Nikkei article: Japan's NII

[David Farber <farber () central cis upenn edu>]

from The Nikkei Weekly, May 16, 1994 (front page):


FIBER-OPTIC NETWORK ZIPS TO FAST LANE


        Japan may be a relative backwater in the use of
communications technology today, but in about 15 years it will be
interacting , accessing, and digiticzing as effortlessly as any other
country.
        That at least is the future envisioned by the Ministry of
Posts and Telecommunications in a long-awaited report it is about to
release on Japan's next-generation infromation network.  The report
is seen as a road map for a commnuications industry that has been
desperately looking for signals from the government on how to advance
into the information age.
        That desperation comes from a growing realization that the
U.S. is ahead of Japan, and that even parts of Europe and Asia are
moving forward more quickly.
        A draft of that report, obtained recently by The Nihon Keizai
Shimbun, acknowledges the growing concern that such a gap will place
Japan's economy "in a precarious position" in the 21st century.
Among other things, it cites the overwhelming lead the U.S. has in
the use of personal computers, ocal area networks needed to connect
those computers, and databases.
        Yet the draft projects that by the year 2010 everyone living
in Japan will be able to enjoy a broad variety of digital interactive
television programs, instantly access all kinds of information from
databases throughout the country, and even get medical checkups from
doctors far away without rising from their beds at home.
        It says the key to realizing all this will be the completion
of a nationwide fiber-optic cable network -- a orijected expected to
cost up to 63 trillion yen ($510 billion) to complete.
        The report, drawn up by the advisory Telecommunications
Council after 14 months, is scheduled to be released May 31.  It is
bound to win praise for arguiing that a number of government
regulations have to be cleared away before any real progress can be
made, but has already drawn criticism for not specifying who wiull
pay for the fiber-optic network and for ignoring the role that
satellite and mobile communications can play in establishing the
information network.
        Among the drafts proposals:
  * The fiber optic network, which can carry much more information
much faster than can copper cables, should be completed by 2010 in
three states.  Networks in major cities covering 30 percent of the
total population should be laid out by 2000, and those in smaller
cities by 2005.
  * Fiber-optic lines should go into all schools, hospitals,
libraries and other public institutions by 2000.
  * The building of the network should mostly be left up to the
private sector, and idea similar to that in the U.S.  That's
especially significant, because when discussion started, some
ministry officials were calling for a larger government role.
  * The government's role should be limited to securing free and
low-interest  financing as well as tax-reduction measures as
incentives to build the network as fast as possible.
  * The government should also take the initative in developing and
launching various new services utilizing the network, such as
establishing databases and local area networks in government facilities.
        The 2010 time limit for completing the fiber-optic netowkr
was set in recognitionof Japan's rapidly aging society.  The
government estimates that 21.3 percent of the population will be 55
and older by then.  Yet that deadline is fully five years earlier
than that initially set by Nippon Telephone and Telegraph Corp.,
which has already footed the bill for converting 38 percent of
Japan's intercity cables to fiber optics.
        "We need to complete the network while we have the financial
resources," says a Telecommunications Minstry offical.
        Nonetheless, NTT President Masashi Kojima applauded the plan,
saying, "The minstry has done a really good job.  This is one report
we can rely on."  He especially welcomed the government's limited
role in the project.
        Another satiated executive was Masaaki Arima, general manager
of corporate planning and development at Tokyu Cable Television Co.,
one of Japan's largest cab;e TV operators.  Airma says he is pleased
that the draft stresses the need to establish an "equal footing"
between telephone companies and cable TV operators as soon as possible.
        That, the draft says, will create healthy competition for the
completion of the network.
        "We're happy that the cable TV network has finally been
acknowledged as part of the new information highway," says Arima.
That network now covers only 19 percent of the total population,
whereas in the U.S. 96 percent is covered.
        The draft also says that systematic ways must be discovered
to break down the barriers between telecommunications and
broadcasting, which would also be good news for cable TV operators.
        The Telecommunications Minstry is setting up a new panel this
week to produce a report by next March on digitizing the nation's
analog broadcasting system.  That would be a key technology in
providing both telecommunications and broadcasting services
simulatneously on one fiber-optic line.


  Multimedia Age


        The digital format is capable of trasmitting hundreds
of programs, essential for the emerging multimedia age.
        Still, Arima questions "to what extent the other arms of
government will cooperate with the report," citing the Ministry of
Construction, whose approval will be needed to smoothly and cheaply
lay out cables.
        Telecommunications Ministry officials say they also are
concerned about how high a priority other sectors of the government
will place on the information network.
        Indeed, a whole slew of regulations must be changed to
promote the use of fiber-optic networks.
        For example, the Medical Act, which is enforced by the
Ministry of Health and Welfare, must be revised in order for home
medical checkups to be realized; teleconferencing can't be applied to
board of directors' meetings due to commercial law regulations; and
the Education Law says nothing about home education.
        In Japan, it takes at least a year to revise any kind of law
-- and much longer if ministries and agencies are reluctant to do so.


  Who will pay?


        Another problem is who will actually make the investment.  "If
we leave things as they are, only NTT will be able to do it," says one
Telecommunications Minstry official.  Because of the difficulty in
stipulating who should be laying cables in what part of the country,
the draft simply avoids the issue.
        Also, although the draft carries the epic title, "Establish
the new information infrastructure toward the 21st century," it mainly
focuses on how a fiber-optic network should be laid out.
        "A fiber-optic network is not the only means for an
information network," says Kazuto Sasaki, an economist at LTCR
Research Institute.  "I think we need to look into the possiblities
of mobile and satellite communications as well to complete a network
that consumers really want," he adds.
        The draft is subject to further revisions, say ministry
officials.  And that suits the business community fine.
        "We're still in the process of seeking changes in some
phrases," says one industry official.  "The report is going to
determine the government's telecommunications policy, so it's
extremely important for us to do so."