KDDI CORPORATION, SoftBank Corp., and Rakuten Mobile, Inc. (“the three companies”) announced their views on the “The NTT Law: Our Perspective” (“NTT’s Perspective”) document issued by Nippon Telegraph and Telephone Corporation (“NTT”)*2 on October 19, 2023.
Currently, discussions are underway within the Liberal Democratic Party and the Ministry of Internal Affairs and Communications regarding the future of the Act on Nippon Telegraph and Telephone Corporation (the “NTT Law”). Given its potential impact on Japan’s national interests and citizens’ lives, the three companies have highlighted the following three areas as especially significant.
Key implications for Japan’s national interests and citizens’ lives resulting from revision of the NTT Law
|Especially significant areas||Concerns if each area is not upheld|
|Fair competition||Risk of prices increasing and stagnation in the advancement and diversification of services due to a lack of new industry developments stemming from decreased competition.|
|Universal service obligations|
(Services that should be guaranteed nationwide)
|Risk that NTT, which inherited special assets from its time as a public corporation, will no longer have universal service obligations, and thus have the ability to withdraw services freely, resulting in an inability to maintain services in disadvantaged areas, such as rural regions.|
|Foreign investment regulations for NTT||Risk that NTT, which inherited special assets from its time as a public corporation, could sell the majority of its shares to non-Japanese individuals or foreign governments, potentially compromising the security of Japan’s telecommunications infrastructure.|
There are certain descriptions in NTT’s Perspective that may result in inadequate mentions of or misunderstandings regarding the factual circumstances of the current legal framework related to the above areas, as outlined below.
|Shared view of the three companies||NTT’s claims|
|Fair competition||The provisions regarding fair competition function through a combination of the Telecommunications Business Act (equipment leasing rules) and the NTT Law (regulations on organization).||Mentions only the Telecommunications Business Act (equipment leasing rules), while there is no reference to the provisions of the NTT Law (regulations on organization).|
|Universal service obligations||Telephone users’ interests are to be guaranteed due to the “obligation to provide services throughout Japan” which implies the inability to withdraw services.|
(Disadvantages users due to the abolition of the NTT Law)
|Without mentioning its “obligation to provide services throughout Japan,” NTT argues this obligation can be integrated into the Telecommunications Business Act.|
|Foreign investment regulations for NTT||The NTT Law is the most effective means for regulating foreign ownership to protect NTT and its special assets.Strengthening foreign ownership regulation through the Foreign Exchange and Foreign Trade Act contradicts the policy of promoting investment from overseas.||Protection against foreign investment is possible without relying on the NTT Law.NTT advocates strengthening foreign ownership regulation through the Foreign Exchange and Foreign Trade Act.|
While NTT’s Perspective is said to be identical to the document submitted to the Liberal Democratic Party’s Project Team on the Future of the Act on Nippon Telegraph and Telephone Corporation meeting that was held on October 19, 2023, considering the potential for misunderstandings regarding its content, it is crucial that discussions on the NTT Law be conducted in a manner that avoids any potential harm to Japan’s national interests and its citizens’ lives.