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CHAPTER 2.3

Information and Communication

Technologies Policy in Japan:
Meeting the Challenges Ahead
HIDEO SHIMIZU, Ministry of Internal Affairs and
Communications, Japan
KUNIKO OGAWA, Ministry of Internal Affairs and
Communications, Japan
KOICHI FUJINUMA, Ministry of Internal Affairs and
Communications, Japan

The world has witnessed remarkable growth and diffusion

in information and communication technologies (ICT)
system usage in this decade.The further development of
the ICT industry will become a major factor for economic
growth.This chapter will provide some economic background related to current Japanese ICT policies. It also
sets out changes in the regulatory environment and looks
at the current status of ICT infrastructure in Japan.The
positive outcomes of the steps that have been taken are
found in the high penetration rate of the broadband,
including fiber optic cable services, mobile telephones with
a high Internet access rate at 87 percent (incidentally, over
60 percent of these mobile telephones are third-generation
telephones). Mobile telephones in Japan can be used also
for watching television, using electronic money, and purchasing electronic tickets.The final section of this chapter
will highlight challenges in the ICT field for the future,
such as convergence of communications and broadcasting,
security and privacy, and relating government policies.

History of Japans ICT policy up to 2005

Japan has made sequential national ICT policies since
around 2000, with the aim of fostering an advanced ICT
network society.The Information Technology Basic Law
was enacted in November of 2000. In 1999, Japanese
Internet penetration rate was just 13.4 percent, lagging
behind that of Northern Europe and North American
countries. Also, in April 2001 the number of broadband
subscribers in Japan was 737,000, behind the United States
and Korea. At the time, introducing ICT into corporate
management in Japan meant simply installing information
technology devices and systems.The law was established
because of a sense of urgency on the part of the government about Japans slow start in the ICT revolution.
In January 2001, based on the Law, the Advanced
Information and Telecommunications Society Promotion
Headquarters was established within the Japanese cabinet.
Beginning in January 2001, the headquarters crafted several
national e-Japan Strategies that would put Japan among
the leading ICT nations. Specific targets were set:
Promote the upgrading of Japans Internet network to
meet the highest global standards, with super high-speed
access (30100 Mbps) possible within 5 years; and make
this access available at affordable rates for all citizens.1
Under the principle of private-sector-driven development,
a number of government policies were implemented.
Among these were policies to enforce fair competition in
the information and communications field, policies to
support the development of e-commerce systems, policies
that implement e-government, and policies for human
resources development.
In particular, infrastructural improvements for the
expansion of broadband progressed so rapidly that by 2003

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Figure 1: The framework of Japanese ICT policy

e-Japan Strategy
(Jan 2001)

e-Japan Strategy
II (Jan 2003)

e-Japan Strategy II
accelerated package
(Feb 2004)

IT policy
package
(Feb 2005)

Frontrunner in the
worlds ICT evolution

IT New Reform
Strategy
(Jan 2006)

IT Basic Law
Establishment of IT Strategic
Headquarters (Director: Prime Minister)

KEY AREA

KEY AREA

Development
of broadband
infrastructure,
and so on

Emphasis on IT usage (7 leading areas)

1. Health care
2. Diet
3. Lifestyle
4. Financing for
small businesses
5. Knowledge
6. Labor
7. Administrative
services

Realizing a society that has

the benefits of IT whenever,
wherever, and with whomever

Evaluation / validation of worlds

most advanced method (Expert
Committee on IT Strategy Evaluation)

e-Japan Priority Policy

Program 2006 (Jul 2006)

Realization of
an autonomous
ICT society

Realization
of a
ubiquitous
networked
society

e-Japan Priority Policy

Program 2004 (Jun 2004)
e-Japan Priority Policy
Program 2003 (Oct 2003)
e-Japan Priority Policy
Program 2002 (Jun 2002)

108

e-Japan Priority Policy

Program (Mar 2001)
Ministry of Internal Affairs and Communications IT Policies

2001

2003

2004

Ministry of Internal Affairs and Communications u-Japan Policies

2005

2006

Source: MIC, Japan, 2005.

the targets of the e-Japan Strategies had been achieved.

