March29, 2004, Vol. 14, No. 24 ISSN 1346-5317

In the amended Telecommunications Business Law, which was enactedduring the 156th Diet Session, new provisions were set forth for publicityconcerning the notification when suspending or discontinuing a businessto users (Article 18-3), accountability on terms and conditions (Article26), and processing complaints (Article 27), as consumer protection rules. 
MPHPT, in order to improve consumer protection, has produced and announcedguidelines that explain, in an easy-to-understand manner, the purpose andcontents of the provisions in the Law and related ministerial ordinances,as guidance to telecommunications carriers in following consumer protectionrules.
The "Guidelines for Consumer Protection Rules in the TelecommunicationsBusiness Law" provide, in an easy-to-understand manner, the objectivesand contents of the provisions in the Law and related ministerial ordinancesconcerning the intentions of the provisions for publicity and the notificationto users, when suspending or discontinuing a business, accountability onterms and conditions, and processing of complaints.  Furthermore,in relation to these provisions, the Guidelines indicate preferable voluntaryactions to be taken by telecommunications carriers, in order for protectingconsumers. 
MPHPT plans to apply these Guidelines from a date of enforcement ofthe amended Telecommunications Business Law (a date to be decided by theapplicable cabinet order not exceeding one year calculating from the dateof promulgation, July 24, 2003).

I. Provisions of the amended TelecommunicationsBusiness Law (excerpts)
(Suspension and Discontinuation of Business and Dissolution of JuridicalPerson)
Article 18.
(1) and (2)  (Omitted)
(3)  When a telecommunications carrier intends to suspend or discontinuepart or all of the operations of its telecommunications business, as specifiedin the applicable ministerial ordinance of the Ministry of Public Management,Home Affairs, Posts and Telecommunications, the telecommunications carriershall inform fully to that effect to users (meaning persons concludingcontracts with a telecommunications carrier to receive telecommunicationsservices.  Hereinafter the same shall apply.) of said telecommunicationsbusiness to be suspended and discontinued.  Provided, however, thatin the cases where suspension or discontinuation of a telecommunicationsbusiness specified in the applicable ministerial ordinance of the Ministryof Public Management, Home Affairs, Posts and Telecommunications as thosehaving a comparatively small influence on the users' benefit, this shallnot apply.

(Accountability on Terms and Conditions)
Article 26.
Telecommunications carriers and persons who perform conclusion of contractsas business of intermediary, commission or procuration concerning the provisionof telecommunications services from other telecommunications carriers (hereinafterreferred to as "telecommunications carrier, etc.") shall, when intendingto perform conclusion of contracts, contracts as business of intermediary,commission or procuration concerning the provision of telecommunicationsservices that are specified as telecommunications services pertaining topeople's daily lives in the applicable ministerial ordinance of the Ministryof Public Management, Home Affairs, Posts and Telecommunications, withpersons who intend to receive telecommunications services (except personswho are telecommunications carriers), explain outlines of terms and conditionsincluding charges concerning said telecommunications services to the persons,as specified in the applicable ministerial ordinance of the Ministry ofPublic Management, Home Affairs, Posts and Telecommunications.

(Procedure for Processing Complaints, Etc.)
Article 27.
Any telecommunications carrier shall, properly and promptly, processcomplaints and inquiries from users (including persons who intend to receivetelecommunications services and except persons who are telecommunicationscarriers.  The same shall apply to Article 29 paragraph (2)) concerningoperations methods of said telecommunications carrier pertaining to telecommunicationsservices specified in the applicable ministerial ordinance of the Ministryof Public Management, Home Affairs, Posts and Telecommunications underthe preceding article or telecommunications services provided by said telecommunicationscarrier specified in the applicable ministerial ordinance of the Ministryof Public Management, Home Affairs, Posts and Telecommunications underthe same article.

II. Prior notice to users pertaining to suspensionor discontinuation of business operations
[When to release prior notice]
¥ The telecommunications carrier concerned shall fully inform usersof the suspension or discontinuation "by setting a reasonable time period"prior to implementation thereof so that the users can have enough timeto select a substitutable service and shift thereto.
(Basic concepts)
Users shall have a necessary time period to implement the followingprocedures:

a) The users shall be provided with information on the suspensionor discontinuation of business operations by the telecommunications carrier;subsequently, they come to be informed to that effect;
b) The users shall come to recognize the existence of alternative orsubstitutable services;
c) The users shall be able to understand, compare and consider termsand conditions for the alternative or substitutable services; and
d) Subsequently the users shall be enabled to decide which servicethey will shift to.

