Regulation Policy and Economics of Regulation
Class No. 11 (file 10): Regulatory Reform in
Telecommunications Market
Objectives of Today’s Class(1) To understand basic characteristics and problems ofth telecommunications
the
t l
i ti
(t
(telecom)l) marketk t(2) By taking the telecom market as an example, to reaffirm
basic mechanism and effectiveness of the rules leaned
up to nowREGULATION POLICY & ECONOMICS OF REGULATION

1Telecom Market(1) Telegram(2) Telephone service (via a switchboard)(3) Internet connection, data communication, NGN(4) IP telephony(5) Mobile phone, mobile telecommunications(6) Public wireless LAN service(7) Services converged for mobile and fixed-line phones(FMC)(8) LAN for one’s home, remote control and security service
regarding electric appliances; cf. supply services by city
gas firms
REGULATION POLICY & ECONOMICS OF REGULATION2

T l hTelephone
ServiceSi (via( i Switchboard)
S it hbd)
Local Telephone
Exchange

Out-of-town Line

Local Communication Net
REGULATION POLICY & ECONOMICS OF REGULATION

Locall T
L
Telephonel hExchange

Local Communication Net

3

Situation before Regulatory Reform
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Monopoly by a state enterprise (Nippon Telegraph andTelephone Public Corporation, hereinafter shortened to
NTT Public Co.)Co )Price regulation based on overall fundamentalism
Universal service
Underdeveloped sectoral accounting
R & D (cf(cf. NHK)
Relatively high profits (room for new entries); cf. Japan
National Railways

Ground for Regulationgover Telecom Industryy

Natural-monopoly disposition, the weight in the military
aspectPublic welfare ← Discussion on universal service

REGULATION POLICY & ECONOMICS OF REGULATION

4

Change in Ground for Regulation(1) Increase of the demand in the long-distancelong distancecommunication market → At least in the market of out-oftown call, the importance of economies of scale has gone
down substantially; to have brought forth room for entry ofmultiple firms(2) Technological innovation→ With the advent of wireless technology and an optical
fib a variety
fiber,
i t off entry
t fformats
t h
has b
become possible.
ibl(3) New demand like interenterprise data communications
has come into being(4) The weight (necessity) in the military aspect has
disappeared
disappeared.
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5

Obstacle to Competition
Locall communications
Li ti
nett remains
i tto bbe iin a naturalt lmonopoly situation.
If a local communications net (and a telephone drop toeach household) could not be used, an extent of services
a new entrant is able to provide is extremely limited. ~Essential facilities (file 7)yis not in pplace,, it obviously
y does not→ If the access system
work out to privatize NTT Public Co. and to promotecompetition by approving the new entry.
→ It is necessary to upgrade an open-door system for the
local communications net.
REGULATION POLICY & ECONOMICS OF REGULATION

6

P
Processoff Regulatory
Rl t
Reform
R f
In 1985 the privatization of NTT Public Co. and adoptionof competition,competition and the opening up of the local
communication network→ Three firms
firms’ entry in the long-distancelong distance communication
marketUpgradingpg
g of the access charge
g byy the method of longg
run incremental cost (LRIC)
Division of NTT by means of a holding company system(1999)
Relaxation of (implicit) asymmetric regulations over NTT
Introduction of a competitive assessment (since 2003)
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REGULATION POLICY & ECONOMICS OF REGULATION

7

Sit ti prior
Situationi tot Reform
R f
It was structured for the surplus gained in the long
longdistance call sector to fill the deficits in the sectors of
local communication, basic charge, public phone, anddirectory assistance.
→ Situation beingg relatively
y easyy for one to enter in thelong-distance call sector (i.e., the situation where
potentially cream skimming was easy to happen)

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8

Situation in Early Stages of Liberalization
Preferential treatments in essence of new entrants
A greater attention was paid to potential formation of amonopoly market without regulations where new entries
would not work out, than to a concern on inefficiententries (cream skimming).
It was intended to develop
p a competitivepmarket within ashort time by binding NTT hand and foot so as to prevent
it from blocking new entries.
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REGULATION POLICY & ECONOMICS OF REGULATION