The ICT environment in Japan made it possible for 35
million households to have a constant connection to a
digital subscriber line (DSL), for 23 million households to
have cable TV, and for 17.7 million households to have
fiber-to-the-home (FTTH) connections. As infrastructural
improvements progressed, interest turned toward the
promotion of usage. In 2003, the headquarters established
a new strategy called e-Japan Strategy II, settling on
seven areashealth care, diet, lifestyle, financing for small
businesses, knowledge, labor, and administrative services
where ICT could be used in groundbreaking ways. Again,
as infrastructural improvements progressed, attention
turned toward the issue of ICT usage. E-Japan Strategy II
aims to continue to maintain the Japanese position as the

frontrunner in terms of ICT technology beyond 2006

(see Figure 1).

Toward the ubiquitous networked society

In December 2004, just before the target year for completion of the e-Japan Strategy, the Ministry of Internal
Affairs and Communications (MIC) drafted its u-Japan
Policy.This policy seeks to create a ubiquitous networked
society by 2010 that will permit ICT access at any time,
anywhere, with anything and by anyone.2
The major goal of the u-Japan Policy is to lead the
way as the worlds most advanced ICT nation in 2010, to
have the worlds best ICT infrastructure, and to contribute
to the world by providing an original and creative
Japanese social model that balances infrastructure with

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ICT usage.The following are the three basic elements of

the u-Japan Policy:
development of ubiquitous networks that can be used
seamlessly for both wireless and fixed networks,
advanced usage of ICT to assist in resolving social
issues, and
improvement of the environment for ICT usage in a
safe and secure manner.
In January 2006 the Advanced Information and
Telecommunications Society Promotion Headquarters
created the Information Technology New Reform Strategy,
which included follow-up on the capability of ICT to
facilitate structural reforms (that is, its ability to help
resolve issues facing Japanese society), ICT infrastructure
improvement (that is, developing infrastructure that moves
Japan toward the goal of being a ubiquitous networked
society), and dissemination to the world (that is, Japans
ICT contribution to the world).
The new strategy seeks to make all areas of Japan
accessible to broadband so that Japans communications
infrastructure is completely broadband-capable by 2010.
The strategy also seeks to make 2011 the First Year of
Completely Digital Networks for all communications
and transmissions, with the changeover to digital terrestrial
television broadcasts complete by July of 2011. All of this
is to be accomplished through the principle of privatesector-driven development and a variety of government
policies that seek to promote these goals.

ICT and macroeconomics: Three effects on

economic growth
Japan has placed priority on ICT-related policies because ICT
has an impact on economic growth in a number of ways:
through the growth of the ICT industry,
through a deepening of ICT capital stock, and
by fostering productivity increases for all industries,
as a result of ICT spreading across industries and
corporations.
The following section provides some economic
background, drawn from the Japanese information and
telecommunications white paper of 2006, for current
Japanese ICT policies.3
The first effect: The direct impact of ICT industry growth

The ICT industry accounts for an increased percentage

of GDP.The per-industry real GDP of the ICT industry
in 2004 was 61.9 trillion yen (US$560 billion), or 11.7
percent of Japans real GDP. Also, the percentage change

of per-industry real GDP for the ICT industry was 9.21

percent.This means that the ICT industry contributed 40
percent to the change in Japans real GDP.4 The effect that
the ICT industrys performance has had on Japans economic growth is significant, no matter what other industry
it is compared with (Figure 2).
The second effect: ICT capital stock and economic growth

Real investments in ICT in 2004 totaled 16.4 trillion

yen (US$150 billion)21.5 percent of the total capital
investments made by the private sector (see Figure 3). ICT
capital stock totaled 36.9 trillion yen (US$335 billion),
comprising 3.0 percent of private capital stock.5 A look at
investments in ICT capital stock over the years shows that,
although they temporarily dipped in the mid 1990s, they
have since rebounded and continue to grow.
Figure 4 shows the contribution of ICT capital to the
economic growth rate. ICT capital stock contributed 0.21
percent to economic growth from 1990 to 1995 (economic
growth was 1.51 percent); from 1995 to 2000 ICT capital
stock contributed 0.54 percent (economic growth was
0.97 percent); and from 2000 to 2004 they contributed
0.21 percent (economic growth was 1.15 percent).Thus
ICT capital stock deepened overall economic growth by
13.9 percent, 55.7 percent, and 18.3 percent respectively
over these years. Considering that ICT capital stock
comprises 23 percent of private capital stock, its impact
on economic growth is significant.
The third effect: The spread of ICT and economic growth

