Hungary-EC to battle over cable laws


BRUSSELS --The European Commission on Thursday said it will take Hungary to the European Union's highest court for failing to scrap restrictions on cable television services.

The EC -- the European Union's executive authority -- said the government has failed to abolish the part of the Hungarian Media Act that limits each cable operator to a maximum subscriber base of just one-third of the Hungarian population.

"The limitation imposed by the Media Act on cable operators is bad for Hungarian citizens as it limits their choice in broadband services," EU Competition Commissioner Neelie Kroes said, announcing the case at the European Court of Justice in Luxembourg.

The Commission contends that consolidation will foster investment and the provision of better broadband services, including triple play services by allowing cable TV operators to compete with dominant telecom player Magyar Telekom throughout the whole of the country.

Officials said the current law prevents cable TV operators from combining, which would provide more investment for the sector and allow better broadband services to emerge.

The Hungarian Media Act breaks an EU directive from 2002 that opens competition in the markets for electronic communications networks and services. The directive says that governments must ensure that no restrictions are imposed or maintained on the provision of electronic communications services, including broadcasting transmission services.

Hungary was to have abolished all restrictions by the time it joined the EU on May 1, 2004. In 2005, the Hungarian government failed to secure the two-thirds majority needed to amend the Media Act in the parliament, and it has not proposed any new changes this year.