FMMC / ITU AJ October 13 th, 2008 in Paris ARITOMI Kan’ichiro Toward Ultra-Broadband ～ Broadband Ubiquitous Policy in Japan ～ Toward Ultra-Broadband ～ Broadband Ubiquitous Policy in Japan ～ Former Vice Minister for Policy Coordination, Ministry of Internal Affairs and Communications of Japan (MIC) President, Foundation for Multimedia Communications (FMMC) President, ITU Association of Japan (ITU AJ)

Multi-Sensory Interaction System 2008 FMMC / ITU AJ / MIC

Although there is no real object, you can see it, touch it, and hear it as if you were interacting with a real 3D object. Multi-Sensory Interaction System Multi-Sensory Interaction System (MSenS) Re-creating 3D Images, Sounds, and Touch Technology Collision detection between the pen and the virtual object Data Acquisition and modeling a virtual object Synthesis of 3D image, sounds and tactile sense in real-time SOURCE; NICT/ATR Touch Sounds3D Images 2008 FMMC / ITU AJ

Multi-Sensory Interaction System ； Future Applications SOURCE; NICT/ATR Cultural and Scientific Education Medical Training High-Quality Product Design Net Shopping with Multiple Senses 2008 FMMC / ITU AJ

CONTENT CONTENT Ⅰ Ultra-Broadband Ⅱ Advancement of the Information and Communication Ⅱ Advancement of the Information and Communication infrastructure infrastructure Ⅲ Competition Policies and Investment Incentives Ⅳ Policy Issues in the Age of “Ultra-broadband”

FMMC / ITU AJ Ⅰ Ultra-Broadband ～ Broadband Ubiquitous Society ～ ～ Broadband Ubiquitous Society ～

FMMC / ITU AJ / MIC 64k384k1.5M8M20M40M100M ADSL ISDN Analog Digital Telephony Internet Broadband Mobile Wireless Broadband Ubiquitous Society Fixed Telephone Mobile Phone 3G Mobile ，４ G Wireless LAN ＷＩＭＡＸ Optical Fiber From “Telephony” towards “IBMW” Digitization of TV Broadcasting Digitization of Satellite Broadcasting Digitization of Terrestrial Broadcasting Digitization of CATV Broadband-Ubiquitous Infrastructure

FMMC / ITU AJ / MIC IP network service platform Authentication, Accounting, Payment, Client Management, Security ・・・ Internet, Intranet, Data center, ＮＷ management IP network service platform Authentication, Accounting, Payment, Client Management, Security ・・・ Internet, Intranet, Data center, ＮＷ management Contents ／ Application service ＥＤＩ, ＣＲＭ, Ｅ -market place ・・・ , ＩＰ phone, Movie, Music, ・・・ Shop, Portal, Auction ・・・ Contents ／ Application service ＥＤＩ, ＣＲＭ, Ｅ -market place ・・・ , ＩＰ phone, Movie, Music, ・・・ Shop, Portal, Auction ・・・ IP Backbone network （ ISP procures from telecommunication carrier. Etc. ） IP phone network Public switched telephone network Public switched telephone network Subscription telephone ADSLFTTHFWA Wireless ＬＡＮ Direct line telephone Dry copper Optical fiber PHS Regional IP network ＰＳＴ Ｎ Mobile phone ITS Termin al Intelligent home appliance, STB, AV, TV, etc Telephone set/Facsimile Video game Car navigation, ITS RFID Mobile phone PC PDA Person, Shops, Convenience store, Enterprise, School, Government office, Municipality, Robot/Machinery, Foods, Livestock, etc. User Subject of use Fixed （ Fixed line, Wireless ） Mobile （ Wireless ） Access （ Local ） ＮＷ layer Interexchange （ Long-distance ） Platform layer Contents/ Application layer ASP service ISP service Mobile IP Ubiquitous environment Broadband environment ＩＳＰ ＣＰ ＡＳＰ The Internet Structure of ICT industry Structure of ICT industry

FMMC / ITU AJ INNOVATION COMPETITION INVESTMENT

FMMC / ITU AJ Ⅱ Advancement of Ⅱ Advancement of the Information and the Information and Communication infrastructure Communication infrastructure

FMMC / ITU AJ ～ ◆ IT Basic Law ◆ IT Strategy Headquarters (chaired by Prime-Minister) Realization of a Self-sustaining ICT Society e-Japan Priority Program-2002 (March 2001) e-Japan Priority Program-2002 (June 2002) e-Japan Priority Program-2003 (August 2003) ｅーＪａｐａｎ Priority Program （ June 2004 ） Promoting IT applications （ Seven priority fields ） Health care, food supplies, households, small business finance, knowledge, employment and industry, government services e-Japan Strategy (January 2001) IT Strategy in Japan IT New Reform Strategy (January 2006) IT New Reform Strategy Policy Package (April 2007) u-Japan promotion program of MIC (September 2006)

