A Permanent Organization Needed for Handling Telecommunications Disputes: Part 1

Hajime YAMADA (Professor of Economics, Toyo University)

Argument Without a Guidepost Over Competition

Technology innovation is progressing at a high speed in the telecommunications industry. To handle disputes arising in the industry, the existing committees with part-time members consisting of intellectuals are not enough any more. Establishing a permanent regulatory organization is needed.

The Telecommunications Business Dispute Settlement Commission, which belongs to the Ministry of Public Management, Home Affairs, Posts and Telecommunications (MPHPT), submitted a report rejecting an application by a wireless Internet service provider for authorization of installing antennas in premises of railway stations of East Japan Railway (JR) Company, according to the report published in late July.

Rejection of Wireless Internet Access Based on Misunderstandings

Upon hearing the news I read the submitted report on the Commission's website, and was surprised to learn that the Commission must have been mistaken.

Wireless Internet access is a service that enables access to a worldwide network through wireless connections between personal computers and antennas. It is a type of public telecommunications business. However, according to the report, the Commission considered it a means of private communications only among users on premises of railway stations. Wireless Internet connections are sometimes called wireless LANs, or wireless local area networks. The LAN means a network on a premise, which might cause the misunderstanding.

Why did such a simple misunderstanding happen? One of the reasons may be that all the members of the Dispute Settlement Commission are knowledgeable persons who serve part-time. Moreover, a majority of the members are either jurists or economists, who are not necessarily experts on telecommunication technologies.

Wireless Internet connection, in the prospects of information-based society in the 21st century, is possibly utilized as an indispensable infrastructure for realization of such a society. Various wireless LAN services such as Hot Spot Services at coffee shops or convenience stores, and limited-area services within some busy shopping areas in Tokyo, including Shibuya, have already begun. These services reportedly will become available in the observatory of the Tokyo Metropolitan Government building soon.

Wireless LANs are spreading at a remarkable speed, and are now a worthy opponent for third generation (3G) mobile phone services. In present times when mobile phones are used so extensively, what would happen if users could not use their mobile phones in JR stations? For wireless LANs this will in fact likely happen because of the dismissal of the application mentioned above. It is utterly beyond users' comprehension.

It is said that in the United States, due to delayed licensing, 3G mobile phone services will not start until 2008, even if licensing is realized. Also, it is increasingly strongly anticipated that wireless Internet access will be widely spread in the mean time and eventually established as a de facto standard in the United States.

Undergoing various business experiences by quickly spreading wireless Internet access throughout Japan must also bring a great advantage for Japanese industry to strengthen its international competitiveness ahead of the United States. Both Sha-Mail and i-mode, which were developed in Japan, have already been widely doing business in Europe. Japan is ranked high among the parties concerned as one of the advanced countries that created a new business with mobile phone services. Wireless Internet access has a great potential to follow them as well. This service is beginning to start in Asia and Europe. The time has come, but this opportunity of development is just going to be ruined by this simple misunderstanding by the Dispute Settlement Commission, and may result in a major failure of economic policies of Japan.

(Part 1 of an English version of the author's Japanese article that appeared in the October 1, 2002 issue of "Economist", published by Mainichi Newspaper Co.)