May 28, 2021 Establishment of Standard Charge Index for Specified Telecommunications Services Provided by NTT East and West

The Ministry of Internal Affairs and Communications (MIC) received a report from the Information and Communications and Posts Administrative Council (chaired by KAWAHAMA Noboru, Professor, School of Government, Kyoto University) today in response to the MIC’s inquiry (Inquiry No. 3138 of March 26, 2021). The inquiry covered the Minister’s approval for the establishment of a standard charge index for specified telecommunications services provided by Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West Corporation. The report states that the inquired approval is appropriate.

1. Background

The maximum rate level (price cap) has been applied as a rate regulation since October 1, 2000, to charges related to telephone services, including subscriber telephone services, of Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West Corporation (hereafter referred to as “NTT East and West”).
NTT East and West can set or change charges, including subscriber telephone rates, only by notifications submitted if they do not exceed the standard charge index that indicates the maximum charge. If they intend to set a charge that exceeds the standard charge index, they must obtain approval from the Minister for Internal Affairs and Communications.
For setting the standard rate index that indicates the maximum rate, the expected rate of productivity improvement (X-factor) is to be calculated every three years based on a reasonable forecast of future costs. However, the application deadline for the current X-factor is the end of September 2021. Accordingly, it is necessary to calculate the X-factor applied to the next term (three years from October 1, 2021) and set the standard charge index applied from October 1, 2021, through September 30, 2022.
The Ministry of Internal Affairs and Communications (MIC) submitted an inquiry on the establishment of the standard charge index for specified telecommunications services provided by NTT East and West on March 26, 2021, to the Information and Communications and Posts Administrative Council, which made an appeal for opinions through MIC on the matter from March 27 through April 26, 2021.

2. Report and result of appeal for opinions

The Information and Communications and Posts Administrative Council today made a report on the establishment of the standard charge index for specified telecommunications services provided by NTT East and West, which states that the inquired approval is appropriate.
In this connection, no opinions were received in response to the appeal.

3 Future plans

Considering this report, MIC plans to notify NTT East and West of the standard charge index by the end of June 2021, after following the required procedures.