1. Ideal Situation for the Nation and Users

As the demand for info-communications services is very diverse, it is hoped that various ways to use info-communications can be realized. The following outline provides an ideal scenario of info-communications that meet the needs of the nation and users.

(1) Diversified services

As more and more options are offered to users, it is expected that info- communications will be developed at the initiative of users rather than of suppliers.
As well as basic telecommunications services, a range of new multimedia services are expected to appear, including electronic commercial transactions on open networks, distance education with video, and information supply and information search by computer.
Upon supplying these new services, the supplier must provide clear and accurate information so that users can then select the service they require.

(2) Rate reductions

It is necessary for telecommunications rates to become as low as possible to ensure that the expected upsurge in usage of the info- communication system by both business and individuals can be met and encouraged to grow.

Example of rate reductions

1. Elimination of rate gaps between Japan and foreign countries

2. Elimination of disparities between long- and short-distance rates through reduction of long-distance rates

3. Variety of flat-rate services at low cost

4. Abolition or substantial reduction of installation charge (non recurrent)

(3) User confidence

Users must have confidence in the reliability of the service.

1. High-quality, highly reliable service level
   The quality and reliability of service must be ensured by maintaining/improving transmission quality and building a trouble- free system.

2. Protection of privacy
   Legal measures should be adopted that ensure the users rights to privacy, and encrypting and verification technology should be developed and applied to prevent others from easily accessing personal data.

3. Elimination of information detrimental to the public interest
   Establishment of rules should be examined for the treatment of information which is not in the public interest or has an adverse effect on social stability. While at the same time freedom of expression and protection of privacy should be ensured.

4. Securing of safe, reliable info-communications
   To enable electronic accounting on open networks and to prevent access by hackers, we must work towards developing applications for encrypting and verification technologies as well as building a system encompassing these technologies, and ensure secure and reliable info- communications at the same time.

5. Clarity of contracts
   We need to create an environment in which users can understand the contents of their contracts clearly, this includes taking such measures as informing users of the detailed contents of the services.

(4) Easy and convenience in using telecommunications

We need to create an environment in which users find it easy to use the services.

1. One-stop shopping
   With rising competition in the future, it is likely that a number of carriers will interconnect and use each others' networks effectively to provide various services to users.
   In this case, we need to create an environment in which users are able to access the service, so-called "seamless service," without being conscious that a number of carriers are involved by having one representative of the linked services serving as user liaison (receiving applications, billing, responding to faults) on behalf of other companies.
   As information on subscribers would be exchanged among carriers in the linked services, careful consideration must be given to prevent the abuse of personal information, to protect the subscribers' privacy.

2. Easy operation of telecommunications equipment
   It is hoped that human interfaces will be sufficiently improved to create an environment for users to easily operate telecommunications equipment.

3. The establishment of a user-oriented framework for providing services
   A framework which provides services from the user's standpoint - such as counter services to deal with applications, inquiries and repair requests- should be established to ensure that users can take full advantage of telecommunications at any time.

(5) Guarantee of opportunities to access universal service

Equal and open access to universal services must be guaranteed as well as measures taken to avoid the emergence of two classes of people, information "haves" and "have-nots."

(6) Expansion of information transmission by individuals

1. As society becomes more information oriented, individuals can easily dispatch information. This situation will create new relationships between people. A society based on information networks will be different from the conventional society of today. The potential to significantly influence personal lifestyles and society is indeed immense.

2. For example, by using the Internet, people can establish human relationships and interact with society in a completely unique way, attending a new community without regard for distance. Individuals and small groups will be able to send information all over the world and influence society in ways that were not possible before.

(7) Assurance of welfare services

1. It is hoped that the aged and the disabled will be able to participate in society to the same extent as healthy people can by overcoming impediments to physical mobility with advanced info-communications systems and by using visual media.

2. Advanced welfare information systems should improve the quality of home care and medical services in rural areas.

Activating the info-communications industry as a supplier is essential for further enhancing benefits to the nation and users.

(1) Promotion of cross entry

1. Under the present legal system, although NTT is limited to domestic communication, KDD to international communications, and NHK to broadcasting, there are no business demarcations between domestic and international communications, local and long-distance communications, fixed and mobile communications or broadcasting and telecommunications.

