Argentine Government Bans Cablevisión's Broadband Service Commercialisation

Argentina's Communications Secretariat (Secom) has ordered Cablevisión to refrain from selling its internet services in the country, local daily La Nación reports. According to Secom, Cablevisión can only operate as a cable TV provider as it does not have a licence to operate any other type of telecoms services, including internet. The cableco had been offering broadband services using a licence previously awarded to ISP Fibertel, which merged with Cablevisión in 2002. However, the government believes that Fibertel's status as a legal entity expired when it consolidated with Cablevisión, along with its concession rights.

Cablevision said in a press release that Secom’s resolution is “outrageous” as it violates rights inherited from Fibertel. The merger conditions were approved by the General Inspection of Justice (IGJ) and, since then, Cablevisión has being offering internet services under the Fibertel brand without any problems with the authorities. The company believes that this new ban constitutes a harassment campaign by the government.

Outlook and Implications

• Voice Service Ban: The same argument also frustrated Cablevisión's plans to provide voice services using a licence previously awarded to Fibertel. Secom, which had initially given the green light to the Cablevisión voice project, revoked its decision after receiving a number of complaints from several fixed-line carriers, including incumbents Telefónica de Argentina and Telecom Argentina. According to Telefónica de Argentina, Fibertel's licence to operate voice services is no longer valid as it was awarded when Fibertel was still a subsidiary of Cablevisión. Since Fibertel does not now exist as a company following the merger, it therefore does not have a licence to provide voice services. Telefónica de Argentina and Telecom Argentina have been attempting to block Grupo Clarín's plans in order to delay Cablevisión's entry into the triple-play market as such a move could have a negative effect on both operators, which are still not allowed to provide triple-play services over their networks (see Argentina: 23 July 2009:  Secom Cancels Licence Awarded Last Week to Fibertel and 13 August 2009: Grupo Clarín to Take Legal Action if Government Blocks VoIP Plans in Argentina).

• Cablevision-Multicanal Merger: Cablevision is 60% controlled by Argentine media giant Grupo Clarín, which also has subsidiaries in the telecoms, broadcasting, radio, and publishing sectors. Fibertel’s merger with Cablevisión is part of Clarín long-term business strategy to provide triple-play services under an integrated platform, which will reduce the cost of internet service provision to cities in the provinces, and enable the implementation of broadband services in new areas. As part of this strategy, Cablevisión is currently immersed in its merger process with cableco Multicanal. The merger, which was approved by the National Commission for the Defence of Competition (CNDC) in December 2007, is currently on hold after the government ordered the two cablecos to suspend their merger proceedings earlier in March. However, the company has appealed the decision and announced in April that it had rebranded its Multicanal cable TV services under the Cablevisión brand (see Argentina: 8 March 2010: Argentine Government Stops Cablevisión-Multicanal Merger). Cablevisión has said that the move is merely a marketing strategy to avoid confusion among its clients and that it did not constitute a violation of the CNDC merger suspension.