• Kyodo

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The United States urged the Japanese government Monday to strengthen regulatory control over telecom giant Nippon Telegraph and Telephone Corp. to free up competition in the sector.

The Office of the U.S. Trade Representative outlined the U.S. policy in an annual review of compliance with telecom trade accords that have been concluded with the U.S.

Washington continues to place a high priority on promoting competition in Japan’s telecommunications market, the USTR report says.

“Over-regulation of new entrants and toleration of anticompetitive behavior by the 46 percent government-owned NTT group of companies have restricted opportunities for new entrants,” it says.

The report, compiled under Section 1377 of the Omnibus Trade and Competition Act of 1988, says the Japanese government lacks legal authority to effectively regulate the operations of dominant carriers, especially over their pricing policy.

Japan should also introduce “a fully independent regulator with effective enforcement powers,” the USTR said.

Japan is currently considering legislative changes to address these issues but the originally proposed measures have been weakened due to political lobbying from NTT, the report says.

“We’re very concerned that it (the law) will not actually have the teeth that it needs to have in order to be an effective instrument,” a U.S. trade official said during a telephone news conference.

The USTR also accused Japan of maintaining phone connection rates at levels above costs both in the wired and wireless markets.

In talks with the U.S. in July, Japan agreed to significantly reduce fees charged by NTT for the use of its intracity networks by other carriers.

The USTR said it will closely monitor the implementation of the July 2000 agreement, including an expected proposal from a Japanese government panel next year to establish a new structure for NTT connection fees.

The Japanese government committee should come up with a proposal that would not facilitate NTT’s monopolization of next-generation data services, the report says.

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