0 Toward Next Generation Network -From PSTN to new IP-based network- SEKI Keiichiro Director, International Economic Affairs Ministry of Internal Affairs

1

Toward Next Generation Network -From PSTN to new IP-based network-

SEKI KeiichiroDirector, International Economic Affairs

Ministry of Internal Affairs and Communications(MIC)

2

1. Introduction

3

Development of NGN and Change of Market Environment

Ｃｈａｎｇｅ　ⅠＣｈａｎｇｅ　Ⅰ

Structural change Structural change in communication networksin communication networks

Ｃｈａｎｇｅ ⅡＣｈａｎｇｅ Ⅱ

Progress of intermodal competitionProgress of intermodal competition

Change ⅢChange Ⅲ

Diversity of business modelsDiversity of business models

Rapid progress in development of NGN

All copyrights reserved (MIC)

4

Telephone service

PSTN

Metalnetworks

８０ s ９０ s ～ present

Wirelessnetworks

present ～

Change Ⅰ ：　 Structural Change in Communication Networks

analogue 　　 digital( ２Ｇ→３Ｇ )

00 ～

metal 　　 optical fiber

　ＰＳＴＮ

Fixed networks

Broadband service

(integration of voice, data and video)

Fib

er n

etw

ork

s

Wireless access(W

iMAX etc)

Mob

ile p

hon

e

（　　→

　　）

3G

4G

Oth

er n

ew

access te

ch

nolo

gy

Progressive transition to IP based networks

Seamless networks

ＰＨＳ

Access networks

Wireless ＬＡＮ

Mobilenetworks


Start of competition in the long-distance

market

ADSLFTTH

Full-scale competition in the

local market

1985-

2001-

2000-

2004-

Full-scale competition in basic charges

5

Change Ⅱ ： Progress of Intermodal competition

Transition from PSTN to IP Networks(The age of “Everything over IP”)

　 Drastic Change of Market Structure (Paradigm Shift ）

voice data video “packet based”

fixed mobile “ubiquitous”

regional Long distance international “communication”

From “intramodal” competition to “intermodal” Competition

Integrated Services

Horizontal integration


6

Physical Network layer

Telecom Service layer

Platform layer

Content and applications

layer

Integrated services by a

single independent

company

Telephone age IP age

Entry into broadband(high speed, high volume)

Digitization of content(voice + data + video)

Change Ⅲ : Diversity of New Business Models

Vertical integration

A variety of contentand applications

“packet based”

“ubiquitous”

“communication”

Integrated Services

Horizontal integration

over


7

What is NGN ?

Core Networks

Access Networks

The Core network of the public switched telephone network (PSTN) is now being replaced by packet (mainly IP) based data network providing multiple services.

Access loops will be upgraded from copper to advanced loops such as fiber optics (FTTH/P) and/or innovated wireless technologies to realize the full potential of NGN core networks.


8New policies are required

(1) Threat of unilateral technological arrangement of interfaces by incumbents(2) Installation of new nodes may result in changes for locations where competitors interconnect their networks.(3) New Nodes with ‘soft switch’ enable incumbents to offer their new services without added construction.(4) New regulatory regime for interconnection including VoIP services will be required.(5) Threat of bundling and discounted services in fixed and mobile converged core network by incumbents.(6) Adverse effects posed by changes in operation supporting system, function of intelligences and so on.

(1) Replacement of copper local loops will foreclose customers of competitors who rely on existing copper loops to provide their DSL products.(2) Incumbents are insisting on a ‘regulatory moratorium’ to upgrade loops as an incentive for new investment. (3) Incumbents’ advantage as they can more easily transfer existing telephone customers to their new loops.(4) Competitors insist on equal treatment in deploying their own FTTH by removing ‘historical advantage’ of incumbents related to right of way.


Core Networks Access Networks

Newly raised Concerns related to NGN

9

2. Service and facility-based competition

10

Change of Telecom Policy Goals


We have to ensure sustainable investment while maintaining fair and effective competition.

Earlier construction of nation wide PSTN

Competition to promote cheaper prices and more choice

NGN construction

Under Public corporation / national monopoly

• Privatization of NTT• Asymmetric regulation• Facility based competition mainly in backbone

•To shorten inefficient transition period•Encouragement of facility-based competition in local loops

~19781985 ~ late 1990’s

11

InternetInternet

ATMATMATMATMDSLAMDSLAMDSLAMDSLAM

DSLAMDSLAMDSLAMDSLAM

IPIPIPIP

ISPISPISPISP

ISPISPISPISP

ISPISPISPISP

ISPISPISPISP

MDFMDF ･･SplitterSplitterMDFMDF ･･

SplitterSplitter

Local Loop DSLAM Backhaul

■ ： Incumbent’s facility ■ ： Competitor's facility

From service-based to deeper facility-based competition

Backbone


Competition at deeper level of infrastructure

Self-deploy full unbundling shared access wholesale

12

Two types of telecommunications revenue models

1. Facility-based business

Installing a telecommunications circuit network and recovering network investment over the long term (15-20years)

2. Service-based business

　 Providing services as a result of the installation of network equipment (e.g. router, server) and lease of telecommunications circuit networks from other carriers and recovering investment over the short term (2-3years)

Two types of telecommunications revenue models

1. Facility-based business

Installing a telecommunications circuit network and recovering network investment over the long term (15-20years)

2. Service-based business

　 Providing services as a result of the installation of network equipment (e.g. router, server) and lease of telecommunications circuit networks from other carriers and recovering investment over the short term (2-3years)

Initial In

vestmen

tIn

itial Investm

ent

Initial In

-In

itial In-

vestmen

tvestm

ent

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 10 2 3 4 5

　　 Depreciation cost of initial investment

　　 Payment of interest on loans

　　 Depreciation cost of initial investment

　　 Expense such as charges for facilities 　　 (including compensation paid to entities

owning infrastructure)

Excess profits

Next generation R&D, etc.