9Effect of Development/Promotion of Competition(1) Raising rates of the local-call sector―considered tooccupy the majority of the deficits―was not approved.
＝ Disapproved rebalancing off the distorted price structurethat was established during the time of a public
corporation→ Promoted new entrants’ cream skimming(2) The rates were under the approval systemsystem, and NTT’s
NTT s
rates for long-distance calls were maintained at 20%gthan ones of new entrants.
higher→ Control over NTT’s pricing aimed to restrain entriesC

REGULATION POLICY & ECONOMICS OF REGULATION

10Effect of Competition Development Still Maintained
Upkeep and expansion of the regulation over accesses→ Constituted the foundation of Softbank’s entry in ADSL
market→ Giving rise to competitions in the sectors of local calls
and a basic chargeg
Imposing the access regulation even on such new
facilities as an optical fiber (not applicable to competitive
business entities)
NTT is not free to effectively implement converged
servicesiallowedll
d tto otherth communicationsi tibbusinessientities.


REGULATION POLICY & ECONOMICS OF REGULATION

11

Effect of Development/Promotion of Competition:
Evaluation
Criticism for preserving discretionary administration→ Necessary to convert to a regulation policy with hightransparency like the adoption of assessment ofcompetition
Distortion of competition attributable to asymmetricalregulationsg＝ Possibility to have allowed the entry of business entities
that are not really efficient
Created an effectively competitive environment within ashort time, and attained the generation of the decline inprices and the new market

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12

Fixed-line Communications Market Hereafter
Dissemination of a fiber-optic network, and developmentof new technologies→ Room for a choice between a facilities-based
competition and the maintenance of an open accessResponse to a world where a software and standard
constitute a bottleneck＝ Should the market power of a standard that has survived
a competitive elimination match be brought into
question? ← A problem having the same structure as apatent license
Response to business merger, vertical integration


REGULATION POLICY & ECONOMICS OF REGULATION

13

From Telephone to Telecommunications
Voice → Data, analog → digital, drive for IP
Increased importance of an Internet connection andtelecommunications,li i
as comparedd to telephonel hservicesi
Telephone services provided based on IP technology
IP phoneOABJ number: to demand quality close to the currentt l htelephoneservices,i
specifying
if i ththe llocationti ~ tto givei aregular number
050 number: location-free,location free a low level of quality regulation(best effort) ←Feature close to a cellphone

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14

B
Broadbanddb d AccessA
ServiceS
iInternet connection
DU → ISDN → ADSL → FTTH
Japan’s total number of the subscriptions for broadband
access services (as of June 2009): 15
15.89
89 mil for FTTH
FTTH,
10.84 mil for ADSL, and 4.18 mil for CATV
Number of the net increase for ADSL peaked in the firstquarter of 2003; its net decrease started in the second
quarter of 2006, and which went into reverse in 2008.
In no other countries is there an optical fiber being
widespread this much. ~ The reason for which is a puzzle.
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15

Situation of Optical Fiber Servicing
As of March 2006
Urban districts with the population of 100
100,000
000 or more
~ 90%
Others ~ 70%(not subscription percentages)

REGULATION POLICY & ECONOMICS OF REGULATION

16

Neutrality of Network
Increase in the volume of communication → Technologicalinnovation and capital investment → Speeding up →Increase in heavily-loaded communication → Further
technological innovation and capital investment
Textual information → Photos → Animation
An increment in facilities’ cost is growing to a height thatcannot be paid off with the decrement in costs saved bytechnological innovation.
→ Carriers (communication business entities) demandb dburdens
ffrom content
t t providers
id
with
ith h
heavy lloads,
d anddusers.
→ Those content p
providers who rejectjsuch loads are
restricted to a limited access to HP (a low-speed accessonly).
⇒ Opposition from consumers and content providers
claiming that to be practical censorship
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17

