November 28, 2003,Vol. 14, No. 16 ISSN 1346-5317

On November 10, 2003, MPHPT held the "Study Group on Mobile NumberPortability (MNP)" with the objective of deliberating upon MNP, from theviewpoints of improving users' convenience and of promoting competitionamong mobile telephone carriers.
 

1. Purpose
The "Mobile Number Portability (MNP)" is expected to bring about meritsfrom the viewpoints of improving users' convenience and of promoting competitionamong mobile telephone carriers.  Since a considerable amount of costsis required for introduction of portability, it is vital to fully consideruser needs and effects thereof.
To this end, the Study Group, as an open forum, was established forthe purpose of deliberating upon MNP based on a range of opinions.

2. Major topics
i) Analysis/evaluation needs concerning MNP
ii) Basic concepts on introduction of MNP
iii) Desirable methods for realizing MNP and for sharing the coststhereof

3. Schedule
Following the first meeting held on November 10, 2003, the Study Groupplans to compile its findings as a report around February 2004.
For details refer to the Japanese website:
http://www.soumu.go.jp/s-news/2003/031106_1.html
 

On November 18, 2003, MPHPT released the "Basic Approach Concerningthe Evaluation of Competitive Situation in the Telecommunications BusinessField" and "FY2003 Details for Implementation of the Evaluation of CompetitiveSituation in the Telecommunications Business Field."
On October 7, 2003, MPHPT released a draft "Basic Approach" and draft"FY2003 Details for Implementation" for inviting public comments basedon the report (July 2003) of the "Study Group on Methods for EvaluatingCompetition in the Telecommunications Fields as IP Evolves" (Chair: Dr.SAITO Tadao, Professor Emeritus, the University of Tokyo). These "BasicApproach" and "FY2003 Details for Implementation" released this time wereformulated based upon the public comments filed through the due procedures. 
The outline of these "Basic Approach" and "FY2003 Details for Implementation"are as follows:
I. Purposes
1. Grasping of increasingly complex competitive situation along withthe evolution of IP/broadband introduction
i) Flexibility in constructing networks is improved through repeatedregulatory reforms in the telecommunications business field.
ii) New entries, services and operation methods are successively increasingalong with the evolution of IP/broadband introduction. 
iii) Due to changes in the structures for providing services and inrelationships among service providers, progress of competition varies byservice and area.
2.  The shared recognition of competitive situations, transparencyof administration and foreseeability are improved.
i) Formulation of broader consent concerning data, etc. and methodsfor analyses, competitive situations of market are analyzed on a fact basisand published 
ii) Improvement in transparency of administration and in foreseeability.
3. Ensuring of international harmonization
i) Following in the footsteps of the UK, which now has "competitionreview" in place, EU member states will adopt "competition review."
ii) In the US, competition assessment reflecting variances by service/areais being implemented.
iii) In the global telecommunications business field, it is vital toensure international harmonization in policies.

II. Basic stance
1. Evaluation of competition is to be implemented by the administrationas part of the process of planning, developing and promoting policies.
2. Contents include "Decision of objectives for analysis," "Definitionof market" and "Analysis/evaluation of competitive situation."
3. The following points shall be noted so as to improve transparency:
i) Explain indices for analyzing competitive situations and the evaluationprocess, and the like.
ii) Announce methods for analysis of data, etc. as much as possible 
iii) Procedures for invitation of public comments shall be employed. Public comment procedures will be taken upon publication of the Basic Approach(draft), Details for implementation (draft) and results of evaluation,respectively.