FMMC / ITU AJ ( １ ) Advancement of Fixed Line Networks ( １ ) Advancement of Fixed Line Networks

FMMC / ITU AJ / MIC Shift of network structure to IP network

Current State of Broadband in Japan Wireless （ＦＷＡ） Subscribers: 13,142 Number of carriers: 29 Wireless （ＦＷＡ） Subscribers: 13,142 Number of carriers: 29 Subscribers (Unit: 10 Thousand) Source: MIC FTTH Subscribers: 13,082, 699 Number of carriers: 170 DSL Subscribers: 12,289,972 Number of carriers: 48 Cable Internet Subscribers: 3,956,096 Number of carriers: FMMC / ITU AJ / MIC

Network Evolution to NGN (the Next Generation Network) Internet PSTN Internet 【 Facilities 】 ・ ADSL, Wireless LAN ・ router, server Managed Networks Best Effort Networks Mobile 【 Facilities 】 ・ handset ・ BTS ? 【 Facilities 】 ・ metal line ・ circuit switch CATV Wireless Network Mobile 【 Facilities 】 ・ handset ・ BTS ・ IP-based core network N G N 【 Facilities 】 ・ FTTH ・ high-speed & high-capacity router ・ video delivery ・ application servers including authentication platform

FMMC / ITU AJ NGN Network Services (from March 31, 2008) Service category VPN Optical IP telephone/ videophone Optical broadband Network services for contents delivery Ethernet service Services Service brand FLET'S Hikari Next Hikari Denwa / Hikari Denwa Office Type Business Ethernet Wide FLET'S VPN Gate/Wide Under review FLET'S Cast Services for digital terrestrial TV IP retransmitting companies Best effort QoS Consumer (Max 100Mbps) Business ( Max approx. 1Gbps) (under review) Under review Center-end type, CUG Type/Center-end type Voice: Standard and High quality(7kHz) Videophone (Standard, SD-equivalent, Hi-definition (under review)) Videophone (Standard, SD-equivalent, Hi-definition (under review)) Unicast function Services for digital terrestrial TV IP retransmitting companies Services for digital terrestrial TV IP retransmitting companies Best effort Unicast / Multicast Wide-area Ethernet (intra-prefecture/inter-prefecture) Wide-area Ethernet (intra-prefecture/inter-prefecture) New Source: NTT

FMMC / ITU AJ Communication PC IPTV High-definition Video delivery × - IP retransmission of digital terrestrial TV broadcasting - Multi-channel broadcasting - Video On Demand Digital terrestrial TV broadcasting CS Optical fiber IP telephone Video Delivery Center Stations IPTV Service Source: NTT

FMMC / ITU AJ ( ２ ) Advancement of Mobile Networks ( ２ ) Advancement of Mobile Networks

FMMC / ITU AJ Current State of Mobile Telephony in Japan Mobile Telephony (Cellular+PHS) Fixed Telephone Subs Including ISDN) Broadband Subs (DSL+CATV+FTTH+Wireless) ＩＰ Telephony Subscribers (Unit: 10 Thousand) Cellular exceede d Fixed 10,734 5,123 2,875 1,754 Source: MIC

FMMC / ITU AJ Current State of 3G in Japan 2001 IMT-2000 service launch 2G Mobile Internet Access IMT-2000 Subscribers Ratio of IMT-2000 as of March 2008 IMT % (Unit: 10 Thousand) Source: MIC

FMMC / ITU AJ New Mobile and Wireless Broadband Technology Next Generation PHS 4G WiMAX - WiMAX Mobile - WiMAX Fix LTE, Super 3G

FMMC / ITU AJ ( ３ ) Advancement of Broadcasting ( ３ ) Advancement of Broadcasting

FMMC / ITU AJ State of Terrestrial Digital Broadcasting in Japan Beijing Olympic World Cup (Germany) Target Number of Receivable Households 22 million Target for Households with receivers: 22 million as of March, 2008 Actual Number of Receivable Households 22 million Actual Number for households with receivers: 22 million as of March, 2008 (coverage 44%) Target for Terrestrial Digital Broadcasting Receivable Households ( Roadmap) Target Number of Receivable Households 22 million Target for Households with receivers: 50 million as of 24 July, 2011 Source: MIC

FMMC / ITU AJ System of Mobile TV in Japan One-segment (One-Seg) Terrestrial Digital Broadcasting Mobile Terminals with Mobile Terminals with one-segment terrestrial digital broadcasting tuners: 28.8 million 28.8 million ( as of March, 2008) Programs to be received by mobile phone Hi-Vision Programs to be received by fixed terminals Terrestrial digital broadcasting divides each channel into 13 segments, through which it transmits video, audio and data signals. Data segment Data transmitted Receivers Fixed reception by such equipment as stationary receivers Mobile reception by equipment such as terminals combined with mobile phone Source: MIC

