Note: In line with the Japanese Government reorganization ... · the IT Strategic Headquarters in...

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Note: In line with the Japanese Government reorganization, on January 6, 2001, the Ministry ofPosts and Telecommunications (MPT), together with the Ministry of Home Affairs and theManagement and Coordination Agency, was integrated into the “Ministry of Public Man-agement, Home Affairs, Posts and Telecommunications (MPHPT).” Please be advisedthat throughout this report “MPT” on and before January 5, 2001, is currently “MPHPT.”Where an article refers to “MPHPT,” if the article describes a matter occurring on andbefore January 5, 2001, said “MPHPT” shall be read as “MPT.”

Contents

Information and Communications Policy ............................. 2Policies under the jurisdiction of the Information and Communications Policy Bureau, etc.

Telecommunications Administration................................... 24Policies under the jurisdiction of the Telecommunications Bureau, etc.

International Policy and Cooperation.................................. 45Policies under the jurisdiction of the International Affairs Department

Statistics ................................................................................ 52

2002 Annual Report

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1) e-Japan StrategyUnder e-Japan Strategy, all citizens

will use information technology (IT)fully and also make possible an intel-lectually creative society, which will tothe greatest extent allow the aforemen-tioned concept to become a reality.This will be accomplished by concen-trating on the four major policy mea-sures of i) building an ultrahigh-speedInternet network and providing con-stant Internet access at the earliest datepossible, ii) establishing rules on elec-tronic commerce, iii) realizing an elec-tronic government and iv) nurturinghigh-quality human resources for thenew era. Furthermore, the promotioneffort will be furthered by establishingan environment where the private sec-tor based on market principles canmaximize their strengths and settingthe target of becoming one of theworld's advanced ICT nations withinfive years.

2) e-Japan Priority Policy Program-2002

"e-Japan Priority Policy Program-2002" will specifically in order toclarify the major policies, after delin-eating the roles to be played by thepublic and private sectors, deal withthe following five priority areas,namely;

i) Formation of the world's mostadvanced information and tele-communications networks

ii) Enrichment of education/learn-ing and human resource devel-opment

iii) Promotion of e-commerce, etc.iv) Putting administration and pub-

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I. Deployment of ICT Policy in the 21st Century

Information andCommunications Policy

1. ICT Strategy Promotion atGovernment Level

The government established withinthe Cabinet in January 2001 the "Stra-tegic Headquarters for the Promotionof an Advanced Information and Tele-communications Network Society (ITStrategic Headquarters)" -- with thePrime Minister as the Director-Generalthereof -- based upon the recognitionthat promotion of IT Revolution is astrategic matter.

This IT Strategic Headquarters, inaddition to deciding upon the basicstrategy that is the "e-Japan Strategy"had set in March 2001 its action plancalled the "e-Japan Priority Policy Pro-gram" that includes 220 specific mea-sures.

Moreover, in June 2002 it reconsid-ered the "e-Japan Priority Policy Pro-gram" that, keeping afresh in mind thesituation for Japan in comparison withother nations and the evaluation inlight of Japan’s results, aiming to trulymake the target of "becoming one ofthe world's advanced IT nationswithin five years" a reality known ase-Japan Priority Policy Program-2002.

While the "e-Japan Strategy" that isthe basic strategy related to IT will bepromoted aggressively, the "e-JapanStrategy" will also, based on said e-Ja-pan Priority Policy Program-2002 di-recting that necessary structural re-forms and facilities will be quickly andforcefully realized within five yearsfrom year 2001, with the governmentas a whole led by the IT StrategicHeadquarters promote necessary poli-cies on a strategic and focused stanceas well as in a speedy manner.

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v) Ensuring the security and reli-ability over advanced informa-tion and telecommunicationsnetworks

This plan, in addition to the long-term policies included in thee-JapanPriority Policy Program, includes a to-tal of 318 measures that meet the threerequirements of i) being a policy thataims realize the world's advanced ICTnation within five years, ii) being apolicy that realizes necessary struc-tural reforms and facilities quickly andforcefully, and iii) being a policy thatin principle have specified goals anddates for attaining said goals.

2. Promotion of central andlocal electronic governments(e-governments)

1) Establishment of National Strate-gies

-- The “Program for Promotion of e-

Government at Central and Local Lev-els" adopted in October 2001 --

Against the backdrop of a global-scale technological advances in the ICTfield, Japan is going through a rapidtransition to the broadband Internet,digital broadcasting, and highly ad-vanced and diversified informationtechnologies which bring about astructural change in the entire spec-trum of socioeconomic activities in Ja-pan, including citizen’s life and busi-ness activities. At the central and lo-cal governments, an extensive effort isunderway in order to realize e-govern-ments at national and local levels al-lowing online public access to govern-ment information, online applicationfor issue of certificates/notificationand tax declaration/payment via theInternet from home, by making themost of the latest information technol-ogy. It would provide access to pub-

lic services with no restrictions in timeand place. This initiative would domore than just improve administrativeconvenience substantially; it wouldserve as a social infrastructure for citi-zens and businesses to enjoy benefitsof using ICT.

In its “e-Japan Strategy” (adopted bythe IT Strategic Headquarters in Janu-ary 2001), the government positions itas one of the priority policy areas torealize the e-Governments encompass-ing the central and local governments.Presently, it is promoting a focusedreform of operations to bring about ashift to electronic delivery of govern-ment information, electronic filing (ap-plication, notification, and others),electronic documentation, paperworkelimination, and sharing/utilization ofinformation through information net-works, for the purpose of simplifying,and improving efficiency and trans-parency of administrative manage-

Information and Communications Policy

Schematic Overview of e-Government -- Creation of new administrative services

Now

To make use of administrative services, we have to1) use the mail, or2) go in person to public offices,in order to submit documents and carry out procedures for application, notification, etc.

Private sector certification authority

Enables confirmation that electronic documents created by individuals or companies are authentic

Commercial registration certification authority

Government Public Key Infrastructure

Enables confirmation that electronic documents created by commercially registered corporations are authentic

Enables confirmation that electronic documents created by national administrative bodies are authentic

After FY2003(future image)

Administrative procedures

<Epochal situations in life>

• Moving home

• Building a house

• Having children

• Applying for benefits

• Using public

<Business situations>

• Bidding for government procurement• Applying for business licenses• Making notifications• Applying for issue of certificates• Filing tax returns

Administrative services accessible for principally 24 hours a day over the Internet

Tax payments, etc

• Making tax payments• Making social insurance payments• Paying commission fees

Administrative information

• Checking up on laws and systems• Obtaining data published by the government• Obtaining addresses of public sector bodies• Obtaining statistical data• Perusing white papers

From home

From work

From nearest public offices

Enables confirmation that electronic documents created by local governments are authentic

e-Government Portal

the InternetA system of comprehensive search and guidance on administrative information instantly indicates the procedure sought

e-GovernmentMinistries

Ministries

Ministry networks

Kasumigaseki WANNetwork linking national

administrative bodiesNetwork linking local

governments

Regional branches

Bank of Japan

Institutions and other bodies

Post officesPost offices

Financial institutions

Online settlement infrastructure

Prefectures

Prefectures

MunicipalitiesMunicipalities

Local Government Wide-Area Network

(LGWAN)

Public certification service for individuals

Enables confirmation that electronic documents created by residents are authentic

Local Government Public Key Infrastructure

Network of basic registers of residents

Local intrnets

Fig. I-2-1) Central and local electronic governments

2002 Annual Report

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tem” (http://www.shinsei.soumu.go.jp) partially operational in March2002. They began to accept online ap-plication for 10 different administra-tive procedures. They also opened awebsite to provide a hands-on expe-rience of the online application systemin order to deepen understandingamong people on the idea of elec-tronic administrative procedures

(http://www.taiken.soumu.go.jp).

ii) Computerization within adminis-trative agencies

Computerization within administra-tive agencies will in the first place cre-ate a work and information manage-ment system using ICT, and improvestreamlining and efficiency of opera-tions and enhance administrativemanagement. It also helps establishICT infrastructure for providing onlineinteraction among public, businessand governments. Examples includedeployment of information and com-munications equipment such as PCs,construction of intra-agency and inter-ministerial networks, etc. For PC de-ployment within the nation’s admin-istrative agencies, the number of em-ployees per PC at the end of 2001 was1.2 across all administrative agencies(except for national university-relatedones under the Ministry of Education,Culture, Sports, Science and Technol-ogy). This indicates that the effort to-ward deploying a PC per employee is

steadily progressing. Also, ex-amining by agency category(see Note), at the internal bu-reaus and departments (0.9employees per PC) and inde-pendent administrative insti-tutions (0.4 per PC), the mile-stone of a PC per employeehas been achieved. In the fu-ture, deployment at facilities/institutes (2.2), special institu-tions and overseas establish-ments (1.9), and branch offices(1.2) is expected to go forward.

Looking at network connec-tion of these PCs deployed,about 80% of them are net-worked one way or another,including LAN (77.7%) and

ment in line with the “e-Japan Prior-ity Policy Programs” (established bythe IT Strategic Headquarters in March2001 and revised in June 2002) thatstates full facts about the policies thatthe government must implementpromptly and in a focused manner byclearly stating the strategies.

2) Promotion of e-governments-- “MPHPT electronic application

and notification system” now partiallyoperational --

i) Online interaction among citizen,business and government

Online interaction among citizens,business and governments at centraland local levels is to improve the qual-ity of government services, e.g., byprecisely answering the request for al-leviation of burdens on citizens andbusiness in connection with provisionof a broad range of government infor-mation, administrative proceduresand public access to public services byutilizing the Internet, etc. Specifically,this include electronic delivery of gov-ernment information and electronicfilling/application, registration andnotification with the government. Ofthe 13 office and ministries of the gov-ernment (including their affiliatedagencies), all the authorities concernedhave opened websites. The number ofwebsites as opened by all administra-tive agencies of the government as ofthe end of FY2001 was1,310 (see Fig. I-2-2)-1).

For progress in onlineservice delivery (appli-cation, notification, etc.),according to the "e-JapanPriori ty Policy Pro-grams," it is planned tobring practically all gov-ernment services for citi-zenry online via the In-ternet by the end ofFY2003, as long as ser-vices from the centralgovernment are con-cerned.

With the objective ofmoving ahead of timethe schedule of provid-ing online services, sim-

plifying and streamlining administra-tive procedures, the relevant officeand ministries will review the existingaction plans and bring services onlinefor 7,335 procedures (54% of all) by theend of FY2002, and 13,299 (98%) bythe end of FY2003. Also, for applica-tions, notifications, and other statu-tory formalities, the “Bill Concerningthe use of Information and Telecom-munications Technology on Adminis-trative Procedures” was submitted tothe Diet in June 2002 (carried over thenext session) as a legislation to enableelectronic administrative procedures,in principle, for all public services, inaddition to the conventional meansbased on paperwork (see Fig. I-2-2)-2).

As a specific effort to offer onlinepublic services (application, notifica-tion, etc.), MPHPT made the “MPHPTonline application/notification sys-

(Unit: Number of sites)

0

200

400

600

800

1,000

1,200

1,400

FY2001FY2000FY1999FY1998FY1997

356490

874

1,2151,310

(As of the end of fiscal year)

Fig. I-2-2)-1 Number of websitesopened by the nation’sadministrative agencies

(Unit: Number of procedures)

0

2,000

4,000

6,000

8,000

10,000

12,000

FY2003FY2002FY2001FY2000

124(1.1%)

590(5.3%)

3,895(35.0%)

10,868(97.7%)

11,123: Number of administrative procedures intended to be offered online

Bringing ahead of time the schedule in order to make 50% of administrative procedures online(Source: MPHPT’s “E-Government Promotion Program”)

Fig. I-2-2)-2 Number of electronic administrative procedures(application, notification, etc.) brought onlineby the nation’s administrative agencies

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plication/notification, and other ser-vices (implementation ratio: 1.0%) asof FY2001. FY2002 and FY2003 will seeit increase to 3,055 (59.3%) and 4,914(95.4%), respectively.

4. IT Policy Principles

The diffusion of the Internet andrapid advancement of information andcommunications technology as well aspromotion of the IT Revolution havebeen social changes that equal the Ag-ricultural Revolution and the Indus-trial Revolution. Under such changesin circumstances, Japan in the early21st century is facing various prob-lems such as the environmental issues,urban renewal and population de-crease and graying, but the introduc-tion and diffusion of ICT is a majortheme that is common to all thesefields. That is to say, the promotionof the IT Revolution meeting structuralreforms holds the key to the economicrevival and continuance of sustainablegrowth in Japan, making it vital thatfocused and strategic ICT measures bepromoted aggressively.

Under such recognition, the govern-ment has adopted the "e-Japan Strat-egy," under which Japan aims "to be-come the world's advanced IT nationwithin five years," as well as its actionplan, the "e-Japan Priority Policy Pro-gram" and its 2002 program, the "e-Ja-pan Priority Policy Program - 2002."

The grand scheme applies to, basedon such strategies and the like, the pri-ority areas to be focused upon in par-ticular for FY2002, enumerating thespecific goals and policy outline byconcentrating on FY2002 budget.

Concerning the priority areas, asenumerated in the e-Japan Strategy, inorder to deal effectively with the ITRevolution, it is vital to develop hard-ware, software and content as one,where all citizens without regard togeographical restrictions, age groups,bodily conditions and the like canequally realize a society where thebenefits of ICT can be enjoyed by saidcitizens.

Specifically, as for the new social in-frastructure for dealing with the ITRevolution, regarding establishment


non-LAN connection to hosts (2.2%) asof FY2001. This indicates that therehas been much headway in network-ing within administrative agencies.

Furthermore, as an inter-ministerialnetwork interconnecting LANs of gov-ernment agencies, the KasumigasekiWAN was launched in January 1997.It is serving as the ICT infrastructurein exchanging e-mails and sharing in-formation among governmental agen-cies. By the end of FY2001, about 80%of 57 services for which to introducepaperless work across governmentagencies by the end of FY2001, includ-ing notifications, are now being of-fered online (including partially onlineservices).

Note: “Internal bureaus and departments”means the Cabinet Secretariat and bu-reaus as specified under Articles 7 and20 of the National Government Organi-zation Law (Law No. 120 of 1948).“Facilities/institutions” means the edu-cational and training facilities and cor-rectional institutions as specified underParagraph (2) of Article 8 of said Law.“Special institutions and overseas es-tablishments” means diplomatic mis-sions and prosecutor’s offices as speci-fied under Paragraph (3) of Article 8 ofsaid Law. “Branch offices” means agen-cies located in each block or prefectureas defined under Article 9 of said Law.

3. Promotion of e-local govern-ments

-- LAN deployment of 90% indicatesthat an effort within local govern-ments is steadily progressing. --

In tandem with promotion of the e-Government initiative by the centralgovernment, local governments arealso harnessing the benefits of theleading-edge information and com-munications technology for improvingefficiency, effectiveness and quality ofpublic services, fostering local busi-ness and correcting the digital dividebetween regions. Local governments’efforts toward electronic governmentare outlined below:i) Online interaction among public,

business and local governmentsFor online interaction among public,

business and local governments, 2,751organizations opened websites withinFY2001, which is up 25.5% over the

previous fiscal year. Examining it byorganization category, prefectureshave already attained 100% presenceon the Internet, and municipalities arestill at 83.3%, up 17.3 percentagepoints over the previous fiscal year.ii) Computerization within adminis-

trative agenciesAs for computerization within ad-

ministrative agencies, PC deploymentat local governments in FY2001 was319,915 units (up 21.3% over the pre-vious fiscal year) in prefectures,561,721 units (up 45.0%) in municipali-ties. Construction of intra-agencyLANs was 100% in prefectures and88.6% in municipalities, indicating arapid progress in deployment. Also,in their intra-agency LANs, all prefec-tures have “printer sharing,” “filesharing,” “e-mail” and "electronic bul-letin board” functionalities.

In addition, as a network intercon-necting local governments, the “LocalGovernment WAN" is under construc-tion. It is already operational for allprefectures and 12 major cities in Ja-pan. Also, in April 2002, the networkhas been connected to the “Kasumiga-seki WAN.” Now, connection is ex-tended to other municipalities in suc-cession. The network is slated for op-eration for all such organizationswithin FY2003.iii) An effort by the central govern-

mentAs a preparation to offer public ser-

vices online within local governments,the central government developed the"Framework for Electronic Filing ofApplication/Notification Pertaining toLocal Government AdministrativeProcedures (Guideline)” (approved inDecember 2000 by the Inter-MinisterialCouncil for Promoting the Digitizationof Public Administration), in order tosort out issues facing the national gov-ernment. Also, for public services un-der their jurisdictions, individual gov-ernment agencies established actionplans to specify when to present stan-dard specifications for individual pub-lic services to be put online and whento revise laws and regulations. Fifty-five municipalities have laid downconditions for electronic filing of ap-

2002 Annual Report

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of ultrahigh-speed network infrastruc-ture and promotion of its use, in par-ticular, human resource developmentincluding the nurturing of informationliteracy, there is a need to aggressivelypromote the aforementioned whilekeeping in mind the need to correctgaps in access opportunities or abilityto utilize said infrastructure. More-over, as a propellant of various activi-ties making use of ICT activities basedupon such infrastructure, early realiza-tion of e-governments is a must. Fur-thermore, as to promotion of R&D oninformation and communicationstechnology that supports the IT Revo-lution, there is a need to proceed whiletaking heed of the deliberations at theCouncil for Science and TechnologyPolicy.

From such a standpoint, for FY2002,the following are the five priority ar-eas in FY2002 budget

i) Establish and promote the use ofultrahigh-speed network infra-structure

ii) Realize central and local e-gov-ernments

iii) Develop human resourcesiv) Help bridge the digital dividev) Promote strategic research and

development

5. Advancement of basic Inter-net technology

In the "e-Japan Priority Policy Pro-gram - 2002" and "e-Japan 2002 Pro-gram," R&D on technology for pro-moting the shift to the IPv6-based In-ternet -- with the target of "becomingthe world's most advanced IT nationwithin five years" -- has been shownto be in need of advancement of basicInternet technology and R&D promo-tion, not to mention the highlightingto the citizens of the effects of ICT inan easy-to-understand manner by the"e-Japan 2002 Program."

This policy accelerates and promotesthe establishment of an environmentnecessary, such as deciding upon op-eration rules such as Digital RightsManagement (DRM) and security re-quired because of the need to makeknown the world over the results ofdeliberations on the status and efficacy

support measures for R&D for pro-moting services derived from the con-vergence of communications andbroadcasting" will be taken throughthe Telecommunications Advance-ment Organization of Japan (TAO), asindicated in the program.

During the 151st Ordinary Diet Ses-sion, upon submission, passage onJune 2001 and promulgation (to takeeffect in November 2001) of the Pro-moting the Development of Technol-ogy for the Convergence of Broadcast-ing and Telecommunication Act byMPHPT took place. Under this act, theobjectives of financial support for tech-nological development, by the privatesector and others to become the foun-dation to the convergence of commu-nications and broadcasting technologyas well as promotion of facilities usedby telecommunications systems, etc.that is in common, and for those de-veloping crucial technology are aimedat the development of converged com-munications/broadcasting service.

of technology to realize advanced In-ternet applications for enabling high-level ICT use, for the private sectorand others. Further, by showcasingthe effects of ICT to the citizens, the de-mand will be stimulated concerningnew applications utilizing ICT.

6. Convergence of communica-tions and broadcasting

Digital broadcasting has close affin-ity to the Internet, so by combiningwith the IPv6-based Internet, there willbe such merits as improved flow re-lated to a variegated media -- such ascontent other than those of broadcast-ing -- in addition to the increasing im-portance of new services resultingfrom the convergence of communica-tions and broadcasting. In the "e-Ja-pan Priority Policy Program," as onecase of the policy measures for attain-ing the government objective, the for-mation of the world's most advancedinformation and telecommunicationsnetwork, is the call for the establish-ment of laws like a "bill concerning

II. Building of an Information Society Open toEveryone

1. Virtual Agency’s “EducationComputerization Project”

The Virtual Agency is a task forceunder the direct control of the primeminister, and not otherwise associatedwith any particular ministry or agency,set up in December 1998 as a solutionto deal with the increasing number ofissues that fall outside the jurisdictionof ministries and agencies. TheAgency identifies concrete goals andschedules.

In December 1999, the VirtualAgency submitted its findings as a fi-nal report, describing projects includ-ing measures for realizing an elec-tronic government (E-Government)and the “Education ComputerizationProject.”

2. Use of the Internet in schools

Aiming to establish an environmentwhere children can freely use the In-

ternetSchools have a responsibility to de-

velop in children as high a degree ofinformation literacy as possible, to en-able them to live successfully in an ad-vanced information society of the fu-ture. Of Japan’s public schools, 97.9%,up 16.8 percentage points over the pre-vious fiscal year (FY2000: 81.1%), hadaccess to the Internet by the end ofMarch 2002. There are moves to con-nect all public schools to the Internetby FY2001, and new National Curricu-lum Standards will be introduced inFY 2002 that include education in ICT.

MPHPT started a new three-yearR&D plan in FY2001 by expanding anetwork R&D project in the three-yearR&D project (two years extendedlater) since FY1999 and another three-year R&D plan (one year extendedlater) since FY2000. This R&D plan en-titled “R&D on information and com-munications technology for the School

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outcomes as a report.Taking into consideration future us-

age/images of information and com-munications networks based on theviewpoints above, this report sees ob-jectives and functions of network-hu-man interface as:

Realization of free and comfortabledaily-lives supported by informationand communications networks (real-ization of a networked society inwhich ordinary people can enjoy thebenefits of easy-to-use networks);

Free from surrounding dangers andanxieties (realization of a networkedsociety in which anyone can enjoy thebenefits of networks without fear); andCreation of new ways of enjoymentthrough information and communica-


Internet” is carried out in collaborationwith the “future education R&Dproject utilizing the next-generationICT” of the Ministry of Education, Cul-ture, Sports, Science and Technology(MEXT).

The objective of this R&D is to carryout R&D on network construction inan age where moving picture informa-tion is distributed on a full-scale basis.For the purpose, verification experi-ments are conducted on research net-works that enable 1,540 schools se-lected from some 40,000 elementary/lower and upper secondary schools tobe connected to the high-speed Inter-net through high-speed access net-works.

1,675 schools have been connected tothese research networks through R&Dprojects, which are launched in FY1999and FY2000.

These research networks, called the“School Internet,” consist of about3,000 schools, 86 regional network cen-ters throughout Japan and the CentralNetwork Center in Mitaka City, To-kyo.

3. Study Group on Network-human Interface" CompilesReport

Human-network Inter-relationship -- Toward Prodigiously User-friendly,Highly Satisfactory and Exciting Net-worked Society

With the advent of a society whereinformation and communications net-works surrounding people are ex-panding and ICT is used by anyoneanywhere at anytime, there is a needfor viewpoints concerning what kindof information and communicationsnetworks are required by consumers.

To this end, MPHPT has been hold-ing the "Study Group on Network-hu-m a n I n t e r f a c e " ( C h a i r : P r o f .HARASHIMA Hiroshi, Interfaculty Ini-tiative in Information Studies andGraduate School of InterdisciplinaryInformation Studies, the University ofTokyo) since March 2002 in order tostudy the desirable next-generation"network-human interface" which en-ables people to enjoy the benefits ofICT. The study group compiled its

tions networks (realization of a net-worked society in which everybodycan enjoy the benefits of exciting net-works).

The report proposes promotion mea-sures, including interdisciplinary R&Don network-human interface by gath-ering experts in diversified fields andverification experiments with publicinvolvement (in particular the resi-dents), toward the realization of net-work-human interfaces.

MPHPT will, paying due respect tothe report, promote measures for real-izing the advanced information andtelecommunications network societyat an early stage, under which theJapanese nationals can fully enjoy thebenefits of ICT in a true sense.

III. R&D to Support Advancement and Diversifica-tion of ICT

1. Space Communications R&DOpening up the Future

Space communications has manyfeatures such as wide-area coverage,multiple address functionality and di-saster-resistance, having until nowbeen used widely in fields such ascommunications, broadcasting, posi-tioning, etc. supporting the improve-ment of people’s lives. MPHPT, whileclarifying henceforth the role of spacecommunications within the advancedinformation and communications in-frastructure to be constructed, willconduct R&D needed henceforth in re-alizing space communications.

Specifically, i) R&D on quasi-zenithsatellite system: R&D for enablinghigh-precision positioning systems/mobile communications with the areacoverage rate of 100% that comple-ment terrestrial mobile communica-tions networks and provide broad-band services, ii) Engineering Test Sat-ellite – VIII: ETS-VIII: R&D for en-abling high-speed data communica-tions and high-quality (CD level)sound broadcasting, etc. utilizing geo-stationary satellites for mobile termi-nals, and iii) "global multimedia mo-bile satellite communications technol-ogy": R&D for enabling communica-

tions of moving pictures, etc. by por-table terminals anywhere around theglobe by utilizing next-generation low-earth orbit (LEO) satellites, among oth-ers, are being carried out.

2. Promotion of construction ofGIS

-- Promotion of R&D on key technol-ogy necessary for 3-D GIS --

The Geographical Information Sys-tem (GIS) is a system that integrateselectronic map data and ledger data,as well as statistics in different for-mats, then carries out statistical pro-cessing and simulation. Because GISenables a broader range of economicactivities more efficiently and informa-tion sharing, applicable fields are ur-ban planning, facilities management,area marketing, information analysis,welfare services, etc.

In addition, 3-D (three dimensional)GIS enables creation of 3-D images ofreal topography and urban space byadding altitude information. Thus,this can be applied to not only varioussimulations in specialized fields butalso general fields, including walk-through, tourist information with re-ality, educational fields, etc. 3-D GISR&D includes information and com-

2002 Annual Report

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conversion. Ultrahigh-speed photonicnetwork technology realizes ultrahigh-speed data transmission by maximiz-ing the transmission capacity of opti-cal fibers.

To create the most advanced infor-mation and telecommunications soci-ety in the world, MPHPT has beenpromoting R&D of ultrahigh-speedphotonic network technology under aunified academia-industry-govern-ment R&D scheme in collaborationwith TAO, universities, etc.

5. First Meeting of “PromotionConference on QuantumCommunications Research”Held

On May 28, 2001, in order to pro-mote R&D on quantum communica-tions, MPHPT held the first meeting ofthe “Promotion Conference on Quan-tum Communications Research”(Chair: Dr. Leo ESAKI, President,Shibaura Institute of Technology) atMPHPT headquarters, to comprehen-sively deliberate upon R&D directionsand total strategy with participation ofexperts and researchers.

MPHPT has been promoting inte-grated and strategic R&D on quantumcommunications technology, whichhas potentialities to realize ultrahigh-speed or extremely secure encryptedcommunications.

The Conference was formed for con-tributing to smooth and effective pro-motion of R&D through comprehen-sive deliberations on the current sta-tus, direction, total strategy of R&Damong industry-academia-govern-ment experts and researchers.

Topics to be deliberated at the Con-ference are as follows:i) Survey on quantum communica-

tions R&D trends in Japan and for-eign countries

ii) Comprehensive R&D promotionmeasures concerning quantumcommunications

iii) Evaluation of R&D concerningquantum communications

iv) Other topics necessary for promot-ing R&D on quantum communica-tions

munications technology such as tech-nology for acquisition, renewal, repro-duction, transmission, etc. of 3-D infor-mation.

3. Future Prospects of Ubiqui-tous Network Technology

As networks develop toward higherspeed and diversified access methodsto networks are enabled, the advent ofthe "ubiquitous network society," inwhich high-capacity applications areused, is expected. In Europe and theU.S., industrial, academic and govern-mental groups have been promotingvarious R&D projects concerning net-work technology.

