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Telecommunications carriers move to protect fair competition
Cable & Wireless IDC Inc.
FUSION COMMUNICATIONS CORP.
JAPAN TELECOM CO.,LTD.
KDDI CORPORATION
POWEREDCOM, Inc.
2003/07/17
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(TOKYO) July 17, 2003—Cable & Wireless IDC Inc., FUSION COMMUNICATIONS CORP., JAPAN TELECOM CO.,LTD., KDDI CORPORATION (TSE: 9433) and POWEREDCOM, Inc., five of Japan's major telecommunications carriers, today announced that they are to oppose an average tariff increase of 4.8% resulting from a decision by the Minister of Public Management, Home Affairs, Posts and Telecommunications to amend the interconnection charges paid to NTT East and NTT West. While the companies have each submitted petitions to the Tokyo District Court to launch an administrative suit on a number of legal grounds, the five suspect and oppose a reversal in the Ministry's pro-competition policy that has brought about significant declines in domestic call rates.[1]
The five companies, are specifically calling for the revocation of the approval granted on April 22 by the Minister of Public Management, Home Affairs, Posts and Telecommunications for the partial amendment of tariffs concerning interconnection to Type I designated telecommunications facilities at NTT East and NTT West. The telecommunications carriers are also questioning the Ministry's reversal of policy without adequate debate and through procedures that were not transparent.
Japan's telecommunications industry has a history of utilizing pro-competitive policy to produce benefits for users, such as reductions in charges and the introduction of new services, specifically realizing the aims proclaimed in Article 1 of Japan's Telecommunications Business law to "promote the public welfare."
The recent upwards amendment of the interconnection charges, together with after the fact adjustments and implementation of exactly the same charges for both NTT East and West, appears to be a significant reversal of that pro-competition policy and is likely to lead to increased charges for customers.
Through their shared commitment on this issue, the five companies making this announcement have requested revocation of the approval of the amendment of charges, on the following legal grounds:
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The amendment to bring in uniform interconnection charges for NTT East and NTT West:
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contradicts the findings of the Ministry's own advisory body, the Telecommunications Council;
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infringes the appropriate procedures necessary for administrative action, such as calling for opinions as required by Council report; and,
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includes errors in the decision method and process.
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The interconnection charges are not based on the amount and length of calls or on NTT East and NTT West's efficient use of the network but on other unrelated factors (non-traffic sensitive costs, NTS), thereby infringe the Telecommunications Business Law.
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Adjustments in the interconnection charges are based on amendments that infringe the Telecommunications Business Law.
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Unification of the interconnection charges for NTT East and NTT West infringes both the Anti-Monopoly Law and the Telecommunications Business Law as an unfair restriction on trading and an obstacle to fair competition between telecommunications carriers.
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Making the tariff amendments effective from the date of the ministerial ordinance is a disadvantageous retroactive application, which is an infringement of the Telecommunications Business Law.
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Average cost of a 3-minute call between Tokyo and Osaka in 1988 cost JPY 400. In 2003, the same call would cost JPY 80. |
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