NIRA Research Report 950074
A Study for Developing Model Telecommunication Industries for Highly advanced Information Societies Worldwide
In 1985, the Telecommunications Business Law introduced competition into the Japanese telecommunications market. However, the Law imposed various regulations on the market including new entry and withdrawal regulations and rate and service regulations under subdivided business classifications. In addition, the systematic framework of competition and regulations in the market lacks transparency and openness. It may be said that the current telecommunications market in Japan is indeed under 'controlled competition.'
Major countries in the world consider the telecommunications industry an essential industry for the future and place it as an important pillar for national strategies. Moreover, in todayfs world telecommunications market, each countryfs huge telecommunications industry, so-called 'mega-carrier' is strengthening mutual cooperation and developing bold strategic alliances. On the other hand, in Japan, local phone-service market was actually monopolized by NTT. However, the progress of telecommunication technology has brought competition to this market in various ways. In addition, because NTT announced that it plans to let other telecom firms connect their lines to its local network in response to their request entirely and because more and more new communication technologies including wireless, CATV, and satellite, are entering the market, the situation where local phone-service market was said to be a bottleneck for competition is collapsing.
Now is the time when the Japanese telecommunications policies are required to change towards the advanced information and telecommunications-oriented society. In considering this, what must be especially kept in mind is the following four things: (1)strategies to deal with competition in the global market; (2)promotion of research and development ability; (3)establishment of the interconnecting ability of networks; and (4)user-oriented polices. Based on the foregoing, it is necessary to promote free competition based on transparent rules among telecom firms regardless of business classifications in the market.
Thus, this research presents the following seven proposals.
1. Competition among networks which have borderless interconnecting ability from local to international connections should be promoted.
2. To compete with global mega-carriers equally, personnel and physical resources should be focused on promoting comprehensive research and development.
3. The interconnecting ability of telecommunications networks should be established.
4. Rates should be set freely through competition.
5. Regulations which limit competition in the telecommunications market should be relaxed or abolished.
6. It is necessary to establish a neutral referee body to secure fair connections, to establish rules for line connection, and to ensure adherence to the roles governing the opening of networks.
7. It can not be guaranteed that NTT's separation and division will lead to the promotion of competition, and therefore, it is necessary to conduct drastic reforms of business regulations in the initial stage and to make competition rules clear and transparent.
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