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Bezeq hires consultant LECG in Gronau c'ttee battle: LECG is setting up an office in Israel, to be headed by Gabriel Baron.

Tue. May 05, 2009; Posted: 03:44 PM
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May 05, 2009 (Globes - McClatchy-Tribune Information Services via COMTEX) -- XPRT | Quote | Chart | News | PowerRating -- Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) has hired international consultancy LECG Corporation (Nasdaq: XPRT | Quote | Chart | News | PowerRating) to help it battle the Ministry of Communications and the Gronau committee recommendations.

LECG is setting up an office in Israel, to be headed by economist Gabriel Baron. Baron has been LECG managing consultant in London and was the chief economist at Antitrust Authority before he joined the company. He is returning to Israel because of the demand for LECG's services.

LECG is one of the world's top consultancy firms on regulatory and competition issues.

LECG's first project in Israel concerns the cellular market, and the Ministry of Communications' plan to introduce mobile virtual network operators (MVNO) in order to boost competition. LECG prepared a report for Israel's three large cellular operators, including Bezeq subsidiary Pelephone Communications Ltd., and its conclusions utterly contradicted the conclusions of the Ministries of Communications and Finance regarding the degree of competition in Israel's cellular market. LECG concluded that prices in Israel are lower than in many Western countries, in the private sector.

Bezeq hired LECG to help it fight one of the key Gronau committee recommendations -- local loop unbundling of Bezeq's network. Local loop unbundling allows other companies to use existing firms' wires to reach customers. Bezeq argues that this policy has never worked in any country and there is no reason to believe that it will work in Israel, either, as a means toward promoting competition in fixed-line telephony.

Meanwhile, the Ministry of Communications has not implemented the recommendations because of a dispute with the Ministry of Finance over positions at the ministry for people to implement the recommendations.

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