Accumulated sales amount

Accumulated costs

Accumulated costs

Excess profits

Next business investment

In the case of facility-based competition- Huge initial investment in telecommunications circuit network- Existence of economy of scale and ‘natural monopoly’ characteristics

years years

Accumulated sales amount

In the case of service-based competition- Small initial investment burden- Greater flexibility regarding market entry, expansion and withdrawal

Facility-based businessFacility-based businessFacility-based businessFacility-based business Service-based businessService-based businessService-based businessService-based business

Two Types of Revenue Models of Telecommunications


13

Drivers for Network Development

Development of Ubiquitous Network Society Led by a Virtuous Cycle of Supply and Demand

Development of Ubiquitous Network Society Led by a Virtuous Cycle of Supply and Demand

To promote sophistication and diversification of network

To promote sophistication and diversification of network

SupplyImprovement of Network

SupplyImprovement of Network To create new applicationsTo create new applications

Start from Services-based Competition

Transition to Facilities-based Competition

DemandExpansion of Application

DemandExpansion of Application


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Price

Quantity of Demand

A

B

q1 q2

Cost calculation methodology for interconnection charges on dark fiber by forward-looking cost is considered appropriate in terms of shortening the transition period and encouraging rollout of broadband network.

Cost calculation methodology for interconnection charges on dark fiber by forward-looking cost is considered appropriate in terms of shortening the transition period and encouraging rollout of broadband network.

DThe policy is required

to shorten this period

p2

p1

AC （ Average cost)

MC=MR

MR(Marginal Revenue)

MC(Marginal Cost)

Price: High, Demand: Low- No increase in demand due to excessively high price- No increase in supply as cost exceeds price beyond A

Price: High, Demand: Low- No increase in demand due to excessively high price- No increase in supply as cost exceeds price beyond A

Price: Low, Demand: High- Increase in demand due to decrease in price (q1q2)- Increase in supply as cost is below price beyond B

Price: Low, Demand: High- Increase in demand due to decrease in price (q1q2)- Increase in supply as cost is below price beyond B

Ａ

Growing Pains of Network Paradigm Shift

Demand is a function of “price”. Demand and Supply has two balanced points in the network industry.Each point of balance represents an entirely different market situation. Our policy target is to avoid remaining at “A” and to shorten the transition period from “A” to “B”.

Demand is a function of “price”. Demand and Supply has two balanced points in the network industry.Each point of balance represents an entirely different market situation. Our policy target is to avoid remaining at “A” and to shorten the transition period from “A” to “B”.

Measures to reduce price level to average cost for demand stimulation

Measures to reduce price level to average cost for demand stimulation


15

3. Withering PSTN and Emerging NGN

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- Traffic Reduction in the Traditional PSTN –

(1) Diffusion of Broadband Services (Transition from Dial-up Access to Broadband)

(2) Transition from Fixed to Mobile Communications, including so-called “FMC” service.

(3) Appearance and Dramatic Diffusion of VoIP

- Traffic Reduction in the Traditional PSTN –

(1) Diffusion of Broadband Services (Transition from Dial-up Access to Broadband)

(2) Transition from Fixed to Mobile Communications, including so-called “FMC” service.

(3) Appearance and Dramatic Diffusion of VoIP


Entering into the transition period

Withering PSTN

17Source ： Ministry of Internal Affairs and Communications

(bn times) (bn hours)

Trend of Telecommunication Traffic

0

20

40

60

80

100

120

140

160

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

From PHS

From Mobile

From FixedVia NTT's switch

From IP Phone

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

From PHS

From Mobile

From Fixed

Via NTT's switch

From IP Phone

Fixed-line traffic volume has been declining by around 15% a year after the peak of FY2000.

Access charge will inevitably increase if the traffic continuously decrease.

Fixed-line traffic volume has been declining by around 15% a year after the peak of FY2000.

Access charge will inevitably increase if the traffic continuously decrease.

【 Number of communications】【 Communication time】


18

Number of VoIP Subscribers (Telephone number users only)

(10 thousand users)

DivisionEnd of

Dec, 2003End of

Mar, 2004End of

Jun, 2004End of

Sep, 2004End of

Dec, 2004End of

Mar, 2005End of

Jun, 2005End of

Sep, 2005End of

Dec, 2005

ＩＰ Phone ４３３１５２７６６０３７７０２５７８２９８３０５９０１４９７６ 7 10604

Compared with last

year－２１．８％１４．４％１６．４％１１．４％６．１％８．５％８． 4 ％８． 6 ％

※ 　 Source: MIC

　○Minimum communication quality

○Location-free

○Non-duty to provide emergency calls

○Mainly provided as an additional ADSL service

　○Minimum communication quality

○Location-free

○Non-duty to provide emergency calls

○Mainly provided as an additional ADSL service

IP telephony using 050 numbersIP telephony using 050 numbersIP telephony using 050 numbersIP telephony using 050 numbers

　○Same communication quality as fixed

telephony

○Securing geographical identification

○Duty to provide emergency calls

○Reliability same as for fixed telephones

○Mainly provided as an additional FTTH service

　○Same communication quality as fixed

telephony

○Securing geographical identification

○Duty to provide emergency calls

○Reliability same as for fixed telephones

○Mainly provided as an additional FTTH service

IP telephony using 0ABIP telephony using 0AB ～～ J J numbersnumbersIP telephony using 0ABIP telephony using 0AB ～～ J J numbersnumbers


Different number types are intended to show the differences of service level to consumers.

43315276

60377025

7830 8118

187

8690

323

9254

510

9751

852

0

2000

4000

6000

8000

10000

12000

Dec.,2003 Mar.,2004 J un.,2004 Sep.,2004 Dec.,2004 Mar.,2005 J un.,2005 Sep.,2005 Dec.,2005

0AB J Number～050 Number

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Encouragement of NGN transition from PSTN


Increase of interconnection charge by traffic reduction has resulted in facilitating full unbundling products and competitors’ FTTH deployment

Increase of interconnection charge by traffic reduction has resulted in facilitating full unbundling products and competitors’ FTTH deployment

DSTI-ICCP-TISP-RD(2004)1 “The Telecommunication Policy and Regulatory Impact of VoIP : An Issues Paper” (Issued by OECD :25 May2004)

In some OECD countries, regulators are trying to ensure that VoIP service providers have special telephone numbers which differ from those of the PSTN. In Japan, for example, the popularity of VoIP services and interconnection requirements of the PSTN and VoIP services led the government to take a unique regulatory approach to the numbering plan for IP terminal devices. While traditional circuit-switched telephone numbers start from 0XX in Japan, IP telephone numbers are principally distinguished from them by starting from 050.

In some OECD countries, regulators are trying to ensure that VoIP service providers have special telephone numbers which differ from those of the PSTN. In Japan, for example, the popularity of VoIP services and interconnection requirements of the PSTN and VoIP services led the government to take a unique regulatory approach to the numbering plan for IP terminal devices. While traditional circuit-switched telephone numbers start from 0XX in Japan, IP telephone numbers are principally distinguished from them by starting from 050.

