I. Introduction of new asymmetric regulations

In order to promote further competition in the Telecommunications Business Field and eliminate anti-competitive behavior of major telecommunications carriers which are assumed to have market power in a more transparent manner, fair competition rules shall be strengthened. Anti-competitive safeguards shall be applied to the following two categories of telecommunications carriers: 
1) A Type I telecommunications carrier that possesses the Category I-designated telecommunications facilities (regional fixed system) 
2) A Type I telecommunications carrier that possesses the Category II-designated telecommunications facilities (mobile system) and that is designated by the Minister of Public Management, Home Affairs, Posts and Telecommunications on account of the carrier's market shares, the movement of its shares and other aspects. Carriers falling under the preceding items 1) and 2) above, by clarifying three sets of prohibited behaviors, namely, the abuse or provision of proprietary information obtained from competitors through interconnection for other purposes; unduly favorable or unfavorable treatment of specific telecommunications carriers; and, undue compulsion or intervention upon other telecommunications carriers, manufacturers/suppliers of telecommunication equipment or content providers, effective measures (order to suspend/change behavior) enabling quick correction of violation thereof will be introduced under the revised laws. Limited to telecommunications carriers of item 1), the revised laws set legal "firewall" restrictions (prohibition of concurrency of board members; ensuring equal treatment upon use of buildings/facilities and upon provision of information necessary for interconnection; and ensuring equal treatment upon being entrusted with various services) on telecommunications carriers having special relations therewith (designated among parent companies, subsidiary companies, and fellow subsidiaries by the Minister of Public Management, Home Affairs, Posts and Telecommunications). Effective measures (non-penal fines or order of suspension/change of behavior) for rapidly correcting violation thereof and ordering carriers falling under item 1) to annually report compliance thereof will be established under the revised laws. Formulating and changing tariffs, interconnection tariffs and facilities sharing agreements of telecommunications carriers falling under item 1) shall remain under the existing approval system, but formulating and changing tariffs, interconnection agreements and facilities sharing agreements among carriers except Item 1) (current regulations remain) shall be relaxed from the approval process to the notification process. A Type I telecommunications carrier that possesses the Category II-designated telecommunications facilities (mobile system) shall be obliged to establish, notify and disclose their interconnection tariffs. 

1. In order to improve effective use of fiber-optic networks of local governments, public utilities and other entities and improve network flexibility of telecommunications carriers, regulatory frameworks which enable flexible provision of wholesale telecommunications services through individual contracts among businesses shall be introduced. 
2. All wholesale contracts shall suffice under the notification system. 

1. A new administrative system for dispute settlement shall be introduced to ensure quick and effective dispute resolution among telecommunications carriers. 
2. Outline of the Telecommunications Business Dispute-settlement Commission 

1) Dispute settlement organization independent of the section in charge of permissions and authorizations shall be established based upon Article 8 of the National Government Organization Law.
2) The commission shall comprise five members (a maximum of 2 of them shall be full-time members) appointed by the Minister of Public Management, Home Affairs, Posts and Telecommunications with the consent of the House of Councilors and the Houses of Representatives.
3) For conducting secretarial work, an independent secretariat shall be set up under direct control of the commission.
3. As choices of dispute settlement procedures for resolving various degrees of conflict, new procedures (mediation/reconciliation) shall be established in addition to arbitration.
4. The commission may recommend that the Minister of Public Management, Home Affairs, Posts and Telecommunications take necessary action including improving competition rules in the telecommunications business field. 

The measures to be taken include establishing dispute settlement procedures for ROW conducted by the Telecommunications Business Dispute-settlement Commission and establishing coordination procedures between MPHPT and agencies involved in the use of public land such as roads, leading to smooth and quick use of utility poles, ducts, conduits and the like by telecommunications carriers.

