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An advisory panel to the telecommunications minister recommended Friday that NTT East Corp. and NTT West Corp. set different interconnection fees to promote competition between them.

Nippon Telegraph and Telephone Corp.’s two regional units currently charge new carriers such as KDDI Corp. an identical 4.5 yen for three minutes to use NTT’s phone lines.

The Information and Communications Council estimates that if they introduce different fees, NTT East, which is financially stronger than NTT West, would be able to charge 3.59 yen, while NTT West would have to go up to 4.75 yen.

The proposed disparity may provoke criticism among firms that use these phone lines as it will be difficult for them to charge their users separate rates, meaning that the rate for end users may remain uniform, sources familiar with the issue said.

The British government proposed different fees for the two NTT units in a recent written opinion submitted to the council. It said the move would be “consistent with the original aim of the creation of NTT East and West, which was to introduce competition between them.”

If NTT West collects higher fees, new carriers might have to raise prices in that region.

The two NTT firms have said they are opposed to separate fees, citing strong public demand for uniform rates.

But NTT’s interconnection fees have long been criticized by the United States, Britain and other countries because they are much higher than in those countries.

The Public Management, Home Affairs, Posts and Telecommunications Ministry is scheduled to hold negotiations with the U.S. in October over the issue.

NTT and the two regional carriers issued statements later in the day saying that given the rapid structural changes in the telecommunications market, the current fee calculation format no longer matches their operating environments.

They demanded the format be swiftly scrapped.

Chubu entry OK’d

The Information and Communications Council of the telecommunications ministry on Friday basically approved the entry of Chubu Electric Power Co. into the telecommunications market.

The council submitted a report to the Public Management, Home Affairs, Posts and Telecommunications Ministry saying it recommends the utility be allowed to enter the market pending certain conditions.

The conditions include the separation of organizational structure, accounting and customer data management of the telecom and power divisions.

The panel also said Chubu Electric should allow other operators fair access to its power lines.

Chubu Electric has said it hopes to launch an optical fiber business in the Nagoya area in late November.

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