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Inquiry to the Radio Regulatory Council Pertaining to "Draft MIC Ordinance, etc. for the Partial Amendment of the 'Regulations for Enforcement of the Radio Law' and the 'Rules for Regulating Radio Equipment'", and Results of Public Comments

In addition, MIC invited public comments from December 13, 2006 through January 15, 2007, and received five comments.

MIC plans to amend these ordinances etc., having taken into consideration the report and those comments. With this system in place, the introduction of specified low-power radio stations in the 315 MHz band to enable use of tire pressure monitors, remote keyless entry systems, etc. will become possible, and is expected to drive dissemination.

Background of Amendments

In recent years, there has been growing demand for frequency use, such as tire pressure monitoring systems that relays information on tire pressure while the vehicle is moving to the driver with the device of an air pressure sensor inside the tire, in order to ensure the safety of moving vehicles including preventing tire burst, etc., and remote keyless entry systems that improve convenience for the user in operations such as switching on the engine and locking of doors.

At present, these radio equipments mainly use the 315 MHz band domestically and the frequencies they operate are used as low power emission radio stations (radio stations not requiring a license based on Article 4-1 of the Radio Law). But the introduction of new radio equipments is required in order to work towards a response to diversifying communications needs and spur the trade facilitation of automobiles.

In order to do that, MIC will go ahead with putting in place the various necessary regulation for the introduction of tire pressure monitors and remote keyless entry systems, etc as low-power radio stations for telemeter, telecontrol, and data transmission system, in consideration of technical standards in various foreign countries and operating to other radio station frequency bands that are already in use domestically.

Outline of Amendments

The addition of frequency bands for use by specified low-power radio stations for telemeter, telecontrol and data transmission system in the 315 MHz band.

The addition of technical standards for radio equipment of specified low-power radio stations using frequencies higher than 312 MHz and 315.25 MHz or lower.

Regulations for examination methods for technical regulation conformity certification for specified low-power radio stations using frequencies higher than 312 MHz and 315.25 MHz or lower.

Partial amendment of the frequency assignment plan for the addition of the new topics of specified low-power radio stations for telemeter, telecontrol, and data transmission system in the 315 MHz band.

Announcements are being put in place with regard to other related announcements.

Future plans

MIC plans to move ahead rapidly with other related ministerial ordinances and the like, in consideration of the report and the results of public comments.

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Topics in Competition Review in the Telecommunications Business Field
--Using the FY2006 implementation details as materials--

The significance of this matter - Introduction

The fact that the structure of the telecommunications market has altered greatly due to the move to IP and broadband made it necessary to grasp market trends precisely and to reflect these in the development of strategies. This is where MIC started its review of competition in fiscal year 2003 by analyzing the state of competition in the telecommunications field while taking into consideration examples from the European Union and the United States1 as well as Japan’s anti-monopoly law framework.

In concrete terms, the review took place between fiscal year 2003 and fiscal year 2005 with the four topics of (1) fixed line telephones, (2) Internet access, (3) mobile communications, (4) network services for corporate-use being targeted.2

In addition, in October 2006, a mid-term plan was formulated under the name of “Basic Approach on Competition Review in the Telecommunications Business Field 2006-2008” (referred to below as “new basic approach”), with a view to implementing a strategic review with a renewed focus on specified topics. 3

Following this, the “Detailed Items for Implementation of Competition Review in the Telecommunications Business Field 2006” (hereinafter referred to as “the 2006 implementation details”) were formulated in November 2006. As these determined the target for analysis for fiscal year 2006, this document introduces the particulars of the 2006 implementation details and mentions future topics.

Particulars of the 2006 Implementation Details

In addition to deciding to continue to implement annual reviews (hereinafter referred to as “fixed reviews”) of the four topics of (1) fixed line telephones, (2) Internet access, (3) mobile communications, (4) network services for corporate-use as review targets for 2006-2008, the new guidelines implemented strategic reviews that focus on new specified topics (hereinafter referred to as “strategic reviews”), so as to increase the level of flexible engagement with the competition review. With this as a given, the 2006 implementation details contain the following review targets for fiscal year 2006.

The fixed reviews respond to changes in market environment and strategic priorities and have been made part of the annual review framework focus which is in fiscal year 2006 on areas of severe change such as Internet access and network services for corporate-use.

Three topics have been chosen for analysis in the fiscal year 2006 strategic topics. They are (a) an analysis of the effects on the state of competition of the dealings operators have among themselves, (b) an analysis of the mutual relationship between neighboring markets, and (c) the state of competition resulting from the introduction of a system for mobile telephone number portability.

In (a), the focus will be on dealings between connection and wholesale operators, analyzing the relationship between the state of competition in the market for dealings between operators and the state of competition in the retail market, as well as investigating a framework for ways to review both combined and integrated market dominance across layers.

In (b), there will be an analysis of the mutual relationship in terms of choice for the consumer in the three fields of fixed telephones, mobile communications and Internet access, and an analysis of the effects of overall business power of operators through brands and the like, and the effects of the move towards service bundling such as FMC (Fixed Mobile Convergence) and Triple-Play4.

In (c), there will be an investigation of pricing levels, pricing systems and service contents before and after the introduction of number portability, and an analysis of their effects.

Future Topics

In the fiscal year 2006 review, an analysis is expected to be conducted with attention to points such as the ones shown below.

Since, among the fixed review topics, progress has been made on the migration to ADSL and FTTH in the area of Internet connection, there will be an analysis of the effects of this. At the time, analysis is also expected to be carried out on the effects of the likes of 0ABJ-IP phones which are a peripheral service attached to FTTH, and Triple-Play.

It is also necessary to consider at the same time trends in next-generation networks (NGN), the diversification of services such as social network services (SNS) and video image distribution, and trends towards the fusion of communications and broadcasting.

With regards to strategic review topics, it will first be necessary to consider, in (a) an analysis of the effects on the state of competition of the dealings operators have among themselves, the effect of vital infrastructure, the relationship between wholesale prices and retail prices, and the combined and integrated market dominance that straddles multiple markets.

Also, for (b) an analysis of the mutual relationship between neighboring markets, a full analysis will be sought on the mutual relation of customer preferences in each market, the effects of operators’ integrated business capacities such as brands, and the effects on FMC, Triple-Play, etc.

In addition, with regard to (c) the state of competition resulting from the introduction of a system for mobile telephone number portability, an analysis will be sought that pays attention to changes such as customer preferences before and after selecting such a system, pricing levels, pricing systems, service contents and switching costs.

In its September 2006 “Framework for Competition Rules to Address the Transition to IP-Based Networks --New Competition Promotion Program 2009,” MIC set out to carry out, by 2010, an integral revision of the dominance regulations referred to as “designated telecommunications facilities system,” taking into consideration the SMP5framework that is found in the EU.

In this integral revision, there will be a reform of the legal system for competition review, and a new framework to prevent the abuse of market dominance will be built, taking competition reviews into consideration.

Taking into consideration this move towards reform, a boost in the role of competition reviews is sought so that they can become a wide-ranging foundation for strategy.

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