The third effect is an increase in productivity resulting

from the spread of ICT in industries and businesses.
This increase is due to an improvement in total factor
productivity (TFP), which is a variable factor and not
explained in terms of changes in the input of factors of
production such as capital and labor.The increase in TFP
for the general ICT industry in Japan between 2000 and
2004 was 3.7 percent; it was 2.9 percent for electrical
machines. Clearly TFP was high for fields related to ICT,
but in other industries it was not necessarily so high, and
the overall industry total stood at just 0.09 percent. It is
now believed that growth in Japans TFP is being primarily
supported by the ICT industry, which is a leading factor
in technological innovations.

History of changes in the regulatory environment

Over 20 years have passed since the privatization of Nippon
Telegraph and Telephone Public Corporation (NTT) in
1985. Since that time a number of businesses have ventured
into the communications market; coupled with an easing
of regulations, this has resulted in a considerable growth of
the communications market.6 As of March 2006, there were

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Figure 2: Contribution of the ICT industry to changes in real GDP, 19962004

I ICT industry

4.0

I Other industries

All industries

3.0

2.5
2.1

1.9
2.0

2.0

1.5

1.5

0.9

Percent

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0.8

1.0
1.0

0.7

0.0

0.3
1.9

1.0

2.0

1.3

1.6

0.3
0.7

0.5

0.7
0.9

0.3
0.4

0.7

1.0

2003

2004

0.9

0.4

1.6

3.0
1996

1997

1998

1999

2000

2001

2002

Source: Do Research Institute, 2006.

Figure 3: Evolution of real ICT investment, 19802004

18,000
16,000
14,000

I Software
Software
Electronic
computers
and
I
Electronic
computers
and peripheral

peripheral
attachments
attachments
Telecommunications equipment
I Telecommunications equipment
Percentage of ICT investment covered by
Percentagecapital
of ICT investment
investment covered
private-sector
by private-sector capital investment

25

20

15

12,000
10,000

10

8,000
6,000

4,000
2,000

0
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Source: Do Research Institute, 2006.

Percent

20,000

Yen (billions)

110

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Figure 4: Contribution of ICT capital to the economic growth rate

I Labor
I ICT capital
I General capital
I TFP
Economic growth rate

4.79
0.38

2.41

1.51

2
1.46

0.89

0.97

1.15

0.94

0.54

0.85
0.54
0

0.21
0.44

0.73
0.54
0.31
0.21

0.21
0.34

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Percent

part2.r2

1
198590

199095

19952000

200004

Source: Do Research Institute, 2006.

314 registered and 13,412 notified telecommunications

providers offering a variety of communications services.
The regulatory framework for telecommunications
businesses in Japan is continually revised to meet the needs
of the telecommunications services market and to ensure
that users enjoy a broad range of services through the promotion of fair competition in the facilities and services
fields.These changes in the regulatory framework can be
divided into three time periods, as related below.
Period one: From monopoly to competition (1985 )

In April of 1985, the Telecommunications Business Law

went into effect. Based on this law, the government introduced competition into all areas of the telecommunications
market; also NTT was privatized.When the law went into
effect, a type 1 telecommunications business (that is, the
setting up of physical facilities containing telecommunications lines and providing telecommunications services)
required a massive initial investment in order to construct
a network. Economies of scale, as well as other factors
such as the externality of the networkmade it difficult
to enter into the telecommunications market.The design
of the network was based on the principle that telecommunications was an essential industry to the life and economy of the nation and that the network would play a

major role in serving the public interest, by ensuring, for

instance, that people received important announcements
during emergencies and crises. For these reasons, type 1
telecommunications carriers were required to obtain a
license.
Period two: Promoting further competition (1997 )

In order to facilitate the entry of new carriers into the

telecommunications market, revisions made to the
Telecommunications Business Law in 1997 eased a
requirement for obtaining permission to operate for type
1 telecommunications carriers. In 1998, restrictions on
foreign investment were abolished in principle. In 1999, in
order to further increase the international competitiveness
of Japans ICT industry and to create a more dynamic,
competitive environment, NTT was restructured under
holding corporations into three separate companies: a
regional company for eastern Japan, a regional company
for western Japan, and a long-distance network company.
Following the restructuring of NTT, the basic rules
governing connections were revised in 2000. A long-run
incremental costs (LRIC) system was implemented for
telephone networks cost calculation method, and the connection rules for DSL service were improved by creating
conditions and procedures for unbundling subscriber lines