1. For ensuring the provision of universal service (prescribed by the applicable ordinance of the Ministry of Public Management, Home Affairs, Posts and Telecommunications), a new system (Universal Service Fund) shall be introduced where telecommunications carriers are required to shoulder the fair cost burden.
2. Designation of Eligible Telecommunications Carriers (ETCs) 

1) Under the new system, telecommunications carriers providing universal service may be designated as ETCs followed by application of those carriers. 
2) ETCs may receive universal service supports as a part of financial compensation for the cost of universal service provision. 
3) In order to provide for the universal service support, telecommunications carriers interconnecting with ETCs' facilities for providing universal service shall be required to shoulder reasonable contributions for the provision of universal service.
3. Designation of Universal Service Support Institution

1) A non-profit organization shall be designated as Universal Service Support Institution, which is envisaged to conduct activities such as providing universal service support to ETCs as well as collecting contributions from other telecommunications carriers.
2) Providing universal service support and collecting contributions by the Universal Service Support Institution requires authorization from the Minister of Public Management, Home Affairs, Posts and Telecommunications. 

1. NTT East and NTT West shall be allowed to conduct new telecommunications services (so-called "utilization service") utilizing equipment, technology and/or personnel the companies possess for conducting regional telecommunications services by obtaining authorization from the Minister of Public Management, Home Affairs, Posts and Telecommunications under two conditions mentioned below. 
2. Clearly stipulated as two conditions for the authorization are: i) no possibility of existence of obstructions for ensuring smooth operations of the regional companies' existing services and ii) no possibility of existence of obstructions for ensuring fair competition of telecommunication business. 

1. Foreign capital ownership restrictions on NTT holding company shall be relaxed from less than 20% to less than 1/3. 
2. Special measure shall be introduced for allowing the NTT holding company to issue new shares by notification until the number of the company's shares reaches a certain level specified in the applicable ministerial ordinance of MPHPT for a period of time. 
3. The authorization system for the NTT holding company for sales of NTT Communications Corp. shares held by the holding company shall be abolished. 

1. Along with the series of regulatory reforms above, the Telecommunications Business Law shall add "promotion of fair competition in the field of telecommunications business" in its purposes. 
2. In the supplementary provisions of the amended law, comprehensive review of regulatory frameworks concerning telecommunications shall be provided, taking into account the progress of Internet technology, convergence of communications and broadcasting, the situation of the enforcement of the revised laws and other matters. 

The Law Concerning Electronic Signatures and Certification Services (hereinafter referred to as the "Electronic Signature Law") came into force on April 1, 2001. 
With this, an electronic document and the like with electronic signature, meeting certain security level, is presumed to be authentic, that is, one that has been made based upon the will of the principal. 
And, upon the enforcement of the Electronic Signature Law, a legal scheme under which certification services meeting certain qualification requirements may obtain accreditation from the Minister of Public Management, Home Affairs, and Posts and Telecommunications (MPHPT), the Minister of Economy, Trade and Industry (METI) and the Minister of Justice (MOJ) is introduced. MPHPT, METI and MOJ started reception of application of the accreditation from April 2, 2001. 
Upon the introduction of the accreditation system, MPHPT, METI and MOJ promulgated the "Rules for Enforcement of the Law Concerning Electronic Signatures and Certification Services." At the same time, the three ministries designated an investigating organization that conduct on-site investigation business on facilities, equipment, etc. to be used for certification services which applicants will offer after accreditation. 
The rules were introduced based on opinions gathered in response to the "invitation of public comments concerning enforcement of the Law Concerning Electronic Signatures and Certification Services" conducted from November 20, 2000 to December 18, 2000. (See reference.) 

Outline of the Electronic Signature Law

1. Presumption of the authenticity of an electromagnetic record 
An electromagnetic record (electronic document, etc.) is presumed to be authentic if certain electronic signature is performed by the principal. 
-Creating a legal basis on which an electronic signature has the equivalent authenticity with hand-written signatures or seals 
2. Introduction of a voluntary accreditation system concerning certification services
Regarding certification services (service to verify an electronic signature has been performed by the principal), those who meet certain qualification requirements (such as an identification method) are allowed to obtain national accreditation and to display accreditation showing the fact that the certification services are accredited. Furthermore, requirements for the accreditation and obligations of those who obtain said accreditation are provided.
-Providing criteria for consumers to judge reliability on identification, etc., on the certification services 

