Japanese Telecommunications: Reforms and Trade Implications

For a detailed analysis of the U.S. situation, see Borrus Michael Bar Francois Warde Ibraham , The Impacts of Divestiture and Deregulation: Infrastructure Change, Manufacturing Transition, and U.S. Competitiveness in Telecommunications, BRIE Working Papers, January 1985. This study was originally prepared for the U.S. Congress, Office of Technology Assessment.

U.S. Estimate is from Quantum Science Corporation, MAPTEK USA 1985, “Conference Report: Volume IV,” (October 1984), at p. B.28; Japanese Estimate is from NTT, Annual Report (September 1984), p. 38; and Hayashi Koichiro , “The Principles for Planning in the Information Industry,” (NTT, 1984).

Figures from Rothschild L. F. , Unterberg, Towbin, “The Evolving Integrated Voice/Data Terminal Industry,” (October 1984), p. 4.

Figures from “Voice Mail Offers Broadening Applications for Telecommunications,” Electronic Market Trends, (October 1984), p. 12ff.

Quantum Science, op. cit. at p.C. 36.

EEC, Commission of the European Communities, “Communication from the Commission to the Council on Telecommunications,” May 18, 1984, p. 3.

See Borrus , op. cit., at I-A-2 and II-B.

Eurogestion , Emerging Communications Services: Japanese Experiments and Development Plans (July 1983), p. 38–39.

New Era of Telecommunications In Japan, Telecommunications Association, #5, December 1, 1985, citing Japanese Ministry of Finance, “Statistics of Customs Clearance”.

NTT's comprehensive developmental role is well analyzed in submissions to the U.S. International Trade Commission, docket No. 332–172, “Changes in U.S. Telecommunications Industry and Impact on U.S. Telecommunications Trade.”

This story is based on conversations with officials from the U.S. Department of Commerce.

Background on the NTT Law comes from conversations at NTT held in August 1984. Our analysis of the law is based on the English translation prepared by the Communications Study Group, Japanese Legislation of Telecommunications, Volume 2 (Tokyo, Japan: December 1984).

The new NTT Law is a substantially watered-down implementation of reforms recommended by Japan's Second Ad-Hoc Commission on Administrative Reform in its Basic Report of July 1982. The Commission had recommended that NTT be divested in a form roughly paralleling the break-up of AT&T in the U.S.—a central company was to control the trunk lines network, and local companies were to operate local services; the government was to hold 100% of an initial stock offering, but then sell off up to 49% of ownership to Japanese holders over time; new entrants were to be permitted to compete with NTT in the delivery of enhanced and some common-carrier services. The new NTT law scraps plans to divest NTT into the central and local companies but implements the stockholding and (in conjunction with the new Business Communications Law) liberalization of competition reforms.

Figures from NTT Annual Report, 1984.

These and the following figures are based on NTT data in The Economist, March 30, 1985, p. 81; NTT Annual Report, op. cit.; NTT Telecommunicatioins Bulletin, various issues, 1983–1985; Pacific Projects, Ltd., The Japanese Market for Communications Equipment and Services, Report prepared for the U.S. Department of Commerce, April 1982; and Les Echos, August 24, 1984, p. 5.

Figures from NTT Telecommunications Bulletin, op. cit.; and “Deregulation, Japanese-style,” Financial Times, March 29, 1985.

New Era of Telecommunications, op. cit.

Pacific Projects, Ltd., op. cit.

The chronology and details for this paragraph are derived from the case study on Japanese “Data Communications,” p. 82–114, in the companion “Note” to Alexander Arthur J. Tan Hong W. , Barriers to U.S. Service Trade in Japan (Rand Corporation: R-3175), July 1984.

Our analysis of the Telecommunications Business Law is based on the English translation prepared by the Communications Study Group, Japanese Legislation of Telecommunications, Volume 1, (Tokyo, Japan: December 1984).

Figures are from Financial Times, op. cit.; and The Economist, op. cit.

This and following figures are from Communications Week, December 30, 1985, p. 29.

New Era of Telecommunications in Japan, November 15, 1985, pp. 6–8.

A full analysis of the domestic Japanese politics surrounding telecommunications reform is being done by U.C. Berkeley Professor Chalmers Johnson with BRIE. That study will be available in 1986.