The draft proposal by the Liberal Democratic Party (LDP) for the abolition of the NTT Law has been finalized. Specifically, the LDP will propose to the government to abolish the “mandatory disclosure of research results” in the ordinary Diet session next year and then to realize the complete abolition of the NTT Law by the ordinary Diet session of 2025 at the latest. The NTT Law was enacted in 1985 upon the privatization of Nippon Telegraph and Telephone Public Corporation (NTT). The law aims to maintain the high level of public needs and public benefit and encourage fair competition in the telecommunications industry by mandating the maintenance of a uniform nationwide network of landline telephones and the publication of research results.

In response to the draft proposal by the LDP, telecommunication service providers, including KDDI, SoftBank, and Rakuten Mobile, as well as local governments and the like that are concerned about maintaining of publicness, have expressed “No” and submitted a joint request letter demanding careful policy discussions on October 19. On November 7, NTT announced its opinion on how the NTT Law should be, stating NTT’s logic that it would continue to provide a fair network to other carriers; it has no intention of integrating NTT East and West with NTT DOCOMO; and fair competition should be covered by the Telecommunications Business Law and foreign investment regulations should be covered by the Foreign Exchange and Foreign Trade Act, etc.

On the other hand, the three competing telecommunications giants responded through a joint release dated November 14, stating that the root of the problem is that NTT’s telecommunications infrastructure, built with the investment of 25 trillion yen of national assets, is not just fixed assets of an individual company. There is also deep-rooted strong wariness over the group reorganization of NTT. Meanwhile, the concern for rural areas is the regression of the universal service. Responding to this, NTT claimed that the shares were allocated to the government at the time of privatization, and therefore, the assets belong to the shareholders. It also stated that the maintenance of the uniform nationwide service is regulated in the Telecommunications Business Law.

The telecommunications environment is now very different from the days when landline telephones were the mainstream. A review of the law is inevitable to strengthen international competitiveness in the telecommunications industry and to create a competitive environment responding to new technologies. This review was triggered by the proposal to sell NTT shares held by the government amounting to 5 trillion yen in order to secure financial resources for increasing defense spending. Although the LDP’s draft has been separated from the issue of funding for defense expenditures, I wonder if this issue is vaguely indicated somewhere in the draft where the time limit is clearly stated. The pace of technological innovation is very rapid, and we have no time to waste in making necessary decisions before new technologies become too common. However, the future of the telecommunications industry should not be defined only by a poor argument toward the predetermined conclusion. I expect an open discussion toward the establishment of an environment with publicness and fairness.

This Week’s Focus, November 17

Takashi Mizukoshi, the President