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<p class=MsoNormal><font size=3 color=black face=Arial><span style='font-size:
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<p class=MsoNormal><font size=3 color=black face=Arial><span style='font-size:
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<p class=MsoNormal><font size=3 color=black face=Arial><span style='font-size:
12.0pt'> </span></font><st1:place w:st="on"><st1:country-region w:st="on"><b><font
size=5><span style='font-size:18.0pt;font-weight:bold'>Japan</span></font></b></st1:country-region></st1:place><st1:PersonName
w:st="on"><b><font size=5><span style='font-size:18.0pt;font-weight:bold'>'</span></font></b></st1:PersonName><b><font
size=5><span style='font-size:18.0pt;font-weight:bold'>s Warp-Speed Ride to
Internet Future</span></font></b><o:p></o:p></p>
<p><font size=2 face="Times New Roman"><span style='font-size:10.0pt'>By <st1:place
w:st="on"><st1:City w:st="on">Blaine</st1:City></st1:place> Harden<br>
<st1:place w:st="on"><st1:State w:st="on">Washington</st1:State></st1:place>
Post Foreign Service<br>
Wednesday, August 29, 2007; A01</span></font><o:p></o:p></p>
<p><st1:place w:st="on"><st1:City w:st="on"><font size=3 face="Times New Roman"><span
style='font-size:12.0pt'>TOKYO</span></font></st1:City></st1:place> --
Americans invented the Internet, but the Japanese are running away with it.<o:p></o:p></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Broadband
service here is eight to 30 times as fast as in the <st1:place w:st="on"><st1:country-region
w:st="on">United States</st1:country-region></st1:place> -- and considerably
cheaper. <a
href="http://www.washingtonpost.com/wp-srv/world/countries/japan.html?nav=el">Japan</a>
has the world<st1:PersonName w:st="on">'</st1:PersonName>s fastest Internet
connections, delivering more data at a lower cost than anywhere else, recent
studies show.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Accelerating
broadband speed in this country -- as well as in <a
href="http://www.washingtonpost.com/wp-srv/world/countries/korea.html?nav=el">South
Korea</a> and much of <a
href="http://www.washingtonpost.com/ac2/related/topic/Europe?tid=informline">Europe</a>
-- is pushing open doors to Internet innovation that are likely to remain
closed for years to come in much of the United States.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The speed
advantage allows the Japanese to watch broadcast-quality, full-screen
television over the Internet, an experience that mocks the grainy, wallet-size
images Americans endure.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Ultra-high-speed
applications are being rolled out for low-cost, high-definition
teleconferencing, for telemedicine -- which allows urban doctors to diagnose
diseases from a distance -- and for advanced telecommuting to help <st1:place
w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>
meet its goal of doubling the number of people who work from home by 2010.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>"For
now and for at least the short term, these applications will be cheaper and
probably better in <st1:place w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>,"
said Robert Pepper, senior managing director of global technology policy at <a
href="http://www.washingtonpost.com/ac2/related/topic/Cisco+Systems+Inc.?tid=informline">Cisco
Systems</a>, the networking giant.<o:p></o:p></span></font></p>
<p><st1:country-region w:st="on"><font size=3 face="Times New Roman"><span
style='font-size:12.0pt'>Japan</span></font></st1:country-region> has surged
ahead of the <st1:place w:st="on"><st1:country-region w:st="on">United States</st1:country-region></st1:place>
on the wings of better wire and more aggressive government regulation, industry
analysts say.<o:p></o:p></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The
copper wire used to hook up Japanese homes is newer and runs in shorter loops
to telephone exchanges than in the <st1:place w:st="on"><st1:country-region
w:st="on">United States</st1:country-region></st1:place>. This is partly a
matter of geography and demographics: <st1:place w:st="on"><st1:country-region
w:st="on">Japan</st1:country-region></st1:place> is relatively small, highly
urbanized and densely populated. But better wire is also a legacy of American
bombs, which razed much of urban <st1:place w:st="on"><st1:country-region
w:st="on">Japan</st1:country-region></st1:place> during World War II and led
to a wholesale rewiring of the country.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>In 2000,
the Japanese government seized its advantage in wire. In sharp contrast to the
Bush administration over the same time period, regulators here compelled big
phone companies to open up wires to upstart Internet providers.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>In short order,
broadband exploded. At first, it used the same DSL technology that exists in
the <st1:place w:st="on"><st1:country-region w:st="on">United States</st1:country-region></st1:place>.