Congestion Charging
During a period of congestion, it is only fair to levy a chargein accordance with the degree of congestion
congestion.
→ An which in itself is nothing to do with such afundamental human right issue as freedom of speech.
⇒ A certain type of congestion toll → file 11

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18

Examples of Universal Service
To provide service anywhere in the nation universallyO
Originatedfromfthe catchphrase off business entities off
logistics, communication, and public utility; e.g., adelivery/transmissionyacross the whole country,y, xx%
coverage, electric power service everywhere
The recognition has become firm that such service is theright to access as a fundamental human right
right.
Examples of universal service:
The conveyance of a postcard and sealed document at astandard rate anywhere in the nation ~ A postal clerk
carries a newspaper as well.
T l hTelephoneservicei ~Abbasic
i chargehandd communications
i ticharges by the rules even in an underpopulated area ←Even for broadband service, there is no rate differential ineach region of NTT East Co. and West Co. in principle.
REGULATION POLICY & ECONOMICS OF REGULATION

19

How to Finance Cost of Universal Service(1) Internal supplementation with monopolistic returns
A definite exclusive domain ~ Rent of which is to pay out
money-losing sector’s costs(2) Universal service fundT add
Todd an extra amount on a basic
b i chargehanddcommunications charges, whereby to compensate for theloss(3) Subsidy
To cover the loss with a subsidy from the government
and/or a municipality

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20

Fixed-line Phone Service in Underpopulated Area
▪ Internal
I tl supplementationlt ti withith profits
fit off NTT P
Publicbli C
Corp.
and (current) NTT▪ To cover with managerial efforts of NTT East & West
Relatively larger imposition on NTT West Co. ← To approve
supplementation between East Co
Co. and West Co
Co.
▪ All communication business entities share the burden inproportion to each entity
entity’ss amount of contracts,
contracts ii.e.,e theamount of phone numbers (7 yen → 6 yen → 8 yen perphone number).
New system’s merit:y bear in order
Users come to know clearlyy how much they
to maintain universal service.
REGULATION POLICY & ECONOMICS OF REGULATION

21

Future Universal
SchemeShoff “copper“
wiringi i — switchboard”
it hb d” iis b
bound
d tto
disappear rapidly. (?)
Broadband connection
Mobile telecommunications
I theIs
th service
i neededd d as a universalil one?
?
→ Necessary to change a concept of a national minimum
standard of living
living, and to adopt a structure for eachmunicipality to make a choice
Need to consider fairness in burdens as wellCf. an amount to be borne for the facility installation ~ Why
is it not possible to actualize an allotment disparity inconsideration of running costs?
REGULATION POLICY & ECONOMICS OF REGULATION

22

F t
Featuresoff Mobile
M bil Telecommunications
T li ti▪ Restriction on radio waves, an oligopolistic market of thethree firms (albeit changing considerably; to bedidiscussedd iin ddetailil llater))▪ Being a new market, there exist almost no bottleneckf iliti thfacilities
thatt were b
built
ilt iin th
the P
Publicbli C
Corp. years.
＝Relatively small disparity between NTT and new entrants(though NTT DoCoMo
DoCoMo’ss share at some 50%50%, and no big
change with the introduction of MNP)
▪ Vertical integration model → Possible to change withMVNO
▪ High performance terminals, terminal incentives, highamount (?) of call/basic charges
REGULATION POLICY & ECONOMICS OF REGULATION

23

Number of Cellphone Subscribers
As of November 2009
Cellphone: 110
110,176,700
176 700 subscriptions
IP access service: 92,045,400 subscriptions