On designation of designated investigating organization

1. On designated investigating organization 
When ministers concerned (MPHPT, METI and MOJ) conduct accreditation of certification services based upon the Electronic Signature Law, they are to conduct on-site investigation at offices of the certification business applying for accreditation as to whether equipment, facilities, etc. of the business meets qualification requirements.
The designated investigating organization is an organization conducting said investigation services in lieu of the ministers concerned by obtaining designation from the ministers concerned. 
2. Designation of the designated investigating organization 
The ministers of MPHPT, METI and MOJ designated the following corporation as a designated investigating organization: 
1) Name: Japan Quality Assurance Organization
2) Office address: Akasaka 1-9-15, Minato-City, Tokyo 
3) Date of commencing investigation services: April 2, 2001 

On February 16, 2001, MPHPT required of the Telecommunications Council about applications filed on February 15, 2001 for permission and authorization concerning "L-mode"* services by Nippon Telegraph and Telephone East Corp. (NTT East) and Nippon Telegraph and Telephone West Corp. (NTT West). MPHPT received a report from the council on March 16 in response to the inquiry as follows: 

Regarding applications from NTT East and NTT West for permission or authorization of i) changing the outline of their telecommunications facilities; ii) setting forth tariffs and iii) changing interconnection agreements for providing L-mode services, if ensured that virtual providers of interprefectural communications services are not NTT East and NTT West, through measures ensuring that i) carriers setting up gateways are carriers other than NTT East and NTT West or ii) interprefectural communications functions of gateways are unbundled, the council thinks those applications may be permitted or authorized. 
Aside from these, if measures for making L-mode service areas limited within prefectural boundaries where said gateways are installed, the applications may also be permitted or authorized. 
Upon granting permission or authorization, from viewpoints of ensuring user convenience and fair competition, the council demands following issues to be ensured by NTT East and NTT West.

1. Open procedures for obtaining access point numbers (on selectivity of access points)

1) At L-mode download centers, measures should be taken so that other competitive carriers can quickly obtain access point numbers for L-mode terminals set for providing browser-phone service, on an equal footing basis, as the access point numbers of NTT East and NTT West, upon request from the competitive carriers.
2) In relevance to the above 1),
a) Technical conditions necessary for competitive carriers to establish access points accessible from L-mode terminals and to provide services equivalent with L-mode services of NTT East and NTT West using L-mode terminals should be disclosed. 
b) In the case above, in order to make L-mode terminals as common platforms, a study should be carried out so that no terminals, excluding terminals already on the manufacturing process, display pages specified to L-mode or L-menu at the opening page before entering L-menu content. 

2. Opening access points (on interconnectivity of access points)

Regarding accessibility from access points of NTT East and NTT West to gateways established by other competitive carriers, a study should be carried out on request from the competitive carriers. 

3. Opening gateways (display method of "menu of choice")

It should be enabled as soon as possible to select menu pages posted by other competitive carriers on the second or third page upon request from the competitive carriers. In case this measure on the second page is taken, consideration should be taken that pages posted on the menu selection display by NTT East and NTT West and those by other competitive carriers are treated on a fair basis. 

4. Opening concerning Internet providers (on interconnectivity and selectivity)

When requested by other carriers for interconnection, NTT East and NTT West should accept it.

5. At selection of online content providers (OSPs), other businesses' opinions and requests should be reflected statement of income and expenditure examination criteria, thus fairness and transparency will be ensured. In addition, the examination should be carried out by a third party organization, etc.

6. The status of use of L-mode services relevant to this permission (authorization) should be reported quarterly, and segment information on profit/loss statement should be reported after each business year. No discount services combining L-mode services and other services should be offered. 

7. Accounts of L-mode services and of voice telephony services should be separated. Based on business performance and user trends after the start of L-mode services, deliberations should be made on L-mode services, and, if necessary, review should be made thereon.

L-mode:  A simple, convenient and inexpensive Internet service for people with subscriber telephone or INS-Net contracts.  It allows them to perform information searches and e-mail of mainly text and simple image data using their home telephones and facsimile machines.

