SQ4.11

1
SQ4.11 Study of Development of Broadband Network
in Asia-Pacific Region Case study of
Japan Broadband development in Japan
Asako TOYODA Ministry of Internal Affairs and
Communication (MIC), Japan www.soumu.go.jp
2
C O N T E N T S

• e-Japan Strategy
• 2. Broadband Promotion Policy in Japan, Part 1
• (Rapid dissemination of ADSL)
• (1) Development and strict monitoring/manageme
  nt
• of interconnection rules
• (2) Problems with the previous rate structure
  
• (3) Presence of ambitious new carriers
• 3. Broadband Promotion Policy in Japan, Part 2
• (Promotion of optic fiber network (FTTH))
• 4. u-Japan Strategy

3
1. e-Japan Strategy - 2001 ICT Policy Targets
and Current Status -
Drawing up an ICT state strategy e-Japan
Strategy (January 2001)
Main objective To make Japan the world's most
advanced ICT nation by 2005 ? 5-year urgent
concentrated implementation by 2005 ?
Four priority policy areas
-Infrastructure Principle of private-sector
initiatives, Creation of the worlds most
advanced environment for the Internet -e-commerce
Ex-post-facto check rule, Building confidence in
participants, International harmonization -e-gover
nments Reform of administrative work, Social
infrastructures for use of ICT -Human resources
Improvement in ICT literacy, Recruiting of ICT
instructors, Fostering of ICT engineers/experts
Targets
Constant access environment by 2005
High-speed 30 million households
Ultra-high-speed 10 million households
4
Achieved Targets for e-Japan Strategy
(Establishment of Infrastructure)
Targets
Actual Results
Constant access environment by
2005 High-speed 30 million
households Ultra-high-speed 10 million
households
Constant access environment by
Versus
High-speed (DSL) 38 million households High-speed
(cable TV) 23 million households
Ultra-high-speed (FTTH) 18.50 million
households
5
Current Status of Broadband Penetration in Japan
- Number of Subscribers -
? The number of broadband subscribers in Japan,
especially those of DSL has grown extensively
recent years. (Number of broadband subscribers is
around 18 million as of the end of last year.)
2,034,433
12,803,883
Optical Fiber (FTTH) (for general users) ?
Subscribers 2,034,433 ? Operators 60
(End-Sep.2004)
Wireless ? Subscribers 27,697 ? Operators 18
(End-Sep.2004)
0
7
6
8
1
2
9
16
17
DSL ?Subscribers 12,803,883 ?Operators 43
(End-Sep.2004)
27,697
Cable Internet ?Subscribers Approx.
2,793,063 ?Operators 347 (End-Sep.2004)
2,793,063
6
2. Broadband Promotion Policy in Japan, Part 1
(Rapid dissemination of ADSL) (1/4)
(1) Development and strict monitoring/management
of interconnection rules
i. Creation of Interconnection Rules (1997)

• Introduction of Designated Telecommunications
  Facilities system
• Mandatory for NTT to establish interconnection
  tariffs stipulating interconnection charges and
  other usage terms and conditions, and obtain
  authorization from the Minister for Public
  Management, Home Affairs, Posts and
  Telecommunications
• Introduction of Interconnection Accounting
  System
• Calculation of interconnection charges based on
  accounting results (Actual costs)

ii. Review of interconnection rules (2000-2001)

• Establishment of unbundling and collocation rule
  
• -gt Unbundling requirement not only on copper wire
  but also on subscriber optic fiber and trunk
  optic fiber

• Features
• Rational rate levels
• Thorough information disclosure regarding NTT
  lines and station facilities
• Establishment of detailed use procedures (216
  pages total)

• (Examples of unbundled rates of NTT East)
• Copper lines
• Dry copper ?1,385/line Line
  sharing ?158/line
• Optical lines (Dark fiber) Subscriber ?5,213/l
  ine
• Trunk ?2,166/m

7
Situation regarding Cost Reduction in
Communications Charges
(ref.)
(1) Inter-city calls (Tokyo Osaka)
(2) Intra-city calls
(3 minutes daytime)
(3 minutes daytime)
NTT East and West KDDI, JT, NTT-C 8.5 yen TTNet,
QTNet 8.4 yen
400 yen
TTNet,QTNet 9 yen
Media 8.2 yen HEISEI DENDEN 7.5 yen
NTT East 9 yen TTNet 8.7 yen
10
NTT-C,JT KDDI 80 yen
Fusion Media 20 yen
TTNet 54 yen
? 8096
10 yen
9 yen
9 yen 8.7 yen
CWIDCHeisei DenDen 18 yen
8.5 yen 8.4 yen
?25 ?15
8.2 yen7.5 yen
5