REGULATION POLICY & ECONOMICS OF REGULATION

24

Technology and Norm of Cellphone (W-CDMA)
Third generation (3G)
DoCoMo, Softbank ~ W-CDMA system (global standard
th t becamethatbwidespreadidd iin E
Europe and
dA
Asia)
i )
Developed with Japan’s cooperation based on the secondgeneration technologyggy of Europep
Investment in FOMA in 2001 before the rest of the world(the standard entirely different from the second
generation) → Necessary to install the base station fromscratch; FOMA’s communications radius surpassed
mova’s in 2006.
DoCoMo’s 2nd generation (mova) ~ PDC system(DoCoMo’s original standard) → Failed in spreading to
the world and standardization
REGULATION POLICY & ECONOMICS OF REGULATION

25

Technology and Norm of Cellphone (CDMA-2000)
Third generation (3G)
auCDMA2000 system
Developed with the cooperation of Korea and Japan basedon the second-generation technology of the U
U.S.(CDMA),
S (CDMA)
which disseminated widely in Korea and the U.S.
Continuity with the 2nd generation → Able to be handledwith an improvement of the bases for the 2nd generation~ Relativelyy wide communications areas ⇒ A rapidpswitching to the 3rd generation
Japanese feature ~ Coexistence of multiple standards(same with China), not to venture into consolidation
REGULATION POLICY & ECONOMICS OF REGULATION

26

Cellphone’s Turning into Information andComposite Terminal
1997: Beginning of an e-mail use
1999 ii-mode
1999:
d ⇒ full
f ll bbrowser
2000: Loading of camera function
2002: Music ringtone ⇒ Music ringtone in full, LISMO (tomanage music ringtone in full through a PC) ~ Theamount downloaded being equivalent to the single CD’s
CD samount sold, a market size of 22.2 bln yen in the first halfof 2006 ((about 9 times as largeg as PC music distribution))
2003: Introduction of the packet flat-rate system, loading ofFM radio (linkage with music ringtone)
REGULATION POLICY & ECONOMICS OF REGULATION

27

Cellphone’s Turning into Information andComposite Terminal
2004: Loading of FeliCa (contact-free IC chip) ~ Mobile
wallet (electronic money) → Loading of a credit card ⇒Taking in identification card function (student ID card,
staff identityy card))
2006: Loading of a one-segment tuner, loading of a digitalradio
Additional loading of GPS, infrared communication function,
wireless LAN function, etc.
Possible to make free use of information terminals, laptop
computers, digital cameras, household remote controls
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28

Reform in Cellphone Market▪ Problem of the right to setting up charges
The charges determined by cellphone business entities →Toward the access charge system▪ New
Ne allocation of radio waves
a es → Initially
Initiall 3 firms
firms, b
butt
ended up with two as one, Vodafone, was purchased by
Softbank (the two being EMOBILE and IPMobile)▪ MVNO▪ Number portability

REGULATION POLICY & ECONOMICS OF REGULATION

29

Number Portability
Traditional system:
When one changes a mobile business entity, so does thenumber. ~ Difficult to change a mobile entity → Highswitching cost
One can use the same number even after changing entities.
~ Number portability→ To reduce the switching cost
Expected are impactful changes of the mobile market
structure, and the business model.
~ At this stagestage, the state of affairs has proved disappointing.
disappointing← Business entities are able to control the switching costs
to some extent.
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30

Reform of Cellphone Market Hereafter▪ MVNO~ Firms without allotted radio waves are able to enter themarket.
→ Emergence of a diversified business models▪ Removal of SIM lock~Terminals able to be used by other firms

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31

What is SIM Lock?
SIM card: a card recording customer information
Intrinsically a terminal of the same system can be used forany one of mobile firms by replacing a SIM card.
SIM lock▪ Terminal SIM lock: a terminal cannot be used if a SIM
card is changed.
~ au▪ SIM lock by a firm: a SIM card cannot be used if a mobile
fi is
firm
i changed.
hd~ DoCoMo, Softbank
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32