[Methods of informing users]
The telecommunications carrier concerned shall appropriately informusers to that effect through any of the following methods:
1. Door-to-door visits

- Salespeople visit individual users and deliver them a notice.
- It is essential to explain in an easy-to-understand manner, whennecessary, in writing.

- Explanation via telephone call.  It is essential toexplain in an easy-to-understand manner.

- Delivery of a DM, telegram, facsimile, an explanatory documentattached to an invoice, an enclosed document in an envelop for invoice,etc.
- It is vital that such explanatory documents shall be easy-to-understandfor recipient users, for instance, simple and plain fonts/layouts.

4. Transmission of e-mail

- Through use of e-mail
- Basically, it is vital to send e-mail containing information onlyon the suspension or discontinuation of business operations.  In thiscase, "important notice" or "notice on the suspension (or discontinuation)of business operations" should be entered in the subject column.

- Explanation on a portal site, etc. users watch whenever usingthe service concerned
- It is vital that such explanatory pages shall be easy-to-understandfor users, for instance, simple and plain fonts/layouts.

<Preferable response>
1. In addition to direct notice to users by means of communicationsspecified in the applicable ministerial ordinance, other means includingpress releases, website posting, advertising on daily papers, etc. shallbe taken for making public the suspension or discontinuation.
2. If necessary, plural means of communications shall be taken.
3. Where there are insufficiently informed users despite efforts fornotice, the carrier concerned shall repeatedly inform the users to thateffect or take other means of communications.
4. The carrier concerned shall establish a section to accept inquiriesfrom users and explain/introduce their own or other provider's alternative/substitutableservices.
5. The carrier concerned shall bona fide respond to inquiries on termsand conditions for the period by the suspension or discontinuation, contentof alternative services, procedures for transition, etc.

III. Explanation before conclusion of contract
<Services to be explained>
1. Telephone and ISDN
2. Cellular telephone and Internet access services on cellular phone 
3. PHS and Internet access services on PHS
4. Internet access service
5. DSL service
6. FTTH service
7. Cable TV Internet access service
8. Public wireless LAN access service
9. FWA service
10. IP telephony service

<Methods of explanation>
1. Methods at counter, on the street, etc.
Before conclusion of a contract, a carrier (or agent) shall deliverpotential users documents containing matters to be explained.
2. With consent from users, the following methods may be allowed:

i) Display matters to be explained as posted on a website (beforean application form page for contract)
ii) Send e-mail
iii) Deliver a storage media such an electromagnetic media as CD-ROM
iv) Send DM, etc. containing matters to be explained
v) Telephone call (it is a must that after explanation via telephonecall, written documents shall be sent without delay.)

<Matters to be explained>
"Outline of terms and conditions includingcharges pertaining to the telecommunications service concerned"
1. Name of the telecommunications carrier (in cases of a carrier'sagent on a contract basis, its name)
2. Contact points for the carrier (As for telephone numbers, the businesshours for the telephone be included)
[Contact points for the agents (as for telephone numbers, the businesshours for the telephone be included).  However, they are not neededwhere the carrier is responsible for inquiries pertaining to the agents.)]
4. Charges to be applied to its users, and i) when a free-of-chargeor discount campaign is applied, its period, scope, and other terms andconditions, and ii) where other charges excluded in charges for the serviceare applied, details thereon.

5. Where there are clauses stipulating requests for changes and cancellationfrom users, the clauses and the following clauses:

i) Limits on grace periods for changes and cancellation ofcontract
ii) Clauses on early withdrawal penalty on changes and cancellation
iii) Payment of return costs, etc. for rental modem upon changes andcancellation

¥ In cases of cellular telephones/PHS terminals, services maynot be offered where radio waves do not reach said terminals: The fact
¥ In cases of best-effort type Internet access services, the transmissionspeed concerned may not be attained depending upon situations surroundingtelecommunications facilities and circuits: The fact
¥ In cases of IP telephony services, depending upon circuit status,voices may be difficult to hear in comparison with ordinary subscribertelephones: The fact that the speech quality may be low from time to time. Whether emergency reports are possible or not.

