WASHINGTON-The Bush administration asked Japan to promote competitive wireless policies and to improve spectrum management, but some reforms pushed by trade officials here are not necessarily legally embraced in the United States.
The office of U.S. trade representative weighed in on wireless issues in a package of recommendations delivered to Japan. The action flows from a regulatory and competition initiative created in 2001 by President Bush and Prime Minister Koizumi in which the two governments exchange proposals every year.
“Consistent with Japan’s vision of a `ubiquitous network society,’ the United States recommends that Japan increase flexibility and transparency in its spectrum policy, and apply principles of network and competition policy to the mobile sector,” said USTR.
A spokesperson at the Japanese Embassy said a response to U.S. wireless and telecom recommendations was being crafted.
The mobile-phone market in Japan-considered by many as a cutting-edge wireless technology Mecca-is led by NTT DoCoMo Inc. and KDDI Corp., with Vodafone Japan in a distant third place. But more competition is on the way, with the licensing of new service providers in the 1.7 GHz and 2 GHz bands. E-access, IP Mobile and Softbank Corp. are expected to offer fresh competition to the Japanese mobile-phone sector next year. The new cellular carriers are expected to want wholesale access to NTT DoCoMo’s and KDDI’s wireless systems while they construct their own networks.
As such, the Bush administration “urges Japan to take strong significant steps to ensure a level playing field for the new companies.” Among them, the U.S. advised Japanese regulators to facilitate roaming on incumbent networks for reasonable rates and ensure sufficient access to transmission towers. The U.S. does not mandate roaming on entrenched dominant wireless networks, though the Federal Communications Commission is examining rural roaming issues. The FCC also does not enforce a national equal-access tower policy.
On the other hand, the United States in the past tried to give a helping hand to new market entrants trying to break into the wireless business. When a cellular duopoly existed during the 1980s, the FCC required the first-to-market cellular carrier to give network access to the second wireless operator, but only until the latter built its own network and began to offer service.
The U.S. also suggested Japan identify and eliminate spectrum warehousing among incumbent wireless operators and that it pursue regulatory flexibility such that licensed operators can lease, sub-lease and exchange markets with other carriers. Doing so, said the U.S., would help establish a secondary market.
In other areas, Bush trade officials urged Japan to ensure mobile termination rates are cost-based and to develop a mechanism for arbitration if commercial negotiations fail. Moreover, the USTR said Japan should institute competitive neutrality for wireline operators seeking to interconnect with mobile-phone carriers by doing away with the default right of wireless service providers setting the retail rate. Bush trade officials said NTT DoCoMo’s dominance in Japan’s wireless market should be scrutinized by Japanese officials, who also should analyze “the degree to which existing mobile carriers exert oligopolistic market power in the sub market for call termination.”
The U.S. also urged Japan to begin a process of identifying, allocating and setting proposed assignment dates as soon as possible for spectrum that can be used for innovative services such as wireless local area network technologies, fixed and mobile metropolitan area network technologies and other non-established technologies; consider making spectrum available for unlicensed wireless applications; refrain from instituting privileged spectrum rights for preferred users such as home-entertainment equipment makers when shared rights would be feasible; and review procedures for obtaining test licenses in a way that leads to a streamlined regulatory process.
The Bush administration strongly recommended Japan take immediate steps to develop a regulatory framework for Internet-based mobile communications that is open and non-discriminatory. On a related note, the U.S. urged Japan to move to independent regulatory oversight free of partisan political influences.
While the U.S. attempts to improve telecom trade ties with Japan, China and other countries, efforts to jumpstart global trade talks began in earnest last week in Hong Kong. In recent years, World Trade Organization meetings have focused on equities of free trade among industrialized and developing countries.