0
TTNet March 1st 2001, NTT-C, KDDI, JT March
1st 2001 Fusion April 1st 2001 Media January
2002 CWIDC April 21st 2002 Heisei DenDen
July 15th 2003
Media January 30th 2002 HEISEI DENDEN February
1st 2002
TTNet January 7th 1998 QTNet April 1st 1999
January 10th 2001
May 1st 2001
NTT Nov 17th 1976
NTT July 21, 1983
(3 minutes daytime)
(4) Mobile telephones (800Mhz digital format)
(3) International calls (Japan US)
MCIWCJ 150 yen (Dec 1st 1998) JT 180 yen
(Oct 1st 1999) CW IDC 180 yen (Oct 5th
1999) KDDI 180 yen (Nov 1st 1999) TTNet 132
yen (Nov 1st 1999) DTJ 75 yen (Dec 10th
2000) NTT-COM 160 yen (April 3rd 2000) Fusion
45 yen (Sept 1st 2001) Media 45 yen (Jan
30th 2000) HEISEI DENDEN 45 yen (Feb 1st 2000)
Communication charges (mobile ? fixed,
intra-prefectural)
Basic charges 17,000 yen
KDD 450 yen (Nov 23 1996) JT 440 yen (Dec 20
1996) CW IDC 440 yen
1,530 yen
? 75
? 73
4,300 yen
? 9096
NTT DoCoMo Central Others 9 companies Dec 1st
2000
NTT DoCoMo March 25th 1993
J-Phone June 1st 1999
NTT DoCoMo March 25th 1993
KDD April 1, 1985
Nov 1996
Dec 1998
(Note) March 25th 1993 was the first day of the
800MHz digital format After June 2000, the
basic charge of NTT DoCoMo is 4,500 yen
(including free call amount of 200 yen)
13
8
International comparison of 24-hour Internet
Connection Charges (ADSL)
(ref.)
(downstream speed)
(Yen/month)
1.5M
3M
2.4M
1M
45M
40M
1.5M
1M
8M
10,000
8,734
Communication Charges
ISP charges
8,125
8,000
6,648
6,630
5,991
6,000
5,822
4,188
3,391
3,325
4,000
3,190
2,938
850
850
2,000
2,912
2,600
2,340
2,475
0
Tokyo 1
Tokyo 2
(Reference) Tokyo 3
New York
London
Paris
Dusseldorf
Geneva
(Reference) Seoul
Note 1) 1 month, 24 hours/ 1 day?charge with
permanent connection (does not include modem
lease charges) 2) Tokyo 1 is NTT East Japan Flets
ADSL (communication charges for myline
registration 2,340 yen 1.5Mbps) Plala networks
ADSL set (ISP connection charges 850yen), Tokyo
2 is the same for NTT East Flets ADSL
(communication charges for myline registration
2,475 yen 40Mbps) Plala Networks Flets ADSL set
(ISP connection charges 850yen), Tokyo 3 is
Softbank BB ADSL service which is, though not a
representative carrier, is the cheapest example
(Yahoo!BB 45M communication charges ISP
connection charges 2,938 yen). 3) In addition
to the above from NTT East there is Flets ADSL
(communication charges in case of myline
registration 2,385 yen 8Mbps) and Flets ADSL
(communication charges in case of myline
registration 2,430 yen 12Mbps) are provided.
Further, ADSL services (communication charges
ISP connection charges 2,438yen 8Mbps) and
(communication chargesISP connection charges
2,638yen 12Mbps) etc. are provided by SoftbankBB.
4) In New York, there is Verizon Business DSL of
Verizon Communications (office use) (1.5Mbps)
communications charges ISP connection charges
(59.95) (this graph is campaign charges and a
contract of over 1 year is mandatory. Regular
charges are 89.95). In addition, Verizon Online
DSL (768kbps) are provided by Verizon
Communications for home use communication charges
ISP connection charges (34.95) . 5) In London,
there us BT Broadband from BT communication
charges ISP connection charges (GBP32.34) 6) In
Paris, there is FT La ligne ADSL (communication
charges 19.23 euros) FT Wanadoo (ISP
connection charges 25.08 euros) 7) In
Dusseldorf, there is DT T-DSL 3000
(communication charges 21.54 euros) T-online
DSL Flat 3000 (ISP connection charges 43.06
euros) 8) In Geneva, there is SwissCom Broadway
ADSL 2400 communication charges ISP connection
charges (92.00 swiss francs) 9) In Seoul, there
is Korea Telecom ADSL Premium communication
charges ISP connection charges (4,000 won, 1
won 0.1016 yen)
9
(ref.)
Broadband Charges for Each Communication Speed
Japan
Cost per 100kbps of data communications
(US dollar)
Created from the ITU report Birth of Broadband
(September 2003)
10
(ref.)
Change in the number of users for fixed and
mobile telephone
(Unit 10 thousand)
Fixed Comunications (Subscirbers Telephone ISDN)
10,000
8,666
Subscribers Telephone
9,000
Mobile Communications(Cellular PHS)
8,112
Cellular Phone
8,000
7,482
8,152
Subscribers to High/Ultra High Speed
Internet (DSL CATV FTTH Wireless)
7,566
7,000
6,678
6,912
6,022
6,263
6,285
6,263
6,094
6,164
6,223
6,133
6,077
6,028
5,907
5,781
6,000
5,636
5,685
5,456
6,196
5,245
6,111
6,153
(DSLCATVFTTH??)
5,994
6,045
5,883
5,856
5,555
5,765
5,627
5,000
5,453
4,731
5,245
5,226
5,114
5,100
5,116
Reversal in lead for number of contracts of
subscriber ? mobile (March 2000)
3,825
5,159
4,153
4,000
Reverse Point Subscriber Line/Mobile (Mar. 2000)
Reverse Point Fixed/Mobile (Nov. 2000)
Reversal in lead for number of contracts of
fixed ? mobile (November 2000)
2,691
3,153
3,000
2,000
2,088
1,495
1,170
943
1,000
1,020
433
213
171
387
49
87
138
433
85
22
0
49
138
213
87
171
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
(FY)
11
(ref.)
Transition of the Mobile Telephone and Mobile
Internet Subscribers
(10 thousand contracts)
8,152
Number of mobile telephone subscribers
7,565
8000 7000 6000 5000 4000 3000 2000 1
000 0
(of which)Mobile Internet subscribers
6,912
6,973
6,094
6,246
5,193
3,457
1999.3 2000.3 2001.3
2002.3 2003.3 2004.3
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2. Broadband Promotion Policy in Japan, Part 1
(Rapid dissemination of ADSL) (2/4)
iii. Strict monitoring of rules