With SIM Lock?
L k?
▪ Unable to make a terminal that can be used bestriding
business entities▪ No development of a secondhand market of terminals▪ Barrier to MVNO’s entry▪ To raise switching costs
Removal of SIM lock → Expected is an effect that changes
the structure of the mobile market from the bottom up.
p
On the other is a risk to ruin an incentive for the carriers’
R & D and new services.
In the Western countries, there may be an occasion for SIM
lock to function for a certain p
period ((6-12 months).
)
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33

PHS (Personal Handyphone System)
Japan’s original standard: a sense of carrying out acordlessdl
phoneh
An element of FMC from the outset ~ Easy to become
merged with an extension telephone
A weak radio signal: the arrangement of simple basestations in a large number to cover narrow areas ~ Able
to effectively cut down blind spots as these base stations
can be meticulouslyy installed ((a systemythat can be easilyylinked intrinsically)
Unsuited to telephonic communication in high-speed
movement (albeit headed for solution)
Higher speed compared to a cellphone ~ Suited to data
communication (before speeding up of a cellphone)
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34

PHS (Personal Handyphone System)
Recognized as a low-cost cellphone ~ Failed todifferentiate from a cellphone
Permeation of an image of qualitative disadvantage such as
no connection possible while moving fast
→ Fell into a decline along with the depreciation of thecellphone price ~ Specialized in data communications
WILLCOM’ reentry
WILLCOM’st (breakaway
(b k
from
f
KDDI group))
Epoch-making price structure, new products, newtechnologies → Became the center of attention with thenumber of subscription in excess of 4 mil.

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35

WILLCOM▪ Introduced the flat-rate system for voice calls ~ Cellphonebusiness entities,
entities burdened with heavy loads of radio wave
wave,
could not venture that far at present (though followed by
Softbank).
▪ Launched a new product equipped with a full keyboard,large-size liquid crystal, versatile operating system (andwhich was followed by Softbank).
Softbank)▪ Positive usage of MVNO (e.g., JCOM)▪ To attract business as a terminal of low electromagnetic
waves and low output power ~ Use in hospitals▪ W-SIM: to install a radio-wave-related device in a SIM card
→ To reduce terminal makers’ burdens ⇒ Not only does it
reduce terminal makers’ burdens, but it also prompts theentry of such different lines of business as producers of toys
and watch manufactures.
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36

New Entries
Two firms (EMOBILE and IPMobile) planned to enter in 2007 ~For the first time in 13 years since Digital Phone and TUKA ← Quite a slapstick goings-on;
goings on; Disorder despite no
bidding
EMOBILE ~ A subsidiaryy of eAccess, ranking
g as the 4th in
ADSL market
Constituted the platform of MVNO
IPMobile ~ Specialized in data communications → Abandoned
There are such high barriers to entry as the procurement ofterminals and the area expansion throughout the country. ←It’s apparent that the reason for a limited number of entities
is not necessary the limitation of radio waves
waves.
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37

Status Quo of Mobile Telecommunications
Market in Japan▪ Competitive market involving virtually 3 (5) firms▪ Vertical integration model
Fixed
Fixed-line
line Internet
connection▪ Low compatibility,
compatibility high switching costs→ Intense corralling competition in the initial phase▪ Failure in international standardization for the 2nd
generation, and international standardization in the 3rdggeneration▪ Proceeding to the 3rd generation before the rest of theworld▪ Technological advancedness
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38

Future Vision of Mobile Telecommunications
Market in Japan▪ Promotion of competition by new entries▪ Diversification of company models▪ Drop in switching costs with the adoption of number

portability→From the intense corralling competition to the competition
over rates and services▪ Progress in internationalization▪ Full shift to IP, and a transition to the 4th and 5th
generations→Disappearance of fixed-line communications, the border withbroadcasting→Triple play, grand slam, FMC
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39