In order to ensure Japan's interna-tional competitiveness and to promotestrategic R&D under such circum-stances, MPHPT had been holding a"Study Group on Future Prospects ofUbiquitous Network Technology"(Chair: Dr. SAITO Tadao, ProfessorEmeritus, the University of Tokyo) forclarifying a socioeconomic image ofthe ubiquitous network technologyand the technology's impacts, pro-poses R&D themes to be tackled andpromotion measures for the realizationsince November 2001. In June 2002,the study group compiled its findingsas a report.

This report describes that, through

realization of a "ubiquitous network"at an early stage, it is anticipated thatcreation of new industries and busi-ness markets (CY2010: 84.3 trillionyen), contribution to solving varioussocial problems carried over from the20th century, such as realization ofpeople leading lives in peace, promo-tion of social participation by peoplewith disabilities and the elderly; cop-ing with environmental issues; etc. areto be achieved.

Moreover, this report proposes thati) promotion of R&D in priority tech-nology areas, such as "Ultrasmall chipsnetworking" project, "Anything myterminal" project, "Anywhere net-working" project, ii) collaboration withEurope, the U.S. and Asian economiesin R&D and international standardiza-tion activities, etc., and iii) establishingR&D promotion scheme for industry-academia-government collaboration,such as industry-wide information ex-changes and contribution to R&D/standardization activities.

MPHPT will, paying due respect tothis report, promote R&D and stan-dardization activities toward the real-ization of a "ubiquitous network" at anearly stage.

4. R&D on ultrahigh-speedphotonic network technology

In recent years, transmis-sion of high-volume data(e.g., motion pictures) hasbeen required to the Inter-net. R&D of ultrahigh-speed photonic networktechnology is essential forrealizing large-capacity datatransmission. Ultrahigh-speed photonic networktechnology enables opticalcommunications through-out the network by meansof wavelength division mul-tiplexing (WDM) technol-ogy, which multiplexes, in asingle optical fiber, differentsignals on lightwaves withdifferent wavelengths, aswell as optical routing tech-nology that does not needoptical/electrical signal

Because data volume of 3-D space information is huge, R&D on display under the Internet environment and improvement of transmission speed is carried out.3-D GIS is anticipated to be used in various fields, such as landscape simulation, 3-D facilities management, Walk-through (navigation), through use of visual expressions.

Acquisition/renewal of 3-D information

3-D Spatial information is built usingbythrough acquisition technology through a bird's-eye view and ground levelinformation.

Shopping information

Mmarketing information

Landmarks, etc.

Roads, railways, etc.

Underground facilities/structures

Acquisition through a bird's-eye view

Acquisition of ground information

3-D GIS applications

Disaster prevention

Flood simulation

Sightseeing

Walk-through (Navigation)

Urban planning

Landscape simulation

Facilities management

Underground facilities/structures

Education

Virtual museum

3-D information reproduction/transmission technology

Fig. III-2 3-D GIS

9

6. Toward Diffusion of TimeBusiness

-- “Study Group on R&D of TimeValidation and Time-stamping Ser-vices” Compiles Report --

Recently, with the rapid spread ofelectronic commerce transactions andadministrative procedures over the In-ternet, there is an increasing need toaccurately know the time at whichtransactions, applications and the likeare performed over networks and tobe able to verify the time to a thirdparty. To this end, the developmentof new technology for improving thereliability of time distribution and thesecurity of time-stamping as well asefforts for promoting dissemination ofthe time business have become crucialtasks.

Considering these backdrops, sinceJanuary 2002, MPHPT has held the“Study Group on R&D of Time Vali-dation and Time-stamping Services”(Chair: Dr. OHASHI Masakazu, Profes-sor, Faculty of Policy Studies, ChuoUniversity) in order to study the fu-ture image of time validation andtime-stamping services in the ICT age,R&D themes, standardization prob-lems, socio-economic effects and pro-motion policy for standard time distri-bution and time authentication ser-vices (“time business”). In June 2002,the study group compiled its out-comes as a report.

Against these backdrops, after a se-ries of deliberations on the future im-age of the “time business” and eco-nomic effects thereof, the study reportgroup proposes comprehensive pro-motion measures for this business.

MPHPT will, paying due respect tothis report, take necessary measuresfor dissemination of the “time busi-ness.”

7. Advanced Technology R&DSupport system (TelecomIncubation)

The Telecommunications Advance-ment Organization of Japan (TAO) hasbeen subsidizing part of R&D ex-


penses to ventures, etc. which carryout R&D on leading-edge and originaltechnology in the communicationsand broadcasting fields (leading-edgeR&D subsidization scheme). InFY1999, TAO added an R&D promo-tion scheme for supporting university-industry tie-ups (university-industrytie-up R&D subsidization scheme) andan R&D promotion scheme for sup-porting particularly promising tech-nology fields as designated by TAO(priority technology field R&D subsi-dization scheme). In addition, sinceFY1999, an R&D promotion schemefor supporting university-industry tie-ups and a scheme for subsidizingR&D in technological fields desig-nated by TAO as promising and grow-ing fields (priority technological fieldssubsidization scheme) were instituted.

In FY 2001, TAO subsidized eightprojects, totaling 129 projects sincetheir introduction.

8. Promoting R&D through useof Japan Gigabit Network

Japan Gigabit Network (JGN) isaimed at conducting research and de-velopment of ultrahigh-speed net-working and high-performance appli-cation technologies such as the next-generation Internet technology, and isan open testbed on a nationwide scalethat is from FY1999 being operated bythe Telecommunications Advance-ment Organization of Japan (TAO).

JGN comprises ultrahigh-speed op-tical-f iber networks with ATMswitches (Gigabit Network Link) thathave 66 access points nationwide, fiveShared Use Research Facilities (Giga-bit Laboratories, located in Tsukuba,Keihanna (Kansai Science City), Kita-Kyushu, Kyoto and Okayama) andResearch Centers established for TAOto perform its own research. FromOctober 2001 it has been made IPv6-ready, turning it into one of theworld's largest native IPv6 networks(*) and has been conducting R&D onnetwork operation/management tech-nology related to IPv6 and on IPv6-compliant equipment, among otheractivities.

Note*:a network made up exclusively of IPv6-compliant equipment

Gigabit Network Link and theShared Use Research Facilities areopen to universities, research insti-tutes, private companies and other or-ganizations for a variety of R&D ac-tivities for five years from FY1999through FY2003. The former is rentedout free of charge (users pay for net-work charges from access points totheir own facilities) and users of thelatter are charged minimum expensesfor fuel, lighting and other items.

Latest information is available on thewebsite:

http://www.jgn.tao.go.jp/

9. Competitive Funds for pro-moting R&D on ICT

MPHPT is promoting R&D intounique and innovative ICT on a con-signment basis through subsidies forfunding excellent R&D themes se-lected from applicants. To this end,MPHPT invites R&D themes from thepublic through the following competi-tive research fund:[Strategic Information and Communi-cations R&D Promotion Scheme]

In order to create world's leading in-tellectual property rights, raise thelevel of Japanese researchers throughpreparation of a competitive researchenvironment and create world-leadingintellectual resources, MPHPT is ac-tively promoting unique and innova-tive R&D projects in line with the stra-tegic priority targets. To this end,MPHPT is funding the following R&Dthemes selected from the public pro-posals:i) Top priority Research and Devel-

opment to be focused uponii) Research and Development for Fos-

tering Researchersiii) Research and Development Aimed

at Acquiring International Stan-dardization

MPHPT established the followingcompetitive funding systems in theTelecommunications AdvancementOrganization of Japan (TAO) for pro-moting R&D into original and innova-tive ICT, etc. on a consignment basis

2002 Annual Report

10

field.For this, MPHPT established the

Committee for developing better R&Dsystem under the TelecommunicationsTechnology Sub-Council in the Tele-communications Council. This com-mittee discussed Japan's desirableR&D system in the ICT field. On Au-gust 7, 2002, MPHPT received a report"Desirable R&D System for EnsuringTechnological Competitiveness Per-taining to Information and Communi-cations Technology in Japan" from theTelecommunications Council.

12. Dissemination of Time andFrequency Standards

1) Setting standardsIn accordance with the Ministry of

Public Management, Home Affairs,Posts and Telecommunications Law,etc., the Communications ResearchLaboratory (CRL), which is respon-sible for the national standards fortime and frequency in Japan, generatesthe atomic time scale UTC (CRL) byusing a group of commercial Cesiumatomic clocks. UTC (CRL) is theweighted average of the time of theseclocks, and internationally comparedon regular basis. It is also used as the

source of Japan Stan-dard Time (JST), whichis disseminated by thestandard frequency andtime signal emissionJJY, and also of fre-quency calibration ser-vice. The frequency ac-curacy of UTC (CRL) isevaluated by the opti-cally pumped Cesiumpr imary f requencystandard (CRL-O1)with the uncertainty of1 x 10-14. The evaluatedresults are reported tothe Bureau Interna-t ional des Poids etMesures (BIPM) andcontribute to the Inter-national Atomic Time(TAI) and CoordinatedUniversal Time (UTC).CRL also conducts re-

through subsidies for funding excel-lent R&D themes selected from thepublic.[Basic Research Promotion Schemes inthe ICT Field][R&D promotion scheme utilizing Ja-pan Gigabit Network][Advanced Technology R&D Supportsystem (Telecom Incubation)][R&D promotion scheme for key tech-nologies in the private sector]

Through these competitive researchfunds in the ICT field, it is expectedthat not only various leading-edgeR&D projects be efficiently and effec-tively promoted, but also R&D capa-bilities be enhanced and creation of acompetitive R&D environment raisethe level of Japanese researchers

10. Methods for Evaluation ofR&D on ICT

In order to effectively and efficientlypromote R&D in the ICT field, it is re-quired to create a flexible, competitiveand open R&D environment, and to ef-ficiently allocate R&D resources withpriority. To this end, evaluation ofR&D is significantly critical.

With regard to R&D evaluation, inaccordance with the "GovernmentPolicy Evaluations Act" enacted inJune 2001, the Cabinet decided the "Ba-sic Guidelines for Implementing forEvaluation" in December 2001. The"Basic Guidelines for Implementingfor Evaluation" describes that in addi-tion to the "Government Policy Evalu-ations Act" and the "Basic Guidelinesfor Implementing for Evaluation," thepolicy evaluation shall be conductedin line with the "National Guideline onthe Evaluation for governmental R&D"as decided by Prime Minister in No-vember 2001.

MPHPT, based on those decisionsand the law, submitted an inquiryabout the methods of evaluation forR&D in the ICT field to the Telecom-munications Council, and the inquirywas discussed in the committee ofR&D evaluation under the Telecom-munications Technology Sub-Councilunder the Telecommunications Coun-cil. In March 2002, MPHPT received

a report, the "Nature of R&D Evalua-tion Pertaining Info-CommunicationsTechnology" compiled by the Tele-communications Council.

Paying due respect to the report,MPHPT developed the "Guidelines forInfo-Communications R&D Evalua-tion," and since FY2002 it has beenimplemented and operated on a fullscale as part of policy evaluation.

11. Approach to national R&Dcapability

Information and CommunicationsTechnologies (ICT) is a key infrastruc-ture of all industries and a core tech-nology in the 21st century. And ICT isa driving force that creates new indus-tries while propelling economic struc-tural reforms as well. Accordingly,countries around the world are ac-tively carrying out R&D in the ICTfield. Japan is required to develop aclear strategy and a scheme concern-ing R&D in the ICT field, in such cir-cumstances, in order to make Japan anattractive country with industrial com-petitiveness, world's richest culturesand a high-level quality of life, it is re-quired to develop a clear strategy anda scheme concerning R&D in the ICT

: R&D Basic Strategy

Overseas research institutes, universities and corporations

Domestic research institutes, universities and corporations

Excellent individuals and younger researchers

Promotion of internationalization of R&D environments in Japan

Market creation through ideas of excellent individuals and younger researchers

• Focusing on creativity and originality of excellent individuals and younger researchers

• Activation of R&D activities by making Japan an attractive R&D forum for domestic/overseas researchers

• Realization of an intellectually-invigorating competition that is diversified and multifaceted

Promotion of "open-systems type R&D"

• Establishment of technology with higher transparency, through a nondiscriminatory scheme open to domestic/overseas researchers

• R&D toward establishment of international standards, deployment of R&D results in international markets, promotion of diffusion thereof

• Exact/precise assessment is an important factor for strengthning technological competitiveness.

• Preparation of assessment systems and fair allotment of resources as based upon the assessment

• Focusing on core areas with Japan's technological advantages

• Promotion of technology in its infancy and basic technology on a broader perspective

• Swift return of R&D results to the society• Promotion of communication and common

recognition-building among industry, academia and government

• International standardization activities as one of R&D activities• Preparation of organizations for acquisition of patents and for

international standardization activities

Closer collaboration of industry, academia and government based on a common recognition

Weighted investment of R&D resources by setting priority R&D areas

Appropriate assessment and preparation of competitive environments

Acquisition and management of patents/intellectual property rights, and strategic implementation of standardization activities

Deployment of R&D with two axes: "competition" and "concerted efforts"

Fig. III-11 Points of R&D Basic Strategy

11

search on an atomic fountain primaryfrequency standard, which is expectedto be the next-generation primary fre-quency standard.

2) International comparison of timeand frequency

Standard times maintained by eachnational standard organization arecompared with each other, then theresults are sent to BIPM and are usedfor the construction of TAI and UTC.CRL was designated as the node sta-tion of the international comparisonnetwork in the Asia-Oceania region.Since January 2002, comparison resultsvia the satellite two-way comparisonnetwork mainly deployed by CRLwere adopted by BIPM, for actuallydeciding TAI. In this field, CRL car-ried out basic research on the pulsartime system, time scale algorithm, etc.

3) Dissemination of standardsJST, generated by CRL, is dissemi-

nated using standard-frequency andtime-signal emissions: JJY-LF (40 kHz)and also JJY-LF (60 kHz). These emis-sions are used as a reference fre-quency. The JJY-LF station (40 kHz)on Otakadoya-mountain, located ineastern Fukushima prefecture, hasbeen operational since June 1999. Andthe JJY-LF station (60 kHz) on Hagane-mountain, located in northern Kyushudistrict, has been operational since Oc-tober 2001, resulting in the establish-ment of a two-station operation sys-tem offering the nationwide coveragewith high reliability. A set of timecodes are superposed on the LF radiosignal so that the signal can be usedfor the automatic time adjustment ofradio clocks indicating JST. About 5.8million units of the radio clocks weresold throughout the country as of theend of FY2001, becoming popular inthe society. In response to emergingdemand for reliable time over the In-ternet along with advent of the ICT so-ciety, CRL carried out R&D on timevalidation and time-stamping in col-laboration with MPHPT.

CRL is offering frequency calibra-tion service of the frequencies of vari-ous equipment as part of standard dis-semination activities, in FY2001, such


service was conducted for 30 cases. Inaddition, CRL is preparing to obtaindesignation under ISO 17025 Standardfor the Accreditation of Calibration &Testing Facilities and to participate inthe Mutual Recognition Arrangement(MRA) for national measurement stan-dards and for calibration and measure-ment certificates issued by nationalmetrology institutes.4) Others

CRL has been actively contributingto the promotion of R&D exchanges inthe Asian region, including the launchof researcher invitation scheme in thetime and frequency standard field inAsia.

13. R&D on network securityinfrastructures

-- Toward promotion of sound ad-vanced information and telecommuni-cations network society --

The work and activities of businessand the government have becomeheavily dependent upon informationtechnology, especially including ICTnetworks in recent years, and such de-pendency is expected to become in-creasingly critical. This gives rise tovarious issues of concern related toICT security, such as unauthorized ac-cess by hackers/crackers and com-puter viruses.

Under such circumstances, the "Ac-tion Plan for Building Foundations ofInformation Systems Protection fromHackers and Other Cyberthreats" wasadopted by the "Interagency Director-

Generals' Meeting on IT Security" heldin January 2000, proposing that eachministry and agency promote R&D onsecurity technology. Furthermore, the"e-Japan Strategy" decided by the "ITStrategic Headquarters" in March 2001proposed that R&D on key technologyconcerning information security asspecified measures be promoted.

In line with the proposals, sinceFY2001, MPHPT has been carrying outthe following four R&D topics on net-work security infrastructures:i) Network systems security technol-

ogy: R&D on security technologiesnecessary for network control, op-eration and management

ii) Access systems security technology:R&D on security technologies nec-essary for detecting and preventingunauthorized access such as DoSattacks (an attack to a computer ornetwork by unauthorized overload-ing or exploiting of security holes,disabling business activities) andvirus

iii) Information distribution (content)systems security technology: R&Don security technologies necessaryfor authentication of integrity ofcontent distributed on the networkand prevention of tampering, etc.

iv) Security common element technol-ogy/assessment and verificationtechnology: R&D on security tech-nologies necessary for security ele-ment technology such as cryptog-raphy and security assessment tech-nology through pseudo attacks, etc.

IV. Regional Information Intensification in Promo-tion of ICT Usage

1. Promotion of Telework/SOHO

Telework (or telecommuting)/smalloffice home office (SOHO) offers awork-style free from confinement tofixed work locations, as enabled by theuse of ICT. Not only individuals andbusinesses, but also society as a wholecan benefit from telework/SOHO be-cause it reduces the burden of com-muting on workers, improves produc-tivity, realizes a comfortable lifestyle,

enables engagement in work whilechildrearing, increases job opportuni-ties for the elderly and people withdisabilities, and contributes to envi-ronmental preservation by making ac-tual travel unnecessary.

In particular, with the rapid penetra-tion of ICT including the Internet andthe revision of traditional employmentconditions such as lifetime employ-ment and seniority systems, SOHObusinesses are emerging and their

2002 Annual Report

12

celerating the development of ICT in-frastructure, by developing and intro-ducing ICT applications to public-sec-tor services. The following projects arebeing implemented:1) Regional Intranet Infrastructure

Construction ProjectThe government, from both software

and hardware aspects, supports mu-nicipalities in rural and less-populatedareas that introduce the Internet intopublic facilities in order to provideresidents with two-way administrativeservices over the Internet.2) Project for construction of the next-

generation local cable TV networksThe government supports local gov-

ernments, etc. that construct cable TVfacilities for providing local residentswith indispensable video information,etc. for daily lives.3) City Central District Revitalization

Project Using MultimediaThe government supports local gov-

ernments, etc. that construct facilitieshaving multimedia functions for exhi-bitions/training/meeting in order torevitalize city central districts.4) Information Barrier-free Telework

CentersThe government supports local gov-

ernments, etc. that construct barrier-free center facilities installing ICTequipment, etc. for the elderly andpeople with disabilities.

5. Okinawa International Infor-mation Special DistrictProject

U.S. military bases and facilities areas of now concentrated in OkinawaPrefecture, affecting the islanders’ liv-ing environment and regional devel-opment. Taking this into account, thecentral government has been takingnecessary measures for helpingOkinawa Prefecture i) gain economicself-reliance as a regional economy, ii)secure employment, iii) contribute toimprovement of the prefectural livingstandard and iv) develop Okinawa asa region that contributes to Japan’seconomy and society. MPHPT inFY1996 proposed the “Okinawa Mul-timedia Special District Project” (theMultimedia Island <MMI> Concept in

number is increasing rapidly as inde-pendent businesses that ignore con-ventional corporate structures.

To promote telework/SOHO,MPHPT has been carrying out the fol-lowing measures:i) R&D on ICT systems contributing

to SOHO, etc.;ii) Funding scheme for facilities and

equipment for telework/SOHO;iii) Supporting telework promotional

events; andMeanwhile, the Asia-Pacific Eco-

nomic Cooperation (APEC) project tocompile a “Telework Manual,” whichwas proposed by Japan to promotetelework in the Asia-Pacific region, hasbeen completed, and the manual hasalready been made public.

2. Teletopia project

The Teletopia Project is an initiativeaimed at solving a variety of problemsin local communities and reinvigorat-ing societies by promoting regionalICT through the introduction of ICTmedia such as cable TV, the Internetand community broadcasting into des-ignated communities.

Since its launch in FY1985, a total of203 communities have been desig-nated as Teletopia communitiesthroughout Japan as of the end ofMarch 2002, where a variety of sys-tems have been built to accommodatethe special needs of each communityincluding the revitalization of a com-munity, the promotion of local busi-ness and the expansion of administra-tive, educational, medical as well associal welfare services.

3. Projects for narrowing gaps ininformation and communica-tions

Projects for narrowing gaps in infor-mation and communications were ear-marked projects in the "public works-related budget" scheme since FY2001budget.

In the advanced information andtelecommunications network society,in addition to the existing infrastruc-tures such as roads and ports, informa-tion and communications infrastruc-tures supporting smooth and secure

distribution of information shall beprepared as social capital indispens-able for citizen's daily lives and corpo-rate activities.

MPHPT has been implementing thefollowing projects for promoting socialcapital preparation:i) Project for construction of trans-

mission towers for mobile commu-nications

In order to narrow information andcommunications gaps between regionsthrough expansion of areas where mo-bile communications services such ascellular telephone services are avail-able, in cases where municipalitiesconstruct steel tower facilities for mo-bile communications in rural less-populated areas, the central govern-ment subsidies part of the constructioncosts.ii) Project for eliminating poor recep-

tion of commercial TV, AM radiobroadcasting and interference onreception in urban centers, in caseswhere municipalities, etc. constructfacilities for eliminating poor re-ception, the central governmentsubsidies part of the constructioncosts.

In order to eliminate poor receptionof commercial TV/radio broadcastingiii) Project for construction of local

intranet key facilitiesIn order to enhance local education,

administration, welfare, medicine, di-saster prevention, etc., the central gov-ernment supports efforts of local gov-ernments, etc. to construct high-speed/ultrahigh-speed local publicnetworks with Internet technology

4. Projects for narrowing gaps ininformation and communica-tions

Projects for narrowing gaps in tele-communications were earmarkedprojects in the "Life-related prioritybudget frame" scheme since FY1991budget.

The scheme as the "Project for En-hancement of Regional and Life-re-lated Information Infrastructure" is amodeling project aimed at enhancingthe convenience of people’s daily lives,reinvigorating local economies and ac-

13


of multimedia model towns which willproduce new lifestyles, and contributeto a socioeconomic revolution towardan advanced information society.

8. ICT human resources trainingproject support scheme

In FY2001, MPHPT established an"ICT human resources training projectsupport scheme" with the purpose ofcontributing to making Japan a nationwith abundant ICT human resourcesthrough training of human resourceswith expertise, technical knowledgeand skills in the rapidly growing ICTfield. Under this scheme, MPHPT sub-sidizes part of necessary costs for ICThuman resources training projectsimplemented by third sectors. InFY2001, MPHPT selected 25 projects.Until FY2005, MPHPT will activelyimplement trainings on necessary ex-pertise for personnel in charge of spe-cialized technical services, includingdesigning of telecommunications sys-tems, broadcast program productionin the broadband age.

Okinawa). Since then, MPHPT hasbeen getting expected results, such asjob creation, through a variety ofpolicy measures for transformingOkinawa into an “ICT hub” in theAsia-Pacific region.

Furthermore, based on the results ofthe MMI project, the “Okinawa Inter-national Information Special DistrictProject,” which accelerates the realiza-tion of “ICT hub” and invites domes-tic and overseas ICT-related industriesinto Okinawa, was proposed by the fi-nal report of “Okinawa EconomicBuild-up Plan” (approved by the“Okinawa Policy Council” in August2000). The “Okinawa Economic Build-up Plan” proposes various measuresfor helping the islands gain economicself-reliance.

MPHPT has been deploying, in amultifaceted and multilayered man-ner, a wide range of policy measuresfor realizing the “Okinawa Interna-tional Information Special DistrictProject,” based upon the following fivepromotion measures:1) Constructing a Global Internet

eXchange (IX) for building an ICThub in the Asia-Pacific region

2) Advancing regional ICT networks3) Inviting, clustering and fostering

domestic and overseas ICT-relatedindustries and research institutes

4) Concentrating domestic and over-seas content and applications

6. Telecom Venture BusinessFund

In May 1998, the “Telecom VentureBusiness Fund” (or Telecom Invest-ment Enterprise Cooperative) was es-tablished with the aim of spawningnew telecommunications and broad-casting businesses.

The Fund is giving financial assis-tance to “new telecommunications andbroadcasting businesses” who is givenauthorization by the Minister for Pub-lic Management, Home Affairs, Postsand Telecommunications under the“Law for Promoting Specified Tele-communications and BroadcastingBusinesses.” The new business withauthorization that is newly established

or is within five years since its incep-tion and with a capital of one billionyen or less (where a juridical personwho has Type I telecommunicationsbusiness permission shall be a juridi-cal person with capital of 1.5 billionyen or less) can be given capital invest-ment from the Fund. The upper limitof capital investment per authorizedbusiness is 200 million yen or up to30% of the total capital.

7. Promotion of New ICT Appli-cations R&D (Multimedia PilotTown Project and others)

Via the Telecommunications Ad-vancement Organization of Japan(TAO), MPHPT will conduct follow-up R&D, winning cooperation fromenthusiastic local governments, uni-versities and private companies, fornew ICT applications and realizingfurther advanced ICT system based onbasic technology which has been de-veloped in designated communitiesunder pilot projects.

Through these activities, MPHPTwill create new demand for a variety

V. Contribution to Development of the GlobalInformation Infrastructure

1. Promotion of internationalstandardization

The International Telecommunica-tion Union (ITU) is a specializedagency of the United Nations in chargeof telecommunications issues, whoseobjectives are promotion of interna-tional cooperation for improving tele-communications as well as rationaluse, promotion and provision of tech-nical support for developing countries,and enhancing efficiency of telecom-munications services. At ITU, theTelecommunication StandardizationSector (ITU-T) and the Radiocom-munication Sector (ITU-R) are imple-menting standardization activities.MPHPT, through ITU, is engaging inthe promotion of international stan-dardization.

In order to promptly implementstandardization activities (approval ofRecommendations) in response torapid changes surrounding the ICT en-vironment, working methods are be-ing reviewed.

From September through October2000, the World TelecommunicationStandardization Assembly (WTSA-2000), the general meeting of ITU-Theld every four years, was held inMontreal, Canada. The meeting ac-cepted the introduction of new proce-dure enabling rapid adoption of Rec-ommendations utilizing electronicmethods for technical Recommenda-tions not related with regulatory orpolicy issues, or, Alternative ApprovalProcess (AAP). Through the introduc-tion of AAP, the time period neededfor approval procedures of almost allITU-T Recommendations is enabled to

2002 Annual Report

14

be shortened to two to three months.In addition, in order to promptlyimplement standardization activitiesmeeting market needs, a workingmethod proposed by Japan that uponsubmission of a targeted system stan-dardization activities with prioritystart within a short time of period isunder deliberations.

ITU-T is collaborating with otherstandardization organizations, for in-stance, upon adoption of Recommen-dations, ITU-T is avoiding unneces-sary overlap in and accelerating stan-dardization activities through refer-ence to standards developed by theInternet Engineering Task Force(IETF), a forum for Internet standards,and the Third-Generation PartnershipProject/Third-Generation PartnershipProject 2 (3GPP/3GPP2), a mobilecommunication standardization fo-rum.

ITU-R is carrying out amendment tothe Radio Regulations, studies on is-sues concerning radio communica-tions technology/operation, adoptionof Recommendations and frequencyallocation/registration. At present,ITU-R has been deliberating technicalstudies on radio communications un-der seven Study Groups by techno-logical field, SG 1: Spectrum manage-ment, SG 3: Radiowave propagation,SG 4: Fixed-satellite service, SG 6:Broadcasting services (terrestrial andsatellite), SG 7: Science services, SG 8:Mobile, radiodetermination, amateurand related satellite services and SG 9:Fixed Service; and ITU-R establishedthe Radiocommunication AdvisoryGroup (RAG) that revises priorities ofITU-R works and strategies, andevaluates progress of working plans,for reviewing working methods ofITU-R as a whole.

