December 8, 2021 Inquiry Information and Communications Council about Ideal State of Universal Service Subsidy System in Light of Changes in Fixed-line Phone Environment

The Ministry of Internal Affairs and Communications (MIC) has today sent an inquiry to the Information and Communications Council (Chaired by UCHIYAMADA Takeshi, Chairman of the Board of Directors of Toyota Motor Corporation) about the ideal state of Japan’s universal service subsidy system in light of changes in the environment surrounding fixed-line telephones.

1. Background

The enforcement of the Act Partially Amending the Telecommunications Business Act and the Act on Nippon Telegraph and Telephone Corporation, Etc. (Act No. 30 of 2020) has enabled Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West Corporation (hereafter referred to as “NTT East and West”) to provide telephone services using the telecommunications facilities of other telecommunications carriers since April 1, 2021. However, these services are subject to approval from the Minister for Internal Affairs and Communications, provided that certain requirements are met. In response to the above, NTT East and West plan to start providing wireless fixed-line phone services in the fourth quarter of 2022 or later. Accordingly, it is necessary to consider the ideal state of compensation and interconnection fees based on the universal service subsidy system.
In addition, with respect to the subscriber phone services provided by NTT East and West, the public switched telephone network (hereafter referred to as the “PSTN”) will reach the maintenance limit around 2025. In that situation, the communications route will be switched from the PSTN to the IP network in 2022 or later. In this migration to the IP network, it is necessary to consider the scope of universal service for the migration to the IP network and the calculation of the amount of compensation based on the universal service subsidy system during the migration to the IP network.
Furthermore, a report of July 2021 (the ideal state of public telephones in response to changes in the socio-economic environment) from the Information and Communications Council recommends that subsidies for public telephones for use in times of disaster should include those for category I public phones, without increasing the burden on the public. Therefore, it is necessary to examine the specific scope of compensation and other issues.
As a result of the above, the Information and Communications Council received an inquiry about the ideal universal service subsidy system, considering the changes in the environment surrounding fixed-line telephones.

2. Items for which report is requested

• 1.
  Compensation and interconnection fees based on the universal service subsidy system in connection with the start of wireless fixed-line phone services
• 2.
  The ideal state of the scope of universal service for the migration to the IP network
• 3.
  The ideal state of calculating the amount of compensation based on the universal service subsidy system during the migration period to the IP network
• 4.
  The ideal state of calculating the amount of compensation for public telephones, including public telephones used in times of disaster
• 5.
  Other matters deemed necessary

3. Deadline for the report

Around September 2022