Document 1-1

February 14, 2006
MIC
Telecommunications Bureau
Summary of draft ministerial ordinance to amend part of the Regulations for Enforcement of the Telecommunications Business Law and others


1. Matters concerning the partial amendment to the Regulations for Enforcement of the Telecommunications Business Law (hereinafter referred to as "Regulations for Enforcement")
  1. Local calls for subscriber phones are excluded from the scope of universal telecommunications services.
    (Item 1, Article 14 of the Regulations for Enforcement)
  2. The Minister for Internal Affairs and Communications must notify the eligible telecommunications carriers of the number of emergency calls, which is necessary to prepare the statement of income and expenditures for universal telecommunications services, within three months after the end of the fiscal year.
    (Article 40-4-2 of the Regulations for Enforcement)
  3. The eligible telecommunications carriers must submit documents, including the statement of income and expenditures for universal telecommunications services, to the Minister for Internal Affairs and Communications within five months after the end of each business year.
    (Article 40-5 of the Regulations for Enforcement)
2. Matters concerning the partial amendment to the Rules for Reporting on Telecommunications Business (hereinafter referred to as "Rules for Reporting")
    Each carrier must report the month-end status of use of telecommunications numbers1 to the Minister for Internal Affairs and Communications by the end of the second following month. (Article 9 of the Rules for Reporting)
3. Matters concerning the partial amendment to the Rules for Calculating Methodologies of Subsidies and Contribution concerning the Provision of Universal Service (hereinafter referred to as "Rules for Calculating Methodologies")
  1. Calculating methods for subsidies
    1) Applicable amount for compensation for an eligible telecommunications carrier: (1)+(2)+(3) (Paragraph 1, Article 5 of the Rules for Calculating Methodologies)
    (1) [Subscriber phone: Subscriber line access] The difference between the line cost calculated by the LRIC model and the national average, for the top 4.9% of the subscriber lines with the highest cost
    (2) [Subscriber phone: Emergency calls] Cost concerning emergency call connection lines for the top 4.9% of the subscriber lines with the highest cost
    (3) [Public payphones] Includes the difference between revenue and cost for public payphones nationwide

    2) Calculating methods for subsidies (Paragraph 1, Article 5 of the Rules for Calculating Methodologies)
       Amount of subsidy (calculated per eligible telecommunications carrier)
       = Applicable amount for compensation - Contribution calculated for the respective eligible telecommunications carrier2

    3) Application for approval of subsidies must be made within six months following the end of the fiscal year. (Article 4 of the Rules for Calculating Methodologies)

  2. The scope of contributing carriers
    1) Requirements for contributing carriers
    1) Telecommunications carrier applicable for calculation with operating revenue from telecommunications services of over 1 billion yen.
    (Article 24 of the Rules for Calculating Methodologies)
    2) Be designated by telecommunications numbers listed in Appendix Table 11.
    (Article 25 of the Rules for Calculating Methodologies)

    2) The obligations of contributing carriers
    Contributing carriers must submit documents, including those stating the operating revenue from telecommunications services, to support institutions within five months following the end of the fiscal year.(Article 25 of the Rules for Calculating Methodologies)

  3. Calculation methods for the contributions
    1) Per-number cost: Collected from the contributing carrier per telecommunications number. Support institutions calculate the amount according to the method separately given in a public notice by the Minister for Internal Affairs and Communications3.
    (Paragraph 1, Article 27 of the Rules for Calculating Methodologies)

    Support institutions must publicize the per-number cost calculated.
    (Paragraph 3, Article 27 of the Rules for Calculating Methodologies)
    2) Calculation method for the contributions (Paragraph 1 and 2, Article 27 of the Rules for Calculating Methodologies)
           Contribution per carrier/per month = per-number cost x number of telecommunication numbers in operation per carrier/at the end of each month
    Please note:
    Total contribution + contribution calculated for the respective eligible telecommunications carrier
                             = applicable amount for compensation + administrative costs of the supporting institution4
         Because the per-number cost is provided in advance of calculating the contribution for each month, fluctuation in the number of telecommunications numbers may produce an artificial surplus for the last month calculated (on the 12th or 13th month, etc.). This will be applied in the calculation of the contributions for the subsequent fiscal year.

