The Fair Trade Commission is investigating a regional telephone unit of Nippon Telegraph and Telephone Corp. for allegedly blocking other companies from starting digital Internet services, a violation of the Antimonopoly Law, commission sources said Tuesday.

The sources said NTT East Corp. may have hindered attempts by eAccess Ltd., Tokyo Metallic Communications Corp. and other firms hoping to provide digital subscriber line services by delaying replies to their requests to connect prospective customers’ phone lines.

NTT, a former state-run domestic telephone monopoly still partly owned by the government, controls most local circuits reaching homes and businesses in Japan, forcing most new entrants to reach their customers via NTT circuits.

NTT East, created in the July 1999 breakup of NTT, has a dominant position with a share of over 90 percent of the market for ordinary telephone circuits necessary for DSL businesses.

In one instance, NTT East dragged out negotiations with eAccess on leasing circuits, forcing the Tokyo-based company to delay the launch of its services, the sources said.

eAccess provides asymmetrical digital subscriber line services, which have data transmission speeds several times faster than the integrated services digital network lines promoted by NTT.

An official at eAccess said the company, which started pilot services in a limited area in Tokyo in April, wanted to expand the service area quickly but was unable to do so because negotiations with NTT took longer than expected.

NTT also allegedly responded swiftly to inquiries on providing access to its circuits from companies where former NTT employees have landed jobs, while firms that did not employ former officials of the telecommunication giant were neglected.

A spokesman for NTT East said, “It is true that we have been investigated by the FTC.”

Commenting on NTT’s dealings with firms offering ADSL services, he said, “We believe we have been treating other companies in conformity with a proposal submitted by a Posts and Telecommunications Ministry panel on high-speed digital access technology.”

Junichiro Miyazu, president of Nippon Telegraph and Telephone Corp., the holding company of the NTT group, declined Tuesday to comment on the issue, saying the group has not been thoroughly informed of the commission’s intentions.

“(NTT East) has been questioned (by the commission) fragmentarily and we’re not sure what problems they have in mind in asking those questions,” Miyazu told a regular press conference in Tokyo.

“We cannot comment on it at this stage,” he said.

It is unusual for the FTC to investigate a public utility that effectively dominates a market.

At a regular news conference Tuesday, Posts and Telecommunications Minister Kozo Hirabayashi said the ministry is not planning to investigate the allegations.

The the ministry has clearly established rules on digital subscriber line services, he said.

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