Telecommunications

July 2003

Nippon Telegraph and Telephone Corp. (NTT) and 21 other telecommunications and electrical machinery firms are expected to agree on a common standard for the transmission of high-quality images compatible with household televisions. In addition to NTT, Matsushita Electric Industrial Co., Pioneer Corp. and Sharp Corp. will work on establishing the standard. And telecommunications infrastructure-related tasks will be undertaken by NEC Corp., Cisco Systems Inc. and Sumitomo Electric Industries Ltd. , among others. Using broadband technology, the firms will work on a common standard that will allow for the transmission of text and images on TV screens that have inferior resolution compared with personal computers. The standard will also apply for such processes as accessing servers that store information, telecommunications protocols, and operating procedures. The standard will enable TVs and telecom devices made by different firms to transmit high-definition images among households and businesses. It will also make large-screen TV phones possible. Compatible products and services will appear next year. Initially, audiovisual equipment makers plan to market signal conversion boxes that enable TVs to transmit and receive images. And companies that produce servers will develop image transmission systems compatible with the standard. (July 30, The Nihon Keizai Shimbun)

In a bid to encourage the use of broadband communications, the Telecommunications Ministry will allot spectrum to localities for wireless broadband by opening up frequencies in the 18GHz band for wireless Internet connections. Using such frequencies, regions where fiber-optic networks are lagging will be able to connect to high-speed Internet services. The ministry plans to revise pertinent regulations this fall. Telecommunications carriers such as Nippon Telegraph and Telephone Corp. (NTT) had been using the 18GHz band to relay long-distance communications. But with telecom firms shifting to fiber-optic lines, the ministry plans to open the band to local governments. As installing fiber-optic networks requires tremendous investment, many regions are not equipped with such technology. By allotting the 18GHz band for broadband communications, the ministry aims to narrow the digital divide between urban and more remote areas. Town halls that are connected to fiber-optic networks will be able to set up base stations to communicate wirelessly with antennas set up by households to provide high-speed Internet service. As the 18GHz band allows the transmission of large amounts of data, consumers can gain access to broadband service on a par with ADSL (asymmetric digital subscriber line) service. (July 23, the Nihon Keizai Shimbun)

Public Management Minister Katayama will meet top officials of telecommunications carriers who are planning to file a lawsuit over his ministry's approval of a hike in connection fees to NTT Corp. The five telecommunications carriers are expected to sue the Public Management Ministry if seeking nullification of the ministry's approval for raising the fees NTT charges them for accessing its lines. KDDI Corp., Japan Telecom Co., Poweredcom Inc., Cable & Wireless IDC Inc. and Fusion Communications Corp. claim the ministry's decision to allow NTT East corp. and NTT West Corp. to raise the fees by an average of 5% will severely damage their business. The new telecom carriers seem to have different views on the government's stand. On April 22, the telecom ministry approved the first interconnection fee hike since the introduction of the current fee system in 1994. The hike took effect retroactively from April 1. The ministry tried to encourage competition among new telecom carriers through gradual reductions in NTT's interconnection fees. The decision on the fee hike has raised concerns that the government is beginning to side with the telecom giant. (July 16, the Daily Yomiuri, Kyodo News)

KDDI Corp. with four other new telecommunications carriers decided to file a lawsuit against the Ministry of Telecommunications regarding its approval over the network access fee hike by Nippon Telegraph and Telephone Corp. (NTT) in April. Telecommunications Minister Toranosuke Katayama, questioning the suit's merits, said that the court is very likely to dismiss it. The Telecommunications Ministry is caught in a bind as the telecom carriers are not backing down. The access fees are calculated based on the total cost of network's investment divided by communications traffic generated by the carriers. This system was supported by the new telecom firms and implemented despite opposition from NTT. According to the ministry, the higher access fees are inevitable because of the lower fixed-lined traffic volume resulting from the spread of cellular phones. However, NTT executives have remained silent about the lawsuit. (July 11, the Nihon Keizai Shimbun)

Legislation to revise the Telecommunications Business Law to deregulate the use of the fiber-optic network owned by Nippon Telegraph & Telephone Corp.'s (NTT) regional carriers was approved. In May, the upper house general affairs committee approved an amendment that called for a review of whether NTT East Corp. and NTT West Corp. would be forced to allow new telecom firms to use its fiber-optic network. Since the amendment was not submitted to the lower house committee, the NTT group companies' obligation to share their network remains intact. Opposing this measure, NTT had lobbied relevant lawmakers to pass legislation during the current session to eliminate the obligation as a way to put pressure on the Posts and Telecommunications Ministry. Disagreement among lower house legislators over whether the obligation should be eased resulted in the committee shelving the amendment. Relaxing the obligation would lead to NTT gaining a monopoly on the fiber-optic network. The ministry was concerned that the amendment would pass both houses, as it had planned to implement the deregulation measures for cutting fiber-optic communications costs. (July 11, the Nihon Keizai Shimbun)

Broadband market will top Y10 trillion in 2007. Japan needs to promote the use of broadband products and services by bolstering protective measures against computer viruses and other types of cyber attacks, according to the annual white paper by the Posts and Telecommunications Ministry. The report forecasts that the broadband-related market will grow to Y10.2 trillion yen in 2007, from Y2 trillion in 2002. The annual report, titled "Pursuing the Creation of a Japanese-Led New IT Society," states that if Japan takes advantage of its cellular phone and other technologies, it will be able to become a global leader of the next-generation IT industry. The white paper also analyzes the actual status of Japan's IT society and the tasks it faces in order to develop further. Since charges for high-speed, high-capacity broadband services in Japan are now among the cheapest in the world, the report predicts that the number of subscribers will increase to 59.67 million at the end of 2007, from 19.55 million at the end of 2002. The spread of broadband services will expand the market for distributing music and other data to about Y600 billion from about Y250 billion over the same five-year period, the report says. The document also points out Japanese companies suffered about Y350 billion in damages from computer viruses last year. (July 4, the Nihon Keizai Shimbun)