FMMC / ITU AJ ( ４ ) Convergence of Communications of Communications and and Broadcasting Broadcasting

① FMC ~fixed-mobile convergence ~

FMMC / ITU AJ / MIC “FMC” (fixed-mobile convergence) WiMAX Wi-Fi 3G/4G Mobile FTTH ADSL PSTN Wireless Fixed Seamless Switching

② Triple play ／ Quatro play 2008 FMMC / ITU AJ / MIC

ServiceTelephone Internet access Video distribution Basic charge for three services combined* Plala Optic Triple Pack (Plala Networks) Free between Plala Phone for FLET’S users Domestic: ¥8.4 for 3 min (Plala Networks) Maximum speed 100 Mbps (Plala Networks) Multi-channel broadcasting (more than 50 channels), VOD (4- 5,000 titles) (Online TV/4th MEDIA) ¥9,849 (detached house) ¥7,066 (apartment) FLET’S Hikari Premium** （ NTT West ＋ OCN ＋ On Demand TV ） (NTT West ) Free between. Phone users Domestic: ¥8.4 for 3 min (OCN) Maximum speed 100 Mbps (OCN) Multi-channel broadcasting (21 ch, CS programs) VOD (approx. 3,000 titles) (I-Cast for multi-channel broadcasting, On-Demand TV for VOD) ¥8,683 (detached house) ¥7,024 (apartment) KDDI Hikari Plus (KDDI) Free between Hikari Plus users Domestic: ¥8.4 for 3 min (KDDI) Maximum speed １ Gbps (KDDI/DION) Multi-channel broadcasting (30 ch, CS programs) VOD (approx. 4,500 titles), on-line karaoke (KDDI) ¥9,555 (detached house) ¥7,245 (apartment) (discount rate when taken together with KDDI) Yahoo BB Hikari TV package (SoftBank Group) Free between BB Phone users Domestic: ¥8.4 for 3 min (YAHOO BB) Maximum speed 100 Mbps (YAHOO BB) Multi-channel broadcasting (41 ch, CS programs) VOD (approx. 5,000 titles) (BB Cable) ¥7,234 (detached house) ¥4,189 (apartment) J:COM (J:Com Tokyo) Local: ¥8.3 for 3 min Between J:COM Phones: ¥5.3 for 3 min (J:Com Tokyo) Maximum speed 30 Mbps (J:Com Tokyo) CATV multi-channel broadcasting (81 ch, terrestrial, BS and CS programs), VOD (approx. 3,500 titles) (J:Com Tokyo) ¥11,350 * Based on charge for basic multi-channel plan. Service details differ among providers, so direct cost comparison is not possible. ** FLET’S Hikari Premium permits choice of different provider for other services including internet and video. Triple-Play Services in Japan （ example ） Compiled by MIC based on information provided on operator websites Source: MIC

FMMC / ITU AJ ③ Advanced FMC

FMMC / ITU AJ Advanced FMC LTE, Super 3G Next Generation PHS Next Generation PHS 4G WiMAX - WiMAX Mobile - WiMAX Fix LTE, Super 3G FTTH FMC FMC Services ServicesAnywhereAnytimeSeamlessAccess FTTH

FMMC / ITU AJ ( ５ ) Rapid Increase of Traffic

FMMC / ITU AJ Transition to Network Distribution of Video Content 5 times in 4 years Size of Network Distribution Video Content Market Source: MIC

Trends in ASP/SaaS Business Market (estimated) Source: ASPIC Billion Yen about 2000 billion yen (estimated) by FMMC / ITU AJ

IP Traffic (Downstream ) Top Bottom Bandwidth occupancy rate Others (web, mail etc.) Randomly selected day in April 2006 Randomly selected day in November 2005 P2P traffic has a more significant impact on networks than streaming and web surfing. Average P2P occupancy rate increased by 30% at peak level and by 10% at off-peak level over the six-month period. Source: MIC 2008 FMMC / ITU AJ

FMMC / ITU AJ / MIC (Gbps) about 2.5 times in only 3 years Total Amount of IP Traffic in Japan (estimated) Expansion of Internet Traffic Volume Source: MIC Gbps Gbps New Issues ・ expansion of capacity ・ traffic control ・ review of fee structure ・ electricity supply

FMMC / ITU AJ Ⅲ Competitive Policies and Investment Incentives and Investment Incentives