But because of the better, shorter wire in <st1:place w:st="on"><st1:country-region
w:st="on">Japan</st1:country-region></st1:place>, DSL service here is much
faster. Ten to 20 times as fast, according to Pepper, one of the world<st1:PersonName
w:st="on">'</st1:PersonName>s leading experts on broadband infrastructure.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Indeed,
DSL in <st1:country-region w:st="on">Japan</st1:country-region> is often five
to 10 times as fast as what is widely offered by <st1:place w:st="on"><st1:country-region
w:st="on">U.S.</st1:country-region></st1:place> cable providers, generally
viewed as the fastest American carriers. (Cable has not been much of a player
in <st1:place w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>.)<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Perhaps
more important, competition in Japan gave a kick in the pants to Nippon
Telegraph and Telephone Corp. (NTT), once a government-controlled enterprise
and still Japan<st1:PersonName w:st="on">'</st1:PersonName>s largest phone
company. With the help of government subsidies and tax breaks, NTT launched <b><u><span
style='font-weight:bold'>a nationwide build-out of fiber-optic lines to homes,
making the lower-capacity copper wires obsolete.<o:p></o:p></span></u></b></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>"Obviously,
without the competition, we would not have done all this at this pace,"
said Hideki Ohmichi, NTT<st1:PersonName w:st="on">'</st1:PersonName>s senior
manager for public relations.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>His company
now offers speeds on fiber of up to <b><u><span style='font-weight:bold'>100
megabits per second</span></u></b> -- 17 times as fast as the top
speed generally available from <st1:country-region w:st="on"><st1:place w:st="on">U.S.</st1:place></st1:country-region>
cable. About 8.8 million Japanese homes have fiber lines -- roughly nine times
the number in the <st1:place w:st="on"><st1:country-region w:st="on">United
States</st1:country-region></st1:place>.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The
burgeoning optical fiber system is hurtling <st1:place w:st="on"><st1:country-region
w:st="on">Japan</st1:country-region></st1:place> into an Internet future that
experts say Americans are unlikely to experience for at least several years.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Shoji
Matsuya, director of diagnostic pathology at <st1:PlaceName w:st="on">Kanto</st1:PlaceName>
<st1:PlaceName w:st="on">Medical</st1:PlaceName> <st1:PlaceType w:st="on">Center</st1:PlaceType>
in <a
href="http://www.washingtonpost.com/ac2/related/topic/Tokyo?tid=informline">Tokyo</a>,
has tested an NTT telepathology system scheduled for nationwide use next
spring.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>It allows
pathologists -- using high-definition video and remote-controlled microscopes
-- to examine tissue samples from patients living in areas without access to
major hospitals. Those patients need only find a clinic with the right
microscope and an NTT fiber connection.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>"Before,
we did not have the richness of image detail," Matsuya said, noting that <st1:place
w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>
has a severe shortage of pathologists. "With this equipment, I think it is
possible to make a definitive remote diagnosis of cancer."<o:p></o:p></span></font></p>
<p><st1:country-region w:st="on"><font size=3 face="Times New Roman"><span
style='font-size:12.0pt'>Japan</span></font></st1:country-region><st1:PersonName
w:st="on">'</st1:PersonName>s leap forward, as the <st1:place w:st="on"><st1:country-region
w:st="on">United States</st1:country-region></st1:place> has lost ground among
major industrialized countries in providing high-speed broadband connections,
has frustrated many American high-tech innovators.<o:p></o:p></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>"The
experience of the last seven years shows that sometimes you need a strong
federal regulatory framework to ensure that competition happens in a way that
is constructive," said <a
href="http://www.washingtonpost.com/ac2/related/topic/Vinton+G.+Cerf?tid=informline">Vinton
G. Cerf</a>, a vice president at <a
href="http://www.washingtonpost.com/ac2/related/topic/Google+Inc.?tid=informline">Google</a>.<o:p></o:p></span></font></p>
<p><st1:country-region w:st="on"><font size=3 face="Times New Roman"><span
style='font-size:12.0pt'>Japan</span></font></st1:country-region><st1:PersonName
w:st="on">'</st1:PersonName>s lead in speed is worrisome because it will shift
Internet innovation away from the <st1:place w:st="on"><st1:country-region
w:st="on">United States</st1:country-region></st1:place>, warns Cerf, who is
widely credited with helping to invent some of the Internet<st1:PersonName
w:st="on">'</st1:PersonName>s basic architecture. <b><u><span style='font-weight:
bold'>"Once you have very high speeds, I guarantee that people will figure
out things to do with it that they haven<st1:PersonName w:st="on">'</st1:PersonName>t
done before," he said.<o:p></o:p></span></u></b></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>As a
champion of Japanese-style competition through regulation, Cerf supports
"net neutrality" legislation now pending in Congress. It would mandate
that phone and cable companies treat all online traffic equally, without
imposing higher tolls for certain content.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The
proposed laws would probably save billions for companies such as Google and <a
href="http://www.washingtonpost.com/ac2/related/topic/Yahoo!+Inc.?tid=informline">Yahoo</a>,
but consumer advocates say they would also save money for most home Internet
users.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>U.S.
