Bill passed to limit NTT charge cut

The House of Representatives passed a bill on Thursday that will effectively limit a planned cut in the charges that Nippon Telegraph and Telephone Corp. imposes on its competitors for accessing its local phone circuits.

The bill to revise the Telecommunications Business Law has now been sent to the House of Councilors.

A specific range for the cut will be set in an ordinance to be issued by the Posts and Telecommunications Ministry, ministry officials said.

The ministry has informed the Lower House’s Communications Committee, which deliberated the bill, of its plan to reduce NTT’s interconnection charges by 22.5 percent at the end of a four-year period from late this year.

A supplementary resolution attached to the bill says that care “should be taken that (the planned cut) does not adversely affect the management of NTT East and NTT West or subscriber charges.”

NTT operates its domestic telecommunications services through its two units, NTT East, which covers the eastern half of Japan, and NTT West, which covers the remainder.

The reduction of NTT interconnection charges has been a major bilateral trade issue for Japan and the United States. It could feature on the agenda of discussions when Prime Minister Yoshiro Mori and U.S. President Bill Clinton meet May 5 in Washington, a Japanese official indicated Monday.

In contrast to Japan’s plan for a 22.5 percent cut after four years, the U.S. has demanded a deeper cut, preferably 50 percent, over two years.

Washington has long stressed that the interconnection fees levied by NTT are 4.5 times those of U.S. local carriers and four times those of European firms.