RESTRICTED
WORLD TRADE S/NGBT/W/12/Add.2/Rev.2
16April 1996
ORGANIZATION(96-1411)
Original: English Negotiating Group onBasic Telecommunications
COMMUNICATION FROM JAPAN
Draft Offer onBasic Telecommunications
Revision
Theattached communication iscirculated attherequest ofJapan tomembers oftheNegotiating
Group onBasic Telecommunications.
_______________
Japan hereby submits asecond revision ofitsrevised draftoffersubmitted on20March 1996
(S/NGBT/W/12/Add.2/Rev.1).
Thissecond revised draft offer includes theremoval oftheexisting limitation onforeign
ownership andforeign directors uponlicences ofTypeItelecommunications business andradio stations
tolessthanone-third.
Regardingregulatoryprinciples,thissecondrevisionindicatesthatJapanundertakescommitments
onthebasis ofthe"Reference Paper", asaresult ofdiscussions heldinthe"Reflection Group".
These points oftherevision areconditional anddependent onthemajor negotiating partners
committing themselves tofurther liberalizing measures including theremoval offoreign ownership
restrictions, establishment offrameworks forfairandeffective competition, andguarantee oftransparent
regulations.
Furthermore, duetothelegalandtechnical uncertainties surrounding certain regulatory issues,
which stillneedfurther examination intheNGBT, additional inscription totheschedule maybemade.
Japan reserves therighttomodify orwithdraw allorpartofitscommitments, andtolistMFN
exemptions. Japan, however, hopes thatother Members alsoundertake meaningful commitments on
anMFN basis sothatthiscritically important process willbesuccessfully completed byApril 1996.S/NGBT/W/12/Add.2/Rev.2
Page2JAPAN -SECOND REVISED DRAFT OFFER
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional
commitments
2. COMMUNICATION
SERVICES
C. Telecommunication services
Thefollowing Basic
Telecommunications Services
supplied byType IorType II
Telecommunications Business:
(UNCPC)
a. Voice telephone services
(CPC 7521)
b. Packed-switched data
transmission services
(CPC 7523**)
c. Circuit-switched data
transmission services
(CPC 7523**)
d. Telex services
(CPC 7523**)1)2)&3) Provision ofInternational simple
resale services inamanner tobypass
theinternational accounting rate
system islimited.
(3) Foreign capital participation, direct
and/or indirect, inNTT andKDD
must belessthanone-fifth.
Licensing forradio stations issubject
totheavailability offrequencies.(1) None
(2) None
(3) Board members andauditors inNTT and
KDD arerequired tohave Japanese
nationality.
Asindicated inhorizontal commitmentsJapan undertakes
commitments in
accordance withthe
attached "Reference
Paper" (excluding the
points withbrackets).
"2.Interconnection"
applies onlytothe
essential facilities
supplier.S/NGBT/W/12/Add.2/Rev.2
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional
commitments
f. Facsimile services
(CPC 7521**, 7529**)
g. Private leased circuit
services
(CPC 7522**, 7523**)
o. Others
Type ITelecommunications
Business isthebusiness which
provides telecommunications
services byestablishing
telecommunications circuit
facilities.
Type IITelecommunications
business isany
telecommunications business
other thanType I
Telecommunications Business.
Telecommunications circuit
facilities aretransmission line
facilities connecting transmitting
points withreceiving points,
switching facilities installed as
inseparable units therefore, and
other facilities accessory tosuch
facilities.(4) Unbound except asindicated in
HORIZONTAL COMMITMENTS(4) Unbound except asindicated in
HORIZONTAL COMMITMENTSS/NGBT/W/12/Add.2/Rev.2
Page4
22March 1996
REFERENCE PAPER
Scope
Thefollowingaredefinitionsandprinciplesontheregulatoryframeworkforthebasictelecommunications
services[, where specific commitments areundertaken].
Definitions
Users mean service consumers andservice suppliers.
Essential facilities mean facilities ofapublic telecommunications transport network orservice that
(a) areexclusively orpredominantly provided byasingle orlimited number ofsuppliers;
and
(b) cannot feasibly beeconomically ortechnically substituted inorder toprovide aservice.
Amajor supplier isasupplier which hastheability tomaterially affect theterms ofparticipation (having
regard toprice andsupply) intherelevant market forbasic telecommunications services asaresult
of:
(a) control overessential facilities; or
(b) useofitsposition inthemarket.
