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(No.1 High-Tech News Site in Japanese)

News from NET and COM '99

  • Internet Charges in Japan May Not Decline Further
  • February 11, 1999 (TOKYO) — Leaders of the Internet world in Japan debated when Internet charges will hit bottom during a panel discussion at NET & COM ’99 held in Makuhari Messe from Feb. 3-5.
    The panel discussion, named “The Future of Japanese Internet Services,” was conducted by five panelists: Koichi Suzuki, president and CEO of Internet Initiative of Japan Inc. (IIJ); Shogo Yokoi, executive manager of IP Network Service Department of Corporate Users Division in NTT Corp.’s Long Distance and Global Provisional Headquarters; Takashi Kobayashi, CEO of Rimnet Corp.; Toru Takahashi, chairman of the Internet Association of Japan (IAJ); and Hiroshi Fujiwara, president of the Internet Research Institute Inc. (IRI).

    There was a disparity in answers to the question: “Have Internet charges touched the bottom?” the different answers centered around how to look at backbone systems and access lines.

    As for the backbone, they took a relatively optimistic view. It is because super high-speed networks based on wavelength division multiplex (WDM) technology are being deployed smoothly. An example is Crosswave Communications Inc., established jointly by IIJ, Toyota Motor Corp. and Sony Corp.

    “We hope revenues earned on the backbone networks through cost reductions will be returned in the form of price cuts in usage fees,” said Suzuki of IIJ.

    “Cost reduction can be achieved through application of the WDM technology to routes with significant concentration of traffic, for instance, a route between Tokyo and Osaka. Our Open Computer Network (OCN) service is likely to be received as something cheap and bad. We will improve it further, applying new technologies,” said Yokoi of NTT.

    On the other hand, Kobayashi of Rimnet said of access lines, “No one is in sheer competition for provision of access lines, while services still heavily rely on NTT networks. It is urgently necessary to establish the environment where new carriers can compete with NTT on an equality even in access lines.”

    Moreover, there was a comment focusing on a structural problem of the costly circuit charges between Japan and the United States. “It is inevitable that Japan has to pay more than America does,” said Suzuki, hinting any more effort on the side of providers isn’t possible.

    Fujiwara of IRI said, “When we consider quality, costs and charges, we have to make a distinction between communications services as a life line, high reliability services for business, and low-cost consumer networks.”

    Nonetheless, the panelists agreed they would face difficulty in implementing constant cost reductions at a current pace, unless there is a radical step to change the cost structure among IPSs, IAJ chairman Takahashi said.

    Related story:
    Telecom Firm Owned by IIJ, Toyota, Sony to Offer High-Speed Services
    U.S.-Based PSINet to Acquire Japanese ISP Rimnet

    (Nikkei Communications)

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