2. As mentioned in Chapter 2 2.(6) "Promotion of cross entry", many businesses are independent entities at present, and mutual market participation has not been sufficiently promoted.
   In relation to this matter, there are arguments for clarifying the fact that there are no regulations imposed by business classification as stated in (i).

3. In response to these arguments, the fact that there are no regulations by business classification has been repeatedly made clear. It is hoped that the policy to promote cross market entry will encourage competition and further users' interests in the coming multimedia era.

(2) Formation of diverse network

1. The establishment of info-communications infrastructure
   With respect to the building of the fiber-optic network, the goal is to install fiber optics in every home in Japan by the year 2010. It will be ideal if type I telecommunications carriers and CATV providers compete to build the network.
   We also hope to establish multi-layer networks composed of fiber- optic, satellite or mobile networks as future information infrastructure.

2. Promotion of inter-networking
   Internet-working (interconnection of multiple networks such as LAN) should be easily conducted as computers and multimedia are diffused and developed. For user networks such as the Internet to achieve diverse structures, facility-based networks which are the basic user networks should be open to all, easy to use and inexpensive. Therefore, the promotion of competition at the facility base becomes an important task. NTT has proposed the concept of Open Computer Network (OCN) of the Internet Protocol as the service provided by a Type I telecommunications carrier.
   In the United States where similar services have been realized by interconnection of long-distance carriers and local carriers, Internet connection providers without a facility base are demanding the establishment of fair competition conditions with facility-based carriers. In Japan, such a service should also be provided under fair conditions after securing the unbundling of functions and facilities (clearance of interconnection cost of each network or function element).

3. The promotion of flexible network establishment
   Moreover, it is expected that motivated businesses will be able to develop the info-communication industry in various ways through the promotion of the flexible networks described below.
   1. Telecommunications carriers will be able to build the network using conduit lines and fiber optics of utilities company and local self-governing bodies.
   2. Deregulation of public switched network connections and leased lines.

(3) Promotion of competition in regional markets

1. To eliminate the bottleneck monopoly (explained later in (8) "Dealing with NTT's bottleneck monopoly"), we shall need to create competition in local communications. Telecommunications by CATV, local by-pass, as well as mobile communications such as cellular phones and PHS, can be described as the local communications media needed to achieve this objective.

2. The following examples can be offered as plans to promote competition taking into account these local communications media:
   1. Securing access to power steel towers, conduits, electric poles, and the like.
   2. Smooth connection to local communications networks
   3. Retaining equal access (Users can access any providers under identical conditions, including the number of unit numbers.)
   4. Offering number portability (Members can use the same number even if they change providers.)
   5. Maintaining frequency
   6. Other means

(4) Securing of interconnection

A. The importance of interconnection

Telecommunication services can be offered to users only when networks among different providers, such as local communications, long-distance communications, international communications and mobile communications, are smoothly linked. Consequently, maintaining smooth and effective interconnections are an important objective.
In particular, it is essential to try and maintain interconnections between facilities which other providers must connect to their proper network, such as the NTT local communications network, and other communications networks.
It is necessary to establish regulations relating to interconnections between providers, such as NTT, who have essential facilities and a certain market share, and other providers, and to reinforce supervision to ensure regulations are being observed in practice.

B. Concrete measures for securing interconnection

As basic connection rules:

In order to achieve prompt connection, clarify connection conditions and ensure equality, it is necessary to consider such actions as:

1. making interconnections compulsory;

2. price list and contract covering connection conditions;

3. separation between connection accounts and business accounts (establishing a separate account which clarifies the revenues and expenses for interconnection with other carriers, apart from the present business accounting which only clarifies the status of each service.);

4. Unbundling (unbundling network components and connection fees at every function);

5. Number portability (so that users can use the same number even after changing providers).

   (See Chapter 6 for details)

[Reference] Examples in other countries

1. In the United States, interconnection has become compulsory for all telecommunications carriers under the Communications Act of 1996, while in the United Kingdom interconnection is compulsory for common carriers such as BT, under licensing conditions.
2. For local telephone companies in the United States, the interconnection conditions is included in a price list and tariff. For BT in the United Kingdom, the interconnection fee is set by OFTEL and the interconnection account and business account are separated under BT licensing conditions.
3. In the United States, unbundling has become compulsory for local carriers who have provided a monopoly service in accordance with the Telecommunications Act of 1996. For BT in the United Kingdom, OFTEL sets a connection fee which has been unbundled to about 90.
4. In the United States, access through the presubscription system (connection to the registered carrier without having to dial the carrier number) is compulsory for all local carriers under the Telecommunications Act of 1996.
5. In the United States, number portability must be offered by all local carriers under the Telecommunication Act of 1996. In the United Kingdom, OFTEL is taking action against BT to amend licensing conditions for number portability.