Government induced Depression?
Government-induced
Galapagos?
JJapanese mobile
bil market
k th
has undergoneda peculiar
li evolution:l tiDomestic cellphone producers ~ Overwhelming
competitiveness in the original terminals at home, but none
abroad.
Sales incentive ~ Terminals at 1 yen; attributable to the carrier
buy out system?
buy-out
Not too logical grounding
Th incentiveTheiti beingb i unjust
j t ~ Adoption
Ad ti off alternativelt
ti possibility
ibilitSales decrement of 1 mil pieces or more → Governmentinduced depression
To begin with, weren’t there a problem even before the sales
decrease?
Whil tterminal
While
i l producersdare nott competitive,titi
ththey ddo hhave
competitiveness as the parts manufacturers.
40
REGULATION POLICY & ECONOMICS OF REGULATION

Assessment of Competition

Assessment of competitionp
begun
g in 2003
2003: Internet connection services, company-use network
services
2004: mobile communications
2005: fixed-line pphones ((including
g IP pphones))Present ~ Implemented independent of the regulation
Future ~ Directlyy linked to the regulationg

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41

Discussion in Assessment of Competition:
Market Demarcation▪ Whether the broadband market to be grasped as a single entity, or
FTTH and ADSL to be classified into separate markets▪ Whether
Wh th IP phoneshandd regularl fi
fixed-line
d li phoneshtto b
be grasped
d as
being in the same market▪ In the cellphonepmarket,, whether incoming
g calls to be deemed as beinggin a separate market▪ How to grasp areas
I general,Inl a didiscussioni ththatt starts
t t ffrom market
k t demarcationdti iisinsignificant. (Class No.3)
And which has been correctly
y recognizedgin the course of the assessmentof competition.
While FTTH and ADSL belong to separate markets (once so deemed),
FTTH market is under ADSL’s
ADSL s competitive pressures at the present
phase.
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42

Discussion in Assessment of Competition:
Concern over Market Ascendancy▪ Pointing out of some areas where competition is sparse(FTTH ini theth areas excluding
l di KansaiKi withinithi NTT W
Westt
Co.)
▪ International comparison of price structures▪ Analysis of disputes over connections⇒ In
I termst
off competition
titi policies,li i
tto clarify
l if whath t ought
ht ttobe evaluated in the affirmative; e.g., no pricedifferentiation among areas ~ not exercising theascendancy in prices in the monopoly areas⇒ Role of a loose guideline
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43

Access Charge and Access Regulation▪ NTT’s metal lines ~ Strict access-charge regulation

based on LRIC (an asymmetrical regulation in a wary)▪ NTT
NTT’ss optical fiber
fiber, etc
etc. ~ The business entity (NTT) sets
up charges based on its lump-sum costs: a certain
degree of freedom as to the term of recovering the costs(a completely asymmetrical regulation; almost no
regulations applied to other business entities except for
one on mutual accesses)▪ NTT DoCoMo ~ Thoroughly free once ~ To be restricted
in terms a “cost base”
Stipulations in detail being up to the negotiation→ Treatment by a dispute settlement committee principallyconsisting of neutral members
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44

Proffer of Access and Wholesale Services
Access obligation ▪To
To hook up on a cost basis▪ Obligation for specified business entities to submit noticeon access charges as a stipulation ← Subject of thechange order by the Minister of Public Management,
Home Affairs, Posts and Telecommunications▪ Nondiscrimination (not allowed to act against specified
business entities without reason)
Wholesale service ▪Loose rules like nondiscrimination,
the duty of continuation (not to discontinue a transaction
once started on the basis of an agreement)
The regulation changes depending on the classification of a
specific business as either an access or wholesale
service. ~ Room for administrative discretion (a flexible
regulation)l ti ) → Serious
S i
abuse
b
observedbd withith MVNOREGULATION POLICY & ECONOMICS OF REGULATION

