IP: Tokyo Watching

[Dave Farber <farber () cis upenn edu>]

Date: Thu, 27 Feb 1997 10:59:44 +0900
To: Dave Farber <farber () central cis upenn edu>
From: sja () glocom ac jp (Stephen J. Anderson)
Subject: Presidential Advisory Committee-Tokyo Watching


Congratulations on your appointment, and best of luck with the
discussions.  I am watching the web postings from Tokyo, and 
look forward to more information about the committee discussing
NGI among other topics.


In Japan, the politics of the telecommunications involve more 
mundane horse-trading over the restructuring of NTT and its
bureaucratic handlers.  I won't even use the word "regulators"
because it fails to convey the cozy relationship of how both
sides benefit from appearing at odds.  I do believe that they
disagree, but I also see NTT as riding herd on the matters 
of technology and business that matter in Japan.


Here's a editing of a post I made to our listserv this morning; 
feel free to post as you see fit:


On the issues of the politics of telecom in Japan, it seems 
that the high politics always start with NTT (a company with 
operating revenues of about 5 trillion yen--$50 billion).  This 
number is well under the 15 trillion yen limit proposed by the 
Diet, which makes me wonder about a renewed relationship of 
NTT Data, NTT Mobile, and other NTT family companies that 
might relate throught the holding company.  NTT resisted 
division in 1989-90, then delayed again in 1995-96, and 
now decided its own fate under a holding company scheme.


NTT politics are now focused on the deliberations in the Diet.  
The tax issues of restructuring will be debated by the Liberal 
Democratic Party (LDP) under their Tax Affairs Policy Committee 
and will involve forgiveness of taxes involved in splitting NTT.  
This tax settlement will determine the initial finances of the 
three new firms--NTT still has many irons in the fire.


At the Ministry of Posts and Telecommunications, bureaucrats 
are not losers in the deals.  MPT wants several things, and with 
division of NTT and the emergence of NCC and new ventures, the 
bureaucrats get the added competition that they desire in order 
to transform telecoms in Japan.  Competition (as managed by 
the bureaucrats) is precisely what they see as a means to 
enhance their powers in the new world order.  What is at question, 
though, is how much management these officials will exercise, 
and to what ends?  Can they really create a vision of 
"info-communications" or "teletopia" or whatever this week's 
muddy policy planning concept is projecting?


The test of brokerage between NTT and MPT is whether both 
can get their deal through the Diet.  Yesterday's ludicrous exchange 
in the Diet where MPT political head, Minister Horinouchi Hisao, 
said that postal savings should never be privatized is telling.  
This conservative politician has views at odds with critics 
among politicians such as former MPT and current MHW Minister, 
Koizumi Junichiro.  Koizumi has long urged privatization of postal 
savings (theworld's largest bank) and now gets trashed by his 
fellow LDP cabinet member--this reflects the deeply entrenched 
interests of MPT.


I believe, as do some Japanese colleagues at GLOCOM and on the Prime
Minister's Economic Council, that MPT must give up some regulatory 
power to a commission under the Prime Minister's office--in other
words, an OFTEL or FCC-equivalent organization.  This may not happen,
but it seems a key bellwhether of reform under the current government
as regards to information technology and communications policy.  By
summer, there should be final decisions as both the Big Bang in finance,
and the closely related little buzz in telecoms, are finalized in the Diet.
 


****************************************
Stephen J. Anderson
Associate Professor
URL http://www.glocom.ac.jp/staff/anderson.e.html
Tel:  (+81-3) 5411-6698
Fax:  (+81-3) 5412-7111
Center for Global Communications (GLOCOM)
International University of Japan
****************************************