Standardization systems of telecommunications in Japan

1. Standardization systems of telecommunications in Japan 2004 ITS Yoko Nishioka InfoCom Research, Inc. / Keio University This study is funded by Telecom industry promotion Fund in Japan.

2. Roadmap of this presentation 1. Introduction • Outline of this study (purpose, views) • Trends of standardization activities in Japan 2. Theoretical review • Two approaches to “institution” • Model of institutional change 3. Analysis • Historical analysis of int’l standardization institution • Comparison of three regional standardization organizations (T1, TTC, ETSI) 4. Conclusion

3. 1. Introduction Purpose of this study • To analyze the Japanese system of standardization of telecommunications in the context of “institutional change ” in international standardization of telecommunication

4. 1. Introduction Views of this study • This study analyze the Japanese standardization activities comparing major regional standardization organization created along with change of environment around international standardization. • The definition of institution in this study is based on “neo institutional economics” approach.

5. 1. Introduction Structure of this study • 1st part • To analyze meaning of creation of regional standardization organizations in the context of historical change of institution of international telecommunications • 2nd part • To analyze major regional standardization organizations in Japan, US, and EU, and evaluate how they respond new environment of international standardization.

6. 1. Introduction More attention standardization issues in Japan • “Report of R & D and standardization toward building -up competitiveness in the information- technology area”２００３．３．２７ • e-Japan strategy • Nippon Keidanren published an position paper “strategic international standardization”2004.1 • Cooperation with other Asian countries ASTAP(Asia Standard Program)1997

7. 1. Introduction Japan can contribute more to international standardization • Japanese main contributions to international standards • FAX • MPEG

8. 1. Introduction Why not so far? • Communication skill? • Cultural difference? • Some structural reasons? This study analyze them from the view of institutional change of international standardization of telecommunications technology

9. 2. Theoretical review Two different approaches to “institution” in neo institutional economics Both explain institutions by relations between players and institutions, but the emphasis is different. player • Institutional evolutionary approach “ Institution qua equilibrium of the game ”(Aoki 2001;26): <Players influence institutions> player institutions player player • Institutional design approach “Institutions are the rules of the game” (North 1990;3-4,23) <Institutions influence players> player player institutions player player

10. 2. Theoretical review Institutional evolutionary approach explains well institutional changes Evolutionary approach explains institutional changes through change of balance of players. Rather,design approach is useful to analyze incentive structures given by institutions. Process of institutional change Stability Change Formation

11. 2. Theoreticalreview Model of institutional change This is the model of institutional change based evolutionary approach Path dependency （history matters） Needs of co-evolution of related institution Institution Institution Factors to foster institutional change Gaps between shared beliefs and reality among players Environmental change Factors to stabilize institution

12. 2. Theoretical review What is “sｔａｎｄａｒｄｉｚａｔｉｏｎ”? • Institution of decision-making activities to choose what most members can agree • Activities to promote economic efficiency on innovation • Strategic activities for certain members (countries/ firms) to promote their own ideas in the given markets

13. 3. Analysis Evolution of institution of international standardization of telecommunications ? The institution of int’l standardization seems to have experienced the life cycle? • Birth of ITU 1865: Foundation of the International Telegraph Union 1906:First time of International Radiotelegraph Convention • Growth of ITU 1932: Union changes names to International Telecommunication Union along with combining the two organizations • Stabilization of ITU 1947:ITU becomes a Specialized Agency of the United Nations • Toward diversification of institution Regional standard organizations created 1984:T1in US committee was created with AT&T divestiture 1985:TTC in Japan was created with privatization of NTT 1988:ETSI in EU was created along with EU convergence 1992:Creation of 3 Sectors, ITU-T, ITU-R, ITU-D 1995:ARIB in Japan was created for radio related needs in convergence of telecommunication & broadcasting • Toward cooperation between diversified institutions ITU/ICANN cooperation

