December 14, 2022 Organization of Study Group on Operation of Price Cap System

The Ministry of Internal Affairs and Communications (MIC) has decided to organize a study group on the operation of the price cap system in order to examine such matters as the standard fee index to be applied from January 2024 for subscription telephone services and the handling of the X-factor.

1. Purpose

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 (hereinafter referred to as "NTT East/West").
When setting the standard rate index that indicates the maximum rate, the expected rate of productivity improvement (X-factor) is required to be calculated every three years based on a reasonable forecast of future costs. The current X-factor is due to be applied until the end of September 2024. However, as changes to the rate structure are planned, due to NTT East/West's migration of their voice services to an IP network in January 2024, it is necessary to examine such matters as the standard fee index to be applied from that month and the handling of the X-factor.
This study group will examine and summarize future approaches to the price cap system, including the response to the migration to an IP network.

2. Matters to be examined

• 1.
  Response to changes in the rate structure arising from the migration to an IP network
• 2.
  Future approaches to calculating the X-factor
• 3.
  Calculation of the X-factor for the next period
• 4.
  Other

3. Schedule

The first meeting will be held on Wednesday, December 21, 2022, with further meetings to be held thereafter.

• *
  The published materials are in Japanese only.