Japan has been contributing to ITU-R activities through assuming of oneSG Chair, three SG Vice-Chairs andmany other posts, submitting manycontributions toward formulation ofRecommendations, and participationof many experts in SGs, etc.

At the sixth Working Party 8F -(SG8) held in Tokyo in October 2001,as one of Japan’s recent efforts, it was

agreed to adopt the basic concepts ofIMT-2000 and systems beyond IMT-2000 proposed by Japan as a basis fordiscussion; Japan’s Dedicated ShortRange Communications System as ajoint proposal of ASTAP’s nine coun-tries was submitted to WP8A (SG8),then a new draft Recommendationbased on the joint proposal wasadopted at the SG8 meeting held inNovember 2001.

Japan is actively contributing totechnical studies, such as at the SG6meeting held in Geneva in October2001, it was decided that planning pa-rameters of Japanese system (ISDB-T)are added to the Recommendation ofplanning standard for terrestrial tele-vision broadcasting.

2. Promotion of the Asian Info-communications Council(AIC)

Based on Japan’s proposal, the AsianInfo-communications Council (AIC)was established in FY1988 aimed atsupporting the sound development ofthe telecommunications infrastructure,contributing to socioeconomic devel-opment and improving the quality oflife in each member country.

AIC, initially started with four coun-tries (Japan, the Republic of Korea, thePhilippines and Singapore) was ex-panded to nine countries with the par-ticipation of China, Indonesia, Malay-sia, Thailand and Vietnam. A total of102 organizations participating in AICinclude telecommunications adminis-trations, carriers, communicationsequipment manufacturers, universitiesand other related organizations.

So far 27 conferences of AIC havebeen held. By designating a five-yearperiod from April 1998 to March 2003as the third AIC term, AIC haslaunched new extensive joint experi-ments on Internet Protocol (IP), Wire-less Local Loop (WLL) and otheritems. In October 1999, the name AICwas changed from the Asian ISDNCouncil to the Asian Info-communica-tions Council, in order to respond tothe latest technological trends.

At the 27th AIC Conference in

Chiangrai, Thailand, it was decided tocontinue AIC activities for further fiveyears starting April 2003 after the thirdterm.

The AIC joint experiments are antici-pated contributing to the developmentof Asian ICT infrastructures and therevitalization of the Asian economy.

3. Promotion of the APIITestbed Project

The Asia-Pacific Information Infra-structure (APII) Testbed Project isaimed at contributing to regional eco-nomic development by promoting theconstruction of ICT infrastructure inthe Asia-Pacific region.

The practical promotion of theproject began on February 13, 1997when MPT opened the APII Technol-ogy Center (APII-TC) in the Kansaibranch of the Communications Re-search Laboratory (CRL) in Kobe,Hyogo Prefecture. The center isequipped with advanced ICT experi-mental facilities, which include anATM-backboned network that servesas the hub for international joint stud-ies on the ICT infrastructure that arebeing conducted in the Asia-Pacific re-gion.

The project members are conductinginternationally joint R&D projects andexperiments on next-generation tech-nologies, such as IP over satellite, IPv6and the next-generation Internet, aswell as application technologies thatinclude telemedicine and distancelearning, to mention just a couple. TheAPII Technology Center has also beenproviding training to multimedia info-communications experts who will berequired to develop the next-genera-tion network in the Asia-Pacific re-gion.

In 2002, the JICA training program(eight countries) and an APT trainingcourse (10 countries) on the next-gen-eration Internet technology were con-ducted with support of CRL andMPHPT at APII-TC.

Note: A testbed is an experimental networkfor conducting verification experimentsin order to develop networking and ap-plication technologies.

15


ii) The Japan-Europe experimentgroup

A group representing the Japaneseside in the Japan-Europe Joint HDRSatellite Communications Experimentsis also part of GIBN. Experiments (Ja-pan-Europe Gamma: JEG, which linksJapan and Europe via HDR satellitecircuits) are carried out primarily bythe CRL and the European SpaceAgency (ESA), in collaboration withthe ESA-led GAMMA (Global Archi-tecture for Multi-Media Access)project.

In Phase I (from July 1997 throughNovember 1999) of the project, variousexperiments utilizing 2Mbps linkswere successfully closed.iii) The Japan-Republic of Korea ex-

periment groupAt a Japan-Republic of Korea Bilat-

eral Consultation held in April 1995,Japan’s proposal to conduct the Inter-national Joint High-speed Communi-cations Experiments linking Asiancountries/areas gained consensus.Based on the High-Data Rate SatelliteCommunications Experiment Projectagreed with Korean Ministry of Infor-mation and Communication in Sep-tember 1997, in Phase I between No-vember and December 2000, variousexperiments were successfully con-ducted using 45Mbps links. In PhaseII from November 2001, experimentsusing 155 Mbps links started. Duringthe 2002 FIFA World Cup TM, high-definition live video of games trans-mitted via HDR satellite circuits weredisplayed on large screens. The dra-matic effects of the experiments at-tracted attention from around theworld.iv) The national Satcom application ex-

periment groupThe group, in February 1998, con-

ducted experiments on 3D ultrahigh-definition video transmission at the18th Nagano Winter Olympic Games.

5. POST-PARTNERS Project

MPHPT, in cooperation with coun-tries in the Asia-Pacific region, hadbeen promoting an international joint

experiment known as the POST-PARTNERS (Post-PAn-Pacific Re-gional Telecommunications NetworkExperiments and Research by Satellite)Project. The purpose of this project isto promote technology transfer, hu-man resource development and thediffusion of satellite communicationsin the region.

Many countries in the Asia-Pacificregion are made up of a multitude ofislands with populations spread outover a wide area, and with insufficienttransportation and communicationsnetworks. In such a region, satellitelinks are an extremely effective meansof communications and are expectedto play an essential role in building theAsia-Pacific Information Infrastructure(APII) network of the future.

As the very first project of the POST-PARTNERS, a joint experiment wasconducted in January 1997 between Ja-pan and Thailand. Since then, a vari-ety of experiments had been con-ducted including a measurement ofthe characteristics of satellite radio-wave propagation for studying basicsatellite communications technology, amultimedia satellite communicationsexperiment using 1.5 Mbps satellitelinks, a Tele-education experiment byholding an international workshop atwhich reports on the current status ofeach country’s communications andcultural affairs were provided, and aTelemedicine experiment in whichmedical images were transmitted.Since then, Thailand, Indonesia, Ma-laysia, Fiji and the Philippines partici-pated in the project. In February 2002,the project was closed because the pur-pose was successfully achieved.

From now on, MPHPT is going todevelop comprehensive promotionmeasures for international joint experi-ments in order to propel deploymentof international broadband platforms.

4. Promotion of satellite applica-tion experiments

Since October 1997, MPHPT hasbeen organizing the “Satellite Applica-tion Experiments Promotion Confer-ence,” chaired by Dr. YA S U D AYasuhiko, Professor at the School ofScience and Engineering, Waseda Uni-versity. One of this PromotionConference’s missions is to supportthree high-data rate (HDR) satellitecommunications experiments jointlyconducted by Japan and Europe, Japanand the U.S., and Japan and the Re-public of Korea, that are to verify thefeasibility of HDR satellite communi-cations technologies over an advancedICT infrastructure. Another mission isto promote experiments on satellite-based applications in Japan.1) Roles and structure of the Promo-

tion ConferenceThe Promotion Conference is com-

prised of experienced and knowledge-able persons, satellite communicationscarriers, communications equipmentmanufacturers, satellite communica-tions users, interested organizations,etc. Its purpose is to create a satellitetestbed necessary for the experimentsand to contribute to the smooth pro-motion of satellite communications ex-periments using the testbed.2) Experiment plani) The Japan-U.S. experiment group

A s p a r t o f G 7 ’ s “ G l o b a lInteroperability of Broadband Net-work” (GIBN) project, this experimentis promoted by the CommunicationsResearch Laboratory (CRL) and theU.S. National Aeronautics and SpaceAdministration (NASA) as key actors,in collaboration with industries (com-munications businesses, manufactur-ers, etc.) and universities.

As Phase I, the “high-definitionvideo postproduction experiment”was conducted in March 1997 withsuccess. In May 2000, as Phase II, vari-ous communications experimentswere made by expanding transmissioncapacity to 155 Mbps and using ATMhigh-speed satellite links with success.

2002 Annual Report

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etc. conducting R&D on ICT andbroadcasting services for the elderlyand people with disabilities, MPHPT,through TAO, has been granting sub-sidies to cover part of R&D expensesas the “Subsidy for R&D on ICT andbroadcasting services for the elderlyand people with disabilities.” As ofthe end of FY2001, 78 such grants havebeen made. In addition, in order thatopinions of people with disabilities,etc. will be reflected on R&D towardmore meaningful R&D, MPHPT hasbeen holding opinion exchange meet-ings between private enterprises con-ducting R&D with the subsidies andusers of the ICT equipment sinceFY2000.

6. Study Group on Accessibilityfor the Elderly and Peoplewith Disabilities

Since FY2001, MPHPT has beengranting subsidies to entities who pro-vide telecommunications/broadcast-ing services or conduct R&D on newfirst ever services for the elderly andpeople with disabilities. Telecommu-nications relay service, Internet-Brailleconversion service, etc. for the elderlyand people with disabilities are objectsof the subsidization.

VI. Preparation of “Information Barrier-Free”Environment

1. R&D for imaging technologyfor advanced telemedicine

The Telecommunications Advance-ment Organization of Japan (TAO)carries out R&D on technology con-cerning moving picture natural vision(the next-generation image display/transmission system), which repro-duces superrealistic images with truecolor, gloss and texture, based on mul-tispectral imaging beyond the RGB-based systems, the foundation of cur-rent imaging systems. The system isexpected to be applied to many areasincluding telemedicine, electronic mu-seum, electronic transaction, etc.

2. Measures for the Diffusion ofWebsites Friendly to Every-one

In FY2001, MPHPT, in order that theelderly and people with disabilitiescan easily access to websites and un-derstand the content thereof, createda system with functions to check andimprove the accessibility of websites.In FY2001, MPHPT conducted verifi-cation experiments of the system.Based on the verification experiments,the ministry will complete the systemand widely open the system to thepublic

3. Information Barrier-freeTelework Center ConstructionProject

For the purpose of promoting ex-pansion of the job opportunities andself-reliance by utilizing ICT for theelderly and people with disabilities,MPHPT has been supporting localgovernments, etc., constructing ICTsystems, etc. and constructing Infor-mation Barrier-free Telework Centersthat expand opportunities for the eld-erly and people with disabilities toparticipate in society since FY1998. ByFY2001, five projects have been con-ducted throughout Japan.

4. Development and deploy-ment of ICT system support-ing self-reliance and socialparticipation of the elderlyand people with disabilities

MPHPT, through TAO and with thecooperation of local governments, etc.,has been carrying out R&D for realiz-ing ICT systems with advanced func-tions required in the welfare field tohelp the elderly and people with dis-abilities. The systems expected to berealized include: wide-area care sup-port systems, which enable efficientprovision of care services and regionalwelfare information, etc., and the next-generation visiting-care support sys-tems with which nurses, etc., can getthe latest care information at thehomes being visited.

5. Subsidies to R&D on ICT andbroadcasting services for theelderly and people withdisabilities

Since FY1997, to private enterprises,

VII. Promotion of Content Distribution

1. Creating market for contentdistribution

Although the progress of digitaliza-tion of broadcasting and widespreaduse of the broadband Internet is ex-panding demands for content, the dis-tribution thereof has not been fully fa-cilitated. However, thus far smoothcontent distribution has not been real-ized due to lack of transaction rulesgoverning copyright (copyright andneighboring rights) concerning net-work use and other reasons.

Under these circumstances, the"Study Group on the Formation ofNetwork Distribution Market of Digi-tal Content" has been held since Feb-

ruary 2001 for the purpose of study-ing structural /technological issuesand practical measures for construc-tion of a copyright management sys-tem required upon forming a smoothcontent distribution market, etc. basedupon the recognition of current trendsand problems of content distribution.The group has compiled its findings asa report in July 2002.

Based on this report, with regard toproduction and distribution of broad-band content, in order to realize the "e-Japan Strategy" at an early stage, sinceFY2002 MPHPT will implement twomeasures, namely, i) measures for pre-paring an environment for creating thecontent market by the private sector,

17


and ii) measures for complementing /strengthening content distribution.

Specifically, the following measuresare being taken:1) "Development and verification of

clearance system of copyrights"In collaboration with other minis-

tries, a market environment in whichcopyrights of broadband content suchas broadcast programs are dealt be-tween the right holders and the userswill be developed and verified.2) "Development and implementation

of technologies for supportingbroadband content distribution"

A verification field of large-capacitydigital video content such as broadcastprograms stably distributed over thehigh-speed Internet will be providedfor R&D of relevant technologies sup-porting the distribution of broadbandcontent.3) " Development and verification of

broadband content distribution inthe educational field"

Along with progress in deploymentof broadband platforms in school, inorder to introduce ICT into educationthrough making the most of such plat-forms, systems tailored to educationaluse for ensuring security and provid-ing functions to authentication, billing,distribution on networks shall be veri-fied for promoting the distribution ofbroadband content in classrooms.

2. Advancement of the environ-ment for content productionand archives

In order to promote early diffusionof terrestrial digital broadcasting, to-ward relevant broadcast programmingproduction facilities, etc., special taxincentives, no- or low-interest loansfrom the Development Bank of Japan,and guaranteed obligation by the Tele-communications Advancement Orga-nization of Japan (TAO) based on the“Advanced Television BroadcastingFacility Promotion Temporary Mea-sures Law” enforced in November1999.

Since FY1999, TAO has been carry-ing out R&D on i) systems that digi-talize programming libraries whichcollect and keep broadcast program-ming, connect such libraries, then en-able retrieval/reproduction of broad-cast programming from remote placesat high speed, and ii) systems that ef-fectively reproduce and provide com-paratively short broadcast programsupon remote request.

In addition, since FY1999 TAO hasbeen conducting R&D on advancedtelecommunications system that en-able efficient production of diversifiedHDTV broadcas t programs inOkinawa Prefecture.

ing to penetrate all households, un-bundling of content and broadcast-ing facilities is not appropriate.

iii) Restructuring of business envi-ronments to meet the new age

• It is essential to introduce a newscheme for flexibly responding toanticipated business tie-ups, etc.among businesses, and review theexisting regulatory classification inconsideration of future technologi-cal innovations.

iv)Promotion of digitalization of ter-restrial broadcasting

(1) Digitalization of terrestrial broad-casting has a significant meaningon the ICT strategy.

(2) The government shall actively pro-mote digitalization of terrestrialbroadcasting as a national strategy,and tie-ups with broadcasters,manufacturers, etc.

v) Ensuring good-quality content, hu-man resource development, etc.

(1) From the perspective of realizingculturally rich life and the view-point that in the ICT society, supplyof abundant and high-quality con-tent and creation of the content dis-tribution market have importantsignificance for the national strat-egy, it is vital to promote produc-tion and distribution of good-qual-ity content.

(2) It is critical to promote human re-source development in the field ofcontent production.

vi)Viewer/listener-oriented policy(1) With one eye toward a future ubiq-

uitous network society, it is vital tofurther strengthen service deploy-ment considering viewers/listen-ers.

(2) It is essential even for viewers/lis-teners to improve capabilities to uti-lize and opt for various informa-tion provided by media.

Action Plan for the Promotion of Digi-tal Broadcasting1. Specific efforts by interested par-

tiesA. Terrestrial TV broadcasters will:i) implement the plan, without a hitch,

that terrestrial digital broadcasting

VIII. New Deployment of Broadcasting Policy

1. Interim report of from the“Roundtable Conference onFuture Aspects of Broadcast-ing in the Age of Broadband”

i) Basic stances(1) Deliberations are to be held on pros-

pects for broadcasting five years to10 years down the road.

(2) Considering the progress beingmade in the two key fields ofbroadbandization and digitaliza-tion of broadcasting it is appropri-ate to set clear ways forward.

ii) Reorganization of relationship be-tween broadcasting and commu-

nications, and their roles(1) Broadcasting and communications

for citizens are fundamentally dif-ferent in their social functions,. It isdifficult to consider that the differ-ences will disappear after a lapse offive to 10 years from now.

(2) The relationship between broad-casting and communications is notalternative but a relationship whichcomplements one another, and thesynergy of the relationship will re-alize much higher level of servicesfor citizens.

(3) Now that higher social functions ofterrestrial broadcasting are continu-

2002 Annual Report

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is to start by the end of 2003 in thethree major metropolitan areas ofKanto, Kinki and Chukyo, and inthe other areas by the end of 2006,and analogue broadcasting is to beterminated by 2011.

ii) aim at high-definition broadcast-ing for more than 50 percent of theweekly broadcasting hours in theinitial period when the service isstarted, and after that period, aim atincreasing the ratio.

B. Terrestrial digital radio broadcast-ers will:start test broadcasts for practicaluse in Tokyo and Osaka in the fallof 2003.

C. BS TV broadcasters will:i) make efforts to further diffuse BS

digital broadcasting in Japan, in-cluding the introduction of attrac-tive broadcasting contents and theimplementation of a joint campaignto publicize the merits of digitalbroadcasting.

ii) aim at broadcasting BS digital pro-grams using a transmission capac-ity of more than 22 slots, fully uti-lizing the merits of digital broad-casting, for more than 75 percent ofprime time (between 7:00 p.m. and11:00 p.m )by the end of 2003. Theseprograms are mainly high-defini-tion programs, and among the oth-ers are interactive programs andprogram-based data broadcasting.

D. CS TV broadcasters will:work to diffuse digital broadcasting by

increasing the number of a widevariety of programs utilizing itsmerits through various efforts suchas cooperation among platforms.

E. Cable TV broadcasters will:aim at offering a digital retransmitservice without a hitch when ter-restrial digital broadcasting islaunched within a service area, en-suring the enhanced digital retrans-mit of BS digital broadcasting.

F. Receivers makers and retailers will:i) aim at promptly introducing the re-

ceivers intended both for satellitedigital broadcasting and terrestrialdigital broadcasting into marketsand ensuring smooth supply of in-expensive digital broadcasting re-

ceivers for high definition broad-casting.

ii) sell terrestrial broadcasting receiv-ers, having consumers (citizens)known of when digital TV broad-casting will start and when analogTV broadcasting is being termi-nated.

iii) start a technical discussion as soonas possible by parties related to digi-tal broadcasting on the targeted ra-tio of television sets capable of re-ceiving digital broadcasting in de-vices newly manufactured, anddraw a conclusion.

G. Local authorities will:i) encourage active utilization of ter-

restrial digital broadcasting in thepromotion of e-municipalities.

ii) cooperate to have residents knownof the policy for changing the ana-log frequencies and accompanyingmeasures.

2. Promotion of a publicity campaignby a council

It is necessary to set up a councilconsisting of the above-described par-ties and other people from a widerange of fields, to ensure the smoothpromotion of the digitalization ofbroadcasting and to roll out a cam-paign vigorously to have citizensknow of this.

3. Government's efforts It is necessary for the government

to implement timely and appropriatemeasures for having citizens known ofthe merits of digitalization as a na-tional policy, its schedules, etc. andproviding active support for smoothdigitalization.

4. Follow-upRegular follow-up to the action plan

is required to conduct.

2. Report of “Study GroupConcerning Cable Televisionin the Broadband Age”

In recent years, cable TV has beensteadily growing as a comprehensiveinformation and communications in-frastructure that provides multiplechannel broadcasting service for re-transmitting BS broadcasting and CS

broadcasting, in addition to terrestrialbroadcasting, community broadcast-ing and Internet access services.

However, besides recent progress indigitalization of broadcasting, with therapid progress in broadbanding of thetelecommunications field, the situationsurrounding cable TV are drasticallychanging.

Specifically, with the age of full-scaledigital broadcasting has come, as ex-emplified by the progress of digitali-zation in satellite broadcasting, thelaunch of terrestrial digital broadcast-ing in 2003, etc. Along with rapid pen-etration of diversified broadband ser-vices, such as ADSL, FTTH, video dis-tribution services utilizing IP technol-ogy are emerging.

Against these backdrops, as stated inthe “e-Japan Priority Program – 2002,”the government is aiming to make Ja-pan “the world’s most advanced ITnation until CY2005,” through digita-lization of broadcasting and diffusionof the high-speed/ultrahigh-speed In-ternet throughout Japan, etc. Cable TVis also anticipated to play a major rolefor attaining this target.

Thus, for the purpose of deliberatingfuture promising images of cable TVand challenges toward further devel-opment of cable TV as we face thebroadband age, among others ,MPHPT has been holding the “StudyGroup Concerning Cable Television inthe Broadband Age” since December2001, and established two workinggroups, the “Business Strategy Work-ing Group” and the “technologyWorking Group.” In July 2002, theStudy Group compiled its findings asa report containing the followings:• Promotion of digitalization of cable

TV In order to facilitate digitalizationof broadcasting media as a whole, itis critically important to promotedigitalization of cable TV, to whichone household out of four house-holds subscribes. In addition, it isalso essential to raise public aware-ness concerning advantages of digi-tal broadcasting.

• Promotion of widening of cable TVservice areas and networking

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thereof In order to add higher value tocable TV through implementationof digitalization and new additionalservices, it is indispensable to ad-dress widening of cable TV serviceareas and networking thereof

• Construction of business supportplatforms In order to supplement manage-ment capacity of each business, it isnecessary for the industry as a wholeto prepare business infrastructurescommonly needed for each busi-ness. In particular, it is vital to i)develop/construct a business sup-port platform to operate all neces-sary systems for management/op-eration of a Conditional Access Sys-tem (CAS), and ii) develop/intro-duce more advanced security tech-nology.

• Development of guidelines con-cerning environment for use of cableInternet It is vital for the cable TV industryto develop and publicize guidelinesconcerning network conditions andsecurity policies, so as to prepare anenvironment in which users can en-joy cable TV with ease-of-use.

• Strengthening of activities towardunified specifications in the com-munications field User needs for communicationsapplications through use of cableTV networks will increase. Thus, itis vital for the industry to strengthenactivities toward unified specifica-tions for communications-relatedtechnologies.

3. Approaches for promotion ofdigital terrestrial broadcasting

Digitalization of terrestrial broad-casting will drastically change theviewer mode, in which viewers to dateare forced to receive broadcast unilat-erally, and bring about new viewermodes, in which viewers will activelyinteract with broadcasters. This willresult in considerable benefits forviewers through unprecedented ad-vanced and multifaceted broadcastingservices (high-definition pictures with-out ghosts, closed-captioned/explana-

tory broadcasting for the elderly andpeople with disabilities, interactiveservice by improved affinity to com-munications services, pictures suitablefor reception by a mobile terminalunit). In addition, it is also expectedto bring a significant economic reper-cussion and effective utilization of ra-dio waves. Now, digitalization is be-coming global trends.

In the three major metropolitan ar-eas of Tokyo, Kinki and Chukyo in Ja-pan, the full-scale digital terrestrial TVbroadcasting is to be commenced un-til 2003, while in other locations, thefull-scale digital terrestrial TV broad-casting is expected to be operationaluntil the end of 2006.

Upon digitalization of terrestrialbroadcasting, the analog frequency isto be changed by the required changein frequencies in use allocated for theexisting analog broadcasting so as toensure frequencies necessary for thetransition to digital broadcasting. Inresponse to this change, antennas andtransmitters are to be replaced andtuned at both the broadcaster andviewer sides.

To this end, the “Law to Amend theRadio Law” came into force in June2001 to cover costs for the analog fre-quency change support. Thanks tothis Law, costs for necessary works toimplement the analog frequencychange are allowed to be covered bythe country through subsidization andother support measures with the bud-get allocated from the Spectrum UserFee.

In July 2001, in order to facilitate thetransition to the terrestrial digitalbroadcasting and diffuse/developthereof, the National Terrestrial Digi-tal Broadcasting Promotion Confer-ence was established, aiming at pro-moting joint study on the implemen-tation process of the transition to theterrestrial digital broadcasting amongcommercial broadcasters, JapanBroadcasting Corp. (NHK), MPHPTand local terrestrial digital broadcast-ing promotion conferences.

At the Conference, toward the effi-cient and smooth implementation ofthe analog frequency change support

measures, deliberations on methodsfor the transition, estimations of thetransition cost and approaches to thetransition were made. In August 2002,the Conference compiled a plan con-taining approaches to the transition.

In addition, in July 2002 the “Panelon Future Image of Broadcasting inBroadband Age,” an advisory body tothe MPHPT minister, adopted an “Ac-tion Plan for Promoting Digital Broad-casting.” This action plan stipulatestargets to be attained by each stake-holder, including terrestrial TV broad-casters, satellite broadcasters, receivermanufacturers, equipment suppliers,local public entities and administra-tions, for further promoting terrestrialdigital broadcasting.

In the three major metropolitan ar-eas of Tokyo, Kinki and Chukyo,where terrestrial digital broadcastingwill start at the end of CY2003,MPHPT has started receiving licenseapplication for terrestrial digitalbroadcasting stations since November2002. The ministry will take appropri-ate measures for i) implementing theanalog frequency change support mea-sures in a rapid and concentrated man-ner, ii) strengthening public awarenesscampaigns on social significance ofdigital terrestrial broadcasting, meritsfor audiences, schedules for termina-tion of analog broadcasting, etc., andiii) promoting digitalization of cableTV facilities including satellite masterantenna television, etc.

In line with the “Provisional Mea-sures Law for Promoting Constructionof Advanced Television BroadcastingFacilities (effective in November1999),” for the purpose of diffusingdigital broadcasting at an early stagethrough reduction of initial facilitiesinvestment burden on broadcasters,broadcasters are allowed to receive taxincentives and financial supports incases where the MPHPT Minister ap-proves broadcasters’ facilities con-struction plans. This scheme will helpaudiences benefit from digitalizationof broadcasting at an early stage. Asof September 20, 2002, 23 broadcastersare accredited under this scheme.

With regard to terrestrial digital

2002 Annual Report

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sound broadcasting, in September2001, the Digital Radio Promotion As-sociation was granted preliminary li-censes for two commercial test sta-tions, commercial test broadcastingwill be commenced around autumn2003 in Tokyo and Osaka districts.

4. Approaches for diffusion ofdigital satellite broadcasting

-- Approaches to diffusion of satel-lite digital broadcasting --

1) BS digital broadcastingSince it started in December 1, 2000,

BS digital broadcasting is not only pro-viding the digital high-definition TVbroadcasting with realistic sensations,but is also providing broadcasting ser-vices capitalizing on digital features,including a variety of versatile andconvenient data broadcasting anddigital sound broadcasting that offersCD-quality sound. The number ofsubscriptions to BS digital broadcast-ing services as of the end of August2002 is 3.14 million households, in-cluding subscriptions via cable TV.

2) East longitude 110 degree CS digi-tal broadcasting

CS digital broadcasting has been of-fered by using three CSs (in the geo-stationary orbits at East longitude 124,128 and 144 degrees). In addition tothem, a CS (N-SAT-110) at East longi-tude 110 degree, the same orbit loca-tion as the second digital BS-4 satellite,started its CS digital broadcasting op-eration in March 2002. Utilizing thisnew CS broadcasting, two facility-sup-plying broadcasters and 18 program-supplying broadcasters have com-menced their operations one by one,including interactive broadcasting ser-vice with digital storage function asfirst ever highly functional service.