14. 3. Analysis More players, more diversified after mid of 1980s Stabilization of ITU Toward diversification Toward cooperation Birth of ITU Growth of ITU Needs of co-evolution of related institution (Factors to stabilize institution) Diversification was resulted by both factors to foster institutional change and to stabilize institution As a part of UN, less flexibility to transform itself IETF T1 (1984) forum International Telegraph Union (1865) International Telecommuni cation Union (1932) Became a specialized Agency of the UN (1947) ARIB (1995) TTC (1985) forum Reform (1992) State member 189 Sector member 635 (2004) 20 European member states (1965) ETSI (1988) International Radiotelegraph Convention (1906) Big increase of member states forum Swifter decision reflecting wider range of players with the limited resource Gaps between shared beliefs and reality among players (Factors to foster institutional change) De-regulation of telecom More competition in global markets Attention to users/markets Shortened innovation cycle Needs to pay attention to development issues Environmental Change

15. 3. Analysis Those regional organization were sprung in the new environment. New environment Gaps with existing system Response Swifter decision reflecting wider range of players with the limited resource More operators in one country T1 (1984) More paid attention to users/markets TTC (1985) Shortened innovation cycle ARIB (1995) More competition in global markets ETSI (1988)

16. 3. Analysis Different decision-making structure(before) ITU Member state Member state Member state National Operator National Operator National Operator Manufacturers Manufacturers Manufacturers Manufacturers Manufacturers Manufacturers

17. 3. Analysis Different decision-making structure(current) ITU Regional organization Member state Member state Member state Regional (national) organization National Operator National Operator Sector member (Operator) Manufacturers Sector member (Manufacturers) Manufacturers Manufacturers Manufacturers

18. 3. Analysis How well do they live in the changing environment? Swifter decision reflecting wider range of players with the limited resource Do they represent many voting parties (countries)? T1 (1984) Do they represent users (operators, manufactures, end-users)? TTC (1985) ARIB (1995) ETSI (1988) Do they input their ideas in good timings? (not dealt in this study)

19. 3. Analysis Japanese system ICT council mainly prepares contributions ITU Down-stream ITU-R ITU-T Up-stream Non-governmental MPHPT TTC ARIB JCTA ICT sub- council ITU-T SG ITU-R SG Other committees Recommendations Recommendations Recommendations HATS Cable Labo Technical regulations Telecom companies, broadcasters, manufacturers, universities Source: MPHPT materials

20. 3. Analysis Major standardization organizations in Japan • MPHPT(Ministry of Public Management, Home Affairs, Posts and Telecommunications) • TTC(The Telecommunication Technology Committee) • Created along with deregulation of telecom market in 1985 • ARIB(Association of Radio Industries and Business) • Center for Promotion of Efficient Use of the Radio Spectrum,1995 • JCTEA(Japan Cable Television Engineering Association) 1975 • HATS(Harmonization of Advanced Telecommunications Systems) 1988

21. 3. Analysis EU system Each member country prepares contributions based on ETSI decision ITU ITU-R ITU-T Up-stream Down-stream EC ETSI National standardization organization National government Telecom companies, broadcasters, manufacturers, universities Source: MPHPT materials

22. 3. Analysis US system Each member country prepares contributions based on ETSI decision ITU ITU-R ITU-T Up-stream Contribution Down-stream Government agencies FCC,NTIA ITAC (Int’l telecommunications advisory committee:statedepartment) Contribution ANSI T1 (network interface etc.) TIA (Telecommunications industry association) (terminal equipments, mobile,etc.) IEEe (LAN etc.) forum forum Telecom companies, broadcasters, manufacturers, universities Source: MPHPT materials

23. 3. Analysis Comparison of three regional organizations Compared to US and EU, government takes more leadership to contributions to ITU in Japan

24. 4. Conclusion Conclusion • The institution of Int’l standardization has developed with ITU. • ITU has been stabilized since it became an specialized agency of the UN. • Big environmental changes after deregulation of telecom industry in the mid of 1980s created the gap that ITU can not easily respond. • In order to supply the the gap / support the existing system (ITU), regional / national standardization organizations formed. US:T1 committee, Japan:TTC,EU:ETSI

25. 4. Conclusion Conclusion 2 • Comparing the three organizations, in terms of attracting state member ETSI is doing well. T1 and TTC are not successful to attract other state members In terms of upstream activities, TTC is just participating and not taking a central role.ETSI is facilitating state members upstream activities. T1 takes a leadership in that. • Potential of system improvement in Japan can be follows: • Reform the system in order to invite more active participation of private sector • Merge the organization that currently divided to many specialized areas • More cooperation with Asian countries