<Preferable response>
Although the following practices are not statutory mandates, they arepreferable responses from the viewpoint of consumer protection:
1. Toward consumers who do not sufficiently understand through an ordinaryexplanation, the carrier shall make a further detailed explanation.
2. When requested further detailed information from consumers, thecarrier shall politely explain the detailed information so consumers canfully understand the details.
3. Upon explanation to minors, the carrier shall explain to them focusingon prevention from use of high-priced services.
4. The carrier shall i) produce manuals, etc. and ii) improve trainingfor employees.

IV. Appropriate processing of complaints, etc.
¥ In consideration of the current status where troubles are arisingfrom asymmetry in accessibility to information between carriers and consumers,these guidelines stipulate obligations to be imposed on telecommunicationscarriers to appropriately and rapidly process complaints and inquiriesfrom users so that consumers can continue to use telecommunications serviceswith ease-of-use.
¥ Whether "appropriately and rapidly process(ed)" or not shall be judgedon a case-by-case basis for each individual case.  At least the followingcases are not "appropriately and rapidly process(ed)":

i) Where there is no contact point for accepting complaintsand inquiries
ii) Even if there are contact points for accepting complaints and inquiries,when the contact points and their business hours are not open to consumers
iii) Even if the contact points for accepting complaints and inquiriesare open to consumers, when the contact points are actually not accessiblefrom consumers

On February 17, 2004, MPHPT submitted to the 159th Diet Sessiona "Bill to amend part of the Radio Law and part of the Wire TelecommunicationsLaw" with the purpose of preparing regulatory frameworks for further promotingeffective radio spectrum use, toward realization of the world's most advancedwireless networks.
Outlines of the bill are as follows:

II. Outlines
1. Amendments to Radio Law
1) Introduction of a compensation scheme for reallocation of radiospectrum

i) In cases where, based on results of the evaluation of efficiencyin radio spectrum use, stipulating the expiration date for use of radiofrequencies of existing radio stations within a period shorter than specifiedperiod, measures will be adopted to deliver compensations (to be budgetedfrom the Spectrum User Fee, for covering costs burden ordinarily imposedon said existing licensees due to the shortened expiration date) to theexisting licensees (who intend to apply for change of frequency designationto be needed for the rest of said expiration date for use). 
ii) A necessary amount of Spectrum User Fees will, for a specifiedperiod, be collected from new spectrum users of the said frequency bandswhose expiration date for use was shortened.

i) Part of the ex-ante regulations pertaining to radio stationlicenses satisfying specified conditions will be relaxed to a registrationscheme.
ii) Supervisory measures for registered radio stations, such as validterms of registration, limits on opening of radio stations, registrationof requirements for invalidation, etc., will be established. Also, theprovisions pertaining to the Spectrum User Fee (imposed on registered radiostations) will be prepared.

MPHPT compiled a survey, conducted in October 2003, on the actualstatus of the communications industry (telecommunications and broadcastingbusinesses).  This survey focused on the broadcast programming productionindustry and cable TV programming supply industry.  Major resultsof this survey are as follows:
1. Broadcast programming production industry

• The actual sales amount (per company) in FY2002 increased by 7.0% overthe previous fiscal year; and FY2003 planned sales amount (per company)increased by 1.3% over the previous fiscal year.
• The secondary use of TV broadcast programming were implemented mainly for"rebroadcast," "packaged media" and "satellite broadcast."
• Business efforts in the broadcast programming production industry are beingmade for fields of "Hi-Vision production/technologies" and "Internet programmingproduction."
• As managerial problems, companies pointed out "how to get orders" and "humanresources."

• As managerial problems, there has been an increase in the number of companiespointing out the need to "ensure human resources with experience and skilledpersons" and "improve employee training."