• Establishment of system for submission of
  opinions to the Minister for Public Management,
• Home Affairs, Posts and Telecommunications
  (1999)
• Establishment of Telecommunications Business
  Dispute Settlement Commission (2001)
• Prompt, smooth and fair settlement of disputes
• Takes from 2 weeks to 2 months from the time of
  application

Mechanism related to the Telecommunications
Business Dispute Settlement Commission
Minister for Public Management, Home Affairs,
Posts and Telecommunications
Telecommunications carriers
Telecommunications Business Dispute Settlement
Commission
????
?????????????
???????
Testimony/Orders
Review
Interconnection Order
Inquiry/Report
Application/Rulings
Dispute between telecommunications carriers
Mediation
Ruling
Application/Mediation or Arbitration
Arbitration
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2. Broadband Promotion Policy in Japan, Part 1
(Rapid dissemination of ADSL) (3/4)
(2) Problems with the previous rate structure

• Previously in Japan, there is never been a local
  flat rate system (like that in the U.S.)
• This makes it essentially impossible to build an
  always-on Internet connection environment.
• Since 1995, Japan too has been gradually
  adopting flat rates. However, the rate level is
  high.
• This situation means there is a great deal of
  leeway for user service switching, depending on
  how new operators set prices.

Changes in the adoption of flat rates by NTT
-1995 Telephone service Introduction of
nighttime flat rate system ("Tele-hodai") -gt
?1,800 (To a maximum of 2 local numbers), ?3,600
(To a maximum of 2 numbers in the local area or
neighboring region) -1996 ISDN service
Introduction of nighttime flat rate system (INS
"Tele-hodai") -gt ?2,400 (To a maximum of 2
local numbers), ?4,800 (To a maximum of 2 numbers
in the local area or neighboring region) -1999
ISDN service Introduction of semi-flat rate
system (i-Plan) -gt ?400 (Up to usage
corresponding to ?1,000/month), ?1,200 (Up to
usage corresponding to ?3,000/month), ?3,000 (Up
to usage corresponding to ?7,500/month) -1999
ISDN service Introduction of flat rate system
limited only to internet connection etc. -gt
?8,000 (Test service) -2000 ISDN service Same
as above -gt ?4,500 (Actual service)
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(ref.)
Subscribers on different services (ex. eAccess)
Transition of Charge for FLETS ISDN (ex. NTT
EAST)
(Number of Subscribers)
Start of 40M Service
Start of 24M Service
High-Speed Service
Start of 12M Service
Medium-Speed Service
Start of 8M Service
Start of ADSL Service (later speed up to 1.5M)
Start of 1M Service
Low-Speed Service
(?1) Based on materials published by NTT EAST
(?2) The amount within indicates the discounted
set charge with My Plan Plus. (?3)
The ADSL charge \2900 on 2001.12.1 is applied for
1.5M Type.
(2000, Oct.)
(2001, Oct.)
(2003, July)
(2002, June)
(2003, Nov.)
15
2. Broadband Promotion Policy in Japan, Part 1
(Rapid dissemination of ADSL) (4/4)
(3) Presence of ambitious new carriers

