Argentine orders closure of Internet provider to 1 million customers in antimonopoly campaign

By Michael Warren, AP
Friday, August 20, 2010

Argentina orders Internet provider shut down

BUENOS AIRES, Argentina — Argentina’s government on Friday ordered the closure one of the nation’s three leading Internet providers, demanding that Grupo Clarin immediately inform “each and every one” of its more than 1 million customers that they have 90 days to find new ways of getting online.

The order says Grupo Clarin — which has grown through mergers to become one of Latin America’s leading media companies — illegally absorbed the Fibertel company through its Cablevision subsidiary in January 2009 because it failed to obtain prior approval from the commerce secretary.

Cablevision denied that Friday, citing a previous approval obtained in 2003, and planned to appeal, accusing the government of continuing a campaign to stifle opposition viewpoints.

President Cristina Fernandez has made dismantling Grupo Clarin a priority of her government. A new law that has been challenged in court would force the company to break apart in a drive to dissolve media monopolies.

The immediate effect of taking Fibertel offline may actually reduce competition for high-speed Internet access in Argentina, where Cablevision competes with two major multinational telephone companies — Grupo Telecom and Telefonica SA. Together the three have roughly equal shares of an overall market that adds up to more than 4.2 million Internet connections.

While the government says there are more than 200 providers in Argentina, most have tiny market shares. Removing Fibertel would enable Telecom’s Arnet and Telefonica’s Speedy to reach nearly 90 percent of Argentina’s Internet users between them, and in many locations in the country, customers would only have one of those two companies to choose from.

Cablevision and Fibertel called the order “illegal and arbitrary,” and “one more step in a brutal campaign of persecution, attacks and hostility” that will result in a telecom duopoly.

Cablevision’s chief executive, Carlos Moltini, said he’s confident the courts will overturn the “crazy” order in an interview Friday with radio Mitre.

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