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and so on, and by establishing shared facilities to allow

competitors to connect (a process called colocation). In
2001, in consideration of the degree to which competition
had progressed, the Telecommunications Business Dispute
Settlement Commission was established to handle disputes
and other matters between telecommunications companies,
and to recommend necessary improvements and changes
in the rules to the MIC. In 2002, the universal service
fund system was upgraded to eliminate geographical digital divide.

broadcasting, the convergence of fixed and mobile telephones, the further spread of broadband, IP telephones,
and fiber optics.

Period three: From ex-ante regulations to ex-post regulations

(2004 )

The development of ICT infrastructure

Because of changes in the market structure, revisions were

made to the Telecommunications Business Law in 2003.
These revisions aimed to continue to adapt the law to
changes in the market environment and network structure,
as well as to encourage new companies to enter the market
and to promote fair competition among them.The original
business classifications were abolished and market entry
regulations were greatly eased, shifting the regulations
from ex-ante to ex-post. In principle, regulations governing
fees and notification of contract conditions were abolished
and steps were taken to ease the authorization of the
relative contracts. Along with relaxing these regulations,
rules to protect consumers were introduced in 2003
together with a system for evaluating competition in the
telecommunications.
Evaluation of competition in telecommunications

In 2003, an analysis and evaluation of competition in

telecommunications was conducted by the government.
The analysis was done in each major service such as
Internet access, mobile telecommunications, Internet
protocol (IP) telephones, and fixed-line telephones.The
following are some of the results of the analysis.
For the broadband market, attention was paid to
changes in the competitive environment accompanying
the shift toward the convergence of communications and
broadcasting with fiber optic lines (FTTH). In the asymmetric digital subscriber line (ADSL) market, NTT East
and Wests share as of December 2005 was 39.1 percent;
the market was judged to be functioning effectively under
the rules governing connections, with vigorous competition
in terms of cost and service. In the FTTH market, NTT
East and West had a 60.7 percent share as of December
2005; the number of contracts was growing and video
services were being increasingly realized.The mobile telephone market was switching from the 2nd generation (2G)
to the 3rd generation (3G), and competition remained as
vigorous as ever. NTT Docomos share was 54.1 percent
as of December 2005. It becomes difficult to predict the
future trend of ICT with the innovation and changes in
ICT field such as the convergence of communications and

The current status of ICT infrastructure in Japan

The following section describes the remarkable development
of ICT infrastructure fostered by the above-explained
Japanese policies; it also describes the new trend of
convergence in broadcasting and communications.

The International Telecommunication Union (ITU)s July

2006 edition of The World Information Society Report listed a
Digital Opportunity Index (DOI) of 11 factors (such as
population coverage for mobile telephones, Internet connection fees, Internet access from mobile telephones, and
ratio of broadband coverage) for 180 economic regions.
Korea had the highest DOI score, followed by Japan. Also,
in a comparison of broadband fees, Japan was the cheapest
at US$0.07 per 100 kilobits; it was tied with Korea as the
fastest with a transmission speed of 51.2 Mbps.
Increase in the number of Internet users
In 2005, the number of Internet users in Japan stood at
85.29 million people (66.8 percent of the population).
A majority of peopleestimated at 48.62 million (57.0
percent of total Internet users)used both personal
computers and mobile devices (such as mobile telephones)
to access the Internet. Of these, 19.21 million people
(22.5 percent) used only mobile devices, and 15.85
million (18.6 percent) used only personal computers.
The rate of penetration for broadband has been
increasing (see Figure 5). By the end of 2005 the number
of contracts for broadband lines had reached 23.30 million
(a 19.1 percent increase over the previous year). Looking
at the breakdown of this figure, we see that contracts for
DSL were the most common, at about 14.52 million in
2005 (a 6.2 percent increase over the previous year). Next
came FTTH, with approximately 546,000 contracts (an
88.4 percent increase over the previous year).This was
followed by approximately 331,000 contracts for cable
Internet (an 11.8 percent increase) and approximately
20,000 contracts for fixed wireless access (FWA) (a 34.8
percent decrease).
The governments goal, based on the u-Japan Policy, is
to make broadband available in every region in Japan by
2010 through measures promoting the upgrading of the
broadband network. Interest in switching to FTTH
Internet connection lines is increasing, and a comparison
of the net increase in the number of contracts during the
fourth quarter shows that the number of contracts rose for
FTTH during the period, surpassing that for DSL.

