Deputy U.S. Trade Representative Richard Fisher on Wednesday blasted Japan for trying to settle its long-standing dispute with Washington over interconnection fees charged by Nippon Telegraph and Telephone Corp. through revisions to a law governing NTT's business operations.

In an interview, Fisher said NTT's proposal to revise the law in exchange for accepting a cut in the interconnection fees would not infuse competition into Japan's telecommunications sector. "I think it's very important not to confuse the issues," Fisher said.

The proposal, made recently by NTT President Junichiro Miyazu and also backed by Prime Minister Yoshiro Mori, would relax the law that limits the scope of business operations by NTT and its regional subsidiaries.

Under the proposal, the two regional subsidiaries would be allowed to enter new fields such as Internet or cellular phone services, which could lead to NTT further monopolizing Japan's telecom sector.