3) “Study Group Concerning Satel-lite Broadcasting”

Aiming at deliberating desirable fu-ture satellite broadcasting and promo-tion methods for the time being withthe advent of digital broadcasting viaBS and East longitude 110 degree CS,since March 2002 the “Study GroupConcerning Satellite Broadcasting”

(Chair: Mr. TAGAYA Kazuteru, Vice-President for Education, Chiba Uni-versity) has been convened with themembers from experts, broadcasters,manufacturers and consumers. ThisStudy Group in July 2002 compiled itsfindings as an interim report on thefollowing matters:i) Status of satellite broadcasting as

mass media and the direction of itsdevelopment

ii) Desirable promotion methods ofsatellite broadcasting as a whole

iii) Desirable promotion methods of BSdigital broadcasting

iv) Desirable promotion methods of CSdigital broadcasting

This interim report describes thatbroadcasting is to be digitalized in thefuture, thus, the most urgent task is todiffuse digital broadcasting in the sat-ellite digital broadcasting area; andwith respect to desirable terminationmethods of satellite analog broadcast-ing with 15 million subscribers, it isvital to provide consumers with cor-rect and appropriate information onthe study results based on desirablefuture satellite broadcasting as a wholeand the sense of the subscribers.

5. Progress Report of a “StudyGroup on BroadcastingPolicy”

-- First Report of “Study Group onBroadcasting Policy” Released --

MPHPT launched the “Study Groupon Broadcasting Policy (Chair: Prof.SHIONO Hiroshi, Department of Cor-respondence Graduate Studies, Uni-versity of East Asia) in May 2000 withthe objective of studying overallbroadcasting policies based on thechanging environment surroundingbroadcasting, including the progressof digitalization in all broadcastingmedia and the advancement of the In-ternet. On December 21, 2001, thestudy group compiled its findings asthe initial report on desirable manage-ment structures for subsidiaries of Ja-pan Broadcasting Corp. (NHK), ser-vices offered over the Internet by NHKand other matters.

Refer to the outline of the first reportat the MPHPT website:h t t p : / / w w w . s o u m u . g o . j p /joho_tsusin/eng/Releases/Telecom-munications/news011221_4.html

IX. Technological Development in Digitalization

1. Formulation of digital broad-casting method in cable TV

The technical standard for digitalcable TV system (64QAM), allowingdelivery of four to six times more TVprograms than with the analog cableTV system, was established in Decem-ber 1996; since July 1998, some cableTV operators have been offering digi-tal cable TV broadcasting.

Also, retransmission method of theterrestrial digital broadcast program-ming, BS digital broadcast program-ming and East longitude 110 degreeCS digital broadcast programming viacable TV have been developed as fol-lows:1) Retransmission of terrestrial digi-

tal broadcast programming viacable TV

In April 2000, the technical stan-dards of cable TV transmission meth-ods for terrestrial digital TV which willbe started from 2003, were developed.The outline of the standards is as fol-lows:i) Technical standard for transmission

method of the terrestrial digitalbroadcasting without converting ei-ther modulation (OFDM) or receiv-ing frequencies at a cable TV broad-casting facility (pass-through usingthe same frequency)

ii) Technical standard for convertingreceiving frequencies into optionalones before transmission (pass-through using frequency conver-sion)

2) Retransmission of BS digitalbroadcasting via cable TV

In exact timing with the inaugura-

http://www.soumu.go.jp/joho_tsusin/eng/Releases/Telecommunications/news011221_4.html

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tion of BS digi-tal broadcast-ing from De-cember 2000, atechnical stan-d a r d f o r r e -t r a n s m i t t i n gmultiple trans-port s treams(TS) such asEast longitude 110 degree CS digitalbroadcasting efficiently and reliablyby using the digital cable TV broad-casting system (64QAM) (Multi-TStransmission system), was establishedin August 2000 so that retransmissionvia cable TV of a variety of broadcast-ing media including BS digital broad-casting may be allowed.3) Retransmission of East longitude

110 degree CS digital broadcastingvia cable TV

In step with the launch of East lon-gitude 110 degree CS digital broad-

casting in March 2002, a technical stan-dard for retransmitting single trans-port streams (TS) such as East longi-tude 110 degree CS digital broadcast-ing efficiently and reliably by usingthe digital cable TV broadcasting sys-tem (64QAM) (TS division methodtransmission system), was establishedin March 2002 so that retransmissionvia cable TV of a variety of broadcast-ing media including East longitude110 degree CS digital broadcastingmay be allowed.

2) Study on “server-type broadcast-ing”

Considering the abovementionedsituations, on June 25, 2001, MPHPTinquired of the TelecommunicationsCouncil (Chair: Mr. YOSHIHISAAkiyama, Chairman, Kansai ElectricPower Co., Inc.) of “technical require-ments for digital broadcasting systemsutilizing large-capacity storage func-tions.” The Council established the“Server-Type Broadcasting SystemCommittee” (Chair: Prof. HATORIMitsutoshi, the National Institute ofInformatics) of the Telecommunica-tions Technology Sub-Council for de-liberating “server-type broadcasting.”

Major themes to be studied are asfollows:i) Total system configuration

a) Service models of “server-typebroadcasting”

b) Reference models of transmit-ters and receivers

ii) Transmission systema) Content transmission system

and storage control system onassumptions of reproduction af-ter storing

iii) Metadataa) Specific contents of information

to be transmitted as metadatab) Data structure, description sys-

tem, transmission system andstorage control system ofmetadata

iv) Rights protection methoda) Types of information (rights

protection information) to betransmitted for protecting con-tent rights, coding methods andtransmission system

b) Measures for making compliantwith conditions contained inrights protection information atthe receiver side

v) Access control systemConditional access control system

which controls reproduction and sec-ondary use of content stored in receiv-ers per scene, content, channel, etc.3) Current status of deliberations on

“server-type broadcasting”There is a fear that regardless of will

of rightful content owners, copies withthe same quality when directly view-

X. Approaches to “Server-type Broadcasting”

1. Study on “server-type broad-casting” systems

1) What is “server-type broadcasting”As transmission signals of digital

broadcasting have high affinity withthose of already digitalized communi-cations networks, interactions betweenthe two media are easily realized. So,in BS and CS digital broadcasting, two-way programming services are at-tained through interactions betweenbroadcast waves and communicationsnetworks with receivers installed com-munications functions.

In recent years, along with rapidprogress in technologies concerningdigital storage media, large-capacitystorage devices have already been puton the market, which enable long-timestorage of digital video signals. Suchdigital devices will be effectively usedfor providing services in digital broad-casting.

As such, with digitalization ofbroadcasting as a turning point, utili-zation of communications and contentstorage functions at the receiver side

opens a path to realize a new type ofbroadcasting, “server-type broadcast-ing." Through active use of large-ca-pacity storage functions, this “server-type” broadcasting is enabled to trans-mit content with metadata of contentwith “rights protection information”indicating, and terms and conditionssuch as the number of copies allowed.Anticipated types of services to be re-alized are as follows:i) Viewing types without restrictions

of broadcast hour, such as repro-duction from already stored partwhile recording content, shortenedreproduction of stored content

ii) Viewing types to meet viewers’tastes, such as retrieval of scenes,digested viewing

iii) Versatile use of content with ease-of-use for content providers andviewers through full protection ofproperty rights

iv) Services enabling reproduction af-ter storing large-volume video, etc.aired for long time through use ofnarrow bands in transmission bandof broadcast waves

Features

Transmission speed: 29MbpsBandwidth: 6MHz

Transmitting data without changing themodulation method.i) Terrestrial digital broadcasting (OFDM)ii) BS digital broadcasting (PSK)

Table IX-1 Transmission methods for digital cable television

Transmission method

64QAM modula t ionmethod

Pass-through method

2002 Annual Report

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ing aired original content are possiblewithout limit through use of digitalstorage devices. Thus, the rights pro-tection method was studied prior tothe total system of “server-type broad-casting,” then a partial report was re-leased in March 2002. The “rights pro-tection method” is to be realized in amanner as follows:i) Conditions for use of content are

coded as rights protection informa-tion, which contains the number ofcopies to be allowed, etc., and airedwith content on the broadcastwaves.

ii) The sender side of broadcasts, whomanage a key to code content, etc.,provides the key to receivers com-

pliant with conditions for use ascontained in rights protection in-formation.

iii) Receivers can output content to ex-ternal devices in limited cases onlywhere such external devices arecompliant with conditions for useas contained in rights protectioninformation. In this case, the rightsprotection information shall be out-put together with the content inquestion.

After the partial report, the Server-Type Broadcasting System Committeeis further studying other conditions to-ward the final report around autumn2002.

target fiscal year, it will be pursued torealize a system that automaticallyadds closed captions to most recordedprograms in a short time. Meanwhile,in FY2000, MPHPT built a verificationsystem with more practical functionsfor the system under development,and conducted evaluation jointly withthe Ministry of Health and Welfare(the current Ministry of Health, Laborand Welfare).

3) “Study Group on the Next-Gen-eration Closed Caption”

Since September 2001, MPHPT hasbeen holding the “Study Group on theNext-Generation Closed Caption”(Chair: Dean KIYOHARA Keiko, Schoolof Media Science, Tokyo University ofTechnology) in order to study futureclosed-caption production in the digi-tal age where convergence of commu-nications and broadcasting is inprogress, including effective measuresthereon and closed captioning of liveprograms. In April 2002, the studygroup compiled its findings as a re-port.

In this report, the following propos-als are contained:• In order to diffuse closed-captioned

content, broadcasters shall steadilyimplement their own closed-cap-tioned broadcast expansion plansand revise the target ratios.

• Broadcasters shall attach the sameclosed-captions to digital broadcastprograms as to analog broadcastprograms.

• Broadcasters shall add closed cap-tions to digital broadcast programsexclusively for digital broadcasting.

• In order to diffuse closed-captionedbroadcast receivers, it is necessaryto establish an environment inwhich consumers may easily pur-chase them.

• Manufacturers shall attach closed-captioned broadcast reception func-tions on all digital broadcast receiv-ers.

[Public sector]• In line with expansion policy for

closed-caption content, the admin-istration shall revise the “diffusiontargets of closed-captioned broad-casting,” when necessary.

XI. Measures for the Elderly and People with Dis-abilities

1. Improvement of broadcastprogramming for people withvisual and hearing disabilities

Assisting the equal access opportu-nity for people with disabilities

Improving broadcasting for peoplewith visual and hearing disabilities isan important task for realizing equalopportunities to access information. Inparticular, as for people with visualand hearing disabilities, there may bean increase in the number of peoplewith hearing disabilities along withthe process of aging, from now on, sothe number of those people is seen ris-ing in reflection of the aging society.In FY1997, MPHPT amended theBroadcast Law, etc. to introduce a non-binding target for closed-captions, etc.Likewise, MPHPT has been promotingbroadcast programming with closedcaptions, narrated explanations andsign languages, including develop-ment and publication of “diffusion tar-gets of closed-captioned broadcast-ing,” aiming at the addition of closedcaptions to all broadcast programmingavailable for closed captions by theend of FY2007. The ratio of air timefor closed-captioned broadcast pro-gramming to total air time for allbroadcast programming feasible for

closed-captions has been increasingyear on year. Further efforts to in-crease the ratio are anticipated.

1) Promoting the creation of TV pro-gramming with closed captions andnarrated explanations

Based on the “Law for PromotingBusinesses that Facilitate the Use ofCommunications and BroadcastingServices by the People with Disabili-ties,” MPHPT, through TAO, is subsi-dizing programming suppliers whoproduce TV programming withclosed-captions, etc., up to the half ofthe expenses, from FY1993. The sub-sidy in FY2001 was about 450 millionyen.

2) R&D on TV program productiontechnologies for people with vi-sual and hearing disabilities

TAO is conducting R&D on tech-nologies of producing programmingfor people with visual and hearing dis-abilities. From FY1996 throughFY2000, TAO conducted R&D on sys-tems that automatically create and addclosed captions for TV broadcast pro-gramming whose content can be eas-ily summarized, and all of whosevoiced content is scripted (such asnews and information programs).From now on, setting FY2003 as the

23

• The administration shall managethe progress in implementingclosed-captioned broadcast expan-sion plans.

• The administration shall continue

to support production of closed cap-tions.

• The administration shall raise pub-lic awareness on closed captions,receivers, etc.

Commercial broadcasters, etc. aredistributing broadcast programming,news materials and sports programs toforeign broadcasters, cable TV, hotelsand business offices, using satellitecommunications and fiber-optic com-munications circuits. NHK, usingPanAmSat satellites, is distributing toforeign broadcasters, cable TV opera-tors, etc.

In particular, the program distribu-tion to Asia region is constantly in-creasing in the number of program-ming providers, air time and coun-tries.3) International shortwave broadcast-

ingIn international sound broadcasting

by shortwave, the ordered broadcast-ing in accordance with the provisionsof the Broadcast Law was provided toall the world and 17 regions using 22languages, carrying reports and analy-ses concerning the state’s importantpolicies and the government’s view oninternational issues. The orderedbroadcasting, combined with volun-tary broadcasting of NHK, the sum ofbroadcast hours of the voluntarybroadcast and the ordered broadcastin FY2001 was 65 hours a day. InFY2001, 2.1 billion yen was grantedfrom the Japanese government toNHK as the cost for the ordered broad-casting.

XII. Policy Measures for Internationalization

1. Promotion of BroadcastProgram Exchange

1) PurposeDeveloping countries with insuffi-

cient program production capacityneed foreign programs with high qual-ity.

As part of Japan’s effort for contrib-uting to the broadcasting industry indeveloping countries, MPHPT is pro-moting a project granting subsidies forproviding high-quality Japanese edu-cational programs for developingcountries.2) Outline of the policies

MPHPT is providing subsidies to theJapan Media Communications Center,a foundation providing Japanesebroadcast programs to foreign coun-t r i e s , t o p a r t i a l l y c o v e r t h efoundation’s costs for translating andediting educational programs that aresent to developing countries.3) Achievements• Number of programs stored in the

library: 1,004• Number of programs provided:

4,003• Number of countries provided

with programs: 63• Total subsidies from MPHPT be-

tween FY1991 and FY2001• Total of actual amount: 1,037 mil-

lion yen• FY2002 budget: 58 million yen

2. Current status of interna-tional TV and radio broad-casting

Along with rapid globalization ofinformation transmission, it has be-come more important to gain foreign-ers’ understanding and trust to Japan,as well as to provide information nec-essary for Japanese nationals in for-

eign countries. It is required to con-tinuously transmit information onJapanese culture and society, in addi-tion to positions and propositions ofJapan to the international society, aswell as to provide information con-cerning security of each region and en-tertainment programs. Strengtheningand promoting international broad-casting is one of the goals of broadcast-ing administration.1) International TV broadcasting

The international TV broadcastingcarried out by the NHK (NHK WorldTV), using PanAmSat satellites (PAS-8, PAS-9, PAS-10), HOTBIRD satelliteand Echo satellite, covers almost theentire world. In October 1999, 24-hourbroadcasting was started.

In addition to news programs, Japa-nese-language education programswere started, and the air time of broad-casting in English were expanded.2) Distribution of TV programming

and video materials to abroad

Fig. XII-1 International TV Broadcasting (NHK)

HOTBIRD PAS 8 PAS 9PAS10 Echo


2002 Annual Report

24

Telecommunications Administration

Polic

ies

unde

r the

juri

sdic

tion

of t

he T

elec

omm

unic

atio

ns B

urea

u, e

tc.

Table I-1 Activities of TelecommunicationsBusiness Dispute SettlementCommission (Nov. 30, 01-Nov. 5, 02)

1. Mediation (Assen) cases

Application Concluded Mediating

24 24 0(terminated 1)(settled 23)

2. Arbitration (Chusai) cases None

3. Reports to MPHPT

Inquiry from Report UnderMPHPT to MPHPT deliberation

3 3 0

Issues (1. ~ 3.)

i. Interconnect or not 1ii. Payment on interconnection 17iii. Collocation 4iv. Construction on interconnection 1v. Operation of facilities 2vi. Propriety of business 1vii. Using of lands, etc. 1

*Recommendation to MPHPT: 2

Recommendation Date

Recommendation to improve Feb. 26, 2002the collocation rules

Recommendation on setting proper Nov. 5, 2002charges concerning interconnection

Disputes between Type I telecommunications carriers and land owners, etc.

Telecommunications carriers Telecommunications Business Dispute Settlement Commission

Complaints concerning telecommunications services or other business activities

Application

Application

Submission

• Order to Interconnect• Arbitration (saitei)

• Authorization of using land etc. by Type I carriers

• Arbitration (saitei)

• Order to change charges

• Order to correct business activities

Improvement of competition rules, etc.

Mediation (assen)

Arbitration (chusai)

Deliberations

Secretariat

Minister for MPHPT

Inquiry

Report

Disputes between telecommunications carriers

Application

Recommendations

Fig. I-1 Functions of Telecommunications Business DisputeSettlement Commission


1. Establishment ofTelecommunicationsBusiness DisputeSettlement Commis-sion

-- Strengthening of resolu-tion function of disputes be-tween telecommunications car-riers --

The TelecommunicationsBusiness Dispute SettlementCommission was establishedon November 30, 2001, as aspecial body in order to expe-ditiously and effectively settledisputes over issues such as in-terconnection between tele-communications carriers.

The Commission is indepen-dent of the departments of theMinistry of Public Manage-ment, Home Affairs, Posts andTelecommunications (MPHPT)in charge of issuing permitsand approvals. And the Com-mission consists of five com-missioners appointed by theMinister for MPHPT with theconsent of both theHouses of Represen-tatives and Council-lors. A secretariatunder the Commis-sion’s direct control isestablished to assistthe Commission in itsactivities.

The function of thecommission is as fol-lows:i) Mediation (assen)

and Arbitration(chusai)

Mediation (assen)a n d a r b i t r a t i o n

I. Information and Communications UsageEnvironment in the 21st Century

25

(chusai ) are conducted by theCommission’s members who are ap-pointed by the Commission.ii) Inquiry and Report

The Minister for MPHPT inquiresthe Commission before making ad-ministrative dispositions, such as or-ders or arbitrations (saitei) concerninginterconnection of telecommunicationsfacilities. The Commission deliberatesthe matters and submits a report to theMinister.iii) Recommendation

The Commission makes recommen-dations on new competition rules tothe Minister for MPHPT based onknowledge gained in dealing with ac-tual disputes.

2. Second Report on DesirablePro-Competitive Policies inthe TelecommunicationsBusiness Field for Promotingthe IT Revolution

On February 13, 2002, MPHPT re-ceived the second report on "DesirablePro-Competitive Policies in the Tele-communications Business Field forPromoting the IT Revolution (InquiryNo. 29 of 2000)" from the Telecommu-nica t ions Counc i l (Cha i r : Mr .AKIYAMA Yoshihisa).

Outline of the second report on De-sirable Pro-Competitive Policies in theTelecommunications Business Fieldfor Promoting the IT Revolution.Refer to website:http://www.soumu.go.jp/joho_tsusin/eng/Releases/Telecommunications/news020213_1.html

3. Final Report on DesirablePro-Competitive Policies inthe TelecommunicationsBusiness Field for Promotingthe IT Revolution

On August 7, 2002, MPHPT receivedthe Final Report on "Desirable Pro-Competitive Policies in the Telecom-munications Business Field for Pro-moting the IT Revolution (Inquiry No.29 of 2000)" from the Telecommunica-tions Council.

Outline of the Final Report on Desir-able Pro-Competitive Policies in theTelecommunications Business Fieldfor Promoting the IT Revolution

Chapter 1. Basic Concept Con-cerning Desirable Pro-Competitive Policies inthe Future

1. Current Market Trends in the Tele-communications Business Field

(1) Taking into account remarkabletechnological innovations in theinfo-communications field in recentyears, the stream of broadband hasbeen accelerating as exemplified bythe shift from conventional net-works tailored for each service to-ward high-speed, large-capacityaccess networks (always available)commonly based on Internet Proto-cols.

(2) In specific terms, a sharp rise in thenumber of subscribers to DSL ser-vices (34-fold increase over oneyear); new entries into the fiber-optic access services by new carri-ers, including power utility compa-nies (themselves); and many newentries of IP telephony providers.

(3) In addition, with respect to the mo-bile communications field, thelaunch of the third-generation (3G)mobile telecommunications system;PHS service which provides flat-rate data communications service,new services through wirelessLANs and so on.

(4) Along with the development of IPand broadband, the vertical-inte-gration business model, etc. cover-ing multiple business fields hasemerged. Moreover, in business do-mains on the fringe of the telecom-munications services, new businesssuch as CDN (Content Delivery Net-work) and iDC (internet Data Cen-ter) are already about to be dif-fused.

(5) It is necessary to investigate, fromthe point of view of maximizinguser benefit, the desirable pro-com-petitive environment, flexibly

matching such environmentalchanges as the development of IP,broadband and so on.

2. Trends in New Pro-competitivePolicies in Major Countries

(1) In the U.S., as to the pro-competi-tive policies in the broadband agethe Federal Communications Com-mission (FCC) has been consider-ing whether to maintain pro-com-petitive policies through the mar-ket mechanism or to switch to apolicy that places priority on en-couraging industry. FCC recognizesthat the broadband service marketneeds to be defined and an assess-ment made as to whether or notincumbent local exchange carriers(ILECs) have the significant marketpower in that market. Careful moni-toring of these deliberations is re-quired.

(2) In April, 2002, the EU adopted theNew Directive (2002/21/EC) on aCommon Regulatory Frameworkfor electronic communications net-works and services within the EUterritories (by July 24, 2003, all Mem-ber States of the EU must adoptnational legislation implementingthose new Directives). Under theDirective, in order to minimize theregulatory levels, definition of mar-kets, including the broadband mar-ket, are given priority, so as to clarifyapplicable regulatory frameworks.

3. Basic Concept Concerning Desir-able Pro-competitive Policies in theFuture

(1) Firstly, it is important to furtherpromote new entries into the mar-ket and to ensure that a fair andcompetitive environment is in place.Specifically, it is necessary to openthe bottleneck facilities further andto stimulate both facilities competi-tion and service competitionthrough promotion of aggressivenew entries.

(2) Secondly, it is essential to bolsterconsumer protection through ad-ministration procedures. In other



2002 Annual Report

26

words, it is vital not only to maxi-mize user benefits by promotingcompetition, but also to promptlyformulate specific measures to cre-ate an environment wherein userscan independently make a reason-able choice from diversified andcomplicated services.

(3) Thirdly, it is necessary to examinemeasures that need to be taken tointroduce new pro-competitiveframeworks to suit the IP age. It isessential to conduct fundamentalreviews on the competitive frame-work itself including the businesscategorization, considering the factthat the network and market struc-tures have been changing alongwith the development of IP andbroadband, and that the presentbusiness categorization does notnecessarily mesh with the reality ofcompetition among carriers.

Chapter 2. Active Implementationof Pro-CompetitivePolicies

1. Promotion of New Entries

(1) It is vital to stimulate competitionin both facilities and servicesthrough further promotion of newentries and emergence of the diver-sified "competitive axis."

(2) In order to stimulate the facilities-based competition by promotingnew entries, it is necessary to pre-pare an environment tailored to fur-ther diversification of local loopsand trunk networks regardless ofwired/wireless or fixed/mobilenetworks. In addition, it is vital topromote service competition byopening functions of access net-works, etc.

2. Promotion of Pro-competitive Poli-cies to Open up Networks

2-1. Resale for PSTN(1) To identify and organize such items

as: subject resale services; matterspertaining to contracts; necessaryactivities for a resale carrier; open-ing of the operation support system

(OSS) enabling necessary activitiesfor the resale carrier; and major pre-requisites for the system develop-ment.

(2) Based on the abovementioned or-ganization, the result of NTT East/NTT West's pro forma calculationof the costs pertaining to the systemdevelopment is about 84 billion yen.However, the estimates of the de-velopment cost in various cases, e.g.,under certain conditions excludingthe MYLINE (dialing parity) func-tion, the NTT East/NTT West's es-timates are about 40 billion yen.The time period necessary to de-velop the system is 2 to 3 years.

(3) The discount rate ranges from 17.6%to 27.0% according to the estimatewherein the sales cost that is notincluded in the resale cost is ex-cluded from the total cost. In prac-tice, however, the costs pertainingto the system development/opera-tion are to be added the estimate.

(4) Thus, carriers who wish to start theresale business shall request NTTEast and NTT West for the resalebased on their own business judg-ment by taking into account theabovementioned factors, and shallnegotiate with the parties con-cerned. When NTT East or NTTWest declines to participate in thenegotiation, the carriers may re-quest the administration to issue anorder to start such negotiations. Inthis case, the administration shallmake a decision by taking into ac-count the merits of the resale forPSTN and the rapid changes in theenvironment surrounding tele-phone services.

2-2. Relationship between Intercon-nection Charges and UserCharges

(1) In order to make the interconnec-tion charges more reasonable, it isappropriate to examine the relation-ship between the interconnectioncharges and user charges upon au-thorization for the interconnectioncharges. The same examinationshall be conducted in cases where acompetitor, etc. submits complaints

or opinions or where the relation-ship between interconnectioncharges and user charges is deemedto be unreasonable after notifica-tion of user charges is received.

(2) Internet-related services, in particu-lar, DSL services, etc. shall be ap-propriate as a subject for the exami-nation.

(3) When the relationship between theinterconnection charges and theuser charges is inappropriate, itshall be deemed adequate to re-duce the interconnection charges inprinciple. In addition, upon exami-nation, the current status of the pricecompetition in the market andtrends in the market shares of NTTEast and NTT West shall be takeninto account.

2-3. Access to OSS(1) With respect to access to the OSS

(Operation Support System), the is-sues to be discussed in depth are i)an automatic notification system ofthe conformity confirmation result,ii) automatic notification of namesof services not to be shared withDSL services, iii) automatic notifi-cation of telephone subscribers' in-formation [i), ii) and iii) above arefor DSL services], iv) disclosure ofdetailed information on the sched-ule of interoffice transmission opti-cal line facilities construction, v)disclosure of information on thenumber of interoffice transmissionoptical line facilities unable to beinterconnected, vi) disclosure of in-formation on a specific plan such asfloor expansion of buildings [iv), v)and vi) above are for interofficetransmission optical line facilities],vii) disclosure of information onthe approximate period requiredfor interconnection, viii) disclosureof information on the differentroute, and ix) disclosure of infor-mation on the arrangements andprogress of the construction workof local optical line facilities [vii),viii) and ix) above are for the localoptical line facilities].

(2) The methods of cost sharing amongcarriers including NTT East and

27

NTT West shall be in accordancewith the benefit principle as a gen-eral rule.

(3) With respect to the disclosure oftelephone subscribers' informationand personal information protec-tion, NTT East and NTT West shallstipulate in the tariffs that they maydisclose telephone subscribers' in-formation to carriers intercon-nected, and make said tariffs pub-lic. However, in cases where a tele-phone subscriber clearly stipulatesthat he or she does not want propri-etary information to be disclosedNTT East and NTT West shall en-sure that measures are taken to pre-vent the disclosure of such infor-mation.

3. Measures to Deal with StructuralIssues

(1) It is important to flexibly deal withchanges in the market, monitoringi) the implementation situations offair competition promotion mea-sures including the preparation ofthe asymmetrical regulation, etc.,ii) the implementation situation andthe results of the coming competi-tion rules, iii) whether firewall mea-sures are observed by NTT East andNTT West since reorganization; atthe same time, watching theprogress in competition in the localtelecommunications markets fromvarious aspects.

(2 In addition, with regard to struc-tural-separation pro-competitivepolicies (structural separation ofwholesale/retail units held by NTTEast and NTT West), careful delib-erations thereon shall be continued,taking into account of the merits/demerits and trends in foreign coun-tries.

Chapter 3. Improvement of Con-sumer ProtectionAdministration

1. Significance of Consumer SupportMeasures and Current StatusThereof

(1) In order to maximize consumer ben-

efits through the very significantexpansion of service availability forusers derived from development ofcompetition in the telecommunica-tions market, consumers are encour-aged to make a rational choice byeliminating information asymme-try against telecommunications car-riers, at the same time, an appropri-ate safety net should be preparedthat immediately remedies troublesinvolving consumers.