(5) Improvement of international competitiveness

A. Concerning international competitiveness

1. It is basically proper to understand international competitiveness with concepts such as those described below, rather than to understand it as the pursuit of national interest in competition with other countries.
   1. Japan's info-communications industry is developing strongly.
   2. As a result, users are able to enjoy services that are diverse, inexpensive and of quality.
   3. It is necessary to show leadership in the global community and to contribute to standardization and the establishment of a global information infrastructure.

2. Moreover, the term "international competitiveness" is often discussed from the standpoints shown below:
   1. Telecommunication carriers are developing businesses in overseas markets; and
   2. Development is being made in international telecommunications markets such as alliances with overseas telecommunication carriers; the discussion concerning these standpoints is also necessary.

B. Entering overseas markets

1. Concerning telecommunications carriers and manufacturers business activities in overseas markets, the systems, products and content should be of good quality and inexpensive by international standards in order to meet basic requirements.
   If these requirements are being met, then we can expect positive developments in the international markets for systems, products and content and the achievement of de-facto standards through positive overseas development, such as winning projects to build information infrastructure in developing countries and entering telecommunications markets in developed countries.
   The existence of a very large, representative telecommunications carrier, the so-called "national flag carrier," is often thought to be indispensable for overseas development. However, if we look at the present state in Western countries, in some cases a strong manufacturer is present although there is no major telecommunications carrier, while in others there is a major telecommunications carrier, but no strong manufacturer. Thus, we cannot say that the presence of a national flag carrier is a prerequisite for improving the international competitiveness of one's products.

2. Further, NTT provides an example of a major carrier that has not achieved sufficient penetration of overseas markets as mentioned in Chapter 2 2. (7) (ii) "Alliance with overseas carriers."
   One argument has it that size is a prerequisite to be competitive internationally when entering overseas markets.
   Of course, moving into overseas markets is risky and the size of a firm can sometimes be of importance.
   However, NTT, presently the world's largest carrier, has very little overseas business. In contrast, smaller US and European telecommunication carriers are aggressively entering overseas markets. Therefore, management scale is not an indispensable requirement for entering business overseas.

C. Developing business in international telecommunications markets

1. In the international telecommunications market, there is a move towards cross-border alliances with other nation's carriers. These alliances are designed to respond to global communications demands, such as the needs of multinationals.
   At present, these alliances are taking place in the international telecommunications market, and account for less than 5% of domestic and international telecommunications markets in Japan in FY 1994. Yet, the potential for future growth should not be taken lightly.

2. Moreover, as mentioned in Chapter 1 4. (3) "Globalization," the development of mobile communications technology such as low earth orbit satellite technology is enabling global services and a positive response to this development is therefore anticipated.

3. We should aim to contribute to building a global network in which Japan plays the role as a hub (a center for information receipt and transmission), responding to the trend towards the globalization of info-communications.

4. Improving Japan's competitiveness in the international telecommunications market is another important task in furthering the globalization of info-communications.

D. Improving international competitiveness

1. Generally, overall international competitiveness is judged by a range of elements such as low price, the superiority in service and efficiency, originality of ideas, fast and flexible management (economies of speed), R&D and reliability, and not simply by the size of the company.

2. In the multimedia age, not only low price and diverse services but in all areas of infrastructure, equipment and content the factors such as originality of ideas, economies of speed and advanced R&D, become increasingly important as is seen in the fact that de-facto standards are gaining strength.

3. For our system to take priority over the systems of other countries, constant progress in these factors as a source for international competitiveness will be required.

4. For this to happen, a system in which strong rivals compete and improve on each other in the domestic market seems to be better than a system in which a monopoly exists without any strong domestic competitors.

