The Brazilian telecoms regulator Anatel has blocked Tele Norte Leste Participacoes (Telemar’s) planned takeover of cable TV firm Way TV on competition grounds. The watchdog has ruled against the merger because state regulations bar companies from providing telephony services and cable TV networks in the same geographic areas. The cableco and Brazil’s biggest phone company are adjudged to operate in overlapping areas, the watchdog has ruled. Telemar, which agreed a USD63.6 million deal to acquire the CATV operator in July 2006, plans to appeal the ruling. The decision is seen as a bad sign for telecoms companies wishing to diversify their businesses by offering triple-play or quadruple-play services. Telefónica’s bid for cable-TV company TVA, has also been thrown into question as a result of the ruling.