RESTRICTED
GENERAL AGREEMENT S/NGBT/W/3/Add.17
25October 1994
ONTRADE INSERVICES
(94-2173)
Original: English Negotiating Group onBasic Telecommunications
COMMUNICATION FROM JAPAN
Response toQuestionnaire onBasic Telecommunications
Theattached communication iscirculated attherequest ofJapan tomembers oftheNegotiating
Group onBasic Telecommunications.S/NGBT/W/3/Add.17
Page2
RESPONSE OFJAPAN TOTHE QUESTIONNAIRE ON
BASIC TELECOMMUNICATIONS
PART I
Answer 1
Theconcept ofbasictelecommunications isnotprovided forassuchintheregulatory framework
ofJapan. Ontheother hand, outofthetelecommunications services supplied byType II
Telecommunications Carriers (hereinafter referred toas"Type IICarriers"), referred toinJapan's
Schedule ofSpecific Commitments, thefollowing areconsidered basic telecommunications:
Packet-switched datatransmission services (MTN.GNS/W/120 2.(b))
Circuit-switched datatransmission services (ibid. 2.(c))
Telex services (ibid. 2.(d))
Facsimile services (ibid. 2.(f))
Private leased services (ibid. 2.(g))
Thefollowing answers arebased onthepresumption thatthebasic telecommunications falls
under thecategory ofservices listed in2.C(a)-(g) and(o)intheServices Sectoral Classification list
(MTN.GNS/W/120).
Answer 2
Under theJapanese regulatory regime, telecommunications carriers consist ofType I
Telecommunications Carriers (hereinafter referred toas"Type ICarriers") who supply
telecommunicationsservicesbyestablishingswitches,transmissionroutesandotherfundamentalnetwork
facilities, andType IICarriers whosupply telecommunications businesses other thantheabove.
Answer 3
Notapplicable (seeAnswer 1above).
Answer 4
Japan hasnomonopoly orexclusive service suppliers inthebasic telecommunications sectors
except fortelegraph services.
Answer 5
Same asAnswer 4.
Answer 6:
Same asAnswer 4.
NTT andKDD monopolize domestic andinternational telegraph services respectively forthe
timebeing.
Foreign capital participation inNTTandKDD isbothlimited tolessthanonefifthofthetotal
capital.S/NGBT/W/3/Add.17
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(Current foreign capital participation accounts for1.37percentinNTT and2.06percentin
KDD (asofMarch 1994).)
Answer 8
There arenointer-governmental agreements relating tothesupply ofbasictelecommunications
networks andservices.
PART II
Thefollowing answers arebothforsections ofAandB.
Answer of(i)Overview
(1) Under Japan'sTelecommunications Business Law, TypeICarriers mustacquire governmental
permission andGeneral Type IICarriers submit anotification toMinistry ofPosts and
Telecommunications(hereinafterreferredtoas"MPT").TheTelecommunicationsBusinessLawrequires
Special Type IICarriers (Type IICarriers thatmeetcertain criteria interms ofcircuit scale, etc.)to
register themselves atMPT.
(2) Foreign capital participation inType ICarriers islimited tolessthanonethird ofthetotal
capital. However, capital participation inNTT andKDD mustbelessthanonefifthrespectively, in
accordance withlawsgoverning these companies.
Regulations onforeign capital participation ininternational satellite communications businesses
were eliminated inJune1994.
(3) There arenorestrictions forforeign capital participation forType IICarriers.
Answer of(ii)Modes ofsupply
Except inthemode ofconsumption abroad, theTelecommunications Business Lawrequires
foreign companies toacquire governmental permission toparticipate inType ITelecommunications
Businesses (hereinafter referred toas"Type IBusinesses") andforeign capital participation islimited
tolessthanonethird. Inthecaseofinternational satellite communications, however, there isno
limitation toforeign capital participation.
With respect toType IITelecommunications Businesses (hereinafter referred toas"Type II
Businesses"), there arenolimitations tothemodes ofcross-border supply, consumption abroad and
commercial presence.
However, withrespect totheservices referred toinAnswer 1above, Type IICarriers can
onlysupplydomestictelecommunicationsservices(excludingvoicetransmissionservicessuppliedthrough
theuseofdomestic leased circuits interconnected withpublic switched networks) inaccordance with
thecontracts between Type IandType IICarriers.