5. Therefore, international competitiveness should be improved by creating a dynamic competitive domestic environment through encouraging the emergence of a large number of competitors.

(6) Enhancement of research and development capability

R&D is a source for the development of the info-communications industry. In info-communications in the future, further improvement in R&D must be promoted because the role of R&D seems to be becoming more important as technology rapidly progresses.

A. Stimulus to competition in research and development

Given the rapid and substantial changes in the R&D environment such as the diversifying and rapid expansion of needs in info- communication, technology, as well as the expansion of technological areas at the boundaries, it is important to improve R&D capability. This requires the promotion of dynamic competition among as many organizations as possible, who can independently determine intentions, through multilateral and flexible cooperation with other domestic and overseas organizations, avoiding any drop-off in dynamism caused by market forces.

B. Joint research and development between carriers and manufacturers

NTT has developed equipment such as exchanges for its own use in cooperation with manufacturers, and has contributed to the development of R&D in our country. The following facts have been pointed out in connection with joint R&D between NTT and manufacturers:

1. The digital switchboard developed by joint R&D does not necessarily augment market competitiveness.

2. Despite the fact that some foreign manufacturers have entered the subscriber switchboard area (fixed telecommunications system), there has been no significant change in the share of the four companies that have been carrying out R&D with NTT.

3. The considerable influence over manufacturers R&D by NTT, a monopolistic carrier, may, in fact, be damaging the diversity of R&D.

4. Given the rapid and substantial changes in technologies and needs, it is better that a number of manufacturers engage in R&D designed to meet NTT's procurement markets, to further stimulate R&D competition. If NTT makes procurements in an open manner from domestic and overseas suppliers so that it can purchase the best equipment at the lowest prices, telecommunications rates will be lowered.
   Taking these points into consideration, the joint R&D between carriers and manufacturers should contribute to the diversity and activity of Japanese R&D and market competitiveness, as well as improve benefits for the nation and users, thereby meeting the expectations of the nation and industries.
   In the further break up of AT&T announced in 1995, the carrier will be broken up into three companies, including a communications sector, a manufacturing sector and a computing sector. However, most of the Bell Laboratory will be incorporated into the manufacturing sector, while the communications sector will set up a new research operations division which will engage in R&D related to communications. This underscores the importance of the manufacturers R&D.

Notes:

1. Siemens holds 50% share in GPT and AT&T invests in Italtel.
2. "Domestic market size" refers to the country's switchboard markets as a percentage of the international switchboard markets.
3. The share is based on the number of lines.
4. (S) represents Sweden.

Notes:

Share is based on the number of lines.

Reference:

NBI Report 1994
NBI (Northern Business Information) :
Research company specializing in the communications market with head office in New York.

C. Fostering of venture business
In the United States, venture companies with a high standard of R&D capability have been increasing, and have played central roles in R&D through a mix of both cooperation and competition. The benefits have been a further expansion of R&D capability in the field of applications and services.
To be able to effectively respond to needs that are more sophisticated and diverse and to the rapid changes we are seeing in info-communications, it is important to nurture R&D by promoting the growth of ventures on a global scale in specific areas, and encourage dynamic cooperation among these ventures and other organizations which possess diverse experience and expertise.

D. Steps towards standardization
It is important for the global market to be able to take advantage of breakthroughs in research and development quickly as well as for leading edge R&D activities to be conducted, as info-communications markets develop on a global scale. Standardization is also important to ensure interconnectivity and interoperability of networks and terminal equipment.

1. Steps towards de facto standards
   Taking the examples of OSs for personal computers and communications software for the Internet, it is evident that the standards set by the leading company in a specified market become the de facto standards and prevail worldwide. We must aggressively encourage plural entities which can conform to international de-facto standards.
   The determination of de facto standards in forums at which related organizations and companies attend has become the norm in addition to international alliances among companies. We must further flexibly respond to these trends.

2. Steps towards deduli standards (official standards)
   It is necessary to promote deduli standards more flexibly by re- vitalizing such organizations as the ITU (International Telecommunication Union) so that technological advances based on the globalization of the market can be introduced in a timely fashion and by encouraging cooperation with de facto standard activities.