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Figure 5: Evolution in the number of broadband contracts

2,500

22

86

387

943

1,495

I DSL
I Cable internet
I FTTH
I FWA*

2,000

1,500

1,956

2,330

546
290
331
114

296

258
31

1,000

207
500
146
0

1,368

1,452

2004

2005

1,120

22

1999

78

2000

702

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Contracts (10,000s)

part2.r2

238

2001

2002

2003

Source: Communications Usage Trend Survey, MIC, Japan.

* FWA contracts have grown from 0 contracts in 1999 to 20,000 contracts in 2005; these relatively small values are not visible in this figure.

By the end of 2005, 11.46 million people (such as

DSL subscribers and fiber optic subscribers) had used IP
telephones. In addition, there are peer-to-peer telephones
that are cheaper and utilize IP technology, but they do not
have an assigned IP phone number because they do not
satisfy a quality standard. In keeping with the spread of the
Internet, NTT has stopped investing in circuit switches
and is instead promoting a switchover of the network to
IP. Major companies in Japan have indicated a policy of
switching communications networks from public switched
telephone network (PSTN) to IP by 2010; it is expected
that telecommunications services, including telephones,
will be offered via an all-IP infrastructure.
Penetration and sophistication of mobile telephones
Mobile telephones are no longer just for talking; they have
become peoples most accessible mobile information terminals. One example is their Internet capabilities. By the
end of 2005, the number of people accessing the Internet
from mobile telephones or other mobile information terminals was 69.23 million (81.2 percent, a 7.9 percent
increase over the previous year).This was the first time
Internet access from mobile devices had exceeded Internet
access from personal computers (the relevant figure for
personal computers was 66.01 million).7

In addition, mobile telephone terminals offer games,

music for downloading and playing, one-segment broadcasts (terrestrial television broadcasts aimed at mobile
terminals), and video telephone. Furthermore, there are a
number of mobile terminals with functions that enable
the user to connect to a variety of information read from
barcodes, and even to handle electronic money and tickets
via smartcard or radio frequency identification (RFID). In
2004, the market size for mobile commerce (m-commerce)
was 971 billion yen (US$8.8 billion), encompassing 17.2
percent of the business-to-consumer e-commerce market.
People are able to do a variety of tasks whenever and
wherever they want with their mobile telephones.
Currently, telecommunications carriers provide
subsidies to encourage the sale of mobile telephone units;
thus, users are often able to purchase relatively cheap units
that offer a high degree of functionality.This structure is
credited with having a great effect on helping highly
functional terminals to broadly penetrate the competitive
portable device market. However, to produce more competitively priced products, discussion on replacing this
funding scheme with a new price plan is underway.
Dramatic increase in Internet traffic
In recent years, IP traffic in Japan has shown a tendency to
double each year.The continuing increase in the number

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of broadband subscribers and Internet users is the engine

for this trend. It is believed that the increase in IP traffic is
to the result of factors such as the strong momentum
Internet use is gaining in society and the economy, the
sudden rise in peer-to-peer file sharing, and the ability of
individualsnot just content providersto transmit heavy
content such as music and movies.
Convergence of broadcasting and communications:
The development of digital broadcasts

Terrestrial digital television broadcasts in Japan began in

December 2003.The reception area for these broadcasts
has expanded rapidlyby June of 2006, this area covered
32.2 million households of potential viewers, or 68 percent
of the total number of households in Japan. By the end
of 2006 all prefectural capitals in Japan began terrestrial
digital television broadcasts; by July 2011, all broadcasts
will be done digitally.Television is one of the most accessible means for citizens to obtain information, and it is
hoped that switching television to digital will lead to a
communications infrastructure in households. Also, in
April 2006 digital one-segment broadcasts (terrestrial
television broadcasts aimed at mobile terminals) began,
enabling image and data broadcasts to be received on
mobile devices as clearly as they appear on home televisions.
Movement toward convergence of telecommunications
and broadcasting

