Telecommunications

December 2002

The Telecommunications Ministry may force NTT East Corp. to extend financial support to struggling NTT West Corp.: two carriers can continue charging equal interconnection fees to new carriers. The Ministry of Public Management, Home Affairs Posts and Telecommunications has asked the Finance Ministry and the tax panel of the ruling LDP to allow NTT East to treat financial assistance to NTT West as expenses, which can be deducted from income taxes. In September, the Information and Communications Council recommended that NTT East and NTT West charge other carriers different fees to use their circuits. The recommendation, reflecting NTT East's stronger financial position, means NTT West would be able to boost its revenue by charging more, while NTT East would be required to slash its fees. Committees of the Diet decided in late November to call for the maintenance of uniform interconnection fees, making it difficult for the telecom ministry to allow different fees. By avoiding a cut its interconnection fees, NTT East will post a sharp increase in revenue. The ministry plans to push NTT East to come to the aid of its poorer twin. (December 5, the Nihon Keizai Shimbun, the Nikkei Business Daily, the Japan Times)