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NTT’s still calling all the shots


As is apparent to anyone who owns a computer in Japan, the government’s stated aim of making the nation an IT powerhouse will come to nothing until telecommunications connection fees become more rational.

We have been told that deregulation is the answer, but history has shown that privatizing public utilities doesn’t guarantee what’s best for the citizens. The main obstacle to greater Internet usage in Japan is NTT, which acts completely like a profit-making monopoly and not at all like a utility that is supposed to serve the public. The Japanese government would like us to think that NTT’s stranglehold on telephone services will soon be gone, but actually it will only be loosened slightly.

Starting May 1, consumers will be able to choose from among more than a dozen private companies for any combination of the four connection services used in Japan: local, semilocal (outside your city but within your prefecture), long distance and international. This choice has been available for long-distance and international calls ever since NTT was privatized in 1985, but when consumers want to utilize other carriers they have to dial a special prefix. In May, prefixes will no longer be needed because you will be hooked up directly to the carrier of your choice.

The overall scheme has been dubbed the Myline system, and while the media have attempted to explain it to consumers, in the end most people will not understand the difference between one carrier and another until they compare each carrier’s rates and services on their own, and even then they may not understand.

The commercials being broadcast by the various carriers are clever, but they can’t be expected to clear up consumer questions since none last more than 30 seconds. They utilize the only means they know how to make their appeal: humor and celebrities.

KDDI, the result of a recent merger between international carrier KDD and long-distance carrier DDI, which is half-owned by Toyota Motors, has roped in three of the hottest male actors of the moment, Masatoshi Nagase, Etsushi Toyokawa and Shigenobu Asano, for its ads. The spot featuring Toyokawa as a hotel clerk trying telepathically to inform a bellboy that his fly is open was the funniest commercial of the New Year’s season and ushered in the parade of Myline ads that have since been marching across your TV screen.

In its latest pitch, the three stars are sitting around a table with hoods on their heads so that we can’t tell which one is which. Since part of the ad’s humor is the possibility that none of them is actually there, one might infer that KDDI knows how to save money.

Most of the commercials are tied in to print ads that invariably include charts comparing the charges of the competing companies and the maddening caveat that consumers “should not make a choice based on this chart alone.” Each service has its own special features and discount plans and you are advised to contact each company to find out about them for yourself.

It’s easy to understand why the news media aren’t helping us sort this data out. TV stations and newspapers are making a lot of money right now with ads for these companies and don’t want to offend any of them by appearing to advocate one over the other. NHK, which is free from such commercial considerations, has a strict policy of not mentioning company names, so whatever information they could possibly give is not going to be of any practical use.

The Myline system was devised to address the complaints of new carriers in the wake of NTT’s privatization. These new companies claimed that forcing consumers to dial a prefix in order to access their services amounted to a competitive disadvantage. The Myline Center was set up in the mid-’90s as an industry enterprise to which all the carriers would contribute funds in order to oversee the change. Consumers inform the center of their choices for all four services through applications. The center takes care of all the technical matters.

If you do not choose any service by May 1, you will automatically be hooked up to NTT for all four services. What isn’t publicized is the fact that you can change to any other service at any time, though after Oct. 31 you will have to pay an 800 yen service charge to do so.

But even when you are hooked up to one particular carrier you can use others simply by dialing that carrier’s prefix. Confusion is further compounded by the option of choosing either the Myline plan or the supposedly cheaper Myline Plus plan for each carrier.

The upshot of this surfeit of choice is that NTT will likely capture the lion’s share of subscribers for all four services, and not just because people are too busy to study all 13 companies. NTT, by far the biggest of the players, has set quotas for its employees (engineers as well as salespeople) to sign up friends and relatives for its services before May 1.

But NTT’s biggest edge is that it will continue to own all the telephone lines. Though you use another carrier for each of the four services, you still have to pay NTT a basic monthly fee for the use of your line. And you still have to pay them 72,000 yen for the “right” to establish a new line.

This “right,” along with the absence of an option for unlimited local calls, remains the sticking point in any telecommunications scheme meant to promote IT. When telephones were still a luxury, the selling of rights made some sense, since persons who bought them were considered shareholders in a utility that was still developing.

But with the rise of cellphones, which don’t require the purchase of rights, the practice has become superfluous. It’s a cash cow, and one that NTT is not going to give up without a fight. If forced to stop charging the fee (and the government seems reluctant to do so, despite pressure from outside) NTT would presumably have to reimburse everyone who holds the right to a telephone line, which would amount to something like 2 trillion yen.

In one ad for NTT Communications, a bride is standing at the altar and the clergyman asks her if she takes the man next to her “for all eternity.” She frowns and looks back at the pews, where a gaggle of dorky prospective suitors sit. It’s a funny commercial, but, as is often the case with NTT, the joke’s on us. You can select any carrier you want, but you’re stuck with NTT till death do you part.