(2) At present, along with the wide-spread deployment of advancedand diversified telecommunicationsservices among Japanese people,troubles involving consumers con-cerning Internet-related services,etc. are increasing. The number ofconsultations and complaints filedwith MPHPT, the National Con-sumers Affairs Center of Japan andother related organizations is alsoincreasing.

(3) To this end, comprehensive con-sumer support measures in the tele-communications field shall bestrengthened. MPHPT shall i) for-mulate comprehensive policies forconsumer support, ii) introduce andapply necessary institutional frame-works, and iii) make collaborativeefforts with the relevant ministriesand organizations. Telecommuni-cations carriers shall promote ap-propriate approaches in establish-ing a consumer support system andadopt strengthened measures.

2. Specific Measures to StrengthenConsumer Support

(1) One priority that needs to be ad-dressed is the development of ca-pable persons able to help consum-ers make a rational choice concern-ing a variety of rapidly changingtelecommunications services, andgive consumers advice that contrib-utes to solving troubles concerningtelecommunications. To this end,MPHPT, telecommunications car-riers, etc. shall cooperate with theNational Consumers Affairs Cen-ter of Japan or local governments tofoster expertise for them on tele-

communications consultants, etc.who provide counselling for con-sumers. In addition, in order to pro-mote widespread use of IT by Japa-nese people, introduction of a sys-tem to certify "communications ser-vice planners" by the private sectorwill be useful; thus, a conferenceconsisting of interested parties todeliberate upon the practical sys-tem shall be established.

(2) In order to promote the diffusion ofinformation that helps consumersin choosing telecom activities, tele-communications carriers and tele-communications carriers associa-tions shall develop industrial self-regulation guidelines containingitems to be informed to consumersof new services that are deemed tohave a social impact, in particularbest-effort type services. As forMPHPT, there is a need to improvethe provision of information to con-sumers via its website, etc., such asa portal site function to provide avariety of IT information. Further-more, upon conclusion of a contractpertaining to telecommunicationsservices, appropriate frameworksthat ensure explanation of impor-tant items, etc. to consumers shallbe studied further.

(3) In order to activate consumer coun-selling procedures, with regard tothe submission system of com-plaints/opinions and dispute-settlement systems as provided forunder the TelecommunicationsBusiness Law, there is a need topromote effective use of those sys-tems and ensure transparencythereof, such as publication of dis-pute resolution manuals byMPHPT. It is essential to strengthencollaboration among relevant orga-nizations through establishment ofa liaison committee on a regularand on-going basis consisting ofMPHPT, the National ConsumersAffairs Center of Japan, telecom-munications carriers, consumergroups, etc. In addition, there is aneed to conduct a study by the gov-ernment and telecommunicationscarrier associations on the estab-


2002 Annual Report

28

lishment of a counselling unit toaccept complaints and consultationson telecommunications; in this case,step ahead measures such as ADR(alternative dispute resolution: i.e.,mediation, arbitration, etc.) func-tions shall be put in perspective.

(4) Where flexible regulatory frame-works are introduced, with respectto consumer support measures inthe telecommunications field, in-dustrial voluntary efforts to sup-port consumers shall be strength-ened based on the concept of com-pliance practice. To this end, indus-trial self-regulation guidelines shallbe developed by telecommunica-tions carriers, in collaboration withtelecommunications carriers asso-ciations and the administration.

Chapter 4. Direction of NewCompetition Frame-works

1. Changes in Market Environmentand Necessity of Reviewing Com-petition Frameworks

(1) The present categorization of TypeI and Type II telecommunicationsbusinesses has been a basic struc-ture of competition frameworks inthe telecommunications businessfield. This categorization based ona clear standard has effectively pro-moted competition to date.

(2) However, corresponding to the re-cent changes in market structuresand network structures broughtabout by the development of IP andbroadband and the emergence ofnew business models, the time isripe to comprehensively review thepresent competition frameworks.

2. Basic Viewpoints Related to Re-view of Competition Frameworks

Upon examination of new competi-tion frameworks in the telecommuni-cations business field, the followingthree points shall be recognized as ba-sic viewpoints:(1) Lowering the overall level of regu-

lation in order to encourage compe-

tition through the emergence of di-versified business models, freelycombining a variety of networksand services;

(2) Creating systems for supplement-ing market mechanisms from theviewpoint of ensuring fair compe-tition and protecting consumers(business model neutrality and tech-nological neutrality are necessary);and

(3) Ensuring due process and trans-parency.

3. Desirable New CompetitionFrameworks

(1) With regard to desirable new com-petition frameworks, it is necessaryto examine the fundamental regu-latory frameworks, such as entry/exit regulations and public utilityprivilege (namely, rights-of-way;"ROW" hereinafter) directly linkedwith the entry regulations; at thesame time, other existing systems(regulations on services for end us-ers, interconnection rules, ensuringuniversal service, telecommunica-tions number, technical standards,essential communications, etc.)shall be comprehensively and sys-tematically examined.

(2) Regarding the entry regulations, thepresent Type I and Type II businesscategories shall be abolished, andthe entry regulations shall be dras-tically relaxed (abolition of permis-sion system pertaining to Type Ibusiness). Further studies includ-ing legislation are necessary to fixthe entry regulation systems (en-abling business entry by registra-tion or notification), consideringthat measures to ensure fair compe-tition and protection of consumersshall be taken prior to the new entrywhen necessary.

(3) However, the General Type II busi-ness may be started only by notifi-cation under the present system.Even under new regulatory frame-works, special treatment shall begiven to carriers with a negligiblesocial impact, for example, enablingsuch carriers to enter only by notifi-

cation.(4) As for ROW, in order to facilitate

smooth deployment of network in-frastructure by telecommunicationscarriers, it is necessary to remainthe system of granting the right. Inspecific, further studies shall bemade on the introduction of a newscheme to grant ROW based onapplication from carriers after ex-amination of business plans byamending the present systemswhere ROW is directly linked withthe entry regulations, taking intoconsideration consistency withother laws and regulations.

(5) With respect to market exit regula-tions, permission for changes ofbusiness, and transfer/takeover,merger/break-up, inheritance ofbusiness operations, it is appropri-ate to shift from the present permis-sion/authorization systems to no-tification systems. However, alongwith the shift of the market exitregulations to prior notification sys-tems, obligation of prior announce-ment to users on market exit shallbe studied.

(6) With regard to not-for-profit tele-communications business (e.g., runby local public entities, etc.), thereis a need to study on imposing mini-mal regulations such as ensuring ofsecrecy of communications and con-formity with technical standards.

4. Matters to Be Studied in Line withShift to New Frameworks

(1) In line with abolition of Type I andType II businesses categories, theentire structure of the Telecommu-nications Business Law shall be re-viewed. In particular, as for ser-vices for end users, regulatoryframeworks shall in principle beconsidered separately from net-works, so that each carrier can flex-ibly offer services.

(2) Specifically, it is appropriate that inprinciple obligation to establishcharges/tariffs for providing ser-vices shall be lifted and contractsare to be concluded through nego-tiations between parties concerned.

29

However, from the viewpoint ofconsumer protection, mechanismsfor ensuring sufficient provision ofinformation to users on contract,and issuing orders to improve busi-ness activities or to change chargesshall be required.

(3) In addition, with regard to domi-nant carriers with market power,obligations shall be imposed, to es-tablish charges/tariffs of the ser-vices where said carriers are as-sumed to have market power, andto provide said services based onsaid charges/tariffs. However, con-tracts pertaining to said servicesbased on negotiations are also to beallowed. Furthermore, in order toopen up platform functions such asauthentication and charging insepa-rable from said services, necessarymeasures shall be studied.

(4) It is necessary to define each appro-priate sub-market, taking into con-sideration features and substitut-ability of each service in end userservice markets, and to evaluatemarket powers in said sub-market.As for desirable scheme of regulareffective competition review (mar-ket analysis), a specialist panel shallbe established for detailed study. Inaddition, the regulatory authorityshall be empowered with strength-ened and improved market moni-toring functions.

(5) With respect to interconnectionrules, rules focusing on bottleneckfacilities indispensable for other car-riers to interconnect are still essen-tial. However, the coverage andregulatory measures on designatedfacilities shall, if necessary, be re-viewed based on the progress ofcompetition in the market.

(6) With regard to ensuring of the uni-versal service, assignment of tele-communications numbers, confor-mity with technical standards, en-suring of essential communications,etc., desirable regulatory frame-works for maintaining and ensur-ing those schemes shall be studiedfurther. The technical standardsshall be reviewed comprehensively,fully taking into account the diffu-

sion of best-effort type services.

Chapter 5. Toward Developmentof New Pro-Competi-tive Policies

(1) It is desirable to construct new regu-latory frameworks where thepresent Type I and Type II busi-nesses categories are abolished sothat carriers can freely deploy theirbusiness and problems in light offair competition and consumer pro-tection can be immediately elimi-nated.

(2) To this end, the government shallstart i) drafting a necessary bill toamend relevant laws concerningnew competition frameworks rightaway, and ii) studying more con-crete measures of effective compe-tition review, new methods for as-signing telecommunications num-bers, comprehensive review of thetechnical standards, etc.

(3) It is necessary to improve consumerprotection administration as com-bined policies with pro-competitivepolicies. Thus, the establishment ofa conference concerning a qualifi-cation system for supporting con-sumers, the development of indus-trial self-regulation guidelines bytelecommunications carriers asso-ciations, etc. shall be studied with-out delay.

(4) The highest strategic priority shallbe given to the development of thetelecommunications market in or-der to promote Japan's structuralreform and improve its interna-tional competitiveness. In additionto the radical transformation of theabovementioned pro-competitivepolicies, there is a need to developnew comprehensive IP policies frommultifaceted perspectives includ-ing i) promotion of R&D includingrealization of a ubiquitous environ-ment, ii) promotion of widespreaddeployment of broadband plat-forms without uneven distribution,and iii) tie-up and collaboration forenhancing international competi-tiveness among the government,academia and industry, etc.

4. Final Report of the “StudyGroup on New BusinessModels and the Grand De-sign of Competitive Environ-ments for the New Informa-tion and CommunicationsEra”

On June 6, 2002, the "Study Groupon New Business Models and theGrand Design of Competitive Environ-ments for the New Information andCommunications Era" (Chair: Mr.HAMADA Junichi, Professor, Interfac-ulty Initiative in Information Studies,and Graduate School of Interdiscipli-nary Information Studies, the Univer-sity of Tokyo) compiled its outcomesas a final report, "How CompetitiveEnvironments in the Telecommunica-tions Business Field Should Be Estab-lished in the Broadband Age."

Refer to the website at:http://www.soumu.go.jp/joho_tsusin/eng/Releases/Telecommunications/news020606_2.html

5. Guideline for Use of UtilityPoles, Ducts, Conduits, etc.in the TelecommunicationsField

With the viewpoint of further facili-tating construction of outside plants(transmission line facilities) by Type Itelecommunications carriers, MPHPTamended the "Guideline for Use ofUtility Poles, Ducts, Conduits, Etc. inthe Telecommunications Field" (effec-tive since April 1, 2001), which con-tains rules, etc. on one bundling, andstarted to apply the amended Guide-line.

6. Report Compiled by theStudy Group on Long-RunIncremental Cost Model

MPHPT has been holding the“Study Group on Long-Run Incremen-tal Cost (LRIC) Model” since Septem-ber 2001, in order to review the LRICmodel (a calculation methodology for



2002 Annual Report

30

U.K. and representatives of embassiesof the U.S., the U.K., Germany in Ja-pan and the Delegation of the Euro-pean Commission in Japan). They hadconsultations with some members ofthe Study Group. About 50 audienceswere attended from domestic and for-eign telecommunications carriers, etc.

The report was compiled on March 8,2002.

3) Calculation result based on therevision model

This report shows calculated costs ofinterconnection using the revisedmodel. According to these calculationresults, the zone center (ZC) intercon-nection cost is higher than the costbased on the existing model due to therevision of the calculation method ofthe amount of investment into tollswitches, etc., while the group center(GC) interconnection cost has de-creased.

Moreover, this report points out thefollowing matters:

i) It is necessary to pay close atten-tion to traffic trends that affectsthe cost calculation since the vol-ume of traffic passing throughlocal switches in the first half ofFY2001 decreased.

ii) It is necessary to carefully delib-erate on the pricing matter whenconsidering transferring the costof FRT to the local loop, sincethere is a possibility of an in-crease in subscriber line charges.

7 Enactment of the Law onRestrictions on Liability forDamages of Specified Tele-communications ServiceProviders and Right to De-mand Disclosure of IdentityInformation of the Sender

Along with development of the In-ternet, social problems have beencaused by illegal and harmful informa-tion distributed on the Internet, suchas libel, defamation and slander onwebsites, BBS, etc., as well as informa-tion violating intellectual propertyrights, etc. Consequently, the “Law on

interconnection charges between tele-communications carriers). In March2002, the Study Group compiled itsfindings as a report.

1) BackgroundWith regard to the Japanese inter-

connection rules, the Study Group onLong-Run Incremental Cost (LRIC)Model was established in March 1997so as to establish the LRIC Model. InSeptember 1999, the Study Groupcompiled a report through analysis ofmodels in other countries, invitation ofpublic model proposals, detailed stud-ies for developing a technical model,etc.

Upon receipt of the report of 1999,the Ministry of Posts and Telecommu-nications (currently MPHPT) inquiredof the Telecommunications Councilabout a new calculation methodologyfor the interconnection charges in Sep-tember 1999. Upon receipt of the re-port concerning this inquiry in Febru-ary 2000, the TelecommunicationsBusiness Law was amended in May2000; then, the calculation method forthe interconnection charges pertainingto some designated telecommunica-tions facilities was changed from theactual costs method to the LRICmethod.

On the other hand, this report rec-ommends that: i) the revision of themodel shall be started at the earliestpossible stage, then, ii) it is appropri-ate that the revised model would beapplied after the model implementa-tion period (FY2000 through FY2002).And in the course of the revision, the

following items are pointed to be re-viewed:

i) Treatment of feeder remote ter-minal (FRT) and other non-traf-fic sensitive (NTS) costs;

ii) Economic service life;iii) Logic and input data; andiv) Local loop cost.

2) Revision of the ModelBased on this background, the

“Study Group on Long-Run Incremen-tal Cost Model” was reestablished inSeptember 2001, consisting of expertsin telecommunications engineering,economics and cost accounting. Thisstudy group established three Work-ing Groups (WGs) corresponding tothe program modules (“Local LoopWG,” “Switching, Interoffice, WireCenter Building and Land WG” and“Expense WG”). Those WGs werecomposed of members from domesticand foreign telecommunications carri-ers. At the study group meetings, is-sues postponed by the former studygroup and new issues raised by opin-ions through the invitation of publiccomments had been discussed. Adraft report was released on February1, 2002 and public comments on itwere invited. As a result of this invi-tation, 22 comments in total were sub-mitted including those from domesticand foreign telecommunications carri-ers and foreign governments.

On February 22, 2002, a workshopconcerning the draft revised modelwas held. Participants included in-vited foreign experts and foreign gov-ernment agencies (experts from the

Note 1: In the case where the cost of FRT is transferred to the local loop:GC interconnection: 3.75 yen/3 min. (-16.7%)ZC interconnection: 4.83 yen/3 min. (+1.0%)Local loop transmission (for PHS): 1,336 yen/circuit (+7.8%)Note 2: Figures in parentheses indicate increase or decrease ratios to the interconnection

charges in FY2002.Note 3: The calculation results are based upon forecast traffic data in FY2001. Therefore the

results may be changed when it is replaced by the actual traffic data in FY2001.

Current model (Interconnection Revised model charge in FY2002)

GC interconnection (telephone) 4.50 yen/3 min. 4.13 yen/3 min. (-8.2%)

ZC interconnection (telephone) 4.78 yen/3 min. 5.21 yen/3 min. (+9.0%)

Local loop transmission (for PHS) 1,239 yen/circuit 1,229 yen/circuit (-0.8%)

31

Restrictions on Liability for Damagesof Specified Telecommunications Ser-vice Providers and Right to DemandDisclosure of Identity Information ofthe Sender,” stipulating necessaryrules, etc. for liabilities, was enacted atthe 153rd Diet Session, so that provid-ers, etc. can take prompt and appro-priate actions toward infringement ofother’s rights through posting of infor-mation on websites and BBS over theInternet. The Law came into force inMay 2002. MPHPT has been imple-menting adequate operation of theLaw by supporting efforts to preparerelated guidelines.

8 Enactment of the Law Con-cerning Adjustment, Etc. ofTransmission of SpecifiedElectronic Mail

With respect to unsolicited/mali-cious e-mails, which are sent to con-sumers’ mobile telephone (cellularphone, PHS) terminals, etc. withoutconsent with the purpose of advertise-ment, publicity, soliciting, etc. ,MPHPT requested in April 2001 cellu-lar telephone and PHS carriers to re-port the current status of the problemsand countermeasures taken by them,and compiled and publicized the re-sults of their reports in May 2001. InJanuary 2002, MPHPT publicized nec-essary policies and technical counter-measures to suppress and preventtransmission of unsolicited e-mails, ascompiled by the “Study Group onMethods for Dealing with Nuisance(Unsolicited) E-mail.”

After those measures, at the 154thDiet Session a bill was submitted byDiet members, which provides for opt-out policy that requires senders of un-solicited e-mails to inform recipients oftheir names, etc. and not to send un-solicited e-mails to consumers whoclearly expressed their denial; said billpassed the Diet.

The law, “Law Concerning Adjust-ment, Etc. of Transmission of SpecifiedElectronic Mail,” came into force inJuly 2002.

In line with the law, MPHPT hasbeen taking necessary measures, such

as designation of designated organiza-tions, collection of necessary informa-tion and sending of warning e-mails.

9. Outline of complaints/consul-tations toward telecommuni-cations services in FY2001

MPHPT has been accepting com-plaints toward telecommunicationsservices at the telecommunicationsconsumer consultation centers estab-lished in the ministry. MPHPT is re-questing telecommunications carriers,etc. to improve, if necessary, their busi-ness practices based on complaints/consultations accepted from consum-ers. In addition, toward growing so-cial concerns/problems, MPHPT in-structs service providers to take spe-cific countermeasures, raise publicawareness thereon, and prepares nec-essary regulatory frameworks.

During FY2001, the number of com-plaints/consultations accepted by thetelecommunications consumer consul-tation center was 7,383, a 56% increase(2,642) over the previous fiscal year.The total number of complaints/con-sultations accepted by the telecommu-nications consumer consultation cen-ters at Regional TelecommunicationsBureaus and the MPHPT Headquar-ters was 13,581, a 115% increase (7,257)over the previous fiscal year (6,324).

Analyzing content of complaints/consultations accepted, along withrapid growth and widespread use ofthe Internet, complaints/consultationsconcerning the Internet are on the rise.The following cases are typical:troubles on Digital Subscriber Line(DSL) services (2,990); so-called inter-national information provision ser-vices (883), e.g., while using the Inter-net, connected to international tele-phone service without the user’sknowledge, billed international phonecall charges without recollection ofhaving done so; unsolicited e-mail(198); “one-ring” calls (190), etc.

10. Measures for InternetGovernance

- - J a p a n ’ s c o n t r i b u t i o n t oinfrastructural advancement of the In-

ternet --

In order to ensure that a range of so-cial and economic activities such as e-commerce can be deployed over theInternet, which is called the “networkof networks” for connecting a hugenumber of computers around theworld, there is a need to secureinterconnectivity on a global scale.

1) Internet governanceIP addresses (numeric identifiers as-

signed to each equipment on the net-work) and domain names (interpretedIP addresses into characters which hu-mans can read; a domain name and anIP address correspond one by one) areassigned to each equipment as their“addresses” on the Internet, for ex-changing information over the Internet(toward computers, etc. which connectto the Internet). These are the basicfactors of communications over the In-ternet, and their administration underthe unified rules, which govern assign-ment thereof on a global scale, in gen-eral called “Internet Governance” inthat it means the “governing of theentire Internet for smoothly function-ing thereof.”

At present, deliberations on “Inter-net Governance” are conductedmainly at the Internet Corporation forAssigned Names and Numbers(ICANN), an international non-profitorganization, that administers domainnames and IP addresses and decidespolicies thereof.

In Japan, Japan Network Informa-tion Center (JPNIC), which was estab-lished for carrying out Internet-relatedresearch, survey, education andawareness campaigns, conducts regis-tration and management of IP addressand deliberations on domain namesystems and technological aspects con-cerning the management of “.jp” do-main names . Services for registrationand management of JP domain namesending with “.jp,” were transferredfrom JPNIC to Japan Registry ServiceCo., Ltd. (JPRS) in April 2002.

Policies and deliberations on “Inter-net Governance” are gaining in impor-tance upon formulating new frame-works and dispute resolutions con-


2002 Annual Report

32

cerning domain names. Thus, Japan’sactive participation into those effortscontributes to construction of stableand effective Internet usage on a glo-bal scale and leads to development indomestic Internet usage.

2) ICANN’s organization and Japan’spresence

ICANN is consisting of the Board ofDirectors, a supreme organ, three sup-porting organizations, which carry outstudies on IP addresses, domainnames and protocols, four AdvisoryCommittees and the At-Large mem-berships, etc. (Fig. I-10-1) Of the fourAdvisory Committees, MPHPT, asJapan’s only formally registered mem-ber, participates in the GovernmentalAdvisory Committee (GAC) consistingof accredited representatives of eachnational government, striving to estab-lish an international cooperative envi-ronment, including the Asia-Pacific re-gion.

In the ICANN Board of Directorscomprising 19 directors, two Japaneseare elected as directors. From thestandpoint of Japan’s internationalcontribution to “Internet Governance,”it is essential for Japan to actively sup-port and participate in such interna-tional activities concerning the Inter-net.

3) gTLDs and ccTLDsDomain names used to specify IP

addresses arelargely classi-fied into twocategories: ge-n e r i c T o pLevel Domain(gTLD) andcountry codeTop Level Do-main (ccTLD)names. ThegTLDs, suchas “.com” or“.net,” can beobtained frome v e r y w h e r ea r o u n d t h eworld regard-less of coun-t r i e s ; a n d

ccTLDs, such as “.jp,” are assignedcountry-by-country.

gTLDs administered by some pri-vate companies, such as VeriSign Glo-bal Registry Services (VeriSign GRS)and NeuLevel, Inc., can be obtainedthrough registrars in Japan and over-seas. On the other hand, ccTLDs aremanaged by each country’s registry(ccTLD registry), and various domainname schemes are being reviewed, forinstance in February 2002, introduc-tion of “.JP” domain names withoutrestrictions on the number that can beregistered by any individual, group, ororganization. The “.jp” domain namescan be obtained from JPRS and regis-trars, which are generally Internet ser-vice providers in Japan (ISPs) and con-clude contracts with JPRS.

4) Internationalized domain names(IDNs)

The Domain Name System (DNS)hitherto are in principle based on theEnglish language. For the purpose ofincreasing Internet users among thegeneral public, it is crucial that the do-main names be comprehensible andeasy-to-use for Japanese users. In re-sponse to requests from users in non-English speaking countries and re-gions, ICANN is carrying out studieson introduction of InternationalizedDomain Name (IDN), also known as“multilingual domain names,” whichuses non-English characters for Japa-

nese and other languages containingcharacters other than the alphanu-meric system. At present, the InternetEngineering Task Force (IETF), an in-ternational standardization organiza-tion covering the Internet, is conduct-ing technological standardization ac-tivities on the internationalized do-main name. Apart from the standard-ization activities, in November 2000VeriSign GRS started registration forthe multilingual “gTLD” domainnames including Japanese and in Feb-ruary 2001 JPNIC also started registra-tion for Japanese “.jp” domain names.

Toward practical use of internation-alized domain names, it is necessary toensure that stable operations of IDNcan work under the existing DNS.Thus, paying due consideration to theconvenience of Japanese users, it isimportant for Japan to actively partici-pate in international rule making forstable use of internationalized domainnames.

5) New gTLDsVeriSign GRS has been managing

gTLDs on a monopoly basis to date.However, ICANN started a programfor the introduction of new generictop-level domains (gTLDs), in order tocope with i) forecast of shortage ingTLD space, ii) introduction of compe-tition in management service and iii)regionally distributed managementservice.

At its meeting on November 16,2000, the ICANN Board selected theseven new generic top-level domains(gTLDs) for negotiation to be opera-tional. Of the seven gTLDs, accep-tance of applications for five domainsof “.info,” “.biz,” “.name,” “.aero” and“.coop” was started. The remaining“.pro” and “.museum” are under con-sultation for detailed conditions.There is no proposal from Asian reg-istries in the seven candidate gTLDs,so the Western-oriented domain namemanagement structure still remainsintact. (Table I-10-2) Thus, if gTLDsconvenient for Japanese and otherAsian registrars are introduced, usersin the region can have a broader rangeof choices in gTLDs, resulting in moreinexpensive gTLDs for users. It is im-

ICANN

Domain Name Supporting Organization Address Supporting Organization Protocol Supporting Organization

At-Large Membership

At-Large

DNSO ASO PSO

ccTLD Registries

Work

ing G

roups

Co

llab

ora

tio

n

Co

llab

ora

tio

n

gTLD Registries

ISPs

Registrars

Intellectual Property

Business

Non-Commercial

RIPE NCC

LACNIC

IETF

W3C

ITU-T

ETSIAPNIC

JPNIC

President & CEOM. Stuart Lynn

Supporting organizations: 9 (DNSO: 3, ASO: 3, PSO: 3) At-Large Directors: 5 Initial Directors: 4

ICANN President: 1

ICANN Secretariat

ICANN Board of Directors (total: 19)Chairman: Vinton G. Cerf

Directors from Japan: Prof. MURAI Jun, Keio UniversityKATOH Masanobu, Fujitsu Ltd.

Fig. I-10-1 ICANN

33

portant for Japan to actively, in coop-eration with Asian countries, partici-pate in deliberations conducted inICANN.

6) Dispute resolution and precautionconcerning domain name acquisi-tion

As regards domain names, to datethere are cases where third parties inbad faith acquires a domain name re-flecting trademarks, English corporatenames, acronyms, service marks forthe purpose of reselling it to the right-ful trademark owner at a high price;establishing a website using a domainname identical or similar to a trade-mark owned by another party for thepurpose of creating misunderstandingand confusion among Internet users.In order to cope with those cases andsimilar disputes, ICANN released Uni-form Domain Name Dispute Resolu-tion Policy (“uDRP”) in October 1999.In accordance with this uDRP, dis-pute-resolution Panels which ICANNaccredits can quickly canceling ortransferring domain names obviouslyregistered or used in bad faith when

complaints are made by rightful trade-mark owners through the administra-tive proceedings. In Japan, JPNIC, inJuly 2000, set forth the “JP DomainName Dispute Resolution Policy (JP-DRP)” for coping with domain namedisputes by arranging the uDRP. Asthe dispute-resolution service pro-vider certified in accordance with JP-DRP by JPNIC, the Arbitration Centerfor Industrial Property accepted 19complaints as of July 2002 since the be-ginning of the arbitration in October2000 (Table I-10-2). In addition tothose Alternative Dispute Resolutions(ADRs), because there are trends re-quiring resolutions by court judg-ments, such the JACCS case (ToyamaDistrict Court), in June 2001 the Lawto Amend the Unfair Competition Pre-vention Law was passed the Diet, inorder to prevent domain name abuseand registration for obtaining illicitgain or perpetration.

Undue acquisition of domain nameshave tended to occur upon introduc-tion of new domain name systems. InNovember 2000, when a new systemfor the internationalized domain

names (“.info,” “.biz” and “.name”)was introduced, immediately after theacceptance was started, applicationsfor registration surged, then a registra-tion system for acceptance was down.Furthermore, as the procedure for reg-istration was basically on a first-comefirst-served basis, domain names iden-tical or similar to a trademark ownedby another party were acquired by un-entitled third parties.

