## (2) Study on ideal basic monthly charges and installation fees

Upon consultation with the Telecommunications Council in April 2004, a study was also conducted on the ideal basic monthly charges and installation fees in order to examine the handling of NTS costs. The council compiled a report on ideal basic monthly charges and installation fees among other matters in October of the same year. Based on this report, NTT East and NTT West revised their basic monthly charges in January 2005 and their installation fees in March of the same year.

## (3) Study on the ideal Universal Service Fund System

The Universal Service Fund System was introduced in June 2002 to ensure provision of telecommunications that are essential for national life throughout Japan. It had been decided from the beginning that the system should be reviewed about two years after its introduction, with necessary measures to be taken based on the results. Since then, the number of mobile phone subscribers has exceeded the number of fixed line telephone subscribers and the use of IP telephones has rapidly become widespread. In addition, competition in the telecommunications field is likely to further intensify in the future due to the expected growth of new fixed-line telephone services called chokushu-type services, in which subscribers call without using NTT's switching network, and the reduction in the basic monthly charges and the installation fees of NTT East and NTT West. Against this backdrop, in November 2004, MIC requested advice from the Telecommunications Council on future policies for an ideal Universal Service Fund System, including issues such as the scope of universal service, the method of calculating the cost for providing universal service, and the method of financing this cost.

## (4) Implementation of the competition review in the telecommunications field

The MIC started a measure called “the competition review in the telecommunications field” in fiscal 2003 in order to accurately understand the competition status of the telecommunications field, which is becoming ever complex with the introduction of IP and broadband networks, and to reflect it in the policy. The competition review in fiscal 2004 covered not only “Internet connectivity” and an “intra-company network,” which had been subject to the fiscal 2003 review, but also “mobile communications” and “IP telephones” for analysis and evaluation. Since increased convergence of these services would affect not only terminals but also network configurations, the MIC analyzed and evaluated the competition status while watching the future relationship among the three services—broadband, mobile phones and IP telephones.

## (5) Dispute settlement between carriers The telecommunications field is seeing the occur-

The presence of complicated disputes between carriers in line with the advancement/diversification of services and increased use of IP networks. Therefore, the Telecommunications Business Dispute Settlement Commission presents flexible and reasonable resolutions for individual dispute cases from the viewpoint of the public benefit status of telecommunications services and user protection even if there were no existing rules. Furthermore, when the commission finds that rules have yet to be developed in the course of dispute settlement or deliberation of matters consulted on by the Minister for Internal Affairs and Communications, it recommends to the minister that new rules be developed, as well as expects the minister to develop new rules based on precedents accumulated by the commission. The commission processed 37 cases and made two recommendations to the Minister for Internal Affairs and Communications by the end of fiscal 2004.

Such formal dispute settlement procedures have accomplished certain results, but in order to enhance the system for offering information on a dispute settlement prior to entering such formal dispute settlement procedures and to provide appropriate advice to telecommunications carriers that come to seek opinions on various matters, the commission opened the “Telecommunications Business Dispute Settlement Consultation Desk” in December 2004, and offers appropriate suggestions on dispute settlement means.

## 2 Development of broadcasting policies

## (1) Promotion of digital broadcasting

The digitization of broadcasting will dramatically change the conventional viewing mode where viewers received one-way services, and generate a viewing style in which people, or viewers, actively take part in the service. By providing a wide array of advanced services that could not be provided through conventional broadcasting, the digital broadcasting enables various viewing modes that could not have been imagined in the analog technology phase, as well as significantly improves the usability of the radio spectrums, which are people's common resources, and opens up the possibility for yet more advanced use.

In order to realize a complete shift to digital broadcasting in 2011, the MIC is promoting digitization of all broadcasting, while coordinating with the National Conference for Promotion of Terrestrial Digital Broadcasting.

## (2) Advanced use of terrestrial digital broadcasting in the public service field

The MIC sought advice from the Telecommunications Council on ideal future use of terrestrial digital broadcasting in a wide range of fields, challenges and solution measures toward achieving such use, and the role that should be played by administration in January 2004, and received an interim report in July