[Accounting rateistheratepertraffic unitforagiven relation, which isusedfortheestablishment
ofinternational accounts.]
1. Competitive safeguards
1.1 Prevention ofanti-competitive practices intelecommunications
Appropriate measures shallbemaintained forthepurpose ofpreventing suppliers who, alone
ortogether, areamajor supplier from engaging inorcontinuing anti-competitive practices.
1.2 Safeguards
Theanti-competitive practices referred toabove shallinclude inparticular:
(a) engaging inanti-competitive cross-subsidization;
(b) using information obtained from competitors withanti-competitive results; and
(c) notmaking available toother services suppliers onatimely basistechnical information
about essential facilities andcommercially relevant information which arenecessary for
them toprovide services.S/NGBT/W/12/Add.2/Rev.2
Page5
2. Interconnection
2.1 Thissection applies tolinking withsuppliers providing public telecommunications transport
networks orservices inorder toallow theusers ofonesupplier tocommunicate withusers ofanother
supplier andtoaccess services provided byanother supplier.
2.2 Interconnection tobeensured
Interconnection with[anessential facilities supplier] [amajor supplier] willbeensured atany
technically feasible point inthenetwork. Such interconnection isprovided.
(a) under non-discriminatory terms, conditions (including technical standards and
specifications) andratesandofaquality nolessfavourable thanthatprovided forits
ownlikeservices orforlikeservices ofnon-affiliated service suppliers orforits
subsidiaries orother affiliates;
(b) inatimely fashion, onterms, conditions (including technical standards andspecifications)
andcost-oriented rates thataretransparent, reasonable, having regard toeconomic
feasibility, andsufficiently unbundled sothatthesupplier neednotpayfornetwork
components orfacilities thatitdoesnotrequire fortheservice tobeprovided; and
(c) uponrequest,atpointsinadditiontothenetworkterminationpointsofferedtothemajority
ofusers, subject tocharges thatreflect thecostofconstruction ofnecessary additional
facilities.
2.3 Public availability oftheprocedures forinterconnection negotiations
Theproceduresapplicableforinterconnectionto[anessentialfacilitiessupplier][amajorsupplier]
willbemade publicly available.
2.4 Transparency ofinterconnection arrangements
Itisensured that[anessential facilities supplier] [amajor supplier] willmake publicly available
either itsinterconnection agreements orareference interconnection offer.
2.5 Interconnection: dispute settlement
Aservice supplier requesting interconnection with[anessential facilities supplier] [amajor
supplier] willhaverecourse, either:
(a) atanytimeor
(b) afterareasonable period oftimewhich hasbeenmade publicly known
toanindependent domestic body, which maybearegulatory bodyasreferred toinparagraph 5below,
toresolve disputes regarding appropriate terms, conditions andrates forinterconnection within a
reasonable period oftime, totheextent thatthese havenotbeenestablished previously.S/NGBT/W/12/Add.2/Rev.2
Page6
3. Universal service
AnyMember hastherighttodefine thekindofuniversal service obligation itwishes tomaintain.
Such obligations willnotberegarded asanti-competitive perse,provided theyareadministered in
atransparent, non-discriminatory andcompetitively neutral manner andarenotmore burdensome than
necessary forthekindofuniversal service defined bytheMember.
4. Public availability oflicensing criteria
Where alicence isrequired, thefollowing willbemade publicly available:
(a) allthelicensing criteria andtheperiod oftimenormally required toreach adecision
concerning anapplication foralicence and
(b) theterms andconditions ofindividual licences.
Thereasons forthedenial ofalicence willbemade known totheapplicant upon request.
5. Independent regulators
Theregulatory body isseparate from, andnotaccountable to,anysupplier ofbasic
telecommunications services. Thedecisions ofandtheprocedures usedbyregulators shallbeimpartial
withrespect toallmarket participants.
6. Allocation anduseofscarce resources
Anyprocedures fortheallocation anduseofscarce resources, including frequencies, numbers
andrightsofway,willbecarriedoutinanobjective,timely,transparentandnon-discriminatorymanner.
Thecurrent stateofallocated frequency bands willbemade publicly available, butdetailed identification
offrequencies allocated forspecific government usesisnotrequired.
[7. Public availability ofaccounting rates
International accounting ratesmaintained byanysupplier ofpublic telecommunications transport
networks orservices withforeign correspondents willbeopentopublic review. Upon request ofanother
Member, anessential facilities supplier willberequired tojustify whyaninternational accounting rate
differs significantly from domestic interconnection rates.]