On the contrary, in case of registra-tion for “.jp” domain names in Febru-ary 2001, JPNIC took a preventivemeasures, such as setting a preferen-tial time period (Sunrise Period) forrightful trademark and service markowners, a time period for equal treat-ment without a first-come first-servedbasis.

The Sunrise Period is internationallyrecognized as an effective preventivemeasure avoiding disorder. This mea-sure is employed by JPNIC as theworld’s first attempt in the registrationfor “.jp” domain names. Such at-tempts will lead to stable Internet us-age not only in Japan but also in therest of the world. Proposals concern-ing such attempts shall be studied atinternational fora such as ICANN.

11. Introduction of the “Radio-Radiation Protection Regu-lation” to existing mobiletelephone terminals operat-ing in close proximity to theside portion of the humanhead

On June 1, 2001, MPHPT promul-gated a ministerial ordinance to


Table I-10-2 New TLDs

Unsponsored gTLDs (general purpose)

The following three gTLDs can be freely obtained like “.com,” “.net” and “.org.”.biz NeuLevel (then known as JVTeam, LLC ).info Afilias, LLC.name Global Name Registry, LTD

Sponsored gTLDs (specialized purpose)

The following four gTLDs can be obtained by limited organizations like “.mil,” “.int,” “.gov”and “.edu.”.aero Societe Internationale de Telecommunications Aeronautiques (SITA).coop National Cooperative Business Association (NCBA).museum Museum Domain Management Association (MuseDoma).pro RegistryPro, LTD (a joint venture of Registry.com and Virtual Internet)

Table I-10-3 Accredited Panels for resolving domain name disputes

Accredited Panels Location URL Dispute resolution Accepted

policy cases

gTLDs WIPO Geneva http://www.wipo.int/ UDRP 4,245

gTLDs *1 NAF Minneapolis http://www.arb-forum.com/ UDRP 2,703

gTLDs CPR New York http://www.cpradr.org/ UDRP 58

gTLDs ADNDRC Beijing, Hongkong http://www.adndrc.org/ UDRP 17

JP domains Japan Intellectual Property Tokyo http://www.ip-adr.gr.jp/ JP-DRP 19

Arbitration Center

Note*1: including 34 cases related to Open ccTLDs such as “.tv,” “.cc”, etc. that can be obtained from anywhere around the world.Source: Materials announced by each organization

http://www.wipo.int/

http://www.arb-forum.com/

http://www.cpradr.org/

http://www.adndrc.org/

http://www.ip-adr.gr.jp/

2002 Annual Report

34

amend relevant ministerial ordi-nances, in order to introduce the“Radio-Radiation Protection Regula-tion” to existing mobile telephoneterminals operating in close proxim-ity to the side portion of the humanhead.

In order to prevent radio wavesemitted from radio facilities/equip-ment from affecting human bodies,the “Radio-Radiation ProtectionGuidelines” on the radio-radiationstrength, etc. has been submitted bythe Telecommunications TechnologyCouncil.

Values listed in the “Radio-Radia-tion Protection Guidelines” are stan-dard values, equivalent to the stan-dard values of international guide-lines developed by the InternationalCommission on Non-Ionizing Radia-tion Protection (ICNIRP), set forth onprerequisites for protecting humanbodies, taking into consideration suf-ficient safety margin based on fluc-tuation in mobile terminal user con-ditions and an environment wheremobile stations are installed, etc.Among those values, the “Electro-magnetic Field Strength Guidelines,”applied to broadcast stations, basestations for mobile telephones, etc.,oblige persons who opened radio fa-cilities to construct safety facilitiessuch as fences, etc. for preventing thegeneral public from entering placeswith values equal to or exceedingstandard values of radio wavestrengths emitted from those radiofacilities, as stipulated under Article21-3 of the “Enforcement of the Ra-dio Law.”

Among the “Radio-Radiation Pro-tection Guidelines,” the “Partial-body Absorption Guidelines (Spe-cific Absorption Rate: SAR*),” ap-plied to cellular phone devices, etc.intended for use in close proximityto the side of the head, is currentlyused for guidelines in producing ra-dio equipment. In addition, based onthe partial report of November 2000“Measurement of SAR from mobilephone terminals and other terminalsthat are intended for use in closeproximity to the side of the head”from the Telecommunications Tech-nology Council, the unified mea-surement method of the SAR has

been set forth. Subsequently, inMarch 2001, MPHPT inquired of theRadio Regulatory Council about par-tial amendments of the relevant min-isterial ordinances and in May 2001received a report from the councilstating that the draft amendmentsare appropriate. In accordance withthe report, the partial amendmentsto the “Rules for Regulating RadioEquipment” and the “OrdinanceConcerning Technical RegulationsConformity Certification of SpecifiedRadio Equipment” for introducingthe Radio-radiation Protection Regu-lation, which will cover cellularphone devices intended for use inclose proximity to the side of thehead, were on June 1, 2001, promul-gated and came into force on June 1,2002.

Thanks to the introduction of theRadio-Radiation Protection Regula-tion, safer use of radio wave withease is to be promoted.

Note: SAR: Specific Absorption Rate. Thisrefers to the average amount of radiowave energy imparted to a given 10g oftissue in a time period of six minuteswhen a living body is exposed to elec-tromagnetic fields.

1) Outline of regulations

i) Ordinance for Regulating RadioEquipment (Article 14-2)

To stipulate the SAR limit (2W/kg)applied to radio facilities (limited toradio facilities transmit/receivevoice information and combined in-formation of voice/others) of “landmobile stations conducting mobileradio communications intended foruse in close proximity to the side ofthe head” and “mobile earth sta-tions, which conduct mobile satellitecommunications through relaying ofan artificial satellite station estab-lished on a non-geostationary satel-lite.” (MPHPT Ordinance No. 81)

ii) Ordinance Concerning TechnicalRegulations Conformity Certifica-tion of Specified Radio Equipment(Table 3)

To add the SAR to test items incharacteristic tests of TechnicalRegulations Conformity Certifica-tion for ensuring conformity withtechnical conditions in 1). (MPHPT

Ordinance No. 82)

1) Preparation of relevant NoticesFurthermore, in line with the

amendments to the ministerial ordi-nances, MPHPT made and amendedthe following Notices (promulgatedon October 10, 2001 and come intoforce on June 1, 2002).i) Notice for Setting Methods for Mea-

surement of SAR at the Side of theHead (MPHPT Notice No. 628)

In order to enable unified evalua-tion of conformity of radio equip-ment with the Radio-Radiation Pro-tection Regulation effective fromJune 1, 2002, this Notice provides for“methods for measurement of SARfrom cellular phone devices in-tended for use in close proximity tothe side of the head (measuring in-struments, conditions for measuringenvironments, procedures for mea-surement, etc.).”ii) Notice for Setting Items for Inspec-

tion by Attested Private Inspectors(MPHPT Notice No. 630)

In order to enable Attested PrivateInspectors (a person who performsthe business of conducting inspec-tion of radio equipment, etc. underthe Radio Law Article 24-2) to con-duct measurement of SAR at the sideof the head, MPHPT partiallyamended MPHPT Notice No. 312 of1999 to add the inspection item con-cerning “Methods for Measurementof SAR at the Side of the Head” tothis Notice. Thanks to this amend-ment, when measuring SAR, At-tested Private Inspectors may omitpart of examination for TechnicalRegulations Conformity Certifica-tion.iii) Notice for Setting Implementation

Methods, Etc. for Inspection by At-tested Private Inspectors, Etc.(MPHPT Notice No. 629)

In order for Attested Private In-spectors, etc. to enable unified mea-surement of SAR to cellular tele-phone terminals, etc., MPHPT par-tially amended MPHPT Notice No.666 of 1998 to add the inspectionmethods concerning SAR to this No-tice. Thanks to this amendment,when measuring SAR, Attested Pri-vate Inspectors may conduct inspec-tion concerning SAR with unified

35

measurement methods.

12. Tax incentives for promot-ing reliability of telecommu-nications systems

With socioeconomic activities be-coming increasingly dependent uponthe Internet, such as electronic com-merce, computer viruses influencingthe entire telecommunications systemshave emerged as a new threat which

prevents stable provision of telecom-munications services. In addition tothe facilities conducive to the measuresfor improving reliability of telecommu-nications systems in an emergencysuch as a conventional disaster, "com-puter virus monitoring devices" werealso qualified for tax incentives fromFY2001. If telecommunications carri-ers procure these facilities, they can re-ceive a 12% special depreciation on theacquisition cost for their corporate tax.

"Agreement between Japan and theRepublic of Singapore for a New-AgeEconomic Partnership (JSEPA)," in-cluding MRA covering telecommuni-cations terminal equipment, radioequipment and electric appliances(specified equipment), subsequently,an amended law, the "Law for Imple-mentation of the Mutual RecognitionBetween Japan and the EuropeanCommunity and the Republic ofSingapore in Relation to ConformityAssessment of Specified Equipment,"which adds necessary matters for mu-tual recognition between Singapore tothe MRA Law was promulgated onApril 26, 2002.

Furthermore, the government is pre-paring to implement MRAs withAPEC member economies withinf rameworks f or APEC MRAs .MPHPT has been promoting globaldeployment of Japan’s competitivetelecommunications technology andcontributing to improvement in ICTbenefits for people around the world,through a variety of available telecom-munications equipment including for-eign equipment.


II. Measures for Ongoing Globalization

1. Toward implementation oftelecommunications equip-ment MRA

Along with globalization trends ininternational distribution of telecom-munications equipment, internationalharmonization has been requested inJapan’s technical standard conformitycertification system concerning tele-communications equipment. In re-sponse to this, MPHPT has been pro-moting mutual recognition of ap-proval for telecommunications equip-ment. (Fig. II-1)

Between Japan and the EU, on Janu-ary 1, 2002, the Mutual RecognitionAgreement (MRA: the Agreement onMutual Recognition between Japanand the European Community) forfour specific areas of telecommunica-tions terminal equipment and radioequipment, electrical products, chemi-cals and medical products came into

force. On the same day, the "Law forthe Implementation of the Mutual Rec-ognition between Japan and the Euro-pean Community in Relation to Con-formity Assessment of SpecifiedEquipment" (MRA Law) and relevantministerial ordinances came into force,in order to implement the MRA and fa-cilitate telecommunications equipmenttrade.

Between Japan and Singapore, onJanuary 13, 2002, the two partiessigned a free trade agreement, the

III. Development of ICT Infrastructure

1. National Broadband Initiative-- Toward the most advanced IT na-

tion in the world --

A target to "become the world's ad-vanced IT nation within five years" isclearly stated in Japan's national IT

strategy, "e-Japan Strategy." Toachieve this target, in October 2001,MPHPT announced a "NationalBroadband Initiative."

The "National Broadband Initiative"clearly states a schedule to realize thehigh-speed/ultrahigh-speed Internetin Japan by FY2005, the respectiveroles for the public and the privatesectors, the prospective number ofhigh-speed/ultrahigh-speed Internetsubscribers and the expected socialbenefit brought on by the deploymentof broadband Internet.

1) Construction of high-speed/ultra-high-speed network infrastructure

[Targets]• Create an environment that enables

24-hour connection to high-speedaccess networks from at least 30million households and ultrahigh-speed access networks from 10 mil-

Fig. II-1. MRA scheme

Note: This diagram shows a case where Japan exports equipment to the EU, and vice versa.

[Current system] [After implementation of mutual recognition]

Japan EU Japan EU

Apply directly with EU's conformity assessment bodies

Testing, etc. within the EU

Manufacturer of specified equipment

Manufacturer of specified equipment

1. Application

1. Application

2. Certificate

3. Export3. Export

EU market EU market

Conformity assessment bodies in the EU

EU accepts recognized certification from Japan

2. Certificate

Testing, etc. within Japan (reduction of time and costs)

2002 Annual Report

36

lion households by FY2005.• Bridge the digital divide caused by

geographical constraints.• Deployment of LANs connecting

public facilities through the nationby FY2005.

(1) High-speed network infrastructureAchieve the goal, deployment of "30

mill ion households" by FY2005through the private sector's deploy-ment of high-speed networks, and cre-ate an environment that enables allpeople in every region, regardless oftheir geographical constraints, to have24-hour access to the Internet.• DSL (Digital Subscriber Lines) ser-

vices using existing telephone linesare expected to be deployed* by theprivate sector within FY2002.

• Regarding other high-speed Inter-net access services such as cableInternet and FWA, service areas areexpected to be expanded by FY2005.

Note*: There may be cases that services arenot offered in areas where metalliccables are being removed, or quite farfrom telecommunications carrier's lo-cal exchanges.

(2) Ultrahigh-speed network infra-structure

Achieve the goal, deployment of "10mill ion households" by FY2005through the private sector's deploy-ment of ultrahigh-speed networksmainly in metropolitan areas. How-ever, as to subscriber fiber-optic net-works, the public sector's deploymentis vital for narrowing the "digital di-vide" caused by geographical con-straints.• As regards services using fiber-op-

tic networks, mainstream networksof the ultrahigh-speed Internet in-frastructure, it is expected that theprivate sector will deploy in suchareas as:

i) government-designated citiesand prefectural seats by FY2003

ii) most cities by FY2005• Accordingly, the goal, the deploy-

ment of "10 million households,"can be achieved. However, becauseof problems related to profitability,the "digital divide" caused by geo-graphical constraints may emerge.

• In other words, under-populated

areas and other locations under geo-graphical constraints where the pri-vate sector has no interest to deploynetwork infrastructures because ofprofitability, the network deploy-ment by governments is required toclose the digital divide.

• Upon the network deployment bythe public sector, from the view-point of promoting electronic gov-ernments that realize advancedpublic services such as education,administration, welfare, medicalcare and prevention of disasters, itis desirable to utilize public LANsdeployed by local governments,connecting public facilities.

iii) Public LANs connecting publicfacilities

Implement deployment in every re-gion by FY2005:• From the viewpoint to promote elec-

tronic governments by FY2005, de-ploy public LANs connecting pub-lic facilities, schools, libraries, pub-lic halls and city offices, in order torealize advanced public services,education, administration, welfare,medical care, prevention of disas-ters, etc.

• To this end, it is vital for local gov-ernments to create a concrete plan

for the deployment of public LANs,and the national government shallensure financial support measuresnecessary for those local govern-ments to realize their plans.

(2) Predicted deployment of broad-band Internet (number of house-hold subscriptions)

• The following Fig. III-1 providesestimates that the number of house-hold subscriptions to high-speed/ultrahigh-speed Internet access ser-vices, based on the expected growthrate of the Internet use, rate of de-ployment and charges, etc. undercertain conditions.

• Although DSL is expected to con-stitute the mainstream of high-speed/ultrahigh-speed Internet ac-cess service for the time being, ul-trahigh-speed access services usingfiber-optic networks are expectedto be deployed rapidly from FY2003and eventually overtake DSL.

(3) Changes in lifestyle resulting frompublic applications realizedthrough high-speed/ultrahigh-speed networks

• The creation of an environment forhigh-speed/ultrahigh-speed Inter-net access will bring about not onlya boost to regional economies ex-

As of the end of June 2001

FY2001 FY2002 FY2003 FY2004 FY2005

(Unit: million households)

As of the end of each fiscal year

0

200

400

600

800

1000

1200

1400

1600

1800

200020

10

8

6

4

2

12

14

16

18

0

Total: 1.260

0.970.29

0

Total: 3.780.022.051.640.07

Total: 9.170.163.234.810.97

Total: 15.130.413.887.493.35

Total: 17.970.654.177.225.93

Total: 19.770.804.296.957.73

Wireless

Cable Internet

DSL

Fiber optics

Fig. III-1 Predicted deployment of broadband Internet (number of householdsubscriptions)

37

telephonyAs for methods, conditions, etc. for

assessing quality of IP telephony,based on trends in international stan-dardization at ITU-T, ETSI, etc., do-mestic standardization organizationsare required to lead studies thereon.iii) Desirable technical standards con-

cerning quality of IP telephonyIn order to make technical standards

applicable to various IP telephony ser-vice, VoIP service providers shall, inthe same manner as the existing tech-nical standards, set forth standard val-ues with recognition of the MPHPTMinister and maintain thereof.iv) Numbering plan for IP telephony

Telephone numbers (telephonenumbers of IP telephony) assigned toterminals (IP telephony terminals),connected 24 hours a day to IP net-works via DSL, cable TV, etc., to becalled by general subscriber tele-phones shall be decided.v) Formulation of examination stan-

dards concerning telephone num-bers

In order to use numbers fairly andeffectively, examination standardsshall be formulated where applicationsfor allocation of numbers includingnumbers of IP telephony are filed.vi) Preparation for and study on ENUM

(Electronic Numbering)

pected through industrial revital-ization, but also changes in thelifestyle of citizens who will be ableto receive advanced public servicessuch as medical care, welfare, edu-cation, culture and prevention ofdisasters, even at home.

2) Government Grant for FTTH net-work in rural areas

In order to narrow the geographicdigital divide, the MPHPT has created,in FY2002 budgets, a new grant forFTTH network in rural areas. Thisgrant provides support for the instal-lation of FTTH network by local gov-ernments in rural area or remote is-lands Through this scheme, MPHPTwill promote and accelerate construc-tion of ultrahigh-speed Internet accessenvironments.

2. "Study Group on IP NetworkTechnology" Compiles Re-port

On February 22, 2002, MPHPT re-leased the report compiled by the"Study Group on IP Network Technol-ogy" (Chair: Professor SAITO Tadao,Chuo University). In June 2001, thestudy group was held to deliberate ontechnological issues concerning IP net-works.

The outline of the report is as fol-lows:1) Background

Technologies for public switchedtelephone networks (PSTNs), Japan'scurrent major communications net-works, are internationally recognizedas high quality ones. The PSTNs,based on detailed technical standards,are consisting of hierarchical networksto provide telephony services.

On the contrary, Internet protocol(IP) technology, which constitutes thebasics of and is derived from computercommunications, including local areanetworks (LANs) and the Internet, isutilized for IP networks with the pur-pose of providing telephony servicethrough interconnection with existingPSTNs.

The quality of telephony servicewith the VoIP (Voice over IP), voicecommunications technology utilizingInternet Protocol (IP), has been drasti-

cally improved as a result of the recenttechnological development. This hasled to the popularization of intercon-nection between the IP network andpublic switched telephone networks(PSTNs). In addition, upon adoptionin March 2001 of "Opinion D" to facili-tate the introduction and widespreaduse of IP telephony at the ITU WorldTelecommunication Policy Forum(WTPF), studies on international stan-dardization and a numbering planconcerning IP telephony are hence-forth seen being accelerated on a glo-bal scale.

2) Outlinei) Speech quality of IP telephony

Based on studies in standardizationorganizations, such as ITU-T, ETSI,TIA, and existing regulatory frame-works, the end-to-end speech qualityof IP telephony is classified into three:Class A (equivalent to fixed tele-phones), Class B (equivalent to cellu-lar telephones) and Class C. In particu-lar, for voice communications, Class Cquality is required. In addition, VoIPservice providers and VoIP terminalequipment vendors are required to af-fix appropriate marks, etc. on VoIPproducts in accordance with the clas-sification.ii) Methods for assessing quality of IP


IP telephone terminal

IP telephone terminal

• DSL• Cable TV• FTTH• Leased circuit• IP-VPN, etc.

[IP telephone terminal-to-IP telephone terminal]

[IP trunk network service]

[From IP telephone terminal to subscriber telephone][From subscriber telephone to IP telephone terminal]

This study group proposed as follows:• It is appropriate that, regarding all types of IP telephony services, end-to-end speech quality be explicitly displayed in order to have consumers easily understand quality display; and• It is necessary that the public and private sectors promote standardization activities in establishing quality assessment methods for IP telephony service, in order to adequately compare each service quality.

VoIP adapter

PC Ordinary telephone

IP telephone PC

PSTN

Subscriber telephone

Subscribertelephone

PSTN

PSTN

Router

Router

Gateway

Gateway

Communications between subscribers to the same service and users using the same VoIP software are possible. Intra-company telephone service based on IP-VPN is offered.

Dedicated VoIP equipment or PCs installed VoIP software are used. Call origination to subscriber telephones is possible via gateways.

Service utilizing IP networks as trunk networks. There are two types: one utilizing dedicated IP networks and one utilizing the Internet.

Because IP telephone terminals are not assigned telephone numbers to be dialed, this kind of service is not provided in general. This study group recommended that 0A0 numbers are appropriate for this service.

IP network

Fig. III-2 IP Network

2002 Annual Report

38

Upon introduction of ENUM, mat-ters (management/operation systemsfor ENUM DNS servers) to be takeninto consideration shall be studied.The outcomes of the study will be uti-lized for contributing to deliberationsat ITU, the Internet Engineering TaskForce (IETF), etc.

3) Subject in the futurei) Promotion of standardization con-

cerning IP network technologyIn order to promote IP telephony

and smooth introduction of IP net-works, and so that domestic technol-ogy can contribute to internationalstandards, standardization concerningIP network technology shall be pro-moted.2) Promotion of interconnection

In order to facilitate interconnectionamong various networks, technicalconditions for interconnection shall beestablished in collaboration with stan-dardization organizations, service pro-viders and relevant businesses.iii) Security measures, etc.

In order to protect IP networksagainst threats from cyberterrorists, se-curity measures shall be implementedand understood by the public, includ-ing R&D, creation of liaison/coopera-tion system between the public andprivate sectors, and security measuresfor users.iv) Ensuring emergency/essential com-

municationsIn order to ensure emergency/es-

sential communications using IP tele-phony, not only telecommunicationscarriers but also the national govern-ment shall implement R&D effortsaimed at playing a leading role in thisfield.v) Measures for introducing IPv6

In order to promote the shift fromIPv4 to IPv6, measures shall be stud-ied, taking into consideration shortageof IPv4 address space.

3. R&D for Stratospheric RadioPlatforms

MPHPT, in cooperation with theMinistry of Education, Culture, Sports,Science and Technology (MEXT),launched full-scale R&D on the Strato-

spheric Radio Platform project inFY1998.

The Stratospheric Radio Platform isa radio relay system utilizing un-manned airships equipped with com-munications equipment and flying atan altitude of approximately 20 kilo-meters in the stratosphere for the pur-poses of communications and broad-casting. If these unmanned airshipsare equipped with observation sen-sors, the platform can also be used forearth observation.

This system has the following ad-vantages:1) High-speed, large-capacity commu-

nications and broadcasting usingunused frequencies such as the Kaband and the millimeter wave band

2) Smaller terminals because of theshorter propagation distance thanthose for satellite communications

3) Effective in earth environment mea-surement such as measuring CO2

MPHPT is responsible for the track-ing and control system as well as thecommunications and broadcastingmission. MEXT is responsible for con-struction of the entire platform systemand the earth observation mission. Asregards budgets, MPHPT and MEXTwere allocated a total of 3.1 billion yenfor FY2001 budget and 3.1 billion yen

for FY2002.By FY2000, MPHPT had already

conducted i) research on element tech-nologies for tracking and control sys-tems and ii) research on element tech-nologies for fixed communications andprototype product ion thereof .MPHPT is now developing technolo-gies to carry out a test flight plannedfor after FY2003.

In October 1999, the StratosphericRadio Platform project was selected asa “Millennium Project” targeting theenvironmental protection based upona decision of the Prime Minister, whichaccelerates research on the Strato-spheric Radio Platform.

Moreover, in addition to the 47-GHzb a n d a l l o c a t e d a t t h e W o r l dRadiocommunication Conference 97(WRC-97), the 31/28GHz-bands wereallocated and were enabled to use theplatform as IMT-2000 base stations atthe WRC-2000, which expanded avail-ability for versatile applications.

4. Introduction of the FixedWireless Access (FWA)System

1) What is the FWA system?The fixed wireless access (FWA) sys-

tem is a system that directly connectssubscribers to the telecommunications

Altitude of 20 km

Length: 250mWeight: 32 ton (including communications equipment 1 ton)Lifespan: 10 years

Covering major regions of Japan with multiple stations

High-speed communications using mobile terminals

High-speed portable data terminals

High-speed mobile data terminals

High-speed portable terminals including TV phone

• High-speed WAN• High-speed portable

data terminals

• High-speed Internet• Multimedia services

such as video-on-demand

Local areas• Fixed communications Elevation angle: 10 or larger Radius: 100 km

Residential areas• Fixed communications (Mobile communications) Elevation angle: 30 or larger Radius: 35 km

Publ

ic sw

itche

d ne

twor

k

Central metropolitan areas• Fixed communications • Mobile communications Elevation angle: 60 or larger Radius: 10 km

High-speed communications and broadcasting using fixed (portable) stations

Fig. III-3 Stratospheric Radio Platforms

39


carrier’s trunk networks by wirelesscommunications technologies. Sincethe FWA enables high-speed Internetaccess and can be established at a lowcost, it is expected that the FWA willbe used for the so-called “last onemile” and "hot spots."

2) Introduction of FWA system usingquasi-millimeter-wave-band andmillimeter-wave-band frequencies

On December 25, 1998, MPHPT pre-pared a regulatory framework for theFWA system using the quasi-millime-ter-wave-band (22GHz and 26GHzbands) and the millimeter-wave-band(38GHz band) frequencies. In May2001, MPHPT added six blocks (720MHz) of frequencies in the 26GHzband to the initial 18 blocks. Atpresent, 15 telecommunications carri-ers are actually providing the FWAservices.

3) Introduction of 5GHz band wire-less access systems

In September 2002, MPHPT formu-lated a regulatory framework for the"5GHz band wireless access system,"which can provide high-speed Internetaccess service outdoor. It is expectedthat this system will be widely usedfor outdoor “hot spots,” such as sta-tion squares, parks, street corners, andfor the "last one mile,” a link to sub-scribers' dwellings.

4) Introduction of new FWA systemsMPHPT has started consideration on

technical conditions, including fre-quency sharing with other systems, on"quasi-millimeter-wave-band FWA forpublic services" that will be used bythe central government and local pub-lic bodies, aiming at completingrulemaking process within FY2003.

5) R&D on the next-generation wire-less access system

In order to realize the next-genera-tion wireless access system, which isa mesh-type system advancing thecurrent wireless access system (P-P orP-MP type) in communication speed,flexibility for network constructionfault tolerance, etc., the following tech-nologies are necessary. MPHPT car-ries out the five-year R&D project

thereon fromF Y 2 0 0 0 t oFY2004 as anentrusted re-search of theTelecommu-nications Ad-v a n c e m e n tOrganizationof Japan.i) A u t o n o -

mous in-terferencep r e v e n -tion tech-nology:Technol-ogy thatautonomously controls radio fre-quencies

ii) Autonomous route selection tech-nology: Technology that autono-

IV. Promotion of Mobile IT

1. Promotion of ITS

Intelligent Transport Systems (ITS)can be regarded to be comprehensiveICT systems dealing with road traffic,and is comprised of humans, roadsand vehicles as a total system, makingthe most of leading –edge informationand communications technologies.

Anticipated ITS applications are traf-fic informationprovision sys-tems, express-way ElectronicToll Collection(ETC) systems,physical distri-b u t i o n ( P D )suppor t sys -t e m s , t r a f f i ccontrol systemsa n d v a r i o u sother systems.Through real-ization thereof,those systemswill not onlycontribute to re-ductions of traf-fic jams and ac-

cidents, improved efficiency of physi-cal distribution, etc., but also bringabout job creation and economic rippleeffects through development of relatedindustries, including auto, ICT indus-try and other industries.

Today, part of ITS is already in prac-tical use. The Vehicle Information andCommunications Systems (VICS), pro-viding drivers with real-time informa-

Fig. IV-1-1 ITS network in the future

Roadside network(optical fiber)

Vehicle Information and Communications System (VICS),Electronic Toll Collection (ETC),

Dedicated Short Range Communications (DSRC), etc.