Specific numbers starting from “056” since Sep 2004Specific numbers starting from “056” since Sep 2004

Japan’s leading model – VoIP Specific numbers starting from “050” since Sep 2002

Japan’s leading model – VoIP Specific numbers starting from “050” since Sep 2002

UKUK

GermanyGermany

IrelandIreland

Specific numbers starting from “032” since Nov 2004Specific numbers starting from “032” since Nov 2004

Specific numbers starting from “076” since Jan 2005Specific numbers starting from “076” since Jan 2005

KoreaKorea Specific numbers starting from “070” since May 2004Specific numbers starting from “070” since May 2004

Facilitation of VoIP diffusion by allocating telephone numbers

Facilitation of VoIP diffusion by allocating telephone numbers

0

1

2

3

4

5

6

7

8

9

10

H11 H12 H13 H14 H15 H16 H17 H18 H19 H20 H21

〔Yen/3min〕GC (local switch) Rate

【Interconnection charge】

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

５．０５

６．４７

VoIP→ PSTN（around 8 yen / 3 min)

Local Call (NTT, NCC; PSTN) （around 8.5 yen / 3 min)

0

1

2

3

4

5

6

7

8

9

10

H11 H12 H13 H14 H15 H16 H17 H18 H19 H20 H21

〔Yen/3min〕GC (local switch) Rate

【Interconnection charge】

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

５．０５

６．４７

VoIP→ PSTN（around 8 yen / 3 min)

Local Call (NTT, NCC; PSTN) （around 8.5 yen / 3 min)

【 After reviewing】

【 Before reviewing】

20

◆ Following the privatization of the old NTT Corporation and introduction of competition in the telecommunications marketplace in 1985, the newly privatized NTT East and NTT West and associated holding companies were obliged under the NTT Law to provide universal service in the form of telephone services on a nationwide basis.

◆ Competition flourished in regional communications markets, particularly the profitable major city regions. In 2001, it was recognized that universal service should be achieved not only via complementary internal arrangements between NTT East and West, but also by seeking contributions from other operators. The Telecommunications Business Law was amended to this end, although the basic obligations under the NTT Law remained.

◆ The amendments set out an obligation to provide universal service in the form of telecommunications services throughout the nation for the benefit of all citizens

◆ The cost to NTT East and West of the complementary internal arrangements designed to provide universal service was calculated on the basis of objective standards, and other telecommunications operators benefiting from the use of facilities and connection services associated with universal service provision were asked to make contributions commensurate with their benefits (user-pays principle)

◆ Following the privatization of the old NTT Corporation and introduction of competition in the telecommunications marketplace in 1985, the newly privatized NTT East and NTT West and associated holding companies were obliged under the NTT Law to provide universal service in the form of telephone services on a nationwide basis.

◆ Competition flourished in regional communications markets, particularly the profitable major city regions. In 2001, it was recognized that universal service should be achieved not only via complementary internal arrangements between NTT East and West, but also by seeking contributions from other operators. The Telecommunications Business Law was amended to this end, although the basic obligations under the NTT Law remained.

◆ The amendments set out an obligation to provide universal service in the form of telecommunications services throughout the nation for the benefit of all citizens

◆ The cost to NTT East and West of the complementary internal arrangements designed to provide universal service was calculated on the basis of objective standards, and other telecommunications operators benefiting from the use of facilities and connection services associated with universal service provision were asked to make contributions commensurate with their benefits (user-pays principle)

Background and objectives

◆ Scope of universal serviceSubscriber lines, public telephones, emergency communications

◆ 　 Mobile telephone and broadband services are still in a growth phase and are excluded from the scope of universal service at this point in time (Telecommunications Council, October 2005

　 Mobile telephone services

- Network infrastructure development through competition among operators

- Unlikely to replace fixed telephone services since charges are roughly double

- Considerable investment required to provide coverage in remaining unserviced areas

　 Broadband services- Network infrastructure development through competition among

operators- Service availability rising steadily, but take-up still in a growth

phase (penetration = 37%)

Scope Changes to the system

Benchmark formula Revenue-cost formula (offset model)

Average cost

Contribution varies in proportion to revenue

Profit

Deficit

Compensation when offset results in deficit

Revenue

Cost

↑NTT

East/West revenue/cos

t per line

Number of subscriber lines →

事業法改正により制度化（平成１４年６月施行）。（赤字が発生しなかったことから、これまで稼働せず。）

Formalized under amendments to the NTT Business Law (enacted June 2002).(Has not been enforced to date since deficit has not arisen)

Contribution varies in proportion to numbers used

Compensation for costs incurred in

high-cost regions

Cost

4.9％

↑NTT

East/West revenue/cost per line

Number of subscriber lines →

平成１８年度から適用。（新制度適用後３年を目途として見直しを行う）

Introduced from FY2006(To be reviewed three years after implementation)

[Ref] Framework of Universal Service


21

70 8

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

99-3 99-6 99-9 99-12 00-3 00-6 00-9 00-12 01-3 01-6 01-9 01-12 02-3 02-6 02-9 02-12 03-3 03-6 03-9 03-12 04-3 04-6 04-9 04-12 05-3 05-6 05-9 05-12

DSLDSL

Cable ModemCable Modem

Establishment of interconnection rules such ascollocation and unbundling rules for access

networks of NTT East and NTT West

Autumn 2000

OthersAbout 62.5%

About 37.5%

【 End-Dec. 04 】

NTT East & West

Severe competition in Japan has led to NTT East and West’s lost of majority share in DSL market


22

• NTT East & West, incumbent regional operators, are prohibited from engaging in the ISP business directly by themselves.• This line of business restriction leads to razor-sharp competition at the retail (or ISP) level, which eventually brings about competition at

the wholesale (or DSL access) level where NTT East & West hold only a 37% market share.

• NTT East & West, incumbent regional operators, are prohibited from engaging in the ISP business directly by themselves.• This line of business restriction leads to razor-sharp competition at the retail (or ISP) level, which eventually brings about competition at

the wholesale (or DSL access) level where NTT East & West hold only a 37% market share.

• In Japan, dark fiber for interoffice transmission is required to be unbundled and its prices are subject to approval by the MIC.• DSL access providers thus can adopt the latest technology by using dark fiber, instead of leased lines, at reasonable prices.• In Japan, dark fiber for interoffice transmission is required to be unbundled and its prices are subject to approval by the MIC.• DSL access providers thus can adopt the latest technology by using dark fiber, instead of leased lines, at reasonable prices.