In line with the increase in digital broadcasts and the

dramatic increase in carrying capacitythe result of the
spread of broadband throughout the communications
networktelecommunications carriers are using their
optical fiber networks as a single channel for both broadcast services (for television shows and so on) and for
communications services.The movement, described as a
convergence of telecommunications and broadcasting, is
based on the three phenomena of (1) full-scale online
delivery of movies and music; (2) sharing of terminals,
networks, and so on; and (3) the simultaneous entry of
corporations into the communications and broadcast fields.
The acceleration of this convergence, as well as the
situation of the telecommunications and broadcasting
industries, will lead to an increase in information provided
and to improved production of content.These increases
are expected to contribute to strengthening the standing
of Japan by, for example, disseminating Japanese culture in
the world at large.
With features such as video on demand (VOD) distribution services that allow people to view videos from
their personal computers (that is, Internet broadcasts); and
with the common usage of the same transmission channel
for both communications and broadcast services, business
tie-ups continue to transcend industry boundaries.

Terrestrial digital television broadcasts have been

shown in Japan since 2003. One of the goals of digitizing
terrestrial broadcasting is to provide bidirectional services
by connecting broadcasting with the Internet. Such bidirectional services enable the viewers and listeners to
have access to a wide variety of services.Television is the
medium that most people use to obtain day-to-day information and can be found in practically every household.
Therefore, digitizing television will provide a basis for
ICT in households. Among cable television and telecommunications corporations in recent years, an increasing
number are offering a triple play package to consumers:
Internet access, video delivery, and IP telephone service.

Challenges for the future

The world has witnessed changes to society as a result of
ICT advancement. Public policies to reflect these social
changes and to further ensure that the benefits of ICT
trickle down are needed. Japan is restructuring its systems
and policies in the ICT field, as well as promoting various
measures.The following are some challenges that Japan
faces in this area.
Promoting discussion on the frameworks of communications
and broadcasting

The MIC held a Panel on Frameworks of Communications

and Broadcasting from January to June of 2006. A comprehensive range of proposals for Japan to reach its goal of
creating the worlds leading communications and broadcasting infrastructure by its target of 2011 were suggested.
Proposals included making use of its strengths to become
the leader in the field of broadband, mobile, and television
communications; preparing legal systems for the convergence of communications and broadcasting; revising its
communications-related regulations; easing its broadcast
regulations; and reforming Nippon Hoso Kyokai (NHK),
Japans public broadcaster. In June 2006, an agreement
between government and ruling parties was reached on
the framework of communications and broadcasting.
Based on this agreement, a Program for Restructuring the
Communications and Broadcasting Sectors was announced
in September 2006.This program addressed the four sectors
relating to NHK reform, broadcasting, convergence, and
communications. In addition, at the end of August 2006, a
study group on the comprehensive legal structure for
communications and broadcasting was established. For
approximately a year and a half, this study group will
examine, from a technical standpoint, how to concretely
orient discussion on the legal system with regard to combining and linking communications and broadcasting.

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Negative issues brought about by ICT advances

As the ubiquitous network continues to develop, and as

ICT continues to permeate citizens lives, it is important
to deal with concerning issues such as privacy and security,
a safe and secure ICT usage, and eliminating the digital
divide.
For example, ensuring security in ICT usage is
becoming a major social issue. Individuals and companies
may become the victims of crimes such as ID theft, skimming, or billing fraud in their daily lives and daily operations (when using an ATM, using a credit card, shopping
on the Internet, and so on).These security concerns must
be addressed effectively and promptly.
There is also a need to provide measures against spam
email.The MIC initiated a revision to the anti-spam law
(effective from November 2005) whereby anyone who
uses the information of an email sender in a deceptive way
is liable for prosecution.The ministry is also promoting a
Spam Purging Project (begun in February 2005) that
operates through the joint cooperation of the government
and the private sector.The project encourages telecommunications companies to cut off and otherwise deny line
access to spammers. International cooperation is also being
sought; an agreement was reached between Japan and
other Asian countries in April 2005, with France in May
2006, with the United Kingdom in September 2006, and
with Canada in October 2006.
Furthermore, in recent years there has been a succession of incidents involving illegal or harmful information
being posted on websites and electronic bulletin boards. In
response, the Provider Liability Limitation Law (in effect
since May 2002) and its related guidelines establish standards of restriction on providers responsibility that enable
providers to remove illegal information. Also, by creating
guidelines (rather than required regulations), the government supports the voluntary efforts of ISPs to deal with
this issue.
New competition promotion program 2010

