Japan Trailing U.S. in Infotech

T O K Y O, Sept. 1, 2000 -- Japan is drawing up a five-year plan to surpass theUnited States as an Internet powerhouse through massive investmentin high-speed infrastructure and scuttling laws that inhibite-commerce.

Despite its technological prowess, high costs and a plethora oflegal restrictions have prevented Japan from having its ownInternet revolution — and officials are worried the new economywill pass the nation by.

The government’s IT Strategy Council, which opened this weekunder the leadership of Sony Corp. President Nobuyuki Idei, said ifsteps are taken now the Internet could lead Japan’s bruised economyinto a new era of super-fast expansion.

“Our country must aim to accomplish a new period of rapideconomic growth by stimulating new businesses and existingindustries, and overtaking the United States within five years as amajor high-speed Internet nation,” the council said in a reportposted on the Prime Minister’s office Web site.

The council said it is essential to grid Japan with fiber-opticlines that will permit the high-speed transmission necessary forgrowth of the Internet. It was scathing in its assessment of thecurrent state of Japan’s information technology infrastructure.

“There is hardly any high-speed infrastructure. … Theconnection speed is so slow that using costs are extremely high,”the council said.

“In Japan, the IT industry’s development is being obstructed.… The promotion of infotech has fallen way behind the UnitedStates.”

Hundreds of Legal Impediments Cited

The council cited more than 700 legal impediments to the growthof e-commerce, including the obligatory exchange of paper documentsin Internet transactions.

It highlighted the urgency of immediate steps to jump-startJapan’s laggard information technology industry by recommendingthat laws to deregulate e-commerce be debated during this fall’sspecial session of Parliament.

The government panel said it would complete its proposal ofspecific measures to promote the Internet in Japan within twomonths.

“The government’s understanding is that it has to move fast,”Akira Fujimoto, an official in the information technology bureau ofthe Prime Minister’s office, said today. “We are hoping to puttogether a concrete plan by the end of the year.”

Prime Minister Yoshiro Mori has promised to make informationtechnology the backbone of Japan’s economy in the future.

Much of the mammoth amount of public funding going into nursingJapan’s economy back to life has been allocated to promotinginformation technology. Fujimoto said the council has not yetdiscussed whether expanding IT infrastructure would be part ofpublic works or accomplished by the private sector.

The Internet has been slow to catch on in Japan. Only about 11percent of Japanese households have access to the Web, compared to37 percent in the United States.

Web Access in Japan Very Expensive

The main problem is cost. Local call fees in Japan make itexpensive to go online with a telephone line, whereas such calls inAmerica are almost free.

The United States has been aggressively lobbying Tokyo to bring downtelecom fees and open the lucrative sector to competition.

In July, the Japanese government agreed to lower the connectioncharges that foreign telecom companies pay to local telephone giantNippon Telegraph and Telephone Co. by 20 percent over two years.

One bright spot has been the country’s embrace — in research anddevelopment and among consumers — of wireless technology.

The Internet-friendly i-mode mobile phone created by NTTsubsidiary NTT DoCoMo now has more than 10 million subscribers.

Experts say Japanese wireless technology is about two yearsahead of the United States and Europe.