• The MIC has been regulating the prices of line sharing at a level of around 1€/month (¥120 in the case of NTT East).• The calculation of these prices is based on the idea that subscriber-line costs are already recouped through telephone basic charges and

that costs incurred by shared access are only those brought by its additional function.

• The MIC has been regulating the prices of line sharing at a level of around 1€/month (¥120 in the case of NTT East).• The calculation of these prices is based on the idea that subscriber-line costs are already recouped through telephone basic charges and

that costs incurred by shared access are only those brought by its additional function.

Policy and Regulation to promote competition of DSL in Japan

III. Unbundling of Dark Fiber for Interoffice TransportIII. Unbundling of Dark Fiber for Interoffice Transport

IV. Line of Business Restriction on Incumbent OperatorsIV. Line of Business Restriction on Incumbent Operators

I. Regulations on Prices of Line SharingI. Regulations on Prices of Line Sharing

• Although there were disputes among operators related to co-location at the early stage of DSL rollout, rules for realization of timely and appropriate co-location have been developed through dispute resolution by the Telecommunications Business Dispute Settlement Commission, among others.

• Although there were disputes among operators related to co-location at the early stage of DSL rollout, rules for realization of timely and appropriate co-location have been developed through dispute resolution by the Telecommunications Business Dispute Settlement Commission, among others.

II. Development of Co-location RulesII. Development of Co-location Rules

•Japan’s success in broadband is brought about by LLU-based competition, where operators can pursue differentiation through speedup of their DSL access services (“competition at deeper levels of infrastructure”) .

•In the case of competition based on resale/bitstream access, speed competition cannot be expected because competitors rely mostly or entirely on the network of incumbents.

• Japan’s MIC (Ministry of Internal Affairs and Communications) has been implementing following measures.

•Japan’s success in broadband is brought about by LLU-based competition, where operators can pursue differentiation through speedup of their DSL access services (“competition at deeper levels of infrastructure”) .

•In the case of competition based on resale/bitstream access, speed competition cannot be expected because competitors rely mostly or entirely on the network of incumbents.

• Japan’s MIC (Ministry of Internal Affairs and Communications) has been implementing following measures.


23

Dark-Fiber Use for Competitors

Metro Ring Metro Ring

Metro Ring

Core Ring

NTT BuildingNTT Building

NTT Building

NTT Building

NTT Building

NTT BuildingNTT Building

NTT Building

NTT Building

NTT Building

NTT Building

NTT Building

Competitor Building

Competitor Building

Competitor Building

Competitor Building

Local loop Dark Fiber

Interoffice Transmission Dark Fiber

ADSL

FTTH

For companies (Ether-Access)

Competitor Basic Network(Competitor Cable & local loop Dark Fiber)

Approved the access charges calculated under the actual accounting performance of each fiscal year since FY01.

(based on the historical cost method under ministerial instructions.) [Access charges] 　 NTT East: \1.917 (monthly fee per meter) 　 NTT West: \1.920 (monthly fee per meter) (NB)NTT East/West have independent access charges from FY02.

Therefore the cost price and income from the access fees should balance out.

Interoffice dark fiber access charges


24

Competitive pressure has led more investment to FTTH in Japan’s case

DSL market competition FTTH market competition

(1)Users familiar with broadband discover new ways of usage and tend to seek higher speed access. To say, they are ready to use FTTH.

(2)NTT East and West which have lost majority share in DSL market will want to recapture lost customers and transfer their existing telephone users by the provision of FTTH services.

(3)Increasing DSL user number encourages operators to provide triple play services.

(4)Content and application providers try to offer more and more audiovisual rich services to attract end users.

(1)Increasing number of potential FTTH users enable operators to reduce price per customer and make intentional deployment plan.

(2)Competitors such as electric affiliates and cable operators aim at the first mover to deploy FTTH who will grab a lion’s share of customers.

(3)Operators including NTT East and West increase their investment to FTTH under the recognition very difficult for rivals to recapture customers from the first mover.

(4)NTT East and West hope to accelerate FTTH deployment to shorten inefficient co-existing period of both PSTN and NGN.

Importance to deepen competition in DSL market for higher speed access

Investment to FTTH under competition


25

Transition of subscribers in broadband access services in Japan

•Broadband subscribers have rapidly increased recent years. (The total has exceeded 20.6M)•The world’s first optical access service for ordinary families was introduced in Japan in March, 2001.•DSL is still more subscribed than FTTH in total; however, FTTH shows faster increase in net subscription increase.

•Broadband subscribers have rapidly increased recent years. (The total has exceeded 20.6M)•The world’s first optical access service for ordinary families was introduced in Japan in March, 2001.•DSL is still more subscribed than FTTH in total; however, FTTH shows faster increase in net subscription increase.

The number of subscribersThe number of subscribers

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

Dec-00

J un-01

Dec-01

J un-02

Dec-02

J un-03

Dec-03

J un-04

Dec-04

J un-05

Dec-05

FTTH

DSL

CATV

0

500000

1000000

1500000

2000000

2500000

3000000

Dec- 00

J un- 01

Dec- 01

J un- 02

Dec- 02

J un- 03

Dec- 03

J un- 04

Dec- 04

J un- 05

Dec- 05

FTTHDSLCATV

The number of net increase for half yearThe number of net increase for half year


26

FTTH Service Market Shares

Single residences/businesses

(1.382 million subscribers)

Multiple residences (Condominium/Apartment

Type)(1.050 million subscribers)

As of Dec. 31, 2004

NTTEast/ West

77.8%

USEN1.8%

PowerUtilities19.2%

OtherCompanies

1.2%NTT

East/ West33.9%

USEN19.7%

PowerUtilities

8.3%

OtherCompanies

30.9%

Fiber-bit7.2%

Barriers may exist for competitors other than power utilities.Barriers may exist for competitors other than power utilities.

NTT East/West have lost majority.NTT East/West have lost majority.


27

Access charges were approved in August 2001 for 7 years from 2001 to 2007. [AC: \5,074 €35.73/month]

FTTH : Demand Stimulation by Forward-looking Cost Method

• This method uses average charges calculated with the predicted cost and demand for the next several years.

• The cost price and the access charge should balance out during the said period. • This method is especially desirable for NGN because it allows NTT East/West to collect full investm

ent in fibre. • At the same time, we can suppress the level of charges though the cost per line is very high becaus

e of the small demand at the beginning.

• This method uses average charges calculated with the predicted cost and demand for the next several years.

