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An advisory panel to communications minister Heizo Takenaka proposed Tuesday that NHK user fees be lowered by reducing the number of the public broadcaster’s channels.

The eight-member panel, formed in January, also said in its outline on the future of Japan’s telecommunication and broadcasting industries that it is necessary to reform telecommunication giant Nippon Telegraph and Telephone Corp. to promote fair competition in the industry.

The panel will hammer out a final report after discussing details of its proposals, but no completion date has been set, said Satoru Matsubara, chairman of the panel and a professor at Toyo University.

However, proposals in the final report are expected to be reflected in a midterm economic and fiscal policy the government plans to compile in June.

The outline says the broadcaster should drastically lower NHK fees by cutting its costs, which it can do by reducing the number of channels; streamlining its organization, including subsidiaries; and reducing the costs of collecting NHK fees.

NHK currently has two terrestrial and three satellite TV channels, and three radio channels.

Earlier this year, the panel discussed making NHK fees mandatory and imposing penalties on households that refused to pay. However, the outline says it is necessary to get public support if it wants to implement such measures.

Viewer fees make up 96 percent of NHK’s revenue, but there is no penalty for not paying.

It has been estimated that about 30 percent of households refuse to pay their NHK fees. The number of refusals rose drastically following a slew of scandals involving NHK officials in July 2004. Another embezzlement case involving an NHK employee surfaced last month.

The outline says NHK’s international broadcasting services should be reinforced to get people in other countries more interested in Japan.

On reforming NTT, Matsubara said the panel has proposed the NTT group be reorganized by the early 2010s to meet the demand for telecommunications using Internet Protocol technology and to promote fair competition in the market.

NTT was split up in 1999 into two regional carriers, and a long-distance carrier for both domestic and international service under a holding company to force cheaper and more efficient telecommunications services through fairer competition with new companies.

Mobile phone service operator NTT DoCoMo. Inc. and NTT Data Corp. are also part of the NTT group.

“The current style (of NTT operations) will pose a problem” in developing Japan’s telecommunications industry because it was designed before advanced IP technology has been developed and digital broadcasting have been developed, Matsubara said.

The panel said that providing new carriers better access to NTT’s telephone line networks was necessary to develop broadband telecommunications services nationwide.

NTT, a former monopoly in the domestic telephone business, currently controls nearly all of the “last mile,” which link each home and office to the main telephone pipelines.

This situation puts NTT at an advantage over newcomers to the market and subsequently makes it difficult for telecommunications service firms to offer better services and lower fees.

According to the Internal Affairs and Telecommunications Ministry, NTT’s two regional companies, NTT East Corp. and NTT West Corp., accounted for 39.1 percent of the domestic market for telecom services using ADSL and 60.7 percent of the optical-fiber service market, as of December 2005.