FMMC / ITU AJ ( １ ) Dominant Regulation in Japan

FMMC / ITU AJ / MIC All Telecommunication operators are obliged to provide interconnection facilities. 1) Bottleneck Facilities/Essential Facilities More than 50% of subscriber lines (in each prefecture). e.g. Copper cable and telephone switch, Optical-fiber cable, OLT etc 2) Obligations ・ Open up their subscriber lines and network facilities. ・ Unbundling and collocation, ・ Setting of interconnection tariffs, ・ Separation of accounts Dominant Regulatory Policy 1 General Obligations 2 Asymmetrical Regulations on Bottleneck Facilities

FMMC / ITU AJ / MIC Unbundling Regulation for Promoting Broadband SP MDF Telephone NTT bldg Local Switch Equipment of competitive DSL operators NTT  ＦＴＴＨ Optical subscriber line (Dark Fiber) NTT bldg （ Subscriber’s residence) FTM Indoor Equipment ･ Unbundling and collocation obligation on FTTH’s Essential Facilities for FTTH and ADSL Unbundling (Subscriber line) DSLAM Splitte r NCC Equipment of competitive FTTH operators Collocation  ADSL Metal subscriber line (Dry copper 、 Line sharing) （ Subscriber’s residence) NTT NCC NTT ex. B-FLET’S ex. Optical-Plus ex. YahooBB Telephony

FMMC / ITU AJ Market Share of Broadband Service Providers

FTTH (as of June 2008) DSL (as of June 2008) NTT East NTT West Electric Power Companies KDDI USEN Others NTT East NTT West Softbank BB Acca Networks Others e-Access Share of Subscriber Source: MIC 2008 FMMC / ITU AJ / MIC

FMMC / ITU AJ （２） Discussions on Dominant Regulation

FMMC / ITU AJ New Competition Promotion Program 2010 (1) Promotion of Facility-Based Competition (2) Review of policies covering Interconnection (3) Review of the Universal Service Obligation, (4) Review of the regulation covering the Dominant Carrier. (5) Network Neutrality (6) Interconnection rules for the NGN era.

FMMC / ITU AJ / MIC Facility Based Competition AO Closure NTT East/West Bldg Internal Splitter Optical Signal Transmission Equipment (OLT) Cabinet Indoor Equipment 6.7 m For other businesses 6.4 m For other businesses 6.1 m Reserved for NTT use (for cable drops) 5.8 m Reserved for NTT use 5.5 m Reserved for NTT use Utility Pole Connection Points 1,500 m600 m100 m 7.0 m for electricity safety communication lines Conduit/Culvert Feeder Point Outdoor Splitter 8 branches from 1 strand Drop Cable Main Cable To stimulate competition in the access fiber sector; 1. Ensuring open access to NTT E ＆ W’s ducts and poles, i.e. grant of “Right of Way”, is necessary, and 2. Regulations on conditions and procedures are necessary so that competitors can use them on equal terms with NTT E ＆ W.

Indoor Equipment ～ Last One Mile ～ AO closure ＮＴＴ E/W bldg. FTM splitter OLT Drop line Poi-box Indoor Equipment splitter To further promote Facility- based competition in FTTH market, it is important for competitors to be able to deploy drop lines by themselves. In this respect, simplification and acceleration of procedures to use poles and roads are necessary. ･ Facility based competition between fixed broadband and wireless broadband. ･ Competitors can easily construct wireless access networks FMMC / ITU AJ / MIC

FMMC / ITU AJ Ⅳ Policy Issues in the Age of Ultra-broadband -- in conclusion--

FMMC / ITU AJ Current Issues in Development of ICT Infrastructure 1)Further advancement of ICT Infrastructure 2)Building bridges across of the digital divide and realizing digital opportunity for all 3) Development of new applications and businesses 4) Encouragement of movement towards convergence 5) Countermeasures against ‘Dark Side of ICT’

New Competition Promotion Program 2010 Next-Generation Broadband Strategy 2010 Fundamental Restructuring of Legal System for Communications and Broadcasting (by 2010) Digitalization of Terrestrial Broadcasting (by 2011) Review of Regulatory Framework Concerning NTT （ 2010 ～） Reform Program FMMC / ITU AJ

2010

Information and Communications Policy Bureau Telecommunications Bureau Postal Services Policy Planning Bureau Reorganization of ICT-Related Bureaus of MIC (2008) Global ICT Strategy Bureau Information and Communications Bureau （ Broadcasting （ Broadcasting and Contents Distribution ） and Contents Distribution ） Telecommunications Bureau （ Regulation to Infrastructure ） （ Regulation to Infrastructure ） 2008 FMMC / ITU AJ

Policy Issues in the Age of “Ultra-broadband” Policy Issues in the Age of “Ultra-broadband” Vision on Information & Communication Policies Competition Policy To Strengthen International Competitiveness Issues of the Dark Side Convergence of Laws Investment Incentive Technological Development Smooth Content Distribution 2008 FMMC / ITU AJ

Thank you ! 2008 FMMC / ITU AJ