Frequency Open Policy in Japan

1. Frequency Open Policy in Japan February2004 Radio Department, Telecommunications Bureau Ministry of Public Management, Home Affairs, Posts and Telecommunications

2. Process of Spectrum Reform Study on Effective Use of Radio Spectrum Radio Policy Vision Study Group on Effective Use of Spectrum Policy Telecommunications Council Jan. '02 Start Aug. '02 Consultation of Radio Policy Dec. '02 1st Report 【Introduction of Compensation Scheme】 Jun. '03 Public Comment to Report Sep. '03 2nd Report【Introduction of Registration】 Jul. '03 Report Dec. '03 3rd Report 【Assignment of Spectrum refarming】 Oct. '03 the Guidelines for Spectrum Refarming published Feb. '04 Draft Revised Radio Law submitted to the Diet

3. (Report of the Telecommunications Council) Mid- and long-term outlook of radio spectrum use Basic roles of radio spectrum use Radio Policy Vision Desirable radio policy Realization of a ubiquitous network society through construction of wireless broadband environment • Expectations for realization of a wireless broadband environment It is expected that various radio spectrum uses have been drastically expanding in such areas as the home, business, medicine/welfare, security of Japanese nationals, so that the radio spectrum uses contribute to realization of convenient/ safe/secure daily lives and society. ･ Expansion of radio-related market sizes I. dynamic review of radio spectrum allocation • Realization of comfort and high quality of life II. Policies for frequency refarming and radio spectrum use III. Reform of Spectrum User Fee • Revitalization of industrial/economic activities Mid- and long-term outlook of radio policy IV. Promotion of R&D • Formation of a safe and disaster-tolerant society/country Mid- to long-term goals (in 5 to 10 years) • Contribution to realization of a ubiquitous network society through construction of the world’s most advanced wireless broadband environment • Ensuring national security through use of diversified networks • Fostering internationally competitive wireless ICT industry V. Facilitating smooth prevalence of radio equipment VI. Enhancing international strategy • Invigoration of local economy VII. Building a safer and securer environment for radio spectrum use

4. Estimation of Market Sizes of Radio-related Industries Industries Potentially Using Radio * 2013 92 Tri. Yen distributors, education, medical/nursing care/welfare services, games, etc. 2008 43 Tri. Yen Industries Using Radio * Security service, Airline, Maritime, Railway and Automobile transportation services etc. 2000 19 Tri. Yen Core Radio-based Industries Cellular Operators, Broadcasters, Related manufacturers, Contents creaters, mobile EC etc. * Radio-related Amounts

5. Dynamic Review of Frequency Allocation (1) dynamic review of radio spectrum allocation in all frequency bands including those assigned to the national government and public corporations. (2) Encourage licensees to return redundant spectrum not being used efficiently. (3) refarming of radio spectrum, which are used for radio systems actually replaceable with fiber-optic cables etc., to other radio systems such as mobile communications, for which radio spectrum use is indispensable. (4) Rapid refarming of radio spectrum to new radio systems with higher demand. It is necessary to dynamically review radio spectrum allocation in order to facilitate the introduction of radio systems required for the world’s most advanced Wireless Broadband Environment *1 The figures of the bandwidths of Mobile Communication Systems and Wireless LAN are round numbers. *2 MCA: Multi-Channel Access (a trunked radio system.) *3 HEO : Highly Elliptical Orbit satellite system used for satellite communication, radiodetermination etc.

6. Facilitation of rapid radio spectrum refarming • The amendment to the Radio Law in 2002 institutionalized the scheme for conducting surveys and evaluation on actual radio spectrum usage and publicizing the results. The survey conducted by MPHPT every year is to cover one of three sections of the radio spectrum, such that in three-years’ time, the surveys will have covered all of the radio spectrum. MPHPT evaluates the extent of efficiency in radio spectrum usage based on the survey results through seeking public comments, and publicizes the results.The Radio Regulatory Council recommends that MPHPT formulate refarming plans, as appropriate, taking into consideration such evaluations, in order to meet demands for other radio systems such as mobile communication systems and wireless LANs. • Should refarming need to be completed in a short term, e.g. 3 years from the formulation of a frequency refarming plan, incumbent licensees will be forced to dismantle radio facilities that the licensees purchased and constructed in the past and to purchase and construct alternative facilities.The Council recommends that MPHPT conduct studies on establishment of a scheme to compensate incumbent licensees for refarming costs such as a portion of the remaining book value and the dismantling cost of the radio facilities, etc.