    * The Minister for Internal Affairs and Communications, upon receiving the status of use for the telecommunications numbers, will notify support institutions without delay. (Paragraph 4, Article 27 of the Rules for Calculating Methodologies)

    3) Application for approval of contributions must be made within six months following the end of the fiscal year. (Article 28 of the Rules for Calculating Methodologies)

  4. Matters concerning supplementary provisions

    1. Effective date
      April 1, 2006 (excluding some parts) (Paragraph 1 of Supplementary Provision)
    2. Transitional measures
          For the time being, provisions of Chapter 3 of the amended Regulations for Enforcement as well as provisions of the amended Rules for Calculating Methodologies will not be applied to the subscriber lines in the special communications for isolated islands.
      (Paragraph 2 of Supplementary Provision)
    3. Provision for reviews
       Provision for reviews to be conducted about three years later will be included. (Paragraph 4 of Supplementary Provision)


1The scope of telecommunications numbers to be included in the report is provided in Appended Table 11 of the Rules for Calculating Methodologies
2The contribution to be made by the telecommunications carrier itself, which is deducted from the applicable amount for compensation when calculating the amount of subsidy
3"The Method to Be Notified by Minister for MIC under Article 27 (1) of the Rules for Calculating Methodologies"
4Administration costs of the support institution divided proportionally according to the applicable amount for compensation per eligible telecommunications carrier










  • The scope of telecommunications numbers to be included in the report as per the Rules for Reporting on Telecommunications Business (Appendix Table 11 of the Rules for Calculating Methodologies)
    • 0AB-J numbers: Numbers mainly used for fixed line phones starting from such numbers as 03 and 06
    • 0A0 numbers: Numbers used for 050 (IP phones), 080/090 (mobile phones)
      * Does not include 010 (prefix for international calls).
    • 0AB0 numbers: Numbers used for added services, such as 0120 (toll-free service) and 0990 (premium charging service)
    • Part of 00XY numbers: Of the numbers that identify the telecommunications carriers, such as 0033, 0077, 0088, and 0038, those numbers that are used for added services only within the numbering scheme of the carrier to identify the subscriber transmission line facilities

    * Telecommunications numbers used for calculating contributions are the telecommunications numbers above that are allocated to the end users.
       Note that the telecommunications numbers designated for other carriers will be included in the calculation of contributions if they are used to receive incoming calls with the handset of the calculating carrier's users as a result of number portability.
       Meanwhile, the telecommunications numbers below are not used in calculating contributions:
       1) Telecommunications numbers used by the end users of another carrier as a result of number portability
       2) Telecommunications numbers used by the end users in ways that are not readily apparent, such as those used in call forwarding features (AI number transferring and number portability).



    (Reference)

    "The Method to Be Announced by the Minister for MIC under Article 27 (1) of the Rules for Calculating Methodologies"

      Basic idea behind the calculating methods
    1) Per-number cost is to be calculated so that the collection of contributions and the grant of subsidies would be completed more or less within one year.
    2) The calculation method should be clear, precluding arbitrariness.
    3) The public announcement and revision of the per-number cost should take user convenience into consideration.
  •   Total per-number cost [calculated in September, applied in January]
    = (Total applicable amount for compensation + Administrative costs of supporting institution) / Latest total number of telecommunications numbers [latest month] / 12

  •   Per-number cost for each eligible telecommunications carrier
    = Total per-number cost x Applicable amount for compensation for the respective eligible telecommunications carrier / Total applicable amount for compensation

  •   Total revised per-number cost [calculated in April, applied in July]
    = (Total applicable amount for compensation + Administrative costs of supporting institution
            - Amount scheduled for collection by support institution [up to the number of telecommunications numbers in January]
            - Total per-number cost x Latest total number of telecommunications numbers [latest month] x 5)
            / Latest total number of telecommunications numbers [latest month] / 6

  •   Revised per-number cost for each eligible telecommunications carrier
    = Total revised per-number cost x Applicable amount for compensation for the respective eligible telecommunications carrier / Total applicable amount for compensation
    (Note)
    • As a general rule, revision of the per-number costs will be done twice a year (to be applied in January and July) in light of user convenience.
    • Public announcement of per-number costs will be made at least two months prior to applying them.
    • Support institutions must promptly report to the Minster for Internal Affairs and Communications on calculating or revising the per-number costs.
    • On calculating or revising the per-number costs, the support institutions must round off the costs within a reasonable range, taking such factors as the period to collect the contributions into consideration.