• The cost price and the access charge should balance out during the said period. • This method is especially desirable for NGN because it allows NTT East/West to collect full investm

ent in fibre. • At the same time, we can suppress the level of charges though the cost per line is very high becaus

e of the small demand at the beginning.

Fiber local loop access charge

Fiber local loop access charge


2001 2002 2003 2004 2005 2006 2007

Access fee \5,074

Balance

Cost per line

[Ref] 'The alternative, and more nuanced, policy which we have identified is to have a time varying schedule of access prices – more precisely for access prices to rise over time relative to incremental costs. This régime gives entrants benefits at the start of their operation, when they have replicated only a few of the incumbent’s assets, and an incentive progressively to extend their own infrastructure.'

(From ‘The Relationship between Access Pricing Regulation and Infrastructure Competition’ 　 (2001) by Professor Cave, Majumdar, Rood, Valletti and Vogelsang)

28

NTT East/West’s deployment of Fiber Local Loops

0%

100%

　１） The amount of NTT E/W’s investment in optical fiber has been increasing steadily even after FY 2001 when fiber local loops were unbundled.　２） In FY 2003 especially, the actual ratio of investment in fiber local loops was much higher than that based on the plan. 　３） Actual costs higher than forecast in FY2001 - FY2004. On the other hand, NTT released medium-term strategy including plan to provide optic fiber services to 30 million households by the end of FY2010.

　１） The amount of NTT E/W’s investment in optical fiber has been increasing steadily even after FY 2001 when fiber local loops were unbundled.　２） In FY 2003 especially, the actual ratio of investment in fiber local loops was much higher than that based on the plan. 　３） Actual costs higher than forecast in FY2001 - FY2004. On the other hand, NTT released medium-term strategy including plan to provide optic fiber services to 30 million households by the end of FY2010.

20%

40%

60%

80%

FY2000

200

400

600

800

1000

1200

(\bn)【 NTT’s investment in fiber local loops & total investment in equipment 】

FY2001 FY2002 FY2003 FY2004

（ Planned ）

ratio of fiber local loops

(result)

fiber local loops ： 164

ratio of fiber local loops

(planned)

total investment ：

766.2


775.4


796.9

34%

43%

21%

14%

35%32%

30%

19%

18%


1,097.7


696.6

FY2005


780

42%






36%


Subscriber optic fiber access charges and demand forecastsSubscriber optic fiber access charges and demand forecasts

Cost per w

ire (¥/month)

Num

ber of cables (x 1,000)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Optic fiber cables required for 30 million subscribers

● ●●

●●

Forecast (demand)

Actual (demand)

Forecast (cost per wire)

Current access charge ¥5,074

●

●

¥19,585

¥19, 050

¥17,193

¥13,791

¥19,421

¥13,841

¥9,827

¥6,986

¥4,514

¥3,226¥2,647518

783

1,193

1,921

3,228

4,592

5,494

352 406730

●

1,170

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

Actual (cost per wire)

Dotted lines indicate scenario for 30 million households by end FY2010

Subscriber optic fiber access charges and demand forecastsSubscriber optic fiber access charges and demand forecasts

Cost per w

ire (¥/month)

Num

ber of cables (x 1,000)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Optic fiber cables required for 30 million subscribers

● ●●

●●

Forecast (demand)

Actual (demand)

Forecast (cost per wire)

Current access charge ¥5,074

●

●

¥19,585

¥19, 050

¥17,193

¥13,791

¥19,421

¥13,841

¥9,827

¥6,986

¥4,514

¥3,226¥2,647518

783

1,193

1,921

3,228

4,592

5,494

352 406730

●

1,170

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

Actual (cost per wire)

Dotted lines indicate scenario for 30 million households by end FY2010

29

Open access regulation and sustainable investment to FTTx

1 Issues do not exist in unbundling itself, but its price level.

• Every operator might be required to make faithful negotiation on interconnection with others.

• Without unbundling products, Incumbents can not only transfer their existing market power on copper lines onto new FTTx, but also can get back competitors’ DSL customers depending on copper lines.

2 Price setting is more important to give network investment incentives.

• Incumbents to be allowed to include risk premium in the price.• Pricing to shorten transition period considering future demand

increase.

3 “Parasites” to Incumbents should not be allowed.• Service-based competition is different from “parasitism”.• Pricing is important again from the viewpoint of avoiding continuous

parasites.


30

The essence resides in the difficulty to replicate local loops (economic bottleneck) .

The difficulty is not always derived from the ‘high cost’ of deployment.

a. Construction cost is expensive. But maintenance of copper lines is more expensive compared with FTTx.

b. Optical fiber in itself is much cheaper than copper.c. Someday existing copper lines shall be replaced into an upgraded networ

k after depreciation in the case of Incumbents. Competitors should be encouraged by removing invisible barrier

s and inequalities and ensuring equivalence in construction.a. From the viewpoint of facility-based competition, it is more critical to ena

ble competitors to deploy their own FTTx on an equivalent basis in road digging, access to conduits, ducts, poles, etc.

b. Incumbents may be reluctant to open their property for competitors’ FTTx for many excuses and receive favorable treatment by electric companies, road administrators etc, through long-time relations.

c. Competition will also lead to the increase of incumbents’ investment.

The importance of “Equal treatment” in deploying local loops


2

3

1

31

IncumbentsTelephone Users

ADSL Users

IncumbentsTelephone Users

ADSL Users


　 The Necessity to focus on “Economic Bottleneck” (Facilities)

IncumbentsTriple Play UsersIncumbents

Triple Play Users

Incumbents Fiber LoopsIncumbents Fiber Loops


Triple Play Users

Case A: No obligation

Case B: Unbundling Obligation

Current Structure

*Reseller may survive as sales channels

Case C: Unbundling + Proper Pricing for Incentives +　　　　　 Equal Treatment on Construction

*Incumbents can easily transfer existing market power on copper lines onto fiber loops ．


Triple Play Users

CompetitorsADSL Users

CompetitorsADSL Users

Incumbents Copper LoopsIncumbents

Copper Loops

CompetitorsCompetitors

Incumbents Fiber LoopsIncumbents Fiber Loops

CompetitorsCompetitors

Incumbents

Incumbents

Competitors

Fiber Loops

- Rough Image -

32

End UsersEnd Users

Recent Regulatory Trend to Focus on “Economic Bottleneck”


BT WholesaleBT WholesaleBT WholesaleBT Wholesale

BTSBTSBTSBTS BTWSBTWSBTWSBTWS

BT RetailBT RetailBT RetailBT Retail

Access Service DivisionAccess Service Division

(For competitions and BT’s other (For competitions and BT’s other Division)Division)

Access Service DivisionAccess Service Division

(For competitions and BT’s other (For competitions and BT’s other Division)Division)

Competitors Retail Unit

Network Unit

Wholesale Unit

Bottleneck facilities user unit

End UsersEnd Users End UsersEnd Users

Competitors

Equivalent condition

Bottleneck facilities management unit




TelstraBTBT NTT East/West

Competitors

33

4. NGN deployment plan and Triple play service

34

Outline of “NTT Group’s Mid-Term Management Strategy”

(1) Establishment of Next-Generation Networks (full IP networks from terminal equipments to network facilities)

(2) Establishment of NGNs for the common basis for provision of services, including FMC (Fixed-Mobile Convergence).