III. Flowchart concerning implementation

IV. Objectives to be analyzed in FY2003
The objectives market segment in FY2003 is "Internet connectivity."
Reasons are as follows:
1. The Internet connectivity markets are changing drastically.
2. In terms of policy measures, broadband and fiber-optic networksare used for Internet connectivity and are focus of attention.
3. As for the Internet connectivity market, Japan is a leading country,running ahead of the U.S. and Europe.  Thus, Japan shall develop anoriginal approach for analysis of this domain.
4. In this service domain, different services are provided as one packageor various services are integrated as an inseparable package.  Analysisof individual services in the Internet connectivity market is a difficulttask.  Upon development of methods for competition evaluation, thismarket segment is suitable for developing definitions, for analysis/evaluationand for finding rational solutions.

V. Market definition
1. Market definition is to be implemented focusing on one market whereidentical services are transacted.
2. Markets are defined by i) setting a minimum unit of service amongservices for end-users as a starting point, ii) compiling services as oneservice group comparing with the minimum unit of service with similar andneighboring services, and iii) deciding a boundary of the market acrossservice providers.
3. These works are part of a preparatory process for analysis of acompetitive situation and will affect results of said analysis.
4. Markets will tend to overlap with each other doubly or triply. Accordingly, the market structure is neither systematic nor concrete unlikethe Japan Standard Industry Classification (JSIC).

VI. Analysis/evaluation of competitive situation
1. Quantitative indices shall be analyzed in a multifaceted manner. 
 Grasping the factors that lead to the situations.
2. Indices shall be calculated by defined market, on a one-by-one basis.
3. Concrete indices, etc. analyzed according to the following flow:
i) Quantitative indices shall be analyzed for obtaining a bird's-eyeview of competitive situation.
ii) Analyze trends in the number of contracts and shares of revenues,magnitude of entry barriers, the number of providers, trends in the numbersof new entries/withdrawals.
iii) Analyze qualitatively, including factors that lead to the situationsconcerned as indicated by quantitative indices.

VII. Analysis on qualitative factors
1. Competitive situation in a market between a telecommunications carrierand end users is strongly affected by transactions among telecommunicationscarriers.  Thus, analysis on influences of transactions among telecommunicationscarriers is important. 
2. Algorithms for qualitative factors are generalized as much as possiblein order to apply to the Basic Approach and the Details for Implementation. 
3. To this end, in particular for FY2003, algorithms were carefullydeveloped on analyzing qualitative factors.  Concretely, in the courseof analysis, i) it was deliberated whether the algorithms have generalitythat could be applied to various markets in the "Internet connectivity"domain, then ii) applicability of the algorithms to other domains was tried. 

VIII. Analysis/evaluation of competitive situations;Feedback to policy

MPHPT will set up a high-speed/-capacity international circuit betweenJapan and China based on the "Asia Broadband Program" (announced in March2003) and launch international joint IT experiments with China on a varietyof applications.
These joint IT experiments will be implemented as "Advanced IT JointExperiments for the Formation of an International Telecommunications Hub"as funded under the FY2003 budget.  A large number of universitiesand private corporations from both Japan and China will take part, aimingto 1) promote the diffusion of IPv6 and 2) achieve compatibility withina multilingual environment, in order to promote information flow withinthe Asian region. 

1. Aim of the policy
One major issue at present is how to stimulate demand for broadbandfor the promotion of information distribution within the Asian region. 
An IPv6 environment will be established between Japan and China, withexperiments of the following applications being implemented to resolvethis issue. 
i) Joint production of digital content
ii) Establishment of an environment for multilingual communicationsamong cultures (corresponding to a multilingual environment)
iii) Establishment of a corporate information database (correspondingto a multilingual environment)
iv) Joint research of new generation (Beyond 3G) mobile communications 
<Participants in the experiments>
Japanese side: Kyoto University, Osaka University, CRL, etc.
Chinese side: Peking University, Beijing University of Posts and Telecommunications(BUPT), etc. 

2. Expected results
In addition to promoting information flow between Japan and China,the application experiments will lead to further development of joint researchamong universities in the two countries and development of business forthe private sector in such areas as telecommunications and content. 

3. Announcements and future schedule
In order to keep the general public informed about these joint experiments,a series of public events and the launch of a website have been planned.