Answer of(iii)Market access
(1) TheTelecommunications Business Lawrequires foreign companies toacquire governmental
permission toparticipate inType IBusinesses andforeign capital participation islimited tolessthan
onethirdofthetotalcapital.S/NGBT/W/3/Add.17
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(2) TheTelecommunications Business Lawdoesnotrestrict foreign companies 'market access
except forrequiring them toregister ornotify theirparticipations inType IIbusinesses atMPT.
Answer of(iv)National treatment
Foreign telecommunications service suppliers cansupply international satellite communications
services ofType IBusinesses andalltheservices ofType IIBusinesses. Inthose cases, theprocedures
andcriteria which areapplied toJapanese Telecommunications service suppliers willbeaccorded to
foreign telecommunications service suppliers.
Answer of(v)Licensing
TheTelecommunicationsBusinessLawrequiresgovernmentalpermissionforTypeIBusinesses,
notification forGeneral Type IIBusinesses andregistration forSpecial Type IIBusinesses.
GovernmentalpermissiontoconductTypeIBusinessesisgrantedundersuchcriteriaasadequate
financial bases, technical capability andfeasibility ofbusiness plans.
Thefollowing answers areonlyforsection B.
Answer 1
There isnolegaldistinction between localanddomestic longdistance.
Answer 2
Laws governing NTTandKDD stipulate thatNTTshallsupply domestic telecommunications
services andKDD shallsupply international telecommunications services. Norestrictions areapplied
toanyother telecommunications service suppliers.
Answer 3
International resale ofprivate leased circuit capacity supplying services such as
MTN.GNS/W/120 2.C(a)-(g) isnotpermitted under/by provisioning conditions (contracts) ofType
ICarriers, regardless ofwhether itisconnected tothepublic switched networks ornot.Theinternational
resale ofswitched voice capacity isnotpermitted either. (TheGovernment ofJapan (hereinafter referred
toas"GOJ") authorizes those contracts.)
Answer 4
Resale ofdomestic private leased circuit excess capacity (excluding acircuit connected tothe
public switched network forvoice transmission) ispermitted byprovisioning conditions (Tariffs) of
Type ICarriers. (TheGOJauthorizes those tariffs.) Inthiscase, notification orregister asType II
Carriers arerequired forthose service suppliers.
Answer 5
TypeICarriers mayconstruct andoperate theirownnetworks orinvest inconsortia toconstruct
andoperate suchfacilities. Foreign capital participation inType IBusinesses islimited tolessthan
onethirdoftotalcapital. (InthecaseofNTT andKDD, itislimited tolessthanonefifth.)S/NGBT/W/3/Add.17
Page5
Answer 6
Nodistinctions.
Answer 7
Under theTelecommunications Business Law, Type ITelecommunications Carriers cannot
refuse supply oftelecommunications services without valid reasons andaslongasterminal facilities
meet certain technical standards andcustomer-provided telecommunications facilities meet certain
circumstances. Type ICarriers cannot refuse requests made byowners ofthose facilities toconnect
Type ICarriers 'linestothose facilities.
Answer 8
Same asAnswer 6.
Answer 9
Astheconcept ofpublic basictelecommunications service suppliers isnotprovided forassuch
intheregulatory framework inJapan, therearenolegalobligations forsuchpublic suppliers. However,
Type ICarriers aresubject toobligation mentioned inAnswer 7above. However, NTT isrequired
toprovide stable nationwide telephone services throughout Japan.
Answer 10
There arenoregulations oninstallation andsupply ofnetworks established privately by
telecommunications suppliers.
Answer 11
No.
PART III
Answer 1
TheGOJ isresponsible formaking andimplementing regulatory policies andstandards.
However, telecommunications service suppliers may beasked toexpress their opinions at
Telecommunications Technology Council, anadvisory body totheMinister ofPosts and
Telecommunications, ontheissues oftechnical standards tobesetbytheGOJ.
Answer 2
TheGOJisresponsible forformulating andenforcing standards.