(3) 30 million customers (out of 60 million customers) will shift to fiber access and NGNs in 2010.

(4) Increase revenues from next-generation networks solutions and non-traffic businesses to 500 billion yen by 2010.

(5) Maintain the same equipment investment level as before, a cumulative total of 5 trillion yen.

(6) Reduce operating costs for fixed communications businesses by 800 billion yen by 2010.

(1) Establishment of Next-Generation Networks (full IP networks from terminal equipments to network facilities)

(2) Establishment of NGNs for the common basis for provision of services, including FMC (Fixed-Mobile Convergence).

(3) 30 million customers (out of 60 million customers) will shift to fiber access and NGNs in 2010.

(4) Increase revenues from next-generation networks solutions and non-traffic businesses to 500 billion yen by 2010.

(5) Maintain the same equipment investment level as before, a cumulative total of 5 trillion yen.

(6) Reduce operating costs for fixed communications businesses by 800 billion yen by 2010.

“NTT Group’s Mid-Term Management Strategy” （ November, 2004)“NTT Group’s Mid-Term Management Strategy” （ November, 2004)

“Promotion of NTT Groups’ Mid-Term Management Strategy” （ November, 2005)“Promotion of NTT Groups’ Mid-Term Management Strategy” （ November, 2005)(1) Establishment of NGNs with optical/wireless access networks which enable the provision of seamless IP-based s

ervices between inner/inter-prefectures, west and east, fixed and wireless.

(2) NTT East, NTT West and NTT Docomo will establish NGNs.

(3) The field trials of NGNs will start in the latter half of 2006, and the provision of NGNs based services will start in the latter half of 2007.

(4) Integration of upper layer services, such as ISP and portal service, into NTT Communications.

(5) To strengthen fixed-mobile total solution, NTT Communications will deal with business customers unitedly.

(6) Expansion of contents distribution business responding to the convergence of broadcasting and telecommunication.

(7) Provision of “One-stop” service for application and billing through the cooperation of group companies.

(1) Establishment of NGNs with optical/wireless access networks which enable the provision of seamless IP-based services between inner/inter-prefectures, west and east, fixed and wireless.

(2) NTT East, NTT West and NTT Docomo will establish NGNs.

(3) The field trials of NGNs will start in the latter half of 2006, and the provision of NGNs based services will start in the latter half of 2007.

(4) Integration of upper layer services, such as ISP and portal service, into NTT Communications.

(5) To strengthen fixed-mobile total solution, NTT Communications will deal with business customers unitedly.

(6) Expansion of contents distribution business responding to the convergence of broadcasting and telecommunication.

(7) Provision of “One-stop” service for application and billing through the cooperation of group companies.All copyrights reserved (MIC)

All Copyrights reserved (MIC)

35

Outline of KDDI's IP Migration of PSTN Network (released September 15, 2004)

○ 　 KDDI intends to finish fixed IP migration ahead of others in the world and to provide inexpensive services using IP technology even to customers who do not subscribe to broadband.○ 　 Initiating fixed IP migration in FY2005 and finishing substitution of soft- switches by the end of FY2007○ 　 Establishment of an environment where introduction of new IP-based services is possible with ease through IP migration

○ 　 KDDI intends to finish fixed IP migration ahead of others in the world and to provide inexpensive services using IP technology even to customers who do not subscribe to broadband.○ 　 Initiating fixed IP migration in FY2005 and finishing substitution of soft- switches by the end of FY2007○ 　 Establishment of an environment where introduction of new IP-based services is possible with ease through IP migration

○ 　 KDDI launched “KDDI Hikari Plus” which provides triple play service, including Video, high-speed Internet and high-quality IP phone, by optical fiber in October of 2003.○ 　 KDDI also launched “KDDI Metal Plus” which connect subscriber phone line (Dry copper) directly to KDDI’s IP network (without using NTT’s Switch) in February of 2005

○ 　 KDDI launched “KDDI Hikari Plus” which provides triple play service, including Video, high-speed Internet and high-quality IP phone, by optical fiber in October of 2003.○ 　 KDDI also launched “KDDI Metal Plus” which connect subscriber phone line (Dry copper) directly to KDDI’s IP network (without using NTT’s Switch) in February of 2005

１　 Past Efforts (Introduction of New Services)１　 Past Efforts (Introduction of New Services)

２　 Schedule for IP Migration of PSTN Network２　 Schedule for IP Migration of PSTN Network

All copyrights reserved by MICAll copyrights reserved by MICAll copyrights reserved (MIC)

36

1. “Broadband” inevitably to be interested in upper layers seeking new demand

2. IP-TV: a typical example likely to hold appeal to prospective customers

3. Resolution of anxieties from new interested parties such as broadcasters and rights holders

(1)Rebuilding of broadcasters’ business model(2)Threat of piracy(3)Revenue Distribution Mechanism to content

holders(4)New business model for platform/aggregation layer

1. “Broadband” inevitably to be interested in upper layers seeking new demand

2. IP-TV: a typical example likely to hold appeal to prospective customers

3. Resolution of anxieties from new interested parties such as broadcasters and rights holders

(1)Rebuilding of broadcasters’ business model(2)Threat of piracy(3)Revenue Distribution Mechanism to content

holders(4)New business model for platform/aggregation layer


“Demand Stimulation” looking at upper layers such as platform and Content/Application (ex. IP-TV)

37

■ Competition in the domestic long-distance communications market originally revolved around NTT, KDDI and Japan Telecom. With the advent of broadband services, the main players are now NTT, KDDI, SoftBank, the power companies and CATV. Increasing competition is also expected in the mobile telephone market as new entrants emerge.