• At the time ADSL was launched in Japan, numerous
  venture enterprises, different from previous
  carriers, entered the market.

ltEntry by setting cheap ratesgt

• New carriers entered the market with the
  following distinctive approach
• A) Building a network using state-of-the-art
  technology in a short time by maximally
  exploiting the interconnection rule in (1) above.
• B) Offering revolutionary rates, different from
  previous carriers, under the conditions of the
  rate structure in (2) above.
• Switching from existing Internet access services
  (ISDN, dial-up) progressed in a short time
• This contributed greatly to the rapid expansion
  of broadband service.

ltFierce competition on the service sidegt

• Fierce competition grew between carriers in the
  areas of service and quality.
• A) ISPs provide users not only with Internet
  access, but also with a wide range of services
  like VoIP and VOD.
• It becomes possible to enjoy a wealth of
  applications on a broadband network.
• B) Carriers are actively developing technology to
  increase ADSL line speed
• The speed of ADSL is increasing at an
  unparalleled rate in the rest of the world too.

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3. Broadband Promotion Policy in Japan, Part 2
(Promotion of optic fiber network (FTTH))
ii. Present situation

• At present, Japan is leading the world, with
  multiple carriers providing FTTH access service
  for home.
• Characteristics
• (1) In competition with ADSL, there is only a
  slight price difference between FTTH and ADSL.
• (2) Some new carriers are also developing new
  services using FTTH.
• (Example) In the fall of last year, one
  carrier started a service providing integrated
  internet access, VoIP and digital broadcasting.
  To counter this, NTT East and West plan to start
  an optical VoIP service this fall.

iii. Future development

• Taking the above situation into consideration,
  the number of FTTH service subscribers is
  expected to accelerate and increase further in
  the future.
• For the time being, FTTH will function as a
  competitor of other broadband connection services
  such as ADSL and CATV internet.
• However, in the future, FTTH service is
  expected to play the leading role among broadband
  services.

17
(Annex)
Transition in the Deployment of ICT Infrastructure
1981
Vision of NTT Public Corp. (ISDN(INS) Vision)
81 INS Vision announced 84 Start of INS
model system experiment 88 Start of INS 64
Service
Enactment of Provisional Measures Law for
Telecommunications Infrastructure Improvement
(91)
1991
Support for deployment of fiber optic
network (Low-interest loans, favorable tax
regime, etc)
Municipal network Support for new generation
CATV program, etc.
Program for Enhancement of ICT Infrastructure for
Region and Life (94)
Establishment of the Advanced Information and
Telecommunications Network Society Promotion
Headquarters (within the Cabinet 94)
1994
ICT Infrastructure Deployment Program
(Telecommunications Council Report) (94)
Setting of target for nation-wide deployment
of fiber optic network
1995
Addition of support for FTTH network
Amendment to Telecommunications Infrastructure
Improvement Law (95)
Enactment of Basic Law on the Formation of an
Advanced Information and Telecommunications
Network Society(IT Basic Law) (00)
2000

• Competition PolicyDeregulation
• Unbundling Rule, etc
• Improvement for ADSL usage environment

Principle of Private Initiatives
Extension of the validity of Telecommunications
Infrastructure Improvement Law (01)
Establishment of the IT Strategic
Headquarters(within the Cabinet 01)
Addition of support for DSL, FWA, etc.
2001
Realization of worlds fastest and cheapest
broadband environment
e-Japan Strategy (established 01.1.22)
Targets of deployment (By 2005 always-on
environment high-speed access (30milion
households), ultra high-speed access (10 million
households) have already been achieved.)
18
4. u-Japan Strategy - Framework of u-Japan
Policy toward 2010 -
Main objective to attain the frontrunner targets
for 2010
Main objective of e-Japan To be the world
leader achieved by 2005 (Catching up)
Main objective of u-Japan Maintain to be the
world leader leadership in 2010
(Frontrunner)