phone and cable companies, which control about 98 percent of the country<st1:PersonName
w:st="on">'</st1:PersonName>s broadband market, strongly oppose the proposed laws,
saying they would discourage the huge investments needed to upgrade broadband
speed.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Yet the
story of how <st1:country-region w:st="on">Japan</st1:country-region>
outclassed the <st1:place w:st="on"><st1:country-region w:st="on">United States</st1:country-region></st1:place>
in the provision of better, cheaper Internet service suggests that forceful
government regulation can pay substantial dividends.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The
opening of <st1:place w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place><st1:PersonName
w:st="on">'</st1:PersonName>s copper phone lines to DSL competition launched a
"virtuous cycle" of ever-increasing speed, said Cisco<st1:PersonName
w:st="on">'</st1:PersonName>s Pepper. The cycle began shortly after Japanese
politicians -- fretting about an Internet system that in 2000 was slower and
more expensive than what existed in the <st1:place w:st="on"><st1:country-region
w:st="on">United States</st1:country-region></st1:place> -- decided to
"unbundle" copper lines.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>For just
$2 a month, upstart broadband companies were allowed to rent bandwidth on an
NTT copper wire connected to a Japanese home. Low rent allowed them to charge
low prices to consumers -- as little as $22 a month for a DSL connection faster
than almost all <st1:place w:st="on"><st1:country-region w:st="on">U.S.</st1:country-region></st1:place>
broadband services.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>In the <st1:place
w:st="on"><st1:country-region w:st="on">United States</st1:country-region></st1:place>,
a similar kind of competitive access to phone company lines was strongly
endorsed by Congress in a 1996 telecommunications law. But the federal push
fizzled in 2003 and 2004, when the <a
href="http://www.washingtonpost.com/ac2/related/topic/U.S.+Federal+Communications+Commission?tid=informline">Federal
Communications Commission</a> and a federal court ruled that major companies do
not have to share phone or fiber lines with competitors. The Bush
administration did not appeal the court ruling.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>"The
Bush administration largely turned its back on the Internet, so we have just
drifted downwards," said Thomas Bleha, a former <st1:country-region w:st="on">U.S.</st1:country-region>
diplomat who served in <st1:country-region w:st="on">Japan</st1:country-region>
and is writing a history of how that country trumped the <st1:place w:st="on"><st1:country-region
w:st="on">United States</st1:country-region></st1:place> in broadband.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>As the <st1:country-region
w:st="on">United States</st1:country-region> drifted, a prominent venture
capitalist in <st1:place w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>
pounced on his government<st1:PersonName w:st="on">'</st1:PersonName>s decision
to open up the country<st1:PersonName w:st="on">'</st1:PersonName>s copper
wire.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>Masayoshi
Son, head of a company called <a
href="http://www.washingtonpost.com/ac2/related/topic/SOFTBANK+Corporation?tid=informline">Softbank</a>,
offered broadband that was much cheaper and more than six times as fast as NTT<st1:PersonName
w:st="on">'</st1:PersonName>s. He added marketing razzmatazz to the mix,
dispatching young people to street corners to give away modems that would
connect users to a service called Yahoo BB. (The U.S.-based Yahoo owns about a
third of it.) The company<st1:PersonName w:st="on">'</st1:PersonName>s share of
DSL business in <st1:place w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>
has exploded in the past five years, from zero to 37 percent. As competition
grew, the monthly cost of broadband across <st1:place w:st="on"><st1:country-region
w:st="on">Japan</st1:country-region></st1:place> fell by about half, as
broadband speed jumped 33-fold, according to a recent study.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>"Once
a customer enjoyed the high speed of DSL, then he or she preferred more
speed," said Harumasa Sato, a professor of telecommunication economics at <st1:PlaceName
w:st="on">Konan</st1:PlaceName> <st1:PlaceType w:st="on">University</st1:PlaceType>
in <st1:place w:st="on"><st1:City w:st="on">Kobe</st1:City></st1:place>.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>The
growing addiction to speed, ironically, is returning near-monopoly power in
fiber to NTT, which owns and controls most new fiber lines to homes. Growth of
new fiber connections exceeded DSL growth two years ago. Fiber is how all of <st1:place
w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>
will soon be connected -- for phones, television and nearly all other services.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>"NTT
is becoming dominant again in the fiber broadband kingdom," Sato said.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>That
infuriates its competitors. Yahoo BB and others are demanding that the
government once again compel NTT to unlock the lines.<o:p></o:p></span></font></p>
<p><font size=3 face="Times New Roman"><span style='font-size:12.0pt'>In <st1:place
w:st="on"><st1:country-region w:st="on">Japan</st1:country-region></st1:place>,
the regulatory wars over broadband are far from over.<o:p></o:p></span></font></p>
<p><i><font size=3 face="Times New Roman"><span style='font-size:12.0pt;
font-style:italic'>Special correspondent Akiko Yamamoto contributed to this
report.</span></font></i><o:p></o:p></p>
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