited or subject to strict rules.

New media, such as OTT broadcasting, are not currently regulated.

8 Competition

8.1 What competition-related provisions (eg, structural or functional separation requirements; significant market power requirements; media plurality rules) apply in the following sectors: (a) Telecommunications; (b) Internet; (c) Media (broadcasting + print) and (d) Social media?

The minister of communications has the authority to order structural or financial separation in order to maintain or increase competition.

(a) Telecommunications

A structural separation currently applies to two major Israeli providers:

• Bezeq, Israel's largest landline operator, has monopoly status and is therefore subject to these requirement.
• HOT - Hot Telecommunication Systems Ltd provides cable television, last-mile internet access, broadband and telecommunications services in Israel. It also provides various data transmission services and network services at different rates, services to the business sector and other ancillary services. As the company is active in both the broadcasting sector and the telecoms sector, it is subject to a structural separation obligation.

(b) Internet

Currently there are no regulations in this area.

(c) Media (broadcasting + print)

Israeli law does not permit cross-ownership of media sources, including print. There are also limitations on the broadcasting of news – the news company must be a separate entity. Additionally, there are limitations on the number of self-produced channels that a platform owner can broadcast. Also, at least 50% of local productions should be purchased by the platform and not produced by the platform itself.

(d) Social media

Currently there are no regulations in this area.

8.2 To what extent can the national competition regulator intervene in the relevant sectors? What is the interplay between the competition regulator and the various sectoral regulators?

The Israel Competition Authority acts in accordance with the Antitrust Law. The Antitrust Law provides the director-general of the Israel Competition Authority with various powers that make it possible to address anti-competitive behaviour in all its forms. Under these powers, the authority seeks to:

• increase and encourage competition where it exists;
• create conditions for increased competition where it does not exist;
• enforce the provisions of the law when they are violated; and
• increase awareness of competition law.

Therefore, the Israel Competition Authority can intervene in various sectors in the Israeli market. However, where a specific sector is involved, the different regulators will typically act in cooperation on the specific issue.

8.3 How are mergers and acquisitions in the relevant sectors treated from a competition perspective?

Generally speaking, the disposition of a means of control of more than 10% requires approval, unless this is a done vis-à-vis a small provider acting in accordance with the provisions of the General Authorisation.

Also, under the Israeli competition regime, merger approval is required in some cases.

8.4 What other specific challenges or concerns do the relevant sectors present from a competition perspective?

The new digital platforms and the option to transmit media and other communications services via the Internet have changed the playing field and led to greater competition between traditional service providers and the new players that use the new platforms. The regulator is faced with a choice between:

• imposing regulations on the new entities that provide these services via the Internet; or
• relaxing some of the regulatory burden on existing providers.

9 Data security and cybersecurity

9.1 What data security regimes apply in the following sectors: (a) Telecommunications; (b) Internet; (c) Media (broadcasting + print) and (d) Social media?

(a) Telecommunications

There are no specific provisions other than the general requirements under Israeli law. Crucial services may receive separate instructions from the security forces.

(b) Internet

There are no specific provisions other than the general requirements under Israeli law.

(c) Media (broadcasting + print)

There are no specific provisions other than the general requirements under Israeli law. Crucial services may receive separate instructions from the security forces.

(d) Social media

There are no specific provisions other than the general requirements under Israeli law.

9.2 What cybersecurity regimes apply in the following sectors: (a) Telecommunications; (b) Internet; (c) Media (broadcasting + print) and (d) Social media?

(a) Telecommunications

The Ministry of Communication considered introducing specific rules on cybersecurity under the first draft of the General Authorisation. However, the final draft did not include these provisions. There are specific cybersecurity provisions in the licences granted to cellular carriers.

(b) Internet

There are no specific provisions other than the general requirements under Israeli law.

(c) Media (broadcasting + print)

There are no specific provisions other than the general requirements under Israeli law. Crucial services may receive separate instructions from the security forces.

(d) Social media

There are no specific provisions other than the general requirements under Israeli law.

9.3 What other specific challenges or concerns do the relevant sectors present from a data security/cybersecurity perspective?

In recent years, there have been discussions on the introduction of cyber legislation, which would grant the National Cyber Directorate an extensive set of roles and responsibilities concerning cybersecurity in Israel. This would extend to the telecoms and media sectors, which would be subject to the provisions of this legislation. However, apart from publication of a legislative draft, there has been no progress towards the passage of the law. We assume that once this initiative resumes, players in these sectors will need to align their operations with the provisions of the new law.

10 Trends and predictions

10.1 How would you describe the current TMT industry landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The general trend is a shift from licences to permits. This is a part of a process of 'deregulation', aimed at easing entry to the TMT market and encouraging competition for the benefit of consumers.

More specifically, the Ministry of Communications seems to be focusing on the possible regulation of social media and international content providers (eg, Netflix, Disney+, Amazon Prime, Apple TV). Several committees have been established and a draft law has even been prepared on some of these issues, indicating that international content providers may also be obliged to invest in local productions and may possibly be subject to additional content regulations. However, due to the recent elections, these initiatives have been put on hold.

11 Tips and traps

11.1 What are your top tips for TMT players seeking to operate in your jurisdiction and what potential sticking points would you highlight?

The Telecoms Law has undergone a major reform that makes it much easier to enter the Israeli market than it used to be. While there is a requirement to act with an Israeli entity or a foreign registered company in Israel, the threshold for the initiation of service provision is very low and can easily be satisfied.

Many discussions have taken place on the introduction of specific regulations on over-the-top providers and social media operators. Players in these sectors should keep a close eye on these developments.

Providers and operators that wish to enter the fibre deployment and broadband sector may be required to contribute funds to the investment fund aimed at encouraging the deployment of fibre throughout Israel (see question 6.1).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.