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Ukraine: Conflict Looms Among Cable TV Operators

By Vitaly Sych

Kyiv, 24 July 1998 (RFE/RL) - Ukraine's largest cable television companies have recently set up the Union of Ukraine's Cable TV in an apparent attempt to exclude smaller operators from the market.

The group brings together eight of Ukraine's largest cable television companies, including IVK, Kyivtelemontazh, and Tsenturion. It is estimated that they have about 700,000 subscribers, accounting for 70 percent of the entire cable television market in Ukraine.

Oleksandr Lyakhov, the deputy director of the government's National Council for Radio and Television, has been appointed head of the union despite criticism that his position in the body overseeing the TV cable industry conflicts with a major job in a private association.

This is particularly puzzling, since, according to the group spokesman Vyacheslav Shlyakhtenko, the union intends to create a political lobby capable of influencing the development of Ukraine's cable television market.

"The purpose of [the Union] is not only to establish cable television as a business, but also to form a powerful political pressure group to lobby for the necessary laws" said Vyacheslav Shlyakhtenko.

The competition for Ukraine's cable television market has been tough. The cable operators have recurrently complained that the law contains no regulations about cable television thus allowing the National Council for Radio and Television to rule over the industry at will.

No cable television company can start operating legally without a license from the National Council, but waiting to gain permission may run into months or even years. As a result, about half of the country's 107 cable TV operators work without permission.

"If the regulations are senseless, they force the businesses to operate in the shadow economy," said Yuriy Labunsky, director of the Association of Ukraine's Cable Television, a group that includes small and middle-sized operators. They are concerned about the possible monopolization of the cable market by the big companies.

Labunsky, who is also president of the Information Technologies cable company, says that his company "applied to the National Council for Radio and Television for a license a year ago. But we still haven't received a response, neither have we received any explanations for this silence."

The National Council for Radio and Television has said it has two draft laws on cable TV to be submitted to the Parliament. The first one was prepared by the Association of Ukraine's Cable TV. It was submitted to the previous Parliament, but was never considered..

The second draft was prepared by the National Council for Radio and TV broadcasting itself. It favors the newly-created Union of Ukraine's Cable TV.

Though the cable television market in Ukraine has recently grown in quality and variety, it is still in its infancy. The cable network, mostly located in big cities, covers only about eight percent of Ukraine's households.

An average cable operator in Ukraine offers its clients 18 channels including three Ukrainian channels, three regional TV companies and three Russian channels. The choice of western satellite channels depends on the technical resources of the company, but CNN and Eurosport are the ones most frequently appearing.

In Kyiv the cable companies cover the most densely populated suburbs, with the center of the city still uncovered. The services proposed by the cable companies are about three hryvna per month.

The conflict between the Union of Ukraine's Cable TV and the Association of Ukraine's Cable TV is likely to come to a head in December, when their respective draft laws will be submitted to Parliament for consideration.