On March 28, 2001, MPHPT inquired of the Telecommunications Council (Chair: Yoshihisa Akiyama, Chairman of Kansai Electric Power Co., Inc.) about "Method of Evaluation for R&D on IT."
Reasons for the inquiry is as follows:

1. Reasons for the inquiry 

Technological innovations in the info-communications field is a basis of development of an advanced information and telecommunications network society (IT society) as well as strengthens international competitiveness of Japanese industries. In this context, an active national commitment to promote research and development (R&D) is required. Upon promotion of R&D, in order to utilize limited R&D resources effectively, it is vital to adequately evaluate R&D at the beginning, midway and after completion and to reflect the results on improvement of R&D quality and allocation of resources.
To date, MPHPT (former MPT) has actively conducted R&D evaluation, based on the "R&D Master Plan for Info-Communications Technology" (Report of April 1997 by the Telecommunications Technology Council) and the "National Guideline on the Method of Evaluation for Government R&D" (Decision by the Prime Minister in August 1997).
Meanwhile, in the "Science and Technology Basic Plan" that starts in FY 2001, for realizing a competitive research environment and effective and efficient resource allocation, the need to revise the National Guideline was pointed out. Thus, deliberations for revising the National Guideline have started in the Council for Science and Technology Policy, Cabinet Office. From now on, it will be necessary to create an evaluation method in line with i) deliberations on revision of the National Guideline in the Council for Science and Technology Policy and ii) the policy evaluation scheme which starts from FY 2001.
From these reasons, MPHPT asked for deliberations on methods of evaluation for R&D on IT.

2. Items inquired

Items concerning IT for deliberations are as follows:

• Evaluation standard/method of R&D themes, institutions and scheme
• Ensuring resources (human resources for evaluation, supporting systems) necessary for evaluation
• Desirable evaluation systems
• Other issues contributing to effective evaluation 

On March 21, 2001, MPHPT has received a report on partial revision of the Ordinance for Regulating Radio Equipment regarding advancement of 800MHz band code division multiple access (CDMA) cellular telephone systems from the Radio Regulatory Council (Chair: Professor Shigeo Tsujii, Faculty of Science and Engineering, and Chair of the Research and Development Initiative, Chuo University). The report says that it is adequate to revise the Ordinance as inquired.
CDMA cellular telephone systems using 800MHz band has been expanding subscriptions since its start in 1998. The number of subscriptions reached 7.83 million at the end of February 2001. Along with penetration of e-mail and Internet access services, the number of subscriptions as well as its communications traffic are to increase from now on. Accordingly, expectation is high for measures to meet various consumer demands such as those for improvement in subscriber accommodation capacity and for advancement of high-speed communications.
Under such circumstances, MPHPT inquired of the Telecommunications Technology Council (TTC) about "Technical Conditions for CDMA Cellular Telephone Systems Using 800MHz Band with Aims of Enhancement and Efficient Frequency Use" for the purpose of promoting improvement of CDMA cellular telephone systems using 800MHz band. In October 2000, MPT received a report in response to the inquiry from the Telecommunications Technology Council.
Based on the TTC report, on January 31, 2001, MPHPT inquired of the Radio Regulatory Council about ministerial ordinances to partially revise the Ordinance for Regulating Radio Equipment for adjusting relevant rules concerning technical conditions for radio equipment.
Also, MPHPT invited public comments from January 31 through February 28, 2001 on the ministerial ordinances by posting on the MPHPT website, etc.; however, no comments have been received.
On March 21, 2001, the Radio Regulatory Council (RRC) reported on the ministerial ordinances that it was adequate to revise those ordinances, as in the inquiry. Based on the RRC report, relevant ministerial ordinances will be amended without delay. 
The ministerial ordinances are to introduce CDMA 1X systems, which was developed for application to IMT-2000, to 800-MHz band cellular telephone systems. Through the amendments, the following improvements in efficient use of frequency resources and advancement of systems will be promoted:

1. Improvement in efficient use of frequencies (number of subscriber accommodation capacity will be 1.4 times to 2.4 times current capacity) 
2. Improvement in wireless transmission speed (data communications speed 64kbps --> 144kbps) 

On March 28, 2001, MPHPT inquired of the Telecommunications Council (Chair: Mr. Yoshihisa Akiyama) about "Technical conditions necessary for advancement of wireless system using 2.4GHz band."