Answer 3
TheGOJistheonlylevelofgovernment which isresponsible forformulating andenforcing
regulations ontelecommunications, andtheMPT istheonlybody directly incharge. Theprocedure
forfiling complaints ondecisions made bytheregulatory bodies aresetoutintheTelecommunications
Business Law, theRadio LawandtheAdministrative Procedure Law.S/NGBT/W/3/Add.17
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Answer 4
Aperson seeking tooperate aradio station mustobtain alicence from theMinister ofPosts
andTelecommunications. Thecriteria applied fortheassignment ofradiofrequencies aretheconformity
totheradio frequency allocation principle andtheprevention ofinterference withother radio stations.
However, inaccordance withtheprovisions ofArticle 5oftheRadio Law, aforeign national
isgenerally notqualified foraradio station licensee.
Answer 5
Foreign satellite communications carriers whohaveobtained permission forTypeIBusinesses
inaccordance withtheprovisions ofArticle 9oftheTelecommunications Business Lawreceive national
treatment withrespect toearth station licences.
However, thesecarriers canonlyoperate international telecommunications businesses onsuch
conditions asinstalling radio station equipments inartificial satellites andearth stations which relay
radio communications between specific fixed points.
Answer 6
MPT allocates thenumbers toidentify long-distance, international andmobile carriers, and
datanetwork identification codes, etc.
Answer 7
Yes.
Answer 8
They aretechnical standards setoutbytheTelecommunications Business Law, Regulations
onTerminal Facilities, theRadio LawandRegulations onRadio Equipments. SeeAnswer 11.
Answer 9
(1) TheTelecommunications Technology Council deliberates technical requirements, which are
thebasis fortechnical standards tobedecided byMPT. Inthisprocess, theTelecommunications
Technology Council willhearviews from private sector, foreigners andother parties concerned.
Intheprocess ofsetting technical standards, there areother opportunities tohearopinions of
relevant parties. Theprivate standardization organizations suchastheTelecommunications Technology
Committee (TTC) which develops voluntary standards, discuss draftstandards atvarious meetings in
which foreign companies canparticipate.
Answer 10
Allterminals thatareconnected tothetelecommunications networks, including telephones,
facsimiles andmobile phones, aresubject tocertification. Although self-certification isnotallowed,
certification isgranted afterreviewing documents prepared bytheapplicants which incorporate data
measured bythemselves. There arenointer-governmental agreements formutual recognition. Foreign-
produced equipments arehandled inthesame manner asmentioned above.S/NGBT/W/3/Add.17
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Answer 11
Asperthetechnical requirements setoutbytelecommunications service suppliers aswellas
technical standards specified byrelevant lawsandregulations. Thefollowing aretheprinciples for
those technical requirements andstandards.
(1) Terminal facilities shallnotdamage telecommunications circuit facilities orthefunctions of
suchfacilities.
(2) Terminal facilities shallnotcause problems forother subscribers whousetelecommunications
circuit facilities.
(3) Thedemarcationofresponsibilitiesshallbeclearbetweenthetelecommunicationscircuitfacilities
provided bytheservice suppliers andterminal facilities provided bysubscribers.
(4) Theoutbreak ofharmful interference withother radio stations shallbeprevented.
Answer 12
Possible.
Answer 13
UndertheTelecommunicationsBusinessLaw,aslongasterminalfacilitiesmeetcertaintechnical
standardsandcustomer-providedtelecommunicationsfacilitiesmeetcertaincircumstances,network-based
suppliers cannot refuse requests made byowners ofthose facilities toconnect network-based suppliers '
linestothose facilities.
Answer 14
Authorization from MPT isnecessary foranagreement tointerconnect telecommunications
facilities between Type ICarriers. With respect toagreements oninterconnection between Special
TypeIICarriers, when either orbothparties concerned supply international VAN services, authorization
from MPT isrequired. Inother cases, notification toMPT onsuchagreements isrequired.
Answer 15
Under theJapanese law,network-based suppliers arenotrequired toprovide interconnection
forotherbasictelecommunications networks orservice suppliers. However, MPT retains theauthority
toorder them toenter intoanagreement oninterconnection attherequest from theparty (parties)
concerned inaccordance withprovisions oftheTelecommunications Business Law, inthefollowing
cases: when negotiations forsuchinterconnection failtobeconducted orcome toanagreement, and
when MPT deems interconnection especially necessary andappropriate topromote thepublic interest.