Base station(antenna)

Roadside network(optical fiber)

Mobile communications

networks

Broadcasting

Base station(antenna)

Information Vehicle-roadside communications

Information Information

Information

Iinformation

Inter-vehicle communications

Truck (carriers: physical distributors)(Increasing efficiency in commercial vehicle operations)

Bus, taxi (support for public transport operations)

Pedestrian (support for pedestrians)

Passenger car

Intra-car network (ITS data bus), sensors, collision avoidance radars, etc.

Existing networks

Cellular phone,satellite mobile phone, dispatch radio, etc.

ITS info-communications platform (infrastructure)

Global positioning system (GPS)

FM multiplex broadcasting,digital terrestrial broadcasting,digital satellite broadcasting, etc.

(ETC, DSRC)

Set alternate routes during inclement weather

Communications is established in spite of an obstruction the line of sight.

High-speed access is enable in case of good condition of communications

Fig. III-4 Next-generation wireless access system

mously selects the optimal routeiii) Wireless network technology:

Technology that constructs the next-generation wireless access system.

2002 Annual Report

40

tion on traffic congestion and the like,have been in operation as a full-scaleservice since 1996. As of the end ofJune 2002, the cumulative units ofVICS shipped totaled 4.98 million.Meanwhile, the Electronic Toll Collec-tion (ETC) system, which enables tollcollection without stopping vehicleson the expressway, became opera-tional as of March 2001.

With the viewpoint of utilizing ICTlinking humans, roads and vehicles,MPHPT has been conducting stan-dardization activities on ICT, such asDedicated Short Range Communica-tions (DSRC) for ITS, R&D on InternetITS technologies and study/researchon deployment of ITS technologies.ITS can be considered to be promisingsystems in diversified aspects, includ-ing improvement of safety in road traf-fic, creation of new industries, etc.MPHPT has been promoting ITS incollaboration with ITS-related minis-tries and agencies (the National PoliceAgency, the Ministry of Economy,Trade and Industry and the Ministryof Land, Infrastructure and Transport),industries, academia, etc.

MPHPT's major promotion mea-sures for ITS are as follows:1) R&D on ICT for realizing ITS

With regard to ITS-related R&D onICT, R&D for realizing ITS is carriedout, e.g., R&D for realizing InternetITS, which enables a system in a cartraveling at high speed to receivelarge-volume data via networks. Todate, with the purpose of enabling anenvironment in which a car can receiveand transmit information as in office,R&D on wireless agent technologies, akind of virtual secretary, and softwareautomatic updating technologies, sucha s a u t o m a t i c a l l y u p d a t i n g o froadmaps for car navigation, havebeen carried out. From now on, R&Don ITS routing technologies, IP-readymultimode terminal technologies, etc.will be conducted.

R&D on smart gateway technologieshas been carried out. In order to real-ize the driving assistance system, R&Don information and communicationstechnologies ("smart gateway" tech-nologies) that enable smooth and reli-

able communications between roads("smart way") and cars ("smart car")traveling at high speed is underway.As for the smart gateway technologies,R&D is to be carried out on the hand-over control, continuous cell configu-ration and high-reliability interconnec-tion systems technologies that supporthigh-speed driving, and comprehen-sive experiments integrating each ele-ment technology will be implementedwithin FY2002.

2) Promotion of DSRC systemsThe 5.8GHz band Dedicated Short

Range Communications (DSRC) sys-tems among ITS ICT are positioned as"short-distance/small-zone two-waymobile communications compliantwith multiapplications," which con-ducts high-speed between roadsideequipment and car-mounted equip-ment for information provision, tollcollection, etc., and comprises of keyelements of ITS. Thus, DSRC systemsare expected to become core technolo-gies of the driving assistance system inthe future. To this end, the RadioRegulatory Council in March 2001submitted a report concerning “Tech-nical Requirements of the RadioEquipment for DSRC System,” in ac-cordance with this report relevantministerial ordinances were prepared.

Part of DSRC basic applications, theElectronic Toll Collection (ETC) sys-tem, has been operational for commer-cial use at 733 toll booths (of a total of1,300 toll booths throughout Japan)since March 2001, and nearly 500,000car-mounted units are diffused.

3) Realization of ITS Smart TownIn order to achieve various targets,

such as road traffic problems includ-ing reductions of traffic accidents/jams, improvement of convenience, itis needed to introduce, at an earlystage, optimum ITS systems tailored tomeet needs of each local community.Some local public bodies, upon work-ing on ITS locally, have started consid-ering introduction of DSRC systems.Upon introduction of DSRC systems,however, problems such as ensuringsystems interoperability/compatibilityare still remain.

MPHPT has been conducting a sur-vey/development on regional ITSmodel systems from FY2001 throughFY2003 that are conducive to the so-lution of such problems in each region.

4) Promotion of international deploy-ment of ITS technologies

In 1991, ITS America of the U.S. andERTICO of the EU were set up as in-dustry-academia-government partner-ships for the implementation of Intel-ligent Transport Systems and Services(ITS). In Asian countries also the Stan-dardization Program (ASTAP) was es-tablished under the Asia-PacificTelecommunity. Movements towardstandardization and internationaliza-tion of ITS have been spreadingaround the world as exemplified bythe ASTAP-Expert Group on Intelli-gent Transport Systems, one of the Ex-pert Groups, that is actively workingon standardization.

Under such circumstances, in orderto respond to the global ITS trends,MPHPT has been carrying out sur-

Weather informationWebsites

Traffic information

Map information

Service information

Spot information

(Specific-object type)(Specific-spot type)(Mobile type)

Wide-area communications

Narrow-area communications

Vehicle-vehicle communications

Traffic information

Weather information

Map information

• ITS high-speed Internet• Available for information on

instantaneous demand and on specific location

Mobile trade

Data sharing

e-Secretary

High-speed Internet

Fig. IV-1-2 Internet ITS

41

veys/studies on international deploy-ment of Japan's ITS information andcommunications technologies, takinginto consideration development/stan-dardization trends of information andcommunications technologies andneeds for ITS in other countries.

2. Promotion of the next-gen-eration mobile communica-tions service (IMT-2000)

IMT-2000 (International MobileTelecommunications - 2000) is a digi-tal, next-generation mobile communi-cations service which features a globalservice allowing use from anywhere inthe world, high-quality voice servicecomparable to the fixed network, pro-vision of a multimedia mobile commu-nications service including easy videotransmission and Internet access, etc.

In preparation for the introductionduring CY2001, MPHPT in March 2000formulated its policies for the intro-duction of the next-generation mobilecommunications service and grantedbusiness permissions and radio stationlicenses to NTT DoCoMo Group, J-PHONE Group, IDO and DDI Cellu-lar Group (current KDDI Corp.). InOctober 2001, NTT DoCoMo Groupstarted the world's first full-scale com-mercial 3G service in Tokyo metropoli-tan area. The numbers of subscribersto 3G services as of the end of August2002 are about 130,000 for NTT

DoCoMo Group and about 2.14 mil-lion for KDDI Group. J-PHONEGroup is to start up its service in De-cember 2002.

In line with the results of ITU-WORC2000, MPHPT is preparing ad-ditional frequencies for the service inorder to respond to the future devel-opment of IMT-2000.

3. Outlook for future mobilecommunications systems

At present, the Systems beyondIMT-2000 (successor systems to IMT-2000, in Japan the "new-generationmobile communications systems"; Fig.IV-3) are being studied internationally,

and Japan is actively participating inthis study.

With the expanded penetration ofmobile computing and the rapid evo-lution of IT, demands are rising for therealization of multimedia mobile com-munications including ultrahigh-defi-nition moving picture transmission,through ultrahigh-speed transmissionand the totally IP-based network hav-ing higher security and reliability. Avariety of R&D activities is being car-ried out in Japan and foreign countrieson future mobile communicationstechnology including the software de-fined radio (SDR) technology, whichallows frequencies, communicationsmethods, etc. to be changed flexiblyand simply by replacing or modifyingsoftware. At ITU, studies for the re-alization of future development ofIMT-2000 and the systems beyondIMT-2000 have just begun.

Taking those backdrops into ac-count, toward the realization of thefuture mobile communication systems,MPHPT started the study on the "new-generation mobile communicationssystems." In October 2000, MPHPTinquired of the TelecommunicationsCouncil about the “Outlook for the Fu-ture Mobile Communications Sys-tems.” The Council in June 2001 sub-mitted a report on images of new-gen-eration mobile communications sys-tems, etc. In response to the report,MPHPT in FY2002 started R&D


Fig. IV-2 IMT-2000

IMT-2000 base station

Data

Easy to access the Internet

Internet

IMT-2000 network

Other mobile network

Handheld terminal capable of sending/receiving 64 - 384 kbps simple video

Personal digital assistance terminal with high quality sound functions (up to 8 kbps)

Multimedia terminal with access functions to traffic/parking lot information (64, 128, 384 kbps)

Multimedia terminal enabling 2Mbps video

1 10 100

MobileAccess

Systems beyond IMT-2000

HIgh-speedtraveling

Midium-speedtraveling

Low-speedtraveling

Communications speed (Mbps)

BS digital broadcasting

Terrestrial digital broadcasting

Wireless access at hIgh-speedtraveling

New elements of Systems Beyond MT-2000

Arrows indicate interactions of wireless systems via networks, etc.Through these systems, users in any environment of use can freely use terminals without conscious of such systems

IMT-2000AdvancedIMT-2000

Advancement

(3G) (3.5G) (4G)

Fig. IV-3 Next-generation mobile communications

2002 Annual Report

42

projects on ultrabroadband mobilecommunications transmission technol-ogy, SDR technology, etc. Moreover,in line with proposals contained in thereport, recommending "it is necessaryto establish a forum for promoting in-terindustrial R&D and standardizationtoward facilitation of R&D on the new-generation mobile communicationssystems," the "Mobile IT Forum" wasset up in June 2001 through a privatesector initiative, and now the forum isvigorously carrying out various activi-ties.

Japan has been actively working onthe new-generation mobile communi-cations systems at ITU-R, etc. for en-suring frequencies for the systems atan early stage.

4. Toward advancement ofwireless system using2.4GHz band

The 2.4-GHz frequency band is allo-cated for low-power wireless facilitiessuch as low-power data transmissionsystem (wireless LAN) or mobile ter-minal identification systems as well asfor various devices for industry, sci-ence and medicine (ISM) such as mi-crowave ovens.

At present, as regards low-powerdata transmission systems, along withthe expansion of demands for wirelessInternet access, development andstudies on large-capacity data trans-

mission technology, etc. are being car-ried out. Also, on mobile terminalidentification systems, a study is beingconducted on establishing a newmethod, which is superior in interfer-ence resistance, as a global standard(ISO). Under such circumstances,there is high expectation from indus-tries for advancement in low-powertransmission systems and mobile ter-minal identification systems.

Based on the conditions above,MPHPT inquired of the Telecommu-nications Council to deliberate on tech-nical conditions for wireless facilitiesand equipment, etc. for the advance-ment of wireless systems using2.4GHz band. Regarding results of thedeliberations on the following items,findings were reported in September2001 and relevant ministerial ordi-nances were amended in February2002.1. Relaxation of antenna gain condi-

tions to allow flexible use of wire-less LAN as a fixed wireless accesssystem

2. Further speedup of wireless LAN(introduction of OFDM modulationmethod; transmission speed of20Mbps or more)

3. Establishment of a mobile terminalidentification system as a globalstandard (introduction of a fre-quency hopping method that issimilar to wireless LAN)

the radio spectrum and disclosure ofradio station license information. InDecember 2001, the group compiledthe final report.

(1) Current status and issues(i) In recent years, radio spectrum re-

sources in Japan have beenstretched to the limit. At the sametime, it is necessary to address ra-dio spectrum demand for wire-less access and other new radiosystems to promote the IT revo-lution.

(ii) Under these circumstances, it isessential to consider reallocationof the radio spectrum and ensurethat such allocation is utilized tothe best possible advantage bygaining public understandingand cooperation after accuratelyassessing the actual use of the ra-dio spectrum and publicizing in-formation.

(iii) Furthermore, it is also an oppor-tune time to promote new radiospectrum use by disclosing thedetails of license informationwhich would be reference for ex-amining the availability of the ra-dio spectrum.

(2) Accurately assess and publicize theactual use of the radio spectrum

(i) It is necessary to accurately assessthe actual use of each radio spec-trum range which is dividedbased on purpose, services, etc.when considering radio spectrumreallocation or other methods.

(ii) Factors such as the number of lic-ensees, the number of radio sta-tions, transmission capacity, ac-tual traffic, and tenure of use offacilities on each radio spectrumrange may be used as quantitativeindices for assessment.

(iii) Though assessment should basi-cally depend on quantitative indi-ces, it is necessary to take the ef-fects of the following factors intoconsideration if the licensee is toterminate use of the radio spec-trum.

(a) Contribution to maintenance ofnational security, public order,etc.

V. Further Promotion and Advancement of Use ofRadio Spectrum

1. Efforts toward optimal use ofradio spectrum

1) The serious shortage of radio spec-trum

Along with the progress of the ITrevolution, radio spectrum resourcesin Japan have been stretched to thelimit due to qualitative changes andquantitative expansion of radio spec-trum use, as exemplified by the over72 million radio stations. On the otherhand, because the nation’s needs forradio spectrum tend to be advancedand diversified, it is necessary to

implement large-scale and swift real-location of the radio spectrum accesssystem and develop mobile communi-cation systems.

2) Implementation of survey, assess-ment and publicity on the actualusage of radio spectrum

In order to address the shortage ofradio spectrum resources, with thepurpose of ensuring transparency ofthe radio regulatory administration,MPHPT held a "Research Group onDisclosure, Etc. of Radio SpectrumUse" to study the survey, assessmentand publicity on the actual usage of

43

(b) Contribution to protection of hu-man life and property in anemergency or other similar situ-ation.

(c) Contribution to an improvementin the standard of living and thedevelopment of the nationaleconomy.

(d) Contribution to the progress ofscience and technology.

(iv) To fully understand the quanti-tative indices, it is necessary tohave licensees report data such asactual traffic and tenure of use offacilities to the Minister in addi-tion to the data provided whenthe radio station license is ob-tained. In this case, it is also nec-essary to consider measures toconfirm report contents and pen-alties for false reports, etc.

(v) It is appropriate in principle tosurvey the usage of all ranges ofthe radio spectrum nationwideevery three years, consideringspeed of technological innovationand workload of administrationsand licensees. Furthermore, the results of suchsurveys should immediately bemade available to the public. Inthis case, for example, the resultsof the surveys should be alignedin certain radio frequency bands,services, or regions.

(vi) Considering the new demand forradio spectrum, if necessary, it isalso appropriate to implement asecond survey to obtain furtherdetails such as technical, eco-nomic effects in a limited range ofthe radio spectrum, regions, orother viewpoints.

(3) Disclosure of radio station licenseinformation

(i) In principle, it is appropriate tomake the license information pub-licly available on the web in orderto promote utilization of the radiospectrum. However, it is inappro-priate to disclose radio station li-cense information related to de-fense, police, fire or other similarservices. In addition, the follow-ing treatment is necessary.

(a) Location of radio station

As there is concern that physi-cal sabotage activities could becarried out against radio facili-ties, it is appropriate to limit in-formation on the location by thescale of municipalities. Furtherdetailed information will bedisclosed based on the applica-tion of a person wishing to es-tablish a radio station.

(b) Allocated frequency In the case of radio station us-age in, for example the electricindustry which is vital to pub-lic life and security, it is advis-able to limit information on thefrequency by the scale of fre-quency band in spite of point.Detailed information would bedisclosed based on an applica-tion.

(c) Name of licensee and other per-sonal records In the case of amateur radiostations or other stations wherethe licensees are private per-sons, it is advisable not to makethe name, address or other per-sonal records publicly availablein order to protect privacy.

(ii) In the case of license informationand application which are not dis-closed, it is advisable to discloseinformation in detail within the lim-its of the requirement for the pur-pose of establishing a radio stationwith the exception of defense andother crucial purposes, based on anapplication from a person whowishes to establish a radio station.In this case, it is necessary to pro-hibit the use of obtained informa-tion other than for the intended pur-pose.

(4) Further studyWhen reallocation of the radio spec-

trum is actually implemented, the lic-ensees of the radio station concernedcould bear a considerable burden.Therefore it is necessary to considerappropriate measures to implementsmooth transition in order to reallocatethe radio spectrum.

In line with the report, MPHPT sub-mitted a bill to amend the Radio Law,which contains the survey, assessment

and publication of actual radio spec-trum usage and expansion of disclo-sure of radio station license informa-tion, to the 154th Ordinary Diet Ses-sion, and the amended Radio Law waspromulgated in May 2002. Towardenforcement of the amended law,MPHPT is preparing relevant ordi-nances.

3) Mechanism of swift and smoothreallocation of the radio spectrum

Upon actual reallocation of radiospectrum resources, because it is fore-cast that considerable financial bur-dens will be imposed on incumbentlicensees, measures for coping withthis problem are indispensable. Tothis end, MPHPT set up the "StudyGroup on Policies Concerning the Ef-fective Radio Spectrum Use" in Janu-ary 2002 with the objective of study-ing new measures concerning the ef-fective radio spectrum use, such asimplementing swift and smooth real-location of the radio spectrum and fur-thering progressing technological in-novations. The study group compiledan interim report in June 2002. Thesummary of the report is as follows:

(1) Mechanism of reallocation of radiospectrum

1) Reallocation planIn accordance with the amended Ra-

dio Law, as a fair and clear procedureto establish the reallocation plan, a sys-tem was introduced for evaluating thedegree of efficient use of radio spec-trum upon taking national opinionsinto consideration by conducting asurvey and publication of the status ofradio spectrum usage.

Accordingly, it is appropriate to for-mulate a specific reallocation plan inaccordance with the above procedurethrough clarifying the objective crite-ria on matters such as the necessity ofreallocation and the preparation pe-riod.

2) License period and implementa-tion of reallocation

In the case of formulating realloca-tion plans in accordance with the pro-cedures mentioned above, the casemay exist in which it is appropriate toimplement this in spite of the fact that


2002 Annual Report

44

the license for each radio station is stillvalid.

Under the current Radio Law, as amatter of fact, it is difficult to imple-ment reallocation within 5 years fol-lowing the formulation of reallocationplan. Therefore, it is necessary to es-tablish systems that enable implement-ing swift reallocation within 5 yearswhen there is a public demand.

(2) Necessity of compensation for in-cumbent licensees

1) Introduction of a compensationsystem

It is considered appropriate that thegovernment compensates financiallyusers who have invested on the as-sumption of continuous radio spec-trum usage, for parts, such as the re-sidual value of facilities, etc., for whichthe investment become unrecoverabledue to policy changes.

Therefore, it is appropriate to intro-duce a system to compensate incum-bent licensees.

2) Case of reallocation in which thecompensation can be paid

Taking into account that the licenseperiod is five years, it is appropriatethat the compensation can be paid inthe case of reallocation whose plan inprinciple sets the final expiration dateof spectrum usage within 5 years afterthe formulation of the plan.

However, as to the case of the spec-trum usage (e.g., fixed relay stations)from which the licensees seem to ex-pect continuous usage, it is necessaryhereafter to study the payment of com-pensations in the case of reallocationwhose plan sets the final expirationdate of spectrum usage within a periodlonger than 5 years (limited to a periodshorter than 10 years).

(3) Source of revenue for compensationi) Contributions from new licenseesNew licensees can enjoy certain ben-

efits because reallocation of radio spec-trum responds to new radio spectrumdemands. Therefore it is consideredappropriate for new licensees to incurcertain expenses.

ii) Contributions from all incumbentlicensees

The worsening of the shortage of ra-

dio spectrum can be moderated as aresult of reallocation of radio spec-trum, and therefore it is consideredthat all incumbent licensees as well asnew licensees can benefit. Therefore,it is also appropriate to allocate thespectrum user fee to compensationcosts of reallocation of the radio spec-trum.

iii) The balance of cost burden of newand incumbent licensees is to befurther studied.

(4) Technical measures for promotingeffective usage of radio spectrum

Promoting the development of soft-ware-defined radio technology can re-duce the economic burden or other as-pects that arise for incumbent licens-ees when reallocation of radio spec-trum is implemented, which contrib-ute to facilitating the swift reallocation.

Therefore, it is necessary hereafter tocategorize these measures into techno-logical measures that can contribute toeffective spectrum usage. It is alsonecessary to promote research and de-velopment aggressively.

After a series of meeting, the StudyGroup will compile its final reportwithin CY2002 .

4) Modification of Frequency Assign-ment Plan in 5GHz band

At present, with regard to wirelessaccess systems, indoor-use 5.2GHzband wireless access systems wereruled in addition to 2.4 GHz band, 22/26/38 GHz bands systems.

In such circumstances, in response tostrong needs for outdoor-use 5GHzband wireless access systems, withinpart of 5GHz band (4900-5000 MHz,etc.), while ensuring frequency sharingwith the existing systems for the wire-less access system, the Frequency As-signment Plan was modified (Notice ofSeptember 19, 2002) in order to ensurefrequency bands for "5GHz band wire-less access systems," (these enablehigh-speed access to the Internet).

2. Securing frequency allocationin international scene

MPHPT secures necessary frequencybands in the international scene forsmooth introduction of new radio sys-

tems.The International Telecommunica-

tion Union (ITU), a specialized agencyof the United Nations involved in thetelecommunications field, normallyholds the World RadiocommunicationConference (WRC) once every two orthree years to set rules for interna-tional allocation of frequencies (ITURadio Regulations). At the previousWRC, held in Istanbul, Turkey, fromMay through June 2000, a number ofresults including the following threewere accomplished.1) 800MHz, 1.7GHz and 2.5GHz bands

were added as frequency bandsavailable for IMT-2000.

2) 31GHz and 28GHz bands wereadded as frequency bands avail-able for High-Altitude Platform Sta-tions (HAPS).

3) For Japan, four channels were addedto the East longitude 110 degreebroadcasting satellite through re-view of the frequency plan forbroadcasting satellites.

The next WRC will be held inGeneva, Switzerland, in June 2003 todiscuss more than 40 agenda items,including consideration for systemsbeyond IMT-2000 and allocation formobile and/or fixed services in the5GHz band. In recent WRC meetings,regional joint proposals have beentreated with higher priority thansingle-handed proposals from indi-vidual countries. Thus, Japan activelyparticipates in WRC preparatory meet-ings in the Asia-Pacific region. To-ward the next WRC, the preparatorymeetings were held four times, wheremany proposals from Japan wereadopted. In February 2003, the lastpreparatory meeting will be held inTokyo, and Japan will formulate jointproposals of the Asia-Pacific regionthrough opinion exchange with eachcountry.

Also, for smooth introduction of ra-dio systems including satellite com-munications networks, internationalcoordination of satellite orbit and fre-quency with concerned countries arebeing made according to the proce-dures as set forth in ITU Radio Regu-lations.

45

International Policy and Cooperation

1. “International Conference forAsia Broadband Strategy”Held

On July 2002, MPHPT MinisterKATAYAMA Toranosuke held the firstmeeting of the "International Confer-ence for Asia Broadband Strategy" atMita Kaigisho (Conference Hall), To-kyo.

The purpose of the "Asia BroadbandStrategic Council" is to develop a com-mon understanding on the basic con-cept, etc. of the "Asia Broadband Pro-gram" directed under the "e-Japan Pri-ority Policy Program -- 2002" and the"Basic Policies for Economic and Fis-cal Policy Management and StructuralReform 2002," in order to contribute toformulate the "Asia Broadband Pro-gram." The Minister for Public Man-agement, Home Affairs, Posts andTelecommunications hosts the Coun-cil consisting of opinion leaders fromJapan and Asian economies (China,the Republic of Korea, Malaysia,Singapore and Thailand). At theCouncil those opinion leaders activelyexchanged opinions.

Minister KATAYAMA gave a keynoteaddress stating that:i) As regional development is heavily

depending on the volume of infor-mation distribution within each re-gion, the Asian shall expand its vol-ume of information distributionwithin the region, and

ii) It is anticipated that invigoratinginformation distribution and in-creasing information distributioncapacity are contribute to makingthe Asian region one of the globalinformation transmission hubs, aworld information base, in terms ofinterregional information distribu-tion.

In addition, the Minister stressed

Policies under the jurisdiction of the International Affairs Department

International Policy and CooperationI. Topics in International Relations

three points toward developing the“Asia Broadband Program" that:i) Government officials, service pro-

viders and users in each economyin the Asian region shall recognizethat ICT will be the future infra-structure of socioeconomic and cul-tural development in Asia, and theadvent of the broadband age willreinforce the significance thereof;

ii) Considering outstanding Asian di-versity in culture, society andeconomy without parallel in the restof the world, interested parties andstakeholders shall understandunique Asian characteristics, thenmap out the information society tocome; and

iii) It is vital for governments, indus-tries, academia, NPOs, internationalorganizations, etc. to voluntarily re-alize their own ownerships throughcloser collaboration among them.

At closing, the Chairman, Mr. USHIOJiro, Chairman of Ushio, Inc., based onthe Minister's keynote address andopinion exchange at the Conference,compiled the following summary asbasic policies on the formulation of the"Asia Broadband Program":Chairman's Summary

-- Basic policies on the formulationof the Asia Broadband Program --1. The common objectives shall be the

stimulation of information distri-bution within the Asia region alongwith establishing the entire Asiaregion as a global information base.

2. Respect shall be given to the eco-nomic, social and cultural diversityin the Asia region.

3. Participation by all related coun-tries in the Asia region and closecooperation between a wide rangeof entities such as governments, theprivate sector and NPOs shall beensured.

2002 Annual Report

46

4. Exhibiting ownership by all relatedparties including governments, theprivate sector and NPOs is essen-tial.

5. Consideration shall be paid as tothe elimination of the digital dividein the Asia region.

From now on, based on the discus-sions and the Chairman's Summarycompiled as the basic policies on theformulation of the "Asia BroadbandProgram," the "Study Group for theAsia Broadband Program" (Chair:Prof. GOTO Shigeki, Waseda Univer-sity) at Mita Kaigisho (ConferenceHall) hosted by Vice-Minister forPolicy Coordination TSUKIO Yoshio,Ph.D., as a forum for deliberating anAction Plan in order to develop spe-cific content of the Plan and to achievethe goals of the Plan, will compile areport around December 2002.

2. Results of the KananaskisSummit

The G8 Kananaskis Summit washeld on June 26 and 27, 2002, inKananaskis, Canada.

At the Summit meeting, discussionson the three topics, the "challenges offighting terrorism (G8 Global Partner-ship Against the Spread of Weaponsand Materials of Mass Destruction),working for peace in the Middle East,etc.," "strengthening global economicgrowth and sustainable development,"and "building a new partnership forAfrica's development," were carriedout.

In the ICT field, G8 leaders reviewedimplementation of the "Genoa Plan ofAction" submitted for the sherpa meet-ing by the DOT Force (the Digital Op-portunity Task Force: DOT Force), es-tablished in line with the "IT Charter"of 2000 Kyushu-Okinawa Summitmeeting. The following phrase wasincluded in the Chair's Summaryadopted on the closing day of theKananaskis Summit:

"We reviewed implementation of theDOT Force's Genoa Plan of Action andwelcomed its initiatives to strengthendeveloping countries' readiness for e-development, such as the e-model toimprove the efficiency of public ad-

ministrations and to enhance the trans-parency of national budgeting."

As regards Africa's development, inthe "G8 Africa Action Plan" adoptedon the second day, considering the ICTis positioned as a priority issue forAfrica's economic and human resourcedevelopment in the "New Partnershipfor Africa's Development (NEPAD),"G8 leaders agreed to implement thefollowing support measures for creat-ing the digital opportunities in Africa:• Encourage initiatives of the DOT

Force to focus on Africa• Putting forth more effort to univer-

salization of access to ICT throughimprovement of regulations andpolicies concerning domestic,intraregional and international tele-communications/ICT

• Encourage development of public/private sector partnership forpromptly implementing infrastruc-ture construction

3. Preparation for the WorldSummit on the InformationSociety (WSIS)

With the purpose of establishing acommon recognition among wide-

ranging stakeholders concerning prob-lems faced by the information society,the World Summit on the InformationSociety (WSIS) is to be held in Geneva,Switzerland in December 2003 and inTunis, Tunisia, in 2005.