■ Competition in the domestic long-distance communications market originally revolved around NTT, KDDI and Japan Telecom. With the advent of broadband services, the main players are now NTT, KDDI, SoftBank, the power companies and CATV. Increasing competition is also expected in the mobile telephone market as new entrants emerge.

GroupGroup Own subscriber lines

Own subscriber lines

Long distance, international and corporate

communication

Long distance, international and corporate

communication

Broadcasting and video distribution services

Broadcasting and video distribution services

NTTNTT

KDDIKDDI

SoftBankSoftBank

NTT East/West

NTT East/West NTT comNTT com

TEPCOTEPCO

VodafoneVodafone

USENUSEN

Japan TelecomJapan Telecom

JCN Group＋

TEPCO

JCN Group＋

TEPCO

Yuzu Communications Yuzu Communications MediaMedia Gyao Show timeGyao Show time

casTYcasTY

Mobile telephonyMobile telephony

BBTVTV BankBBTV

TV Bank

Broadband services

Broadband services

USENUSEN

TEPCOTEPCO

SoftBank BBSoftBank BB

NTT East/WestNTT com

NTT East/WestNTT com

eAccesseAccess eAccesseAccess

KDDIKDDI

In future:

In future:

KDDIKDDI Hikari Plus TVHikari Plus TV KDDIKDDI

WillcomWillcom

Competition in communication markets

Plala Networks４ｔｈＭＥＤＩＡ

Plala Networks４ｔｈＭＥＤＩＡ

K-Opti.comK-Opti.com K-Opti.comK-Opti.com K-Opti.comK-Opti.com K-CATK-CAT

J:COMJ:COM J:COMJ:COM J:COMJ:COM J:COMJ:COM

WillcomWillcom WillcomWillcom

NTT DoCoMoNTT DoCoMo

VodafoneVodafone

Produced by MIC from information available on websites


38

5. Other Issues

39

　　　　　　　　　　　　　　　　　　

○ 　 ITU started standardizing NGN which began replacing existing PSTN in 2003.

　　⇒ The architecture (1st version) will be determined in early 2006. ○ 　 In Japan, the Information and Communications Council is considering

this matter in cooperation with the Telecommunication Technology Committee.

○ 　 ITU started standardizing NGN which began replacing existing PSTN in 2003.

　　⇒ The architecture (1st version) will be determined in early 2006. ○ 　 In Japan, the Information and Communications Council is considering

this matter in cooperation with the Telecommunication Technology Committee.

NGN Standardization Trend at the global levelNGN Standardization Trend at the global level

Network infrastructure

(transport-related technologies)

Session control

Edge node

Core node

Application, server etc.Application, server etc.

OpticalaccessxDSL

Core network

Access network

Authentication,security

Management ofcharge fee

Fixed line, PC, consumer electronics, mobile phone

Platform/service infrastructure(service related functions)

Application function

Otheraccesses

WirelessLAN

Distribution of contents

Videophone ････

Global Standardization by ITU

Domestic Standardization by TTC etc.

[Main characteristics of NGN]　　　 Independency of service-related functions from underlying transport-related technologies• transport-related technologies designed basically based on IP protocol•service-related functions do not rely on network infrastructure and provide service-related functions including the basic and added functions of telephony, video phone and distribution of contents⇒enable development and deployment of equipment with high flexibility, approach to the latest element technologies and diverse e of business

[Main characteristics of NGN]　　　 Independency of service-related functions from underlying transport-related technologies• transport-related technologies designed basically based on IP protocol•service-related functions do not rely on network infrastructure and provide service-related functions including the basic and added functions of telephony, video phone and distribution of contents⇒enable development and deployment of equipment with high flexibility, approach to the latest element technologies and diverse e of business


40

Points for Discussion Efforts of the MIC

[3. Billing fraud]

　 Prepaid-type mobile phones, etc., which have a high degree of anonymity, are used for crimes such as "Ore ore sagi" ("It's me, it's me!"-fraud; fraudulent crank calls where the caller pretends to be a member of the family needing help), or billing fraud　 <Related laws: Law to Prevent the Illegal Use of Mobile Phones, etc.>

Establishment of the "Law to Prevent the Illegal Use of Mobile Phones“ (Partial enforcement in May 2005, full enforcement planned for April 2006) -> obligation to confirm identity, etc. when signing a contract for or transferring ownership a mobile phone Confirmation and registration of all contract owners for prepaid-type mobile phones Suspension of use of confirmation is impossible (measure in the terms of contract, until March 2006)

　 Damage from "phishing" - the fraudulent acquisition of personal information over the Internet through emails disguised as coming from banks or other companies - has been seen also in Japan　 <Related laws: Criminal law (fraud charges), Unauthorized Computer Access Law, etc.>

Regular meetings of a "Liaison Group for the Promotion of Phishing Countermeasures“ (January 2005) Aim to share information among industry associations, etc., and study into effective countermeasures such as the introduction of sender domain authentication technology (Published interim report in August 2005)

[2. Phishing]

[4. Illegal and harmful content on the Internet]

　 Illegal or harmful information is posted on electronic bulletin boards, etc. on the Internet　 <Related laws: Provider Liability Limitation Law, etc.>

Enforcement of the "Provider Liability Limitation Law" and related guidelines (May 2002 - ) Regulations for standards on exemptions from liability for the deletion of information by providers, etc. Promoting "R&D for mobile filtering technology" (fiscal 2004 - 2005) Support for the establishment of industry guidelines related to the response to suicide announcements （ October 2005 ） Organization of a "Study Group on the Response to Illegal and Harmful Information on the Internet" (August 2005 - , published interim report in January 2006)

[1. Spam mails]

　 Advertisement emails are sent to mobile phones or computers one-sidedly and in large volumes 　 <Related laws: Law on Specified Electronic Mail, etc.>

Amendment of the Law on Specified Electronic Mail (enforced in November 2005) Establishment of new rules for criminal punishment for faking information on the sender, etc. “Spam Blocking Support Project” under collaboration of the government and the private sector (February 2005 - ) Promote the suspension of lines, etc. by telecommunications carriers Legal organization of the exchange of spam sender information (black lists) 　 Amendment of the guidelines for the protection of personal information (October 2005) Promotion of international cooperation (Agreed on memorandum of understanding with Asian countries in April 2005)

　 Personal information is frequently leaking out　 <Related laws: Law Concerning the Protection of Personal Information, etc.>

Wide-ranging amendment of the guidelines for the protection of personal information on the basis of the discussions in the "Study Group Concerning Information Privacy in the Telecommunications Business Field" (chaired by Prof. HORIBE Masao, Chuo University) (August 2004) Implementation of strict guidance, etc. for businesses leaking personal information on the basis of the Law Concerning the Protection of Personal Information and the amended guidelines

