Figure 3-2-1 Main Points of the Partial Revision of the Telecommunications Business Law and the Law Concerning Nippon Telegraph and Telephone Corporation, Etc.

1. Abolition of Type I and Type II business categories

The revision abolished the Type I and Type II telecommunications business categories which paid attention to whether or not carriers had set up telecommunications line facilities.

2. Review of system relating to business entry and change in business content

The revision abolished the system of requiring permission for business entry and change in business content and switched to systems of registration and notification involving simpler procedures.

3. Liberalization in principle of service provision conditions

The revision abolished in principle the obligation to formulate tariffs for charges and contracts, etc. and made it possible for telecommunications carriers in principle to freely supply services. (However, the formulation of tariffs for contracts is necessary in the case of universal services, etc. that are indispensable for national life.)

4. Establishment of user protection rules

The revision made it obligatory for telecommunications carriers to notify users when abolishing or suspending a business. Also, regarding services for the general consumer, the revision made it obligatory for telecommunications carriers and agents to explain the main points of service supply conditions and thoroughly promoted user protection by making it obligatory for telecommunications carriers to process complaints.

5. Review of system relating to public-service business privileges

The revision introduced a certification system so that telecommunications carriers can receive public-service business privileges to facilitate the construction of infrastructure if they so wish.

### (2) Review of interconnection charges, etc. between carriers

The MPHPT partially amended the regulations for interconnection charges, introducing the Long-Run Incremental Cost (LRIC) methodology for calculating interconnection costs and enabling adjustment between carriers in the case of a heavy fluctuation in traffic. In recent years, as a result of the diffusion of mobile phones and the rapid emergence of IP telephone, the environment surrounding fixed line phones has undergone a major change. For example, the amount of traffic on fixed line phones has decreased. Therefore, in April 2004 the MPHPT submitted an inquiry to the Telecommunications Council to look into the method of calculating interconnection charges from fiscal 2005.

## (3) Study of setting of basic fees, etc

Of the main charges for fixed line phones, dialing fees have steadily become cheaper and more diverse since the liberalization of the telecommunications market in 1985, but basic fees have remained level since a hike in 1995, and opinions have been voiced that the time has come for a review. Therefore, in April 2004 the MPHPT submitted an inquiry to the Telecommunications Business Department of the Telecommunications Council to study the method of calculating basic fees and the sharing of expenses for the construction of facilities.

## (4) Implementation of competition evaluation in the telecommunications business field

From fiscal 2003 the MPHPT has been tackling the issue of competition evaluation. In November 2003 the ministry formulated and issued the Basic Approach Concerning the Evaluation of Competitive Situation in the Telecommunications Business Field, which gives a general picture of competition evaluation, and the fiscal 2003 Details for Implementation of the Evaluation of Competitive Situation in the Telecommunications Business Field, which indicates the areas subject to evaluation in fiscal 2003 and specific evaluation methods. In fiscal 2003 the MPHPT implemented competition evaluation in the area of Internet connection.

## (5) Settlement of disputes between carriers

In order to facilitate smooth settlement in the case of the outbreak of a dispute between carriers, the Telecommunications Business Dispute Settlement Commission engages in procedures for conciliation, mediation, etc. and also conducts deliberations as an advisory body at times when administrative measures are given by the Minister, such as an order to discuss interconnection. By the end of fiscal 2003 the commission had settled 31 dispute cases and submitted two recommendations to the Minister.

### 2. Development of Broadcasting Policies

## (1) Promotion of digital broadcasting

The digitization of broadcasting will realize a high-quality, advanced-function broadcasting media that is close to the national life. In Japan, following CS broadcasting, BS broadcasting, and cable television broadcasting, digital broadcasting began on the core terrestrial television in December 2003 in the three metropolitan areas of Tokyo, Nagoya, and Osaka.

In May 2003 broadcasters, makers, retail stores, con-