In June 2001, the ITU Council de-cided official venues and schedules ofWSIS in two phases with the firstphase to be held from December 10 to12 2003, in Geneva and the second in2005 in Tunisia. The UN General As-sembly in December 2001 welcomedand endorsed the framework for theSummit adopted by the ITU Council.The UN Resolution also endorsed theleading role of ITU in the Summit andits preparation, and encouraged par-ticipation of governments, interna-tional organizations, industries,NGOs, etc.

In addition, preparations for the Ple-nary Meeting are being implementedat the Secretariat of WSIS and inter-governmental consultation meetings.As part of such efforts, Japan will holdthe “Asian Regional Conference – To-kyo” in January 2003, contributing toWSIS through meetings of the Prepa-ratory Committee of WSIS and the Ple-nary Meeting.

II. Promotion of Bilateral Cooperation

1. Bilateral Regular Consulta-tions, Policy Dialogues,Seminars, etc.

1) HistoryBilateral Regular Consultations,

Policy Dialogues and Seminars havebeen held between the U.S., Europeancountries and major Asian countries asfora for exchange opinions and shar-ing information on diversified topicsin the telecommunications and broad-casting fields and for actively promot-ing mutual understanding and col-laborative ties.2) Current status

Along with development of furtherinternationalization in the ICT field, asexemplified by expansion of e-com-merce across national boundaries --thanks to the widespread use of the In-

ternet, a rapid growth of mobile com-munications, etc., many problems, in-cluding rulemaking, internationalstandardization and the digital dividein the ICT field, have become diverseand complicated as well as mutual, inaddition to closely related to eachother. Under such circumstances,there is a growing need to coordinateat multilateral meetings and hold bi-lateral consultations on the current sta-tus of each country and policy matters.In addition to regular consultations,with telecommunications administra-tions in Asian and Nordic countries,Japan has been holding policy dia-logues, seminars, etc. on the currentstatus of each country, policy mattersand collaborative themes.

During FY2001, Japan held ministe-rial meetings two times and public/

47

private sector conferenceswi th F in land and an-nounced a joint statementon collaboration concerningthe mobile Internet; witht h e U . K . , F r a n c e a n dCanada, Japan held regularbilateral consultations, ex-changing opinions mainlyon "pro-competitive policy,""ICT strategy" and "mobilecommunications."

Furthermore, in March2002 MPHPT held seminarswith the theme of broad-band in Washington andBrussels. The purposes ofthe seminars are to i) helpother countries deepen un-derstandings on Japanthrough introduction of the latestpolicy and the market trends in Japan'sinformation and communications andICT fields, and ii) overcome differ-ences in views derived from lack ofunderstandings through Q&A ses-sions. At the seminars, interested par-ties from public/private sectors in theU.S. and the EU, and MPHPT (Vice-Minister for Policy CoordinationTSUKIO Yoshio, Ph.D.) made speechesand exchanged opinions.3) Republic of Korea

Japan has been promoting informa-tion/opinion exchange and coopera-tion with Korea as the nearest countryat various levels, such as ministerialmeetings, regular consultations, etc.Collaboration in the ICT field, includ-ing R&D on the next-generation infor-mation and communications technol-ogy, has been promoted, based on theJapan-Korea IT collaboration initia-tives agreed to at the Japan-KoreaSummit meeting that was held in Sep-tember 2000. The two countriesagreed to promote Japan-Korea col-laboration in the information and com-munications field including R&D andstandardization of 4G systems at thefourth regular ministerial meeting,held in Seoul in January 2002. Japanand Korea are maintaining friendlycollaborative relationships in thebroader range of the information andcommunications field, including ex-

change of government officials of thetwo countries on a daily basis.4) China

With rapid changes ongoing in theinformation and communicationsfield, China joined WTO in December2001, and is promoting introduction ofthe competition principle into the


same field. Japan and Chinahave been building wide-ranging collaborative rela-tionships in the informationand communications field,including ministerial meet-ings, regular consultationsand policy seminars.

At the Japan-China minis-terial meeting held in Janu-ary 2002, the two ministersin charge agreed to buildthe "Japan-China ICT part-nership" as a framework forcollaboration in the infor-mation and communica-tions field. At the sametime, the "Japan-China ICTRoundtable" for both pub-lic-private sectors was held

with the participation of the ministersand officials of the two countries aswell as top executives from the privatesectors, both parties exchanged opin-ions on and explained the current sta-tus of business, future perspectivesand strategic efforts.

III. Bridging the Digital Divide

1. Digital Opportunity Forum(Asian Diversity and the Roleof Japan) Held

The "Digital Opportunity Forum"was held for two days on November5 and 6, 2001, in Tokyo (KeidanrenKaikan), sponsored by the DOT ForceJapan Consultation Committee (Secre-tariat: Center for Global Communica-tions [GLOCOM], International Uni-versity of Japan), and supported byMPHPT, etc.

The forum was held for the purposesof:i) Reporting the activities of the G8

DOT Force, which was founded un-der the auspices of the OkinawaCharter on the Global InformationSociety, with the aim at encourag-ing active engagement of govern-ments, industries and non-profit or-ganizations (NPOs) in the digitaldivide problem; and

ii) Discussing what Japan can do tosupport and contribute to develop-ing countries in the ICT field.

At the forum, discussions weremade among speakers from Japaneseand developing countries' govern-ments, industries and NPOs.

From MPHPT, Mr. KANAZAWAKaoru, Vice-Minister for Policy Coor-dination (International Affairs andTelecommunications Bureau), gave anintroductory remark at the forum, andMr. OKAYAMA Jun, Director, Govern-ment Information Systems PlanningDivision, participated as a guestspeaker.

In the introductory remark, Vice-Minister KANAZAWA referred to adanger that existing economic and so-cial inequalities will worsen in coun-tries that are not involved in the ICTrevolution and not participating in aninformation society, and that this willcreate a gap between "information

FY US EU UK

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haves" and "information have-nots,"the so-called "digital divide." He con-tinued, "Therefore, we must actquickly to bridge our own digital di-vide and create conditions underwhich everyone can participate in andbenefit from ICT, the so-called 'societyof digital opportunity.'" "Regardingour efforts to bridge the internationaldigital divide, it is important to buildpartnerships and cooperation amonggovernments, the private sector andnon-profit organizations (NPOs).Also, that it is imperative that devel-oping countries themselves demon-strate full ownership and tackle thedigital divide," he emphasized. In ad-dition, for developing countries to beable to close the digital divide, he fo-cused on the necessity for priority tobe given to the development of com-munications infrastructure, and thatpolicy steps must be taken to ensurethat competition is encouraged in thecommunications sector and a regula-tory framework established to reflectthe cultural diversities of each nation.

Director OKAYAMA, at the Session"e-Government Strategies and Pros-pects in Electronic Administration,"made a presentation titled "Strategyfor Building 'Electronic Government'in Japan" on Japan's current measuresand a strategy for creating electronicgovernments. After the presentation,he discussed with experts, includingMr. J. B. Kristiadi, Deputy Minister forState Administrative Reform/Secre-tary of the Indonesian Telematics Co-ordinating Taskforce, on the future ofelectronic governments.

At the session, opinions were ex-changed on the need for reflecting thedemands of citizens, users of e-govern-ments, in realizing electronic govern-ments, and on the significance of digi-talization of national and local govern-ments.

2. Establishment of the "e-Policy Support Network ofJapan"

-- DO Site (Digital Opportunity Site)--

On May 17, 2002, MPHPT estab-lished the "e-Policy Support Network

of Japan" by launching a web sitewhich provides the information andexpertise necessary for ICT policymakers in developing countries to es-tablish policies particularly suited totheir requirements. This network ini-tiative aims at helping bridge the glo-bal digital divide.

Support is provided to these coun-tries through: i) the introduction ofJapan's and other countries' leading-edge ICT policies and projects formu-lated to bridge the global digital di-vide, and ii) the provision of onlineadvice in response to inquiries fromICT policy makers, and the like, in de-veloping countries by a group of ICTexperts drawn from government,academia, the private sector andNPOs.

This initiative is positioned as aJapanese Government project imple-menting the Digital Opportunity TaskForce's (DOT Force's) Genoa Plan ofAction. The progress of implementa-tion is to be reported on at the 2002 G8Summit in Kananaskis, Canada.Structure

The "e-Policy Support Network ofJapan" through the use of "Digital Op-

portunity Site (http://www.dosite.jp)"has two principal functions:1) Information Provision Area (En-

glish and Japanese)The web site provides the following

information related to ICT policies:i) Current status of the international

and Japanese digital divide;ii) Japan's policies and projects for

bridging the international digitaldivide;

iii) Policies and projects to promote e-government in Japan; and

iv) Policies and projects conducted byother countries, international orga-nizations, and the like.

2) Communication Area (Englishonly)

The "Communication Area" facili-tates the open exchange of informationand opinions on ICT matters on thewebsite. A group of ICT experts drawnfrom government, academia, the pri-vate sector and NPOs provide free ad-vice in response to inquiries from ICTpolicy makers, and the like, in devel-oping countries wishing to set up andimplement ICT policies/regulatoryframeworks in their respective coun-tries.

IV. Participation in International Organizations

1. World Trade Organization(WTO)

At the WTO 4th Ministerial Confer-ence in Doha, Qatar, which was heldin November 2001, the MinisterialDeclaration was adopted that setJanuary 1, 2005 as the date for com-pleting the negotiations (the negotia-tions on trade in services includingtelecommunications have been com-menced since early 2000 based on theGATS as a built-in agenda.). To pro-mote further liberalization in the tele-communications sector, MPHPT hasbeen actively participating in the ne-gotiations.

Following the WTO Agreement onBasic Telecommunications Services, ef-fective in February 1998, Japan abol-ished all foreign capital restrictions in

the telecommunications sector exceptNTT. As a result, many foreign carri-ers have entered into the Japanesemarket, pushing the number of TypeI telecommunications carriers partiallyor wholly owned by them to 40 (as ofSeptember 1, 2002). The Japanese tele-communications market has thus be-come one of the most open and com-petitive markets in the world.

At the current negotiations on tradein services, Japan submitted initial re-quests to other WTO Members by theend of June 2002. These requests en-courage developing countries that arenot sufficiently liberalized to start lib-eralization, and ask developed coun-tries that are generally liberalized topromote further liberalization. As forthe telecommunications sector, Japanrequests abolition of foreign capital re-

49

strictions, adoption of the “ReferencePaper” stipulating pro-competitiveregulatory frameworks, etc. Takingadvantage of the Council for Trade inServices held about five times annu-ally, Japan will actively hold bilateralnegotiations with other Members.Each Member shall submit an initialoffer by the end of March 2003. In Sep-tember 2003, the 5th Ministerial Con-ference will be held in Cancun,Mexico.

In addition, MPHPT has been ac-tively participating in discussions con-cerning electronic commerce, whichhas the great potential of expandingworld trade dramatically, and the re-view of the Government ProcurementAgreement.

2. OECD

The Organization for Economic Co-operation and Development (OECD) isan international organization bases onprinciples of market economy and lib-eralism, comprising 30 highly indus-trialized member countries. TheOECD’s chief objectives are to prompteconomic growth, to extend support todeveloping countries and to expandmultilateral free trade.

In the ICT sector, where MPHPT hasbeen most active, studies on the im-pact of the ICT infrastructure oneconomy and society at large are un-derway. The Committee for Informa-tion, Computer and CommunicationsPolicy (ICCP) of the OECD is the mainpromoter of these studies.

With the ICCP playing the mainrole, the activities of the OECD on elec-tronic commerce have been vitalized.At the OECD Ministerial Conferenceconvened in May 2002, a forecast onthe world economy, policy issues ontrade, governance, development andenvironment were reviewed. ICCPsince October 2001 has been reviewingthe "Guidelines for the Security of In-formation Systems and Networks"adopted in 1992. This revision is tom e e t n e e d s f o r i m p l e m e n t i n gtransborder security measures, in re-sponse to an increase in the number ofsystems interconnection along withthe widespread use of electronic trans-

actions on the Internet. The newGuidelines for the Security of Informa-tion Systems and Networks was de-cided upon in July 2002 at the OECDCouncil and announced in August2002. MPHPT actively contributed thedevelopment of the new Guidelines,participating together with Prof.HORIBE Masao, Chuo University, andrelevant ministries in expert meetings(including the Working Party on Infor-mation Security and Privacy). Basedon the new Guidelines, taking intoconsideration trends in informationsecurity policies in other countries,MPHPT will implement rulemakingfor diffusion of electronic transactions.MPHPT will further promote informa-tion security in harmonization withother countries. The Economic andDevelopment Review Committee(EDRC) has been reviewing economictrends and policies of Member coun-tries annually. In the review of Japancompiled in December 2001, Japanwas highly appreciated that the tele-communications field has the mostadvanced competitive frameworks inits public service field, such as intro-duction of statute law on asymmetri-cal regulations and the establishmentof the Telecommunications BusinessDispute Settlement Commission aregreat strides in deregulation.

3. APEC

The Asia-Pacific Economic Coopera-tion (APEC) consists of 21 economiesin the Asia-Pacific region, and has asits objectives liberalization and facili-tation of trade and investment in theregion and the strengthening of eco-nomic and technical cooperationamong member economies. APEC hasbeen vigorously conducting a numberof activities in the telecommunicationssector through the Ministerial Meet-ings on Telecommunications and In-formation Industry (TELMINs) andtasks undertaken by the Telecommu-nications and Information WorkingGroup (TEL).

In May 2000, the fourth MinisterialMeeting on Telecommunications andInformation Industry (TELMIN 4) washeld in Cancun, Mexico. The main

theme of the fourth ministerial meet-ing was “Fusion,” reflecting the world-wide spread of the Internet and its ad-vancement. The meeting adopted the“Cancun Declaration,” whose main fo-cus on the following three subject mat-ters: International cost-sharing prob-lem of the Internet, Fusion and Digi-tal Divide

ICT has a huge impact on economicdevelopment, government activitiesand evolution of any society in theAsia-Pacific region. Taking this intoaccount, the fifth Ministerial Meetingon Telecommunications and Informa-tion Industry (TELMIN 5) under thetheme “Leveraging Digital Opportuni-ties to Promote Common Develop-ment” was held in Shanghai, China inMay 2002. At TELMIN 5, the “Shang-hai Declaration”, the “Program of Ac-tion”, the “Statement on the Securityof Information and CommunicationsInfrastructures” were adopted.

Outlines of those documents are asfollows:(1) Information Communications In-

frastructureIt is proposed that in order to

achieve universal access and to expanddigital opportunities, through devel-opment of information communica-tions infrastructure, that comprises acritical basis supporting sustainabledevelopment of an information com-munications society, various interna-tional cooperation be further imple-mented in fields of the next-generationtechnologies including IPv6, the mo-bile Internet, broadband satellite tech-nologies.(2) Telecommunication and Informa-

tion Policies and Market Regula-tion

Toward building of a sound andcompetitive environment for telecom-munication and information policies,the following proposals were made:promotion of e-government for ensur-ing efficiency/transparency of govern-mental activities, study on eliminationof impediments to e-commerce, activecommitment to the new WTO round,further study on the Mutual Recogni-tion Arrangement (MRA) on Confor-mity Assessment for Telecommunica-


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tions Equipment, further facilitation ofthe implementation of the APEC Prin-ciples of Interconnection, in the lightof the newly adopted e-APEC Strat-egy, promotion of cooperation withthe relevant APEC fora and other re-lated international organizations, etc.(3) Information Communication and

Network SecurityMinisters recognize the significance

of special priority to establish legal in-frastructures and to enforce thereof forpreventing the criminal misuse of in-formation technologies, and informa-tion exchange among economies. AndMinisters decide to implement variousconsiderations on security with specialpriority.(4) Human Capacity Building

Ministers recognize that buildinghuman capacity through lifelonglearning for people of both genderswithin the region is essential in achiev-ing the benefits and the realization ofa digital society and in narrowing thedigital divide. Ministers decide fur-ther implementation of the coopera-tion among governments, businesses,educational and social institutions inhuman resource training; and promo-tion of distance learning using ICT.

TEL, which has been convened 26times so far, is a forum where official-level discussions are held to determinedetailed cooperation and liberalizationschemes for the telecommunicationssector.

The 26th APEC TEL Working Group(TEL 26) was convened in Moscow,Russia, from August 19 through 23,2002. At the Plenary Meeting, uponreport on TELMIN 5, the “Cyber-Secu-rity Strategy” was adopted as an inputtoward the APEC Leaders' meeting in2002. Major discussions carried outthe four Steering Groups under thePlenary Meeting are as follows:(1) Business Facilitation Steering

Group (BFSG)At BFSG, chaired by Japan, a

progress report of the current e-Gov-ernment project, one of the most im-portant themes, was made. It is agreedupon that from now on projects shallbe implemented from the viewpointsof small and medium enterprises

(SME), security and user requirements,and public/private sector dialogues atGBDe shall take place.

As the concrete and specific mea-sures for promoting the “APEC Lead-ers Statement on Counter-terrorism”agreed upon in 2001, the “Cyber-Secu-rity Strategy” was compiled and wasto be submitted to the APEC Leaders'meeting in 2002. In addition new pro-posals and progress reports weremade on BFSG projects concerning fa-cilitation of e-commerce, etc.

As regards security-related topics, aComputer Emergency Response Team(CERT) workshop was proposed anda tie-up between the Asia PKI (PublicKey Infrastructure) Forum and the Eu-ropean Electronic Signature Standard-ization Initiative (EESSI) was agreed toconsideration. In addition, informa-tion exchange was made concerningsurveys on cryptography policies ineach economy and the implementationstatus of countermeasures againstcriminal misuse of ICT, and a cyber-crime workshop was held. At TEL 27,a workshop on CERT will be held.(2) Development Cooperation Steering

Group (DCSG)In order to complete the DCSG’s

“Digital Divide Blueprint for Action”by TEL 27, the list of Internet popula-tions and penetration rates attachedthe Blueprint was updated. With re-spect to IPv6, broadband and alterna-tive technologies for community-based networking, presentations con-cerning the current status of policies ineach economy including Japan's reporton the "current status of IPv6" weremade and information exchange wascarried out.

Moreover, progress reports imple-mentation status of DSCG projectswere made. From Japan, progress re-ports on APII (Asia-Pacific Informa-tion Infrastructure)-related projects,the "IP-based WLL project for bridg-ing the digital divide" and the "ad-vanced satellite testbed project" werepresented.(3) Liberalization Steering Group (LSG)

At a WTO Workshop, which washeld to cope with APEC human re-source development for telecommuni-

cations liberalization in collaborationwith WTO activities, an informationexchange was carried out on experi-ence of WTO negotiations in eacheconomy. As regards the telecommu-nications MRA, the implementationstatus of each economy was con-firmed, information exchange on lib-eralization policy of each economywas conducted, and Japan made a pre-sentation entitled “Broadband in Japan--Policies and Deployment --.”(4) Human Resource Development

Steering Group (HRDSG)In order to deliberate measures for

narrowing the digital divide throughu s e o f I P v 6 , a w o r k s h o p f o rpolicymakers is to be held prior to TEL27. A project proposal from Thailandon "e-University Network in HRD fore-Government" was approved and theimplementation status of HRDSG-re-lated projects was reported.

The next TEL will be held in Spring2003, and the next TELMIN in 2004.

4. APT

The Asia-Pacific Telecommunity(APT) is a regional international orga-nization established in 1979. Its pur-poses are: promoting the balanced de-velopment of telecommunications inthe Asia-Pacific region, supporting theplanning and operation of telecommu-nications services, and seeking solu-tions to telecommunications-relatedproblems.

The membership of the APT consistsof telecommunication administrationsof 32 countries and four regions, with48 telecommunications businesses asAffiliate Members. In addition, 46 pri-vate firms other than telecommunica-tions businesses participate as “Com-panies/Organizations.” (as of the endof August 2002)

APT, at the eighth General Meetingand the 24th Management Committeethat were held in 1999, dealt withemerging tasks such as liberalizationof telecommunications which is ad-vancing on a global scale and creationof an ICT base. In addition, with theaim at establishing shared policy in theAsia-Pacific region toward the newage and at strengthening Asia-Pacific

51

countries’ standing in the global fieldthrough such actions, the APT is plan-ning to make three-pronged approachof: i) regional adjustment of telecom-munications policy, ii) enhancementand expansion of standardization, and,iii) support on developing countriessuch as human resource development,during the three years from 2000 to2002.

In November 2000, the "APT Asia-Pacific Summit on the Information So-ciety" (Chair: Mr. HIRABAYASHI Kozo,then Minister of Posts and Telecom-munications of Japan) was held in To-k y o , w i t h 3 5 A s i a - P a c i f i cTelecommunity member countries andregions, 20 ministers for informationand communications from 20 coun-tries and leaders from international or-ganizations, industry and academiaattending. For creating an informationsociety, which respects and reflects thediversity of the Asia-Pacific region, theMinisters successfully adopted the"Tokyo Declaration" and the "ActionPlan" for realization thereof at the APTAsia-Pacific Summit."

In the "Tokyo Declaration," as a Tar-get for Internet Access “Phase One,”the Ministers declared that "we will doour best, in both domestic efforts andthrough international co-operation, toenable people in the Asia-Pacific re-gion to have access to the Internet bythe year 2005 to the extent possible,including access from public facilitiessuch as schools and post offices."

In August 2002, the 2nd Asia-PacificInitiatives for Information Society(AIIS) Meeting as a follow-up meetingof the "Action Plan" was convened inBrunei Darussalam. At the meeting,the review of each economy's activitiesbased on the action plan and futureconcrete measures were discussed.Then, the participants shared a com-mon recognition that further strength-ening of activities in the future is es-sential.

From October 23 to 31, 2002, theninth General Meeting and the 26thManagement Committee were held inNew Delhi, India. At the GeneralMeeting, the new APT strategic planin the three years from 2003 to 2005

was deliberated and adopted, and ba-sic matters in the same period on theAPT financial basis, including theamount of contribution per unit andthe upper limit of annual budget, weredecided. On the other hand, at the26th Management Committee, basedon the strategic plan adopted at theGeneral Meeting, a 2003 activities pro-gram was developed and elections forchair and vice-chairs were carried out.

In addition, as for the revision of the"Constitution of the Asia-PacificTelecommunity" proposed at the pre-vious General Meeting, the Draft"Constitution of the Asia-PacificTelecommunity" prepared by the Pre-paratory Group was adopted.

5. ITU

1) About ITUThe International Telecommunica-

tion Union (ITU) is a specializedagency of the United Nations in chargeof telecommunications issues. Thechief objectives of ITU are 1) interna-tional allocation of frequencies, 2) set-ting telecommunications technicalstandards, and 3) extending technicalsupport to developing countries.Headquartered in Geneva, Switzer-land, ITU had a total of 189 MemberStates as of October 2002. Japan be-came a member of ITU in 1879, andsince 1959 has had the privilege of be-ing selected to one of 46 Council mem-bers authorized to make actual deci-sions on ITU activities. Along with theU.S., Germany and France, Japan hasbeen making the largest contributionsto ITU, with its FY2001 contributionreaching approximately 6 hundredmillion yen.

In CY1998, at the ITU Plenipoten-tiary Conference held in Minneapolis,U.S.A., Mr. UTSUMI Yoshio of Japan(former Deputy Minister of the Minis-try of Posts and Telecommunications)was elected as the Secretary-General ofITU. Mr. UTSUMI took office in Feb-ruary 1999.2) Secretary-General of ITU

Mr. UTSUMI Yoshio was elected asSecretary-General of ITU for his firstterm at the 1998 Minneapolis Plenipo-tentiary Conference and assumed his

duties as Secretary-General in Febru-ary 1999. After assuming office, Sec-retary-General UTSUMI’s achievementin aggressively engaging in ITU re-forms to cope with rapid environmen-tal changes in information and com-munications has been highly appreci-ated by relevant countries.

On October 1, 2002, Mr. UTSUMI wasre-elected for a second term as Secre-tary-General of ITU with a majority of123 votes (of 143 valid votes cast) at theelection of Secretary-General takenplace during the 16th PlenipotentiaryConference of ITU in Marrakesh, Mo-rocco, from September 23 through Oc-tober 18, 2002.3) WTDC

From March 18 through 27, 2002, theWorld Telecommunication Develop-ment Conference 2002 (WTDC) washeld for deliberations on the ITU-Dactions after 2003, in Istanbul, Turkey.At WTDC, the following themes wereadopted: i) a common vision and strat-egy for achieving a balanced telecom-munication development, setting goalsand objectives for the next four years,ii) an action plan including special pro-grams to narrow the Digital Divide forLeast Developed Countries (LDCs),and iii) establishment of study groupsand working methods.4) Africa TELECOM 2001

The ITU TELECOM AFRICA 2001(the fifth regional telecommunicationsExhibition and Forum for the Africanregion) was held from November 12 to16, 2001, at the Gallagher Estate, out-side Johannesburg, the Republic ofSouth Africa. At the Exhibition, 236companies from 28 countries exhibitedtheir state-of-the-art ICT technologies.T h e F o r u m w a s a t t e n d e d b ypolicymakers, corporate executivesfrom 42 countries around the world,and they exchanged their views on thelatest policy/technology trends con-cerning ICT.


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Statistics

Table 9 Number of PHS SubscribersFY2001 FY2000 FY1999 FY1998 FY1997

Number of subscribers 5,698,027 5,841,967 5,706.648 5,777,590 6,727,023

Table 10 Number of Radio PagersFY2001 FY2000 FY1999 FY1998 FY1997

Number of subscribers 1,136,930 1,439,206 2,071,003 3,765,686 7,115,702

Table 8 Number of Cellular PhonesFY2001 FY2000 FY1999 FY1998 FY1997


Table 5 Number of Household BS SubscriptionsFY2001 FY2000 FY1999 FY1998 FY1997

NHK 11,164 10,621 10,069 9,464 8,796

WOWOW 2,667 2,651 2,502 2,534 2,401

Table 4 Ratio of Fiber-optic Cables to All Cables (Cable Length) (Unit: %)

FY2001 FY2000 FY1999 FY1998 FY1997

Transit System 90.6 89.4 86.0 78.1 70.9

Subscriber Loop System 20.7 18.9 17.7 15.2 13.2

Total 32.5 31.4 32.6 27.7 25.1

Table 6 Number of Contracts for Reception of NHK TV BroadcastFY2001 FY2000 FY1999 FY1998 FY1997

Number of contracts 37,678,546 37,273,692 36,878,354 36,597,117 36,282,854

Table 7 Number of Telephone SubscribersFY2001 FY2000 FY1999 FY1998 FY1997


Table 1 Number of Radio StationsFY2001 FY2000 FY1999 FY1998 FY1997

Number of stations 74,345,550 66,573,134 57,478,504 46,971,542 39,478,889

Table 2 Number of Household Cable TV SubscriptionsFY2001 FY2000 FY1999 FY1998 FY1997

Number of subscriptions 13,030,000 10,480,000 9,470,000 7,940,000 6,720,000

Table 3 Total Internet User Population and Internet Diffusion RateFY2001 FY2000 FY1999 FY1998 FY1997

users (unit: million) 55.93 47.08 27.06 16.94 11.55

household (unit: %) 60.5 34.0 19.1 11.0 6.4

company (unit: %) 97.6 95.8 88.6 80.0 68.2

Table 11 Number of DSL SubscribersFY2001 FY2000 FY1999 FY1998 FY1997

Number of subscribers 2,378,795 70,655 211 - -

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