45

Issues on Regulatory Reform in Telecom Market(1) Dramatically changing patterns of communications
markets, and regulations to position technologies
neutrally(2) WhenWh tot abolishb li h theth asymmetricalt i l regulationl ti appliedli d tto
NTT(3) What to do with universal services(4) Response to a threat of new monopoly(5) Competition between a vertically integrated model andseparated model → To maintain the conventional openaccess stand?
(6) Formation of a standard(7) Effective utilization and allotment of a radio wave → To
introduce a bid system → Dealing of vested interests
held by the public sector
REGULATION POLICY & ECONOMICS OF REGULATION

46

Fusion of Communications and Broadcasting▪ To send broadcasting programs using communications
infrastructures▪ Internet
I
contents compete withihb
broadcasting.
diBroadcasting ~ A typical two-sided market
Competition for gaining audiences
Competition for obtaining advertisements→ Competitive relations growing in both fields▪ Decrease in the advertising revenues on the broadcastingpart▪ Decrease in programs targeted at a niche
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47

Neutrality of Competition and Equal Footing
Ideally, as a result of competition, a domain where
broadcasting has an advantage gets serviced bybroadcasting and the one where Internet isadvantageousgshould be covered by
y Internet.
In order to materialize this,, it is necessaryy to correct thesystem that brings forth distorted burdens of expenses.
~ The identical perspective is important as to thecompetition among energies.

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48

Neutrality of Competition, Equal Footing, andIntellectual Property Rights
Treatment of copyright being asymmetrical between communications
and broadcasting
IPTV(1) Even in a case where a specialized channel firm already supplied a
program to a broadcasting business entity, a consent needs to beobtained afresh from a current rightful claimant.
(2) Regarding concurrent retransmission of broadcasting, in addition toan approval of a broadcasting business entity, an assent of aclaimant of rightsgneighboringg
g on copyrightpy g needs to be obtained.
Distinguished handicaps against communications business entities

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49

Neutrality of Competition, Equal Footing, andVertical Integration
Regulations being asymmetrical between communications
and broadcasting
NTT―owner of the transmission line―cannot conduct
programing or the supply of programs.
TV business entities are allowed to integrate vertically.
Possible for CATV to simultaneously feed broadcasting andthe core

REGULATION POLICY & ECONOMICS OF REGULATION

50

Society of “Internet of Things”
andSmart Grid, Smart Energy System

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51

Background
BIPv4 IPv6 ~ To be relieved from the constraint of theexhaustion of address
Dissemination of broadband (upkeep of the optical fiber
network)
NGN, 3.9th generation cellphone (LTE), ZigBee
Sensor technology ＋ Wireless communications technology

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52

Society of “Internet of Things”
1st stage: a society where a person and another person areconnected through a network (former Internet society)2nd stage: a world where a person and a thing are connected
through a network ( A human being controls a connectedthing through the Internet.) ~ the world already materialized
3rd stage: a world where a thing and another thing are directly
connected through a network, and work jointly (Society ofInternet of Things”)
Things ) ~ the world on the way to being“Internet
materialized
y materialized q
quite a while agog
Byy some definition, it’s a society
in the world of electricity. ~ Governor-free operation, etc.
Nevertheless the key is that the scheme is of a light load andable to get into a household as well
well.
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53

Society of “Internet of Things”
A sensor for a local climate corresponds with an agriculturalequipment → Watering,equipment.
Watering fertilizer control
A blood-pressure check at home → Data base in a hospital→ Transmission to a medical doctor at the time of danger
A home party → A cleaning robot→ Refrigerator and a wine cellar → Automaticordering of the stuff running shortSensor nets along the road → Car navigation equipment →Pointing to routes with a less traffic jam

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Key Technologies(1) Sensor technology(2) Stable communications for local areas with low electricity
consumptionp(3) Analysis of a behavioral pattern for information processing
technology(4) Information management and security
Both potential capacities and issues of DSM are common in asmart grid and a smart energy network
network.
Instead of looking at a smart grid only from the standpoint of apower network,, it is importantpp
to have a different way
y ofthinking to observe a power network from the viewpoint of
the Internet. For a change in the social system, this is a
one-in-a-million chance to bring about an upheaval once
every century.
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