E. Enrichment of research and development resources

1. Discussion on concrete measures to secure R&D expenses
   To secure R&D funds for info-communication, companies such as NTT should set aside a certain percentage of gross revenues for R&D and this percentage target should be made public.

2. Personnel development and etc.
   In addition to developing creative people who have a grasp of such subjects as network technology and multimedia, it is also important to ensure that such talented people are retained so that the research and development needed to devise new technology and services can be promoted.
   Interchange among researchers with different experiences and knowledge without regard to limitations of fields and systems encourages competition. This, in turn, provides a powerful stimulus for individual researchers, at the same time promoting activity within research institutions. It is therefore important to promote interchange among researchers and to provide a research environment that is both flexible and competitive.

F. Furthering of basic and leading-edge research and development
Neither basic nor leading-edge R&D is designed to produce short- term successes or immediately visible results. Such R&D needs to be approached from a long-term perspective, and is important in terms of the role that government plays.
For this reason, it is important to further promote Japan's governmental expenditure on basic and leading-edge R&D and its efforts to perfect its research institutions. This will help improve regional potential through multipolar R&D.

G. Reinforcement of links between industry, academia and government
It is necessary to promote the type of all-embracing R&D that shows a balance between basic research, applied research and developmental research. This can be achieved by giving full play to the individual characteristics of industry, education and the government, by strengthening the ties therein, and by complementing their mutual R&D efforts.

(7) Promotion of network businesses

It is necessary to promote the development of business that utilizes content and networks.

1. Fostering content business
   To develop a content industry, it is necessary to promote the provision of a social environment that develops personnel, venture businesses, and other essential aspects. At the same time, we need to encourage the lowering of communication rates through diverse competition and promote the establishment of info-communications networks.
   The continued development of content business can be achieved by establishing links between communications carriers and the different content business operators, and by establishing an environment whereby each carrier can enter into the content business of their own accord.

2. The development of network businesses
   1. Transformation of existing manufacturing and service industries into new business operations
      Existing manufacturing and service industries will use info- communications networks to turn their existing products and services into more advanced, higher value-added products. Or, they will go further and create new businesses, by developing entirely new services or products. The potential result would be transformation into a new industry, quite different from the original.
   2. Growth of new network business
      Such new network businesses as the so-called cyber-business will achieve immense growth. This business will provide business area and social spaces within the info-communications network for ordinary consumers, manufacturers, service providers, various groups and organizations, to trade (i.e., order and pay for products.)

(8) Dealing with NTT's bottleneck monopoly

A. Problems stemming from bottleneck monopoly

1. To further develop the info-communications industry, competition by various entities should be promoted. In this sense, NTT's bottleneck monopoly of the regional communications network is a major problem.

2. The bottleneck monopoly in the regional communications network has created a situation whereby almost all of the telecommunications services cannot be provided without the monopolistic regional communications network. The problems that emerge from this bottleneck monopoly include the following:
   1. It is more than likely that monopolistic power is exercised over competitive carriers to the detriment of fair and effective competition.
   2. Monopoly carriers do not have the incentive to cut costs and improve services. Moreover, cost reductions play an important role in the rates of all markets that use the regional communications networks.
   3. The entry into competitive fields and the convergence with different industries by a company which holds a bottleneck monopoly nationwide may further aggravate the problem mentioned in (a), and make it difficult to create dynamism based on multilateral competition.

3. Hence, in order to encourage lower charges for telecommunications services and promote fair and effective competition in Japan, it is necessary to eliminate the bottleneck monopoly situation itself, so as to prevent the exercising of monopolistic power in various fields to the extent of hindering the development of the info-communications industry.

B. Competition in regional communications market

1. The current state of competition in the regional communications sector may be described as follows:
   1. Cellular phone calls that do not depend on the NTT regional communications network amount to no more than 0.4%.
   2. The typical PHS operation (dependent on NTT network) depends entirely on NTT's regional communications network for line equipment.
   3. CATV telephones are not yet in practical use. Also CATV itself only had 2,210,000 subscribers as of the end of fiscal 1994, for a subscription rate of only 6%.
   4. Compared to NTT's 60 million telephone subscribers, regional NCCs have around 15,000 subscribers. This is no more than 0.025% of the entire subscriber population.

