The ruling Liberal Democratic Party endorsed a set of bills Tuesday to rewrite laws governing Nippon Telegraph and Telephone Corp. that would lead to looser-than-planned regulations on the dominant telecom carrier, LDP officials said.

The move set the stage for the Public Management, Home Affairs, Posts and Telecommunications Ministry to submit the bills to the Diet pending Cabinet approval due next Tuesday, they said.

The legislation would impose regulations on NTT’s two local phone service units, NTT East Corp. and NTT West Corp., as well as mobile phone service providers with a market share of more than 25 percent, such as NTT DoCoMo Inc., the mobile phone arm of NTT, in a bid to ensure fair competition.

Some other major mobile phone service providers, including those affiliated with KDDI and Japan Telecom Co., are also expected to be regulated under the new legislation.

The legislation represents a departure from initially drafted bills that would have kept only NTT’s group companies under regulation as they provided for restrictions only on companies with a market share of more than 50 percent, designating them as “dominant businesses.”

The new bills designate companies subject to regulations as “businesses with market-controlling power.”

They do not contain any proposal for a breakup of the NTT group in case competition is not enhanced in Japan’s telecom market.

A government advisory report presented in December, on which the original bills were based, did include such a proposal. The new bills contain only an appendix that calls for a review of the telecom market, depending on the situation and without any timetable.

Telecom Minister Toranosuke Katayama defended the new bills and played down the fact that they are different in wording from those proposed by the government advisory panel.

“It is said that they are a step backward because of the difference in wording, but the content hardly backpedals,” Katayama told a news conference.

The issue of how to regulate NTT’s operations has been the subject of hot debate within the LDP, as legislators with close ties to NTT blasted the initial bills for putting NTT and its group companies into keener competition with rival carriers and each other.

The bills would also create a dispute-settlement panel authorized to present to the government recommendations to settle telecom-related rows.

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