Answer 16
Itispermitted.S/NGBT/W/3/Add.17
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Answer 17
Asmentioned inAnswer 14above, authorization fromMPT isrequired foranagreement on
interconnection between TypeICarriers etc.Agreements oninterconnection, including interconnection
charges, maybenegotiated onacase-by-case basis. However, unfair ordiscriminatory treatment is
notallowed. Thepublication ofsuchagreements depends onintention ofthecarriers whoconcluded
theagreement.
Answer 18
There arenosafeguards against anti-competitive practices ofmonopolies ordominant suppliers.
However, asmentioned inAnswers 14and15,certain criteria aresetforinterconnection.
InthecaseofNTT, inorder topromote fairandeffective competition, measures havebeen
taken:
-toseparate mobile communications business from NTT,
-tointroduce anindependent division system inNTT,
-andtoprevent cross-subsidization inside NTT, etc.,
based on"measures inaccordance withArticle 2ofSupplementary Provisions oftheNippon Telegraph
andTelephone Corporation Law".
Answer 19
There arenorelevant safeguards because nodistinction ismade between dominant
telecommunications service suppliers andothers.
InthecaseofNTT, measures havebeentaken topromote smooth interconnection between
NTT'snetwork andother telecommunications carriers 'networks, andtoensure theopenness ofNTT's
network tothem, based on"measures inaccordance withArticle 2ofSupplementary Provisions of
theNippon Telegraph andTelephone Corporation Law".
Answer 20
There aresafeguards against anti-competitive measures; forexample, prohibition ofprivate
monopolies, unjust pricing fortransactions andunjust transaction methods, under theAnti-trust Law.
Mergers ofType ICarriers aresubject toapproval under theTelecommunications Business Law.
Answer 21
There arenosuchsafeguards.
Answer 22
Regardless ofwhether itisamonopoly/dominant supplier ornot,Type ICarriers mustobtain
authorizationfromMPTfortariffs,accesschargesandaccountingrates.TypeIICarrierscansetcharges
attheirowndiscretion.S/NGBT/W/3/Add.17
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Answer 23
Authorization from MPT isrequired forprovisioning conditions (tariffs) including charges
setbyType ICarriers. Type ICarriers mustreport profits andlosses foreachtypeofservice, based
onaccounting ordinances oftheGOJ, andmusthavetheiraccounts examined byindependent certified
accountants.SpecialTypeIICarriersmustsubmitprovisioningconditions(contractconditions),including
charges, toMPT.
Answer 24
TypeICarriersarenotallowedtoprovidevolumediscountstargetedforspecificusersorgroups.
Theaccounting ratesmustbedetermined through anagreement between Japanese Type ICarriers and
foreign telecommunications carriers.
Answer 25
No.
Answer 26
Thecharges ofType ICarriers must bedetermined based onproper costs under efficient
management. Costs consist ofoperating expenses, depreciation expenses, various taxesandappropriate
return. Costs areallocated inaccordance withtheordinance ofMPT onaccounting. Type IICarriers
cansettheircharges attheirowndiscretion, andtherearenogeneral rulespertaining totheallocation
ofcosts.
Answer 27
None.
Answer 28
(1) Telecommunications service suppliers areallowed tobuild theirownfacilities.
(2) Telecommunications service suppliers mustobtain permission from MPT when theywishto
acquire ormodify facilities.
Thecriteria areincluded inAnswer (v)licensing.
Answer 29
Foreign telecommunications service suppliers cansupply international satellite communications
services ofType Ibusinesses andalltheservices ofType IIBusinesses. Inthose cases, thesame
procedures andcriteria asareapplied toJapanese telecommunications service suppliers willbeaccorded
toforeign telecommunications service suppliers.
Answer 30
Authorization isrequired forType ITelecommunications Services. However, itispossible
tosupply services without obtaining approval iftheservices aresupplied onatrialbasisbytheType I
Carriers.S/NGBT/W/3/Add.17
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Answer 31
TheGOJdetermines thestatus ofanewservice byissuing theordinance ifnecessary.