? ICT integrated into all aspects of everyday
life at the grassroots level ? Creative
applications to generate brand-new utilities
Basic concept developing from e to u
usage
u-Japan
utility evolution
Solution-oriented
Solution-oriented
Enabling environment
e-Japan? (2003-2005) usage
7 leading areas
computerization
Ubiquitous network
e-Japan (2001-2003) infrastructure
e-commerce, e-government
infrastructure
?
Narrowband
Broadband
Ubiquitous network
19
Fundamental Concepts of Ubiquitous Network
Societies in Japan
Future concepts for the next generation ICT
society in Japan are expressed as u-Japan.
u-Japan (ubiquitous Japan)
Ubiquitous Connects everyone and everything
?Easy connection to networks anytime,
anywhere, by anything and anyone. To a
society where ICT will be everywhere in daily
life and can easily be used. ?Person to Person
plus Person to Goods, and Goods to Goods In
every aspect, communication will play an even
more important role
Unique Creative and vigorous ?Creation of
vitality of the individual A new society where
it is easy to have dreams and take on challenges
even for individuals ?Vitalize the society
Creation of new social systems and business
services Get out from stereotype and realize
local revitalization with creativity
Universal Friendly communication ?Friendly to
people Can be used by anyone without thinking
of the equipment or network The aged and
disabled will be able to actively participate in
society with ICT ?Contacts from heart to heart.
Heart-to-heart communication overcoming barriers
between generations and localities to create
togetherness
User-oriented Based on users viewpoints ?Close
to the user To a society that is even more
aware of user convenience than the ideas of the
supply side. Developing technologies and
services that are closely connected to our
needs ?Users can be suppliers, too Using the
power of networking to make100 million
prosumers
20
Three Cores of the u-Japan Policy
By 2005
By 2010
1st Seamless ubiquitous networks
Development of an ultra-high-speed network
infrastructure High-speed for 30 million
households, ultra-high-speed for 10 million
households DSL, cable, optic fiber (wired
systems)
Development of seamless ubiquitous networks
(wired and wireless) 100 of the population to
have high-speed or ultra-high-speed internet
access Development of a seamless networking
environment including shifting from wired to
wireless and from networks to terminals, and
elements such as authentication and data exchange
From broadband to ubiquitous networks
Infrastructure
2nd Solution-oriented ICT usage
Promoting ICT applications in seven priority
fields Health care, food, daily life, small and
medium business finance, knowledge, labor and
employment, and government services Focus on
promoting information technology
Solution-oriented ICT usage to resolvesocial
issues 80 of the population to appreciate the
role of ICT in resolving social problems
Reforming social systems and structures in order
to address 21st century issues in health and
welfare, environment and energy, disaster
prevention and public safety, and education and
human resources
From computerization to solution-oriented
Usage
3rd Emphasis on safe and secure environment
Upgrade ICT enabling environment to allay
concerns in connection with spread of ICT 80 of
the population to feel comfortable with ICT
Formulate 21 strategies for promoting the safety
and security of ICT, and draw up a Ubiquitous
Network Society Charter for worldwide release
Information security measures Adding the
development of a safe and secure usage
environment to the e-Japan Strategy II
Specializing on information security measures
Drastic upgrade of ICT enabling environment
Enabling environment
21
Examples of ICT Usage in the u-Japan Society
(everyday life)
Case of independent creator
Case of grandfather and grandson
Case of working parents
Case of the handicapped
22
Examples of ICT Usage in the u-Japan Society
(industrial aspect)
Efficiency in production management processes
within corporations
Realize flexible collaboration between
corporations
Management Server
Theater
Travel agency
NW
Restaurant
Car rental
Agent Robot
Hotel
Airline
Example of system that links various companies
together to meet travel-related needs and
provides a system for processing.
Example of supply-chain management for apparel
company (management of orders, stock and
distribution)
Example of system of document management within a
company (confirm location of documents, security
management)
Example of system to support appropriate
provision and application of medicine at
hospitals etc.
Medicine storage room
Security management
????????
Direction on taking medicine
Doctor
Position information management
??????
Documents not to be taken out
????? ????!
Document B
Document B
Documents not to be copied
????? ????
Medical DB
Check
??????
Detection of relocations
Tag reader
????
Check
Tag
Check
????
Management department
Tag
????
Server
Tag
??
Media information DB
???? DB
Tags
Check it is correct patient
Check amount of medicine given
NW
Check type of medicine given
Send alarm if incorrect
Send alarm if amount incorrect
Send alarm if incorrect
Advanced knowledge management within corporations
Penetration of ICT use into all areas of industry
23
Thank you !
Asako TOYODA Senior Officer for International
Cooperation Telecommunications Bureau