2. From the perspective of providing services, it is imperative that NTT's potential regional communications network competitors (i.e., cellular phones, PHSs, CATV, regional NCCs) all remain connected to the monopolistic NTT regional communications network. Moreover, these regional communications media are subject to the following for the time being:
   1. Cellular phones and PHSs are restricted in terms of rates, network construction, and functions (moving image transfer and the like).
   2. CATV telephony is restricted in terms of rates, technology (miscellaneous interference and others), and building costs.
   3. As mentioned above, in September 1995, NTT announced its policy allowing connection to subscriber exchanges and other similar equipment. The time, cost, and technological conditions involved in such connection are still not clear. Additionally, even if this type of connection were to proceed smoothly, there would be no change in the structure whereby regional NCCs remain dependent on NTT's subscriber networks, nor in the situation that connection charges are still dependent on NTT productivity.

C. Difficulty in the eliminating the bottleneck monopoly

1. Even assuming policies to promote competition within the regional communications sector (such as guarantees of access to line systems and smooth connection to the regional communications network), it is believed that the elimination of the bottleneck monopoly will require much time and is difficult to accomplish for the following reasons:
   1. It took more than one hundred years to establish the current regional network in Japan, under a legal government monopoly, based on granting preferential treatment and incentives, such as tax exemption, compulsory liability of subscribers for underwriting telegraph/telephone bonds by law.
   2. The construction of regional communications networks is costly and difficult.
   3. Regarding regional communications media such as cellular phones, PHSs, CATV and regional NCCs, there is little possibility that they would be able to completely replace the present regional communications networks in the short term.

2. Therefore, the existence of the present monopolistic regional network mostly depends on the prevailing technological and economical factors. However, we cannot allow the bottleneck monopoly to hinder healthy competition in the telecommunications market.

D. Restructuring of NTT

As discussed above, with the continuing bottleneck monopoly in NTT's regional communications network, there are limits to the extent to which competition can be effectively introduced. Using government intervention, accompanied by regulations, to prevent a stranglehold on the network will conceivably entail a considerable amount of time and money.
As a result, in order to take drastic measures to promote competition in regional communications market and offer sufficient incentive to cut costs, it is essential to study structural measures pertaining to NTT's regional communications networks, which constitute a bottleneck monopoly, and implement non-structural measures based on such considerations.

(1) Guaranteeing a universal service

1. A nationwide telephone service system has already been established. Although there are still calls for further reductions in telephone charges, the minimum possible universal service is already in place.

2. From now on, it is anticipated that, as the multimedia service develops, the range of universal services will gradually expand to incorporate broadband and two-way info-communications networks, as well as the services making use of these networks.
3. Activation of the info-communications industry through competition by multiple entities will facilitate the flexible development of universal services as follows:
   1. Competition will facilitate a reduction in rates, and contribute to a variety of services being offered at affordable prices.
   2. The entities providing multimedia services will not be limited to the carriers that provide the info-communications infrastructure, but will be expanded to include multiple entities that make use of the info-communications infrastructure to offer their own services.

4. It is necessary to conduct studies on the establishment of a scheme under which all companies would shoulder a burden, in order to secure universal services nationwide. This includes services for remote islands and underpopulated areas, in line with the progress of competition in the regional communications market. This would entail, for instance, the establishment of a basic frame-work to secure universal services.

5. In addition, for the purpose of social welfare, an attempt must be made to create an environment in which basic telecommunication services are guaranteed for senior citizens, the disabled and people with low incomes.

(2) Safeguards to ensure communications are not disrupted during natural or other disasters

1. In the multimedia era, reliance on the info-communications network for vital daily information and important business transactions will further expand. Thus, in order to minimize the effects of disasters, it is necessary to improve network system reliability by establishing a strong and stable info-communication infrastructure through the combined use of underground cables, satellite communications, terrestrial microwave communications, optical fibers and mobile communications.

2. Furthermore, along with the development and diversification of providers of multimedia services, it is essential that congestion and stoppages are kept to a minimum during emergencies and disasters, and that public organizations are given priority in using communications at such times. Therefore, it is necessary to ensure safety and reliability by improving the networks' ability to withstand disasters, by promoting research and development of communications technology for use in emergencies and by implementing such measures as the establishment of the Central Safety and Reliability Center (tentative name) comprising communications carriers.