7. Surveys and Evaluation on Actual Radio Spectrum Usage • All of the radio spectrum is divided • into the following three sections. Surveys are made every year on one of the sections. • Below 770MHｚ • Above 770MHｚ/below 3.4GHｚ • Above 3.4GHｚ 【Survey Items】 〇 Number of radio stations 〇 Traffic 〇 Years in use of radio facilities 〇 Replaceability with other means of telecommunications such as fiber-optic cables etc. Surveys on Actual Radio Spectrum Usage Evaluation of the extent of efficiency in radio spectrum usage on each frequency band Surveys on economic impacts on licensees caused by modification of Frequency Assignment Plan Reflection Modification of Frequency Assignment Plan

8. Transparency of radio spectrum use • In the introduction of auction systems into licensing procedures, there could be a risk that the introduction hinders effective radio spectrum use, in such a way as the delay/withdrawal of services due to extremely high bidding prices as seen in some European countries. Accordingly, from the viewpoint of promoting effective radio spectrum use by incorporating advantages of market principles, it is necessary to consider other appropriate measures by which such kind of demerits can be avoided. • In the report of Radio Policy Vision, it recommends that MPHPT conduct studies on introduction of a licensing system incorporating the following assessment items in the process of comparative examination in addition to appropriateness of business plans: - A portion within the amount of the frequency refarming costs to be shared by new licensees. - Expansion plans of service areas (i.e., facilities investment amount, etc.) etc.It is also appropriate to ensure transparency and fairness in licensing procedures through publication of figures concerning assessment items prior to the assessment.

9. Outline of Draft Revised Radio Law Target Facilitation of flexible business promotion Rapid frequency refarming in order to accomodate wireless broadband systems Solution Partial introduction of a registration scheme with simplified process Introduction of compensation scheme for rapid frequency refarming

10. Compensation Scheme for Rapid Spectrum Refarming Incumbent Licensees New Spectrum Users <A new entry is possible on vacated frequencies> 《RLAN, etc.》 <Station for fixed microwave links> New entry Restaurants Internet Hotel Base stations of Telecommunications Carriers Withdrawal • - No alternative frequencies • Shorter transition period within 3 years • (10 years for the existing scheme) 《Intelligent Home Appliances》 Economic Costs to Incumbent Licensees (Salvage Value, Removal Cost and so on) Provision of Compensation Need for Compensation Economic benefits to new spectrum users Collection of additional Spectrum User Fee from new spectrum users

11. Enhancing flexibility of radio spectrum use • In the report of the Radio Policy Vision, it recommends that MPHPT: • Identify more spectra as “Commons” to allow unlimited numbers of unlicensed wireless systems operated at low power to share frequencies under certain conditions; • Introduce a regulatory scheme such as the registration of radio stations, with simplified process, to allow unlimited numbers of wireless systems such as base stations of wireless LAN systems operated outdoors at relatively high power to share frequencies under certain conditions in order to respond to such expanding installation needs;

12. Outline of Registration System ＜Current System＞ License System ※ No license required for Small Power or Limited Bandwidth Background:Technological Development, etc. <Bandwidth Guaranteed Type> Broadcasting stations, Cellular Phones, etc. ＜Shared Use Type＞ Best Effort systems such as High Power Out-door Radio LAN Introduction (planned) Ex-ante Checking （License System） Ex-post Checking （Registration System） 　・　High Power 　・　Exclusive Use ・Higher Power than License-free systems ・Same operation rules applied （Coping with Interference, limited term permission, etc.） To Promote Multiple Use of Radio Spectrum Realization of wireless broadband environment correspond to internet era

13. Spectrum Expansion of the “Commons” 9600MHz bandwidth in 18 bandwidth is allocated to the “Commons” for RLAN and cordless telephone, etc. (the world most levels) (14kHz) (335kHz) (4MHz) (835kHz) (1.1MHz) (1.1MHz) (8.2MHz) 76 430 440 322 806 255 810 74.6 MHz 322.4 381.3 380.2 413.7 13.56 253.9 469.5 (2MHz) (35.1MHz) (97MHz) (161MHz) (100MHz) (80MHz) MHz 2497 5000 1216 1217 1252 5091 1253 2400 4900 5030 5150 5250 5850 5770 1884.5 1919.6 (30MHz) (200MHz) (900MHz) (7000MHz) (1000MHz) 59 66 76 77 GHz 10.51 10.54 25.23 24.05 24.25 24.77 27