The MIC held a meeting on a framework for competition

rules to address the transition to IP-based networks and
released a report in September 2006.This report was written in light of the changes to the market environment
resulting from the development of IP, such as the spread of
broadband, the switching from PSTN to an IP network,
and the diversification of business models.
The measures for implementing these upgrades by 2010,
with a view toward promoting greater competition and
ensuring the interests of users, were released in September
2006; the MIC then set about implementing them.When
competition policies are developed, the fundamentals of
fair competition will be ensured, providing an appropriate
balance between promoting competition to build facilities
for creating networks on the one hand, and opening up the

networks of dominant telecommunications companies that

have bottleneck facilities on the other hand.The strategy
also promotes fair competition, thus allowing for the
spread of a vertical integration business model that cuts
longitudinally through each network layer.
Promotion of the u-Japan Policy

The MIC is promoting the u-Japan Policy as a means of

contributing to the entire governments initiatives on
behalf of the IT New Reform Strategy, which aims to
achieve a ubiquitous network society in Japan by 2010 as
previously related in this chapter.The ministry has summarized the necessary policy packages for each year in its
ICT Policy Outline; it promotes a variety of policies related
to topics such as eliminating the geographical digital
divide, developing a seamless access environment for
both fixed and wireless networks, promoting advance
social system restructuring through ICT, ensuring the
safety and security of citizens through ICT, and ensuring
network reliability and security.8
In September 2006, the u-Japan Promotion Program
2006 was assembled as a mid-term policy to be implemented
until 2010, reflecting the changes in the communications
and broadcasting situation that have taken place since the
creation of the original u-Japan Policy.This mid-term
policy includes (1) the promotion of the convergence of
communications and broadcasting, (2) strengthening the
growth rate, the competition levels, and the national
standing through ICT, and (3) achieving a safe and secure
ubiquitous network society through ICT.9
Japan faces issues that stem from changes in its social
and economic environment, such as a declining population
the result of a lowering birthrate and aging population.
However, we believe that ICT will generate economic
vitality and will encourage social and economic development through factors such as the increasing accumulation
and integration of knowledge and technology, transforming
the existing social and economic system, and accelerating
the pace of innovation via the realization of a ubiquitous
network society where ICT affects all aspects of socioeconomic activity.

Notes
1 e-Japan Strategies 2001.
2 u-Japan Policy 2005, Chapter 1.
3 See the 2006 Information and Communications White Paper, Chapter 1.
4 Of real GDP growth for 2004 (which was 2.5 percent), 1.0 percent was
the result of the ICT industry.
5 The definition of ICT capital stock here is electronic devices and software for use on computers which are capable of connecting networks. This definition includes electronic computers and peripheral
attachments, fixed-line communications devices, wireless communication devices, and software (not including self-developed software).

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6 See the supplement to the MIC report Framework for Competition

Rules to Address the Transition to IPBbased Networks, 2006. In
Japanese.
7 Communications Usage Trend Survey (2006) conducted by the MIC.
Available at www.johotsusintokei.soumu.go.jp/english/.
8 See u-Japan Policy (2005, Chapter 1).
9 MIC u-Japan Promotion Program 2006.

References
Bleha, T. 2005. Down to the Wire. Foreign Affairs. 84 (3).
Do Research Institute. 2006. Survey on Economic Analysis of ICT, Japan
(in Japanese). Tokyo: Do Research Institute.
ITU (International Telecommunication Union). 2003. World
Telecommunication Indicators 2004. Geneva: ITU.
. 2006. The World Information Society Report, July edition. Geneva:
ITU
MIC (Ministry of Internal Affairs and Communications), Japan. 20012005.
Communications Usage Trend Survey. Available at www.johotsusintokei.soumu.go.jp/english/.
. 20022006. White Paper Information and Communications in
Japan. Tokyo: MIC.
. 2005. u-Japan Policy. MIC. Available at www.soumu.go.jp/
menu_02/ict/u-japan_en/index2.html.
. 2006. Framework for Competition Rules to Address the Transition
to IP-Based Networks. Tokyo: MIC.
OECD. 2004. OECD Broadband Statistics, December 2004. Retrieved July
28, 2005.

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