[Outline of the Survey]
Since FY1992, this Survey has been conducted annually for the assessmentof the actual status of businesses closely related to the telecommunicationsand broadcasting businesses.
[Target companies]
1. Broadcast programming production businesses (surveyed annually):Businesses producing broadcast programming and broadcast advertisements(excluding cable TV programming suppliers)
2. Cable TV programming suppliers (surveyed biennially): Suppliersof broadcast programming to cable TV operators
 
 

	Number of questionnaires sent	Number of replies	Reply rate (%)
Broadcast programming production businesses	871	292	33.5
Cable TV programming suppliers	52	28	53.8
Total	923	320	34.7

I. Broadcast programming production businesses(annually surveyed)

1. Breakdown by business size (capital, sales, number of employees)
¥ Businesses with capital equal to or less than 29 million yen constitute69.7% of all businesses.
¥ Businesses with a sales amount equal to or less than 999 millionyen occupy 73.9% of all businesses.
¥ Businesses with employees equal to or less than 49 occupy 76.3% ofall businesses, showing the majority of this industry are medium- and small-sizedenterprises.

<Industrial structure by capital size>

<Industrial structure by sales amount>

<Industrial structure by number of employees>

2. Average sales amount of broadcast programming business per company
¥ FY2002 actual average sales amount per company was 973 million yen(a 7.0% increase over the previous fiscal year).
¥ FY2003 planned average sales amount per company was 986 million yen(a 1.3% increase over the previous fiscal year).

3. Rights management of TV broadcast programming
(1) Pathways to contract
¥ Pathways to concluding contracts concerning TV programming productionvary from the initial stage of marketing activities.  Proposals/plansfrom TV stations comprise 52.1% of all contracts.

(2) Owner of broadcasting rights
¥ Only TV stations own broadcasting rights to 72.7% of TV broadcastprogramming using delivered packaged programming.*

* Secondary use: Use of broadcastprogramming for purposes other than the initial purpose of broadcasting. For instance, video cassettes, CD-ROMs, publishing, etc.

II. Cable TV broadcast programming suppliers(biennial survey)
1. Breakdown by capital

2. Average sales amount of broadcast programming business per company
¥ FY2002 actual average sales amount per company was 835 million yen(105.2% increase over previous fiscal year).
¥ FY2003 planned average sales amount per company was 986 million yen(18.1% increase over previous fiscal year).

3. Purchase and supply of programming
(1) Methods to purchase programming
¥ With respect to methods to purchase programming, upper three itemsconstitute 80% of all methods; namely "In-house production" (40.5%), "PurchaseJapanese programming" (21.6%) and "Purchase foreign programming" (18.1%).

(2) Methods to supply cable TV broadcast programming
¥ Cable TV broadcast programming was being supplied mainly via "satellitecommunications" (87.9%) in FY2002 and 88.8% of these are to be deliveredvia satellite in FY2003 plan.

4. Managerial problems
¥ Of managerial problems, 61.5% are "Difficulty of ensuring sales incomes"and 57.7% are "Ensuring skilled and experienced staff."
¥ In comparison with the previous survey, companies saying "Ensuringskilled and experienced staff" and "Improving staff training" are increasingmarkedly.

I.  Guidance to application
MPHPT will establish a Funding System from FY2004, under which MPHPTwill, through the National Institute of Information and CommunicationsTechnology, deliver subsidies to ICT ventures that accept capital investmentsfrom private-sector venture capitals.  Qualified applicants for thesubsidization are to file application forms in accordance with the followingguidance:

* Note: On April 1, 2004, theCommunications Research Laboratory (CRL) and the Telecommunications AdvancementOrganization of Japan (TAO) will be reorganized into the "National Instituteof Information and Communications Technology."

¥ 1st period: April X* to May25, 2004
¥ 2nd period: July 5 to August 3, 2004
¥ 3rd period: August 30 to September 28, 2004

¥ Business Promotion Division, Information and CommunicationsPromotion Department, 
¥ National Institute of Information and Communications Technology
¥ Banzai Building the seventh floor, 31-19, Shiba 2-chome, Minato City,Tokyo.   zip: 105-0014
¥ Telephone: +81-3-3769-6816   Facsimile: +81-3-3452-2691
¥ URL:  http://www.nict.go.jp(to be opened in April 2004)

II. Outline of this system
1. Qualifications, etc. for recipients to be subsidized
ICT ventures satisfying the following requirements:

i) Not exceeding five years since its establishment
ii) With paid-in capital of not exceeding one billion yen
iii) Upon implementation of the subsidization system, it is certainthat the applicant will accept investments, etc. (limited to cases whereone single venture capital invests an amount of capital investment surpassingthe amount of the subsidy in the venture) from the venture capital necessaryfor implementing the target project concerned.
(For details, please refer to MPHPT website at: http://www.soumu.go.jp)