[5. Protection of personal information]

Current Status of Efforts Related to the Improper Use of Telecommunications Services


41

6. Conclusion

42

New Policies in Ubiquitous Network Society – Outline-

Transition of Competition StructureTransition of Competition Structure

Fixed Telephony

Diffusion of Cellular Phone and IP Telephony

Fixed Telephony

Diffusion of Cellular Phone and IP Telephony

Separately Providing Fixed/Mobile Services

Fixed and Mobile Convergence (FMC)

Separately Providing Fixed/Mobile Services

Fixed and Mobile Convergence (FMC)

Reviewing Dominant

Regulations

Reviewing Dominant

Regulations

Redefinition of Bottlenecks

Redefinition of Bottlenecks

Ensuring Interconnectivity

and Interoperability

Ensuring Interconnectivity

and Interoperability

Consumer ProtectionConsumer Protection

Continuing Competition Dynamism

Continuing Competition Dynamism

Stability and Reliability of Networks

Stability and Reliability of Networks

Ensuring Investment Incentives

Ensuring Investment Incentives

Ensuring Universal Service

Ensuring Universal Service Elimination of Digital DivideElimination of Digital Divide Anti-SpamAnti-Spam

Dependence on Incumbents’ Networks

BypassingIncumbents’ Networks

Dependence on Incumbents’ Networks

BypassingIncumbents’ Networks


Reconstruction of Competition PolicyReconstruction of Competition PolicyReconstruction of Competition PolicyReconstruction of Competition Policy

43

New Challenges with NGN

1. Cross-Layered and Comprehensive Approaches　 - Everything on IP network and layer-based activities -(1) Modulization from Network layer to Application layer(2) Trend of Convergence: Vertical and horizontal integration or alliance

for FMC, Communications and Broadcasting Convergence, and triple play

(3) To encourage users’ convenience through convergence(4) Necessity to watch all layers and comprehensive policy over layers

2. Emerging concerns about competition policy(1) Monitoring the abuse of market power over layers/vertical integration

① To ensure fair competition among wire and wireless operators② Securing of impartial access to bottleneck facilities for rival

competitors③ Provision of opportunities for equal access to Content/Application

for end users(2) To avoid anti-competitive effects of NGN deployment by Incumbents

① Concerns to transfer Incumbents’ existing market power to NGN② Necessity of open cooperation in construction of NGN between

Incumbents and Competitors

1. Cross-Layered and Comprehensive Approaches　 - Everything on IP network and layer-based activities -(1) Modulization from Network layer to Application layer(2) Trend of Convergence: Vertical and horizontal integration or alliance

for FMC, Communications and Broadcasting Convergence, and triple play

(3) To encourage users’ convenience through convergence(4) Necessity to watch all layers and comprehensive policy over layers

2. Emerging concerns about competition policy(1) Monitoring the abuse of market power over layers/vertical integration

① To ensure fair competition among wire and wireless operators② Securing of impartial access to bottleneck facilities for rival

competitors③ Provision of opportunities for equal access to Content/Application

for end users(2) To avoid anti-competitive effects of NGN deployment by Incumbents

① Concerns to transfer Incumbents’ existing market power to NGN② Necessity of open cooperation in construction of NGN between

Incumbents and Competitors


44

New Challenges with NGN (Cont.)

3. Incentives for NGN construction and to shorten inefficient transition period(1) Pricing policy for further investment and to avoid lasting parasites(2) Encouraging Competitive Deployment of NGN(3) Shortening Inefficient concomitance of PSTN and NGN

4. Interconnectivity and Interoperability Standardization is under discussion.

5. Stability, Reliance, Safety and Security Anti-vulnerability, QoS, cyber attack, virus, etc. Upper layers may generate social problems such as privacy, SPAM, Phishi

ng and pornography.6. Universal ‘Access’ instead of scope of ‘services’

‘Physical access’ in rural areas to convey every service

3. Incentives for NGN construction and to shorten inefficient transition period(1) Pricing policy for further investment and to avoid lasting parasites(2) Encouraging Competitive Deployment of NGN(3) Shortening Inefficient concomitance of PSTN and NGN

4. Interconnectivity and Interoperability Standardization is under discussion.

5. Stability, Reliance, Safety and Security Anti-vulnerability, QoS, cyber attack, virus, etc. Upper layers may generate social problems such as privacy, SPAM, Phishi

ng and pornography.6. Universal ‘Access’ instead of scope of ‘services’

‘Physical access’ in rural areas to convey every service


45

[Ref] Study for Competition Rules to Address Progress in the Move to IP

MIC set up ”Study Group on a Framework for Competition Rules to Address Progress in the Move to IP” (chaired by Professor HAYASHI Toshihiko, the University of the Air and the Director of the Stanford Japan Center) (from Oct. 2005 to Sep. 2006). 　　　　　　　　　　　　　　

MIC set up ”Study Group on a Framework for Competition Rules to Address Progress in the Move to IP” (chaired by Professor HAYASHI Toshihiko, the University of the Air and the Director of the Stanford Japan Center) (from Oct. 2005 to Sep. 2006). 　　　　　　　　　　　　　　

1. Outline 　　

Basic principles concerning competition policy to address the progress in the move to IP • The migration process relating to an IP-based network deployment • The relationship between service-based competition and facility-based competition• A framework for ensuring “competitive neutrality” and “technological neutrality”• A framework for ensuring fair competition that addresses vertically-integrated business models

Framework for future interconnection policy • A framework of designated telecommunications facilities• A framework for calculating interconnection charges• Responding to the diversification of interconnection forms

Framework for future tariff policy • Responding to the diversification of business models

For the advent of full-scale IP age, lay out basic principles on a framework for competition rules applicableclarify specific directions concerning interconnection and tariff policies and a roadmap for future considerations

For the advent of full-scale IP age, lay out basic principles on a framework for competition rules applicableclarify specific directions concerning interconnection and tariff policies and a roadmap for future considerations

Promote sophistication and diversification of business models in the broadband market by enhancing the foreseeability of competition policy

Promote sophistication and diversification of business models in the broadband market by enhancing the foreseeability of competition policy

2. Major topics for consideration (Draft) 　　


46

Thank you!

Keiichiro [email protected]

Documents

0 Toward Next Generation Network -From PSTN to new IP-based network- SEKI Keiichiro Director, International Economic Affairs Ministry of Internal Affairs