WASHINGTON (Kyodo) The Office of the U.S. Trade Representative vowed Thursday in an annual report to press for better access to Japan’s mobile and fixed-line telecommunications markets.
The USTR complained about high “mobile termination” rates imposed by giant provider NTT DoCoMo Inc. on other carriers for network connection and universal fixed-line service programs that favor regional carriers of the telecom giant Nippon Telegraph and Telephone Corp. group.
The 2006 review report on foreign compliance with telecommunications agreements highlights three major problems in which the USTR will focus its efforts this year.
They are “excessively” high mobile termination rates in Germany, Japan, Mexico and Switzerland, restrictions on access to and use of leased lines in Germany, India, and Singapore, and concerns associated with universal service programs in Jamaica and Japan.
“One issue that is particularly troubling to us is the emergence of new regulations around the world that are being billed as universal-service related, that may, in fact, limit competition or create barriers for foreign telecom operations,” U.S. Trade Representative Robert Portman said.
As for Japan, the report said that regional fixed-line operators NTT East Corp. and NTT West Corp. appear to be the only entities eligible for funds under the October 2005 program designed to address high-cost regions.
“USTR has recommended to Japan that it reform this program to enable a broader range of operators, including mobile carriers, to apply for funding from this program to serve these regions,” the report said.
The USTR is also concerned about Japan’s approval of a cross-subsidy of interconnection revenues from NTT East to NTT West, which Japan asserts is necessary to maintain uniform retail rates under the NTT law.
“Allowing NTT East and West to cross-subsidize in this way raises expenses for competitors in NTT East’s region and, thus, adversely affects competitors’ ability to compete against NTT East,” the report said.
U.S. trade negotiators “will continue to work with Japan to promote reform of these programs to ensure more competitively neutral policies,” it said.
On the mobile services, the USTR report said NTT DoCoMo has reduced its termination rate by 2.6 percent this year, but this is the smallest reduction in 10 years and suggests that rate reductions “have plateaued in this market.”
“This issue will be of growing importance in the next year, as new entrants begin offering mobile services in the Japanese market, and the termination rates charged by incumbent mobile carriers will have a large impact on these new entrants’ ability to compete,” the report said.
The Japanese government has declined to examine the mobile market for termination services and is consequently unable to determine whether rates are excessive or whether any remedies may be needed, it said.