Two local Nippon Telegraph and Telephone Corp. group firms said Thursday that they will launch July 17 a full-scale flat-rate Internet connection service for integrated service digital network subscribers.

NTT East Corp. and NTT West Corp. have already been offering the flat-rate service to ISDN users in limited areas in Tokyo and Osaka on an experimental basis.

The move to expand the service, which the firms regard as crucial to increasing Internet use in Japan, aims to cover roughly 50 percent of all ISDN subscribers in eastern Japan and 40 percent in western Japan, said Tetsuo Koga, executive manager of NTT East’s Marketing and Development Department.

The service will offer unlimited line connection time to Internet service providers. The flat rate for the service is 4,500 yen, and, in addition, subscribers are required to pay their Internet service provider’s charges separately.

Home users must also pay the basic rate for the use of an ISDN line, which is 2,830 yen per month.

The service will cover by Aug. 7 most of the Tokyo and Osaka areas, as well as in other major cities in Kanagawa, Chiba, Saitama, Miyagi, Hokkaido, Shizuoka, Aichi, Ishikawa, Kyoto, Hyogo, Okayama, Hiroshima, Ehime, Fukuoka, Kumamoto, Kagoshima and Okinawa prefectures.

“By the end of this fiscal year, (services) will probably cover between 70 and 80 percent” of all ISDN subscribers, Koga told a press conference in Tokyo.

The two companies hope to obtain contracts with about 2 million ISDN subscribers in one year, he added.

Rate cut calls welcomed

A U.S. trade official on Thursday welcomed recent calls by Japanese politicians for Nippon Telegraph and Telephone Corp. to reduce the interconnection fees it charges other carriers to access its local network.

Wendy Cutler, assistant U.S. trade representative for Japan, told reporters that recent statements on the issue by senior Japanese politicians are “favorable” for the United States, which is negotiating cuts in the charges with Japan.

On Monday, Hiromu Nonaka, secretary general of the ruling Liberal Democratic Party, called on NTT to cut the charges and unload a large chunk of its stockholdings in subsidiary NTT DoCoMo Inc. to fund the expected revenue loss.

Earlier this month, Prime Minister Yoshiro Mori suggested that NTT be fully privatized, which would make possible a rapid cut in the interconnection fees. Koichi Kato, a senior member of the ruling party, later welcomed Mori’s remarks.

Cutler reiterated that NTT is “financially strong” enough to endure the drastic cuts proposed by the U.S.

She confirmed that Japan and the U.S. agreed to resume talks on the interconnection fees in the week beginning July 10, aiming to settle the issue before a U.S.-Japan summit expected around July 20, just before the Group of Eight summit in Okinawa.