Background of the inquiry

1. The 2.4GHz frequency band is allocated for low-power wireless facilities such as low-power data transmission system (wireless LAN) or mobile terminal identification systems as well as for various devices for industry, science and medicine (ISM) such as microwave ovens. 
2. At present, as regards low-power data transmission systems, along with the expansion of demands for wireless Internet access, development and studies on large-capacity data transmission technology, etc. are being carried out. Also, on mobile terminal identification systems, a study is being conducted on establishing a new method, which is superior in interference resistance, as a global standard. Under such circumstances, there is high expectation from industries for advancement in low-power transmission systems and mobile terminal identification systems. 
3. To this end, it is essential to study technical conditions allowing advancement of low-power transmission systems and radio stations of mobile terminal identification systems, in consideration of frequency sharing conditions with other wireless systems using the same frequency bands. 

Based on the conditions above, MPHPT inquired of the Telecommunications Council to deliberate on technical conditions for wireless facilities and equipment, etc. for the advancement of wireless systems using 2.4GHz band.
Regarding results of the deliberation, findings will be reported around September 2001, and MPHPT will make relevant ministerial ordinances, etc., paying due respect to the report. 

On March 28, 2001, MPHPT received a report from the Telecommunications Council on the "Guideline for Use of Utility Poles, Ducts, Conduits, etc. in the Telecommunications Field" (in response to the minister's inquiry of January 17, 2001).
The "Guideline for Use of Utility Poles, Ducts, Conduits, etc. in the Telecommunications Field," based upon the report, has been in effect since April 1, 2001. 

On March 21, 2001, MPHPT inquired of the Radio Regulatory Council (Chair: Professor Shigeo Tsujii, Faculty of Science and Engineering, and Chair of the Research and Development Initiative, Chuo University) about a draft ministerial ordinance to amend the Ordinance for Regulating Radio Equipment and the Ordinance Concerning Technical Regulations Conformity Certification of Specified Radio Equipment for introducing the Radio-radiation Protection Regulation, which will cover cellular phone devices intended for use in close proximity to the side of the head.

1. Outline of amendments

In order that radio waves emitted from radio facilities/equipment do not affect on human bodies, the "Radio-Radiation Protection Guidelines" on the radio-radiation strength, etc. is submitted from the Telecommunications Technology Council.
Values listed in the "Radio-Radiation Protection Guidelines" are standard values set forth on prerequisites for protecting human bodies, taking into consideration sufficient safety margin based on fluctuation in mobile terminal user conditions and an environment where mobile stations are installed, etc. Among those values, the "Electromagnetic Field Strength Guidelines," applied to broadcast stations, base stations for mobile telephones, etc., oblige persons who opened radio facilities to construct safety facilities such as fences, etc. for preventing general public entering places with values equal to or exceeding standard values of radio wave strengths emitted from those radio facilities, as stipulated under Article 21-3 of the Ordinance for Executing the Radio Law.
Among the "Radio-Radiation Protection Guidelines," the "Partial-body Absorption Guidelines (Specific Absorption Rate: SAR)," applied to cellular phone devices, etc. intended for use in close proximity to the side of the head, is currently used for guidelines in producing radio equipment. In addition, based on the partial report of November 2000 "Measurement of SAR from mobile phone terminals and other terminals that are intended for use in close proximity to the side of the head" from the Telecommunications Technology Council, the unified measurement method of the SAR has been set forth.
In line with these reports, the draft ministerial ordinance is to amend the relevant regulations for applying the Radio-radiation Protection Regulation to mobile phone terminals and other terminals that are intended for use in close proximity to the side of the head.

2. Outline of partial amendments to ministerial ordinances, etc. 

1) Ordinance for Regulating Radio Equipment (Article 14-2)
To stipulate the SAR limit (2W/kg) applied to radio facilities (limited to radio facilities transmit/receive voice information and combined information of voice/others) of "land mobile stations conducting mobile radio communications intended for use in close proximity to the side of the head" and "mobile earth stations, which conduct mobile satellite communications through relaying of an artificial satellite station established on a non-geostationary satellite." 
2) Ordinance Concerning Technical Regulations Conformity Certification of Specified Radio Equipment 
To add the SAR to test items in characteristic tests of Technical Regulations Conformity Certification for ensuring conformity with technical conditions in 1). 

3. Date of enforcement 

As of the day after one year from the day of promulgation

4. Others

A necessary transition period will be introduced.