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RUEATRS/TREASURY DEPT WASHDC

UNCLAS SECTION 01 OF 02 TOKYO 001353 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB/CIP AND EAP/J 
STATE PASS FCC FOR COMMISSIONER ADELSTEIN 
USTR FOR JMCHALE, MBEEMAN, EHOLLOWAY 
 
E.O. 12958: N/A 
TAGS: ECON EINT ETRD PGOV JA
SUBJECT:  FCC COMMISSIONER ADELSTEIN DISCUSSES BROADBAND, DIGITAL TV 
AND SPECTRUM WITH JAPANESE OFFICIALS 
 
SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET DISTRIBUTION 
 
¶1. (SBU) Summary:  Japan's focus since 2000 on infrastructure 
expansion as a national priority has yielded good results, with 
nearly all Japanese households now having access to broadband 
Internet, Ministry of Internal Affairs and Communications (MIC) Vice 
Minister Akira Terasaki told FCC Commissioner Jonathan Adelstein 
June 9.  However, the GOJ has met with active resistance to 
increased broadband subscriptions from certain ministries, as well 
as from physicians' and teachers' associations.  Commissioner 
Adelstein noted while Japan may have allocated a much larger budget 
than the U.S. to fund the transition from analog to digital 
television, it also faces a bigger challenge since far more Japanese 
consumers rely solely on over-the-air broadcasts.  Vice Minister 
Terasaki asserted Japan's unique system prevents the use of auctions 
to reallocate spectrum and said the GOJ will rely instead on annual 
usage fees to facilitate this process.  End Summary. 
 
¶2. (U) Federal Communications Commission (FCC) Commissioner Jonathan 
Adelstein, while in Tokyo to speak at the Global Information and 
Communications Technology Summit 2009, raised broadband deployment, 
transition to digital television, spectrum policy and regulation in 
meetings June 9 with MIC Vice Minister for Policy Coordination Akira 
Terasaki.  Commissioner Adelstein also met with the National 
Association of Broadcasters, the American Chamber of Commerce in 
Japan, two Japanese telecom providers -- NTT DoCoMo and KDDI - and 
gave an interview with the Nikkei newspaper. 
 
Broadband Deployment -- A National Priority 
------------------------------------------- 
 
¶3. (SBU) Vice Minister Terasaki attributed Japan's progress in 
expanding infrastructure for supporting broadband Internet to a GOJ 
decision in 2000 that made such access a national priority.  Since 
then, MIC has developed four strategic plans to advance broadband 
deployment.  The result is nearly 99 percent of Japanese households 
now have broadband access and almost 90 percent have access to ultra 
high-speed broadband.  The DSL service in Japan offers download 
speeds over 50 Mbps (megabits per second) and, with the government 
supporting optical fiber with speeds of up to 1 Gbps (gigabit per 
second), fiber-to-the-home subscribers now exceed 14 million 
households. 
 
¶4. (SBU) Japan's success in broadband deployment aside, Vice 
Minister Terasaki noted several possible factors for why broadband 
subscription rates in Japan (65 percent) are not much higher than 
rates in the U.S. (57 percent).  Despite the higher quality and 
lower cost available in Japan compared to in the U.S., Terasaki said 
it will take time for content, services, and consumer use to adapt 
in response to better available infrastructure.  He also 
acknowledged active resistance from some in Japan, including certain 
government ministries, as well as from physicians' and teachers' 
associations.  He said the Information Technology Strategy 
Headquarters, chaired by the Prime Minister, seeks to address such 
impediments. 
 
Transition to Digital Television 
-------------------------------- 
 
¶5. (SBU) Commissioner Adelstein's interlocutors expressed 
considerable interest in the U.S. experience transitioning from 
analog to digital television broadcasting.  In response to a 
suggestion from members of Japan's National Association of 
Broadcasters that they come and observe the process, Commissioner 
Adelstein suggested a visit at a later date to allow the FCC and 
U.S. broadcasters time to first address issues arising from the 
change. 
 
¶6. (SBU) The Ministry of Communications shared with the Commissioner 
a comprehensive USD3.6 billion plan for Japan's transition to 
digital that is scheduled to commence in July 2011.  Commissioner 
Adelstein praised the plan, noting Japan is far ahead of where the 
U.S. was at this stage.  He cautioned, however, that Japan has a 
much greater challenge ahead.  In the U.S., 86 percent of viewers 
already subscribe to some form of Pay-TV (cable, satellite, 
 
TOKYO 00001353  002 OF 002 
 
 
Internet), so the proportion of the population relying on 
over-the-air broadcasts is relatively small.  In contrast, only 30 
percent of Japanese viewers use cable and generally watch only what 
is provided by local broadcasters. 
 
¶7. (SBU) The MIC anticipates little consumer interest in set-top 
converters, which typically cost two to five times more in Japan 
than in the U.S.  With inexpensive digital televisions available for 
as little as $140, the Ministry expects most consumers to forego a 
set-top converter and instead purchase a new set.  To facilitate the 
process, the GOJ identified digital televisions as one of three 
product classes (along with air conditioners and refrigerators) to 
which it will apply the "eco-point program."  The program provides 
incentives to purchase digital televisions, energy efficient 
appliances and recycling by awarding points consumers may then apply 
to other purchases. 
 
Spectrum Policy and Telecommunications Regulation 
--------------------------------------------- ---- 
 
¶8. (SBU) Vice Minister Terasaki said MIC will not consider auctions 
to reallocate spectrum made available by the transition to more 
efficient digital content; instead, it will apply an annual usage 
fee.  He acknowledged the logic of the FCC's independent regulatory 
role, but asserted Japan's unique system prevents it from adopting a 
similar model.  One business representative told Commissioner 
Adelstein his company pays far less for spectrum in Japan than in 
the U.S., explaining the GOJ's lack of auctions is designed to 
encourage companies to allocate more resources for research and 
development, building infrastructure, and additional services. 
 
¶9.  (U) Commissioner Adelstein cleared this message after departing 
Tokyo. 
 
ZUMWALT