Draft Summary of Meeting of the Radio Regulatory Council
(No. 904)



1. Date and Time
  February 8, 2006 (Wednesday)
15:55 to 16:50
2. Location
  Meeting Room in MIC (Ministry of Internal Affairs and Communications)
(Meeting Room No. 1002 on the 10th floor)
3. Attendees (Honorifics omitted)
(1) Members of the Radio Regulatory Council
  Mitsutoshi Hatori (Chairperson), Takeo Inokuchi (Vice-Chairperson), Kashiko Kodate, Hatsuko Ukigawa
(2) Hearing Examiner of the Radio Regulatory Council
  Shuichi Tanaka
(3) Secretary
  Ikko Mitsui (Deputy Director of the General Affairs Division, Telecommunications Bureau)
(4) MIC (Ministry of Internal Affairs and Communications)
  Shimizu (Director-General for Policy Planning), Kouno (Deputy Director-General of the Minister’s Secretariat) and others

4. Minutes of the Meeting
(1) Concerning the opinion of the Minister of Internal Affairs and Communications regarding the fiscal 2006 income and expenditure budget, etc. of the Japan Broadcasting Corporation
(Consultation No.2)
     The Ministry of Internal Affairs and Communications (hereinafter, “MIC”) explained the opinion of the Minister of Internal Affairs and Communications regarding the fiscal 2006 income and expenditure budget, etc. of the Japan Broadcasting Corporation (NHK) and provides a questions-and-answers session as follows. The Council deliberated this matter and replied indicating that the Council regarded it as acceptable.

a. Explanation by MIC
  The outline of the fiscal 2006 income and expenditure budget, etc. of NHK is as follows. Income from viewing fees amounts to 594 billon yen (a decrease of 53.8 billion yen compared to the previous year) due to the fact that NHK was affected by default on viewing fees caused by unfortunate events throughout the year. They have decreased operational income together with a substantial decrease in operational expenditure. Consequently, the budget maintains a balance by a narrow margin. In this fiscal year, any reduction in program related costs is avoided as far as possible and the executives and regular employees are undergoing two consecutive years of salary cuts. Further, NHK intends to make efforts to reduce costs by an amount equivalent to the costs for 385 employees. They will also commence reform measures, such as a review of the viewing fee system. For example, while they will keep monthly viewing fees at the same level for the 16th consecutive year, they will start a discount plan for students and business bachelors (workers, who are unaccompanied by their families) in December. With regard to operational expenditure, while they have added 10 billion yen to improve their broadcasting services and reserved expenditure for terrestrial digital media broadcasting, they have reduced expenditure by 40 billion yen, which counterbalances the 10-billion increase.
Due to the following reasons, the opinion of the Minister of Internal Affairs and Communications is that the budget is something we have to accept with resignation, adding that the minister feels that the current situation where 30% of households that should pay viewing fees have defaulted is very regrettable. Currently, NHK itself is in the process of efforts to recover this dip in viewing fee income. While NHK has planned their budget with a focus on assigning a substantial sum of money to improve its broadcasting services, etc. in the middle of this significant drop in income from viewing fees, it is making efforts to maintain the balance of operational income and expenditure.
In the wake of this default problem, a reconsideration of the raison d’etre of public broadcasting has arisen and MIC has set up an advisory body for the minister to discuss an overhaul of the entire public broadcasting system in the future.
Our opinion also states that NHK must continue to make effort to restore the trust of the public and viewers and lists the following eight points to which NHK has to pay special attention:
1) Have its management committee play a leading role in the enhancement of governance.
2) Actively promote information disclosure activities.
3) Make even greater efforts to secure the equitable burden-sharing of viewing fees among the public.
4) Reform the management of its affiliate companies and others.
5) Lead digitalization efforts.
6) Satisfy demands concerning public broadcasting.
7) Consider the future for new international broadcasting services.
8) Promote active use of video picture assets, such as NHK archives.

b. Major questions and answers:
- The following opinion was voiced:
  I would like to comment on the expression “the budget is something we have to accept with resignation.” I also think it is inevitable that NHK has no alternative but making such a budget because of the drop in its operational income due to the effect of the default on the viewing fees caused by the unseemly events. NHK, however, has made clear its intention both to actively carry out improvements to its services and to reduce expenditure—which is very difficult to achieve in practice. I think MIC should have expressed its opinion in a more subtle way so that it could give an impression that MIC appreciated NHK’s stance.
MIC answered as follows:
MIC does not intend to deny NHK’s efforts and appreciates the budget because the results of their reform efforts can be traced in it. At the same time, it is inevitable at this time that MIC continues to regard it as “something we have to accept with resignation” as in fiscal 2005 because the number of reception contracts has not been restored to the one before unseemly events, although MIC recognizes that some achievements have been made.
- The following question was asked:
  I think that the budget for fiscal 2005 was planned based on an optimistic estimate of the income from viewing fees. Can we trust the figure for viewing fee income in the fiscal 2006 budget?
MIC answered as follows:
In the case of the fiscal 2005 budget, NHK could not fully forecast the sudden dip in income from the viewing fees because the number of defaults peaked in March 2005 when the budget had just been passed. MIC believes that the budgeted viewing income for fiscal 2006 will not significantly fluctuate as long as NHK continues to make efforts to reform it, assuming the current environment, which has been drastically changed from the situation in fiscal 2005.
- The following question was asked:
  I had heard that MIC would discuss an overhaul of the entire public broadcasting system. Does MIC have specific measures in mind?
MIC answered as follows:
MIC started the Panel on the Framework of Communications and Broadcasting in January 2006. One of the study subjects is what type of entity should NHK be. The Panel is extensively discussing this without any prior assumptions so that the conclusion may be incorporated into a compelling policy in June.
- The following question was asked:
  I think it is important to understand how the public regards public broadcasting when we discuss problems like this. Is MIC promoting some studies on this matter?
MIC answered as follows:
MIC now recognizes that as it is an important subject that greatly affects the status of the entire public in the future. MIC must promote discussions on the subject from the viewpoint of the supplier as well as the public so that a national consensus may be forged. MIC takes the members’ opinion seriously.

(The Radio Regulatory Council Secretariat is responsible for the wording of this document.)