3. Another way to help improve the safety and reliability of communications during emergencies is, for example, to promote R&D in radio communications technology which realizes broadband, two- way and video communications and enhances the radio services already provided by local governments during emergencies.

(3) Promotion of a "Consumer First" administration

As informatization moves ahead, telecommunications services can be expected to become more and more indispensable to the lives of consumers, thereby playing a major role in society. With the development of a "Consumer First" mentality within the telecommunications administration, it is necessary to provide the sort of environment where consumers are supplied with sufficiently accurate information to enable them to make the right choices and thereby enjoy a truly better quality of life.

1. Promotion of provision of information
   Diversification of telecommunications services and charges will require the establishment of an environment that will allow consumers of telecommunications services to obtain the right sort of information as speedily as possible, in order for them to ultimately make the right kind of choices. In addition to the provision of information by telecommunications carriers, it is vital for the government to provide information that meets the needs of consumers.

2. Improvement of the complaint handling system
   The responsibility for making individual choices in the market is basically left up to the consumer. However, given differences in the capacity of gathering information between carriers and consumers, there is a need to establish a system which helps consumers when they experience problems. Such a system would include advice and the handling of complaints. It is also important for steps to be taken with regard to the establishment of laws that would enable complaints about telecommunications services to be filed against the government. At the same time, it is necessary to study setting up a damage compensation scheme and expansion of the administrative functions pertaining to a "Consumer First" administration in the telecommunications field.
   (Examples from overseas:)
   In Britain, the Telecommunications Law stipulates that BT and others must define their procedures for dealing with complaints and disclose them to the public after they have been approved by OFTEL.
   In the US, complaints brought to the FCC by consumers are dealt with by an institution established by the FCC to mediate between the consumer and the telecommunications carrier concerned.

3. Improvement of information education and cultivation of information literacy
   Advances made in informatization could potentially widen the gap in access to information. It is therefore necessary to rectify and reduce any such disparities to avoid the emergence of two classes of people - the information "haves" and "have nots." With this in mind, it is necessary to ensure that the education system fosters information literacy. It is essential for schools, all other educational vehicles and society itself to actively work towards this end.

4. Establishment of information ethics
   It is necessary to establish a code of information ethics by eliminating information that is detrimental to public order and by improving information education, so that users do not cause offense to others thus facilitating a rich and plentiful exchange of information.

5. Development of various systems to ensure consumer rights
   To ensure consumer rights, it is necessary to introduce systems that will meet the needs of the constant progress being made in informatization.
   1. Development of a legal system which would guarantee that telecommunications could be used to its optimal purpose
      Because of its immediacy and convenience, the telephone has become one of the main means of communication in today's society. However, along with the advantages we have drawbacks such as prank phone calls, obscene calls and calls aimed at selling or soliciting something. The characteristics of such telephone calls are that they are unexpected, anonymous and non-visual. These kind of calls all serve to disturb the citizen's peace of mind and have become a social problem of some consequence. In addition, the use of the increasingly popular Internet for obscene communication purposes poses a problem for society.
      In order to solve these problems, it is necessary to build a healthy advanced info-communications society, by means of prompt introduction of legal systems related to appropriate use of telecommunications, based on the characteristics of the telecommunications media.
      Example:

      a) Prohibition of prank calls, obscene calls, etc.

      b) Prevention of late night or early morning nuisance calls.

      c) Introduction of a caller ID notification service to prevent nuisance calls with careful consideration to the protection of consumer privacy.

      d) Regulations to prevent communications which disturb public order and are merely offensive on so-called open forms such as the Internet and PC electronic boards.

   2. Protection of privacy
      Protection of privacy and dissemination of personal information requires that investigations be made into appropriate legal systems. It also requires the development and application of passwords and personal ID technology in order to protect against the leaking, falsification, or otherwise illegal use of personal information.

   3. Development of a system pertaining to transactions conducted on info-communications networks
      Example:

      Establishment of a framework for an authentication system to confirm personal IDs in electronic commerce, to guarantee all data is received, and to register proof of the fact that transmission and reception were conducted.