of the same year. In response to this report, the MIC plans to construct a model system assuming advanced use of terrestrial digital broadcasting, and implement pilot projects for developing new services that utilize the advanced functions of terrestrial digital broadcasting, such as broadcasting for mobile terminals and server-type broadcasting.

## (3) Addressing various challenges pertaining to digitization of broadcasting

It is expected that advanced use of a digitized broadcasting infrastructure, development of new services in collaboration with sophisticated information and communications networks, enhancement of ubiquitous environment for using broadcasting, and use of contents such as broadcast programs under a digital environment will all make smooth progress, and that broadcasting will greatly contribute to increasing convenience in people's lives, constructing a vigorous economy and society, and creating new culture through its digitization. Under such an environment, the MIC set up the Study Group for the Development of Digitization and Broadcasting Policy in July 2004, and examines the development of digitization and new broadcasting services, public broadcasting in the age of digital broadcasting, and broadcasting contents in the digital age, so as to smoothly shift to digital broadcasting and develop broadcasting that can precisely meet the diverse needs of the people/viewers.

## (4) Future of radio broadcasting in the digital age

While many local stations face severe business conditions amidst rapid changes in the environment surrounding terrestrial radio broadcasting, test broadcasting for practical application of digital radio broadcasting was launched in Tokyo and Osaka in October 2003, and expectations are growing for digitization of terrestrial radio broadcasters. In light of this situation, the MIC has been studying the basic role of terrestrial radio broadcasting in the digital age, measures for the development of a business model for terrestrial radio broadcasting in the multimedia and digital age, and the future of terrestrial radio broadcasting that takes the above into consideration at the Consultative Group on the Future Image of Radio Broadcasting in the Digital Age since September 2004.

## (5) Review of the restriction of foreign investment at broadcasting stations

Terrestrial broadcasting, using public radio spectrums which are national assets, is finite and scarce in nature, and plays a large role in conveying information that is indispensable to people’s lives at times of disaster, etc. It is even positioned as a designated local public institution in the Disaster Measures Basic Law.

In response to the changes in situation in recent years, such as an increase in incoming investment in Japan and rapid changes in the styles of shareholding and capital contribution, the MIC submitted a bill partially amending the Radio Law and the Broadcast Law to the 162nd session of the Diet in April 2005 in order to introduce regulations on indirect investment in addition to the current regulations on direct investment with regard to foreign investment in terrestrial broadcasting.

## 3 Promotion of policies concerning effective radio spectrum use

In order to build a wireless broadband environment, it is essential to enable the use of large amounts of radio waves for mobile communications systems, wireless LAN, and other core elements of the environment. Therefore, MIC formulated and released the “Guidelines for Radio Spectrum Reallocation” in October 2003, setting forth the basic concepts of the radio spectrum reallocation. In this policy, MIC indicates its plan to examine reallocation to secure a spectrum of about 330 to 340 MHz in bandwidth, mainly in the 1.7 GHz band and 2.5 GHz band, for mobile communications systems in the medium term (within five years).

In addition, the Radio Law was amended in 2004 in order to introduce a benefit system for existing radio spectrum users whose frequency use will come to an early end to assist with expenses that normally arise when the said period of use comes to an early end, from the viewpoint of facilitating prompt frequency reallocation.

With regard to wireless systems for joint use such as high-output outdoor wireless LAN, the MIC implemented deregulation and introduced a post-check registration system in place of the existing pre-check licensing system, while maintaining the spectrum order. With the introduction of the registration system, it becomes possible to register radio stations with the same mode of use in a batch while radio stations had to be individually licensed based on detailed information in the past. In addition, individual radio stations can be freely established based on registration (reporting detailed information ex post facto). In this manner, this revision will dramatically expedite and simplify the procedure for opening a radio station, and is expected to promote free use of radio spectrums.

With respect to the Spectrum User Fee System, more than 12 years have already passed since its introduction, and circumstances surrounding radio spectrum user fees have dramatically changed, including development of businesses that use radio spectrums for such devices as mobile phones or wireless LAN. Therefore, the MIC examined the revision of the Spectrum User Fee System at the Study Group on Policies Concerning the Effective Radio Spectrum Use, and based on the proposals by the study group in October 2004, submitted a bill to amend the Radio Law to the 162nd session of the Diet in February 2005 (Figure 3-2-1).