Direction for Regulatory Reform in the IT Field
December 6, 2001
IT Strategic Headquarters
Research Council on IT-Related Regulatory Reform
In order to make information technology (IT) a locomotive for Japan's economic revitalization, the Government should implement the following regulatory reforms as soon as possible:
2. In regard to the infrastructure of information and telecommunications, broadband Internet networks should be built, through measures such as (a) further promotion of fair competition through structural separation in the subscriber networks (separation of wholesale and retail), (b) building of optical fiber networks connecting every household, and (c) making efficient use of radio waves.
3. We should strive to diversify the services provided via the Internet and improve content.
- The current analog technology-based regulatory framework for telecommunications and broadcasting does not fit with the reality of the continuing rise of digital technology and the IP (Internet Protocol) network.
- Under current circumstances, is it possible to achieve the goals laid out in the e-Japan basic strategy?
Is an environment being created whereby private sector businesses that are at the center of the IT field can freely build broadband IP networks and provide diverse, low-cost services under fair competition?
The Regulatory Framework and the Current Situation
1. Under the vertical regulatory structures, the information and telecommunications networks exist alongside several vertical sectors, but with digitization and the development of IP, there are moves toward integrating all networks into the IP network.
2. Telecommunications and broadcasting are regulated by separate laws, but with the advancement of digitization and development of IP, the inevitable trend is toward the convergence of telecommunications and broadcasting.
3. Telecommunications and broadcasting will be shifted from a vertical business-oriented integrated structure to one allowing the horizontal separation (unbundling) of each layer such as content, platform and network infrastructure.
Direction for Regulatory Reform
There is the concern that analog technology-based vertical regulatory structure for telecommunications and broadcasting will inhibit the various changes brought about by digital technology and IP development.
The Government should immediately
(1) examine and implement fundamental reform of the current regulatory structure toward a horizontal, competitive structure on the basis of digital technology and IP development and, at the same time,
 Fundamental Transformation of the Legal Structure for Telecommunications and Broadcasting
Through reform of the analog technology-based vertical regulatory structure for telecommunications and broadcasting to a horizontal, competitive structure in line with digital technology and IP development,
 The Network Layer
In the network layer, for the further promotion of
1. Further promotion of fair competition
- We should deepen the discussion immediately on the most desirable modality for NTT from the perspective of the further promotion of fair competition and the promotion of the development of a broadband IP networks, while giving due consideration to the NTT employment issue.
(Reference) e-Japan Priority Policy Program (March 29, 2001)
2. The building of optical fiber networks
3. Efficient use of radio waves
b) In other areas, the following reforms of the radio wave-related system should be undertaken.
The following approaches should be undertaken by the Government in addition to regulatory reform in relation to the network layer.
1. Promotion of the dissemination of IPv6
2. The strengthening of security
 Platform/Content Layers
1. Fair competition should be promoted through the prevention of businesses utilizing market domination of the network to expand to upper layers.
2. In the aim of improving the content provided via the Internet, the following should be promoted:
1. The Japan Fair Trade Commission
2. Establishment of an independent competition-monitoring organization for information and telecommunications
|Members of theResearch Council on IT-Related Regulatory Reform|
|Yoshihiko Miyauchi||Chairman of the Council for Regulatory Reform|
|Chairman and Group CEO, ORIX Corporation|
|Naoyuki Akikusa||Member of IT Strategic Headquarters|
|President, Fujitsu Limited|
|Nobuyuki Idei||Member of IT Strategic Headquarters|
|Chairman and CEO, Sony Corporation|
|Taku Kajiwara||Member of IT Strategic Headquarters|
|Governor, Gifu Prefecture|
|Hideki Kanda||Member of the Council for Regulatory Reform|
|Professor, Graduate School of Law and Politics, University of Tokyo|
|Satoru Kishi||Member of IT Strategic Headquarters|
|Chairman, The Bank of Tokyo-Mitsubishi, Ltd.|
|Koichi Suzuki||Member of IT Strategic Headquarters|
|President, Internet Initiative Japan Inc.|
|Yoshio Suzuki||Member of the Council of Regulatory Reform|
|President, Asahi Research Center, Co., Ltd.|
|Mari Matsunaga||Member of IT Strategic Headquarters|
|Jun Murai||Member of IT Strategic Headquarters|
|Professor, Faculty of Environmental Information, Keio University|
|Akinori Yonezawa||Member of the Council for Regulatory Reform|
|Professor, Graduate School of the Interfaculty Initiative in Information Studies, University of Tokyo|