The Knesset passed Communications Minister Shlomo Karhi's media overhaul law by a 53-48 vote on July 16, 2026, in its final session before dissolving ahead of the October 27 election. Buried in the same bill are two very different policies: a genuine deregulatory win for streaming platforms, and a consolidation of political control over the domestic broadcast market that should worry anyone who actually cares about a free press.
The streaming exemption, and how it happened
Israel's original draft communications law would have required foreign streaming services generating more than NIS 40 million a year in the country to invest 6.5% of that revenue in local Israeli productions — a levy modeled on the kind of rules already common in Europe. On March 16, 2026, Karhi told the Knesset Economic Affairs Committee he was removing the clause, and said so plainly: "the prime minister decided to remove it because it was a demand that came from the president of the United States," adding that his own "professional position remains that it should be included in the law" (Calcalist). One lawmaker asked whether Israel had become "the 51st state." The final law, as passed July 16, exempts foreign platforms from local-content investment obligations entirely, while domestic broadcasters still carry the duty (Globes).
Steelmanning the levy
The case for a streaming investment mandate isn't frivolous. Under the EU's Audiovisual Media Services Directive, platforms must ensure at least 30% European content and, in several member states, reinvest a share of local revenue directly into production — France requires 20-25%, Switzerland's 2022 referendum set 4% (CEPA). By April 2022, Netflix was already meeting the EU's 30% quota across nearly all its European markets, evidence the obligation is commercially survivable, not existential. The underlying argument is that a domestic screen industry — writers, crews, soundstages — is a public good that a five-minute scroll through a global content library doesn't automatically fund, and that a modest, proportionate levy internalizes that cost without excluding anyone from the market.
Why the exemption is still defensible — on its own
Even granting that case, a mandatory local-content levy is industrial policy dressed as culture policy, and Israel's market is a fraction the size of France's or Germany's — the NIS 40 million threshold would have applied to a handful of firms, extracting a small, symbolically driven sum rather than meaningfully seeding a production ecosystem. Netflix has separately said it already invests in original Israeli productions without being forced to (Times of Israel). Removing a compliance mandate that a market this size barely needs is consistent with keeping the open internet open. What isn't defensible is the mechanism: a foreign government dictating, through backchannel pressure relayed by the Prime Minister's Office, that a specific clause be struck from another country's domestic legislation. That precedent — content policy set by diplomatic leverage rather than domestic deliberation — is worse than the levy it erased, and Israeli lawmakers were right to say so on the record.
The part that actually matters
The streaming exemption is a footnote next to what the rest of the law does. It replaces the Second Authority for Television and Radio and the Council for Cable and Satellite Broadcasting with a single new regulatory authority, funded by a NIS 25 million annual deduction from the public broadcaster Kan's budget, whose selection committee is chaired by the Communications Ministry's own director-general (Jerusalem Post). It scraps cross-ownership limits — a change that directly benefits Patrick Drahi, a Netanyahu ally who owns both the HOT telecom/cable platform and the i24NEWS channel — and eliminates the structural separation between commercial broadcasters and their news divisions, along with minimum journalistic-standards oversight. A Knesset legal-counsel memo on the bill confirms the core structure: one consolidated authority replacing the existing patchwork (Knesset legal counsel opinion).
That combination — a Ministry-controlled regulator plus the end of ownership and newsroom-independence safeguards — is why petitioners moved fast. On July 19, Justice Ofer Grosskopf issued a temporary High Court order freezing the law's immediate-effect provisions, including the committee that would select the new regulator's leadership, permission for i24 to broadcast on cable and satellite, and the removal of the news-division separation requirement, while declining to freeze the statute in full since most provisions don't take effect for two years (Jerusalem Post). Karhi has said he won't recognize the order's authority. The government must respond by July 26.
The actual editorial line
A pro-innovation, pro-speech publication can support scrapping an unnecessary streaming levy and still call this bill what it is. The two halves shouldn't be graded together: freeing Netflix from a compliance burden is proportionate deregulation; stripping cross-ownership limits and installing a Ministry-picked regulator three months before an election is the kind of concentrated media control that speech-protective policy exists to prevent. Israel's High Court has, for now, bought time to sort the two apart. It should use it.