December 2, 2024 Consultation with the Information and Communications Council Regarding the "Method for Calculating Telephone Universal Service Subsidies for the 4th Quarter of FY 2024."

 Today, the Ministry of Internal Affairs and Communications (MIC) has consulted the Information and Communications Council, chaired by ENDO Nobuhiro, special advisor to NEC Corporation, on how the telephone universal service subsidies for the 4th quarter of FY 2024 (January to March 2025) should be calculated.

1. Background, etc.

 The Information and Communications Council issued a report on September 20, 2022, titled "Universal Service Subsidy System in Light of Changes in the Environment Surrounding Landline Telephones." This report outlines the application of the LRIC model to calculate compensation for telephone universal service subsidies during the transition period to IP networks (from April 2022 to December 2024). However, the report does not address how to calculate compensation for telephone universal service subsidies after the transition period, i.e., from January 2025 onward.
 To calculate the compensation for FY 2025, Category 1 eligible telecommunications carriers are required to notify the Universal Telecommunications Services Support Institution of their FY 2024 costs by the end of August 2025. This includes the compensation for the period from January to March 2025, following the IP network transition, as it is calculated based on FY 2024 costs. The application of the LRIC model to this post-transition period needs to be clarified promptly. To address the necessary items for this calculation, the MIC consulted the Council.

2. Matters that should be included in the report

 How to apply the LRIC model to calculate compensation for telephone universal service subsidies for the 4th quarter of FY 2024

3. Preferred timing for reporting

 Around March 2025