Telecommunications

February 2002

The Telecommunications Ministry will press Nippon Telegraph and Telephone Corp. (NTT) to end unfair marketing practices of offering discount phone services by using the networks of its two regional carriers under preferential terms. NTT Communications Corp. will be urged to terminate five types of discount services within 2-3 years. In one of the unfair services, NTT East Corp. and NTT West Corp. enable NTT Communications to provide out-of-city phone services at discounts of 10-30%, substantially lower than those charged by new common carriers. The ministry will also urge NTT Communications, to build its own system by the end of fiscal 2002, which shares a customer data management system with NTT East and NTT West. The measure is intended to ensure fair competition in the telecom industry. New common carriers have complained that the sharing of the customer data system enables the NTT units to pool resources to market their services. The customer data management system enables the two NTT regional units and NTT Communications share such information. The ministry has allowed the NTT group to continue these practices as temporary measures since NTT was reorganized under a holding company in 1999. The ministry will publish the results of its investigations into operations at NTT's two regional units and NTT Communications later this month, drawing up specific measures in March to ensure that NTT group units compete fairly with new common carriers. (February 14, the Nihon Keizai Shimbun)

The Ministry of Land, Infrastructure and Transport will open in April a government- run, nationwide optical fiber network to private companies and local governments for a fee. The network is installed in national roads and is currently used to monitor road traffic. The move is expected to reduce telecommunications costs because it would enable private businesses and local governments to access cheaper Internet service than those offered by Internet providers and telephone companies. The fee will be determined to make it affordable for private businesses. The remaining unused cable lines will form the pillar of the national government's E-Japan Initiative, which aims by 2006 to turn Japan into the most advanced nation in the world in terms of information and communications by utilizing super high-speed Internet connections and other advanced technologies. The plan to open the service exclusively to private companies would be difficult as the network is based on taxes. Thus, the Land Ministry and the Finance Ministry have decided to make the network available to both the government and private sectors. The Land Ministry and private businesses have agreed to share the costs of building the network and that the ministry will be given primary access to the network in times of emergencies. The Land Ministry will consider options from the private sector when drawing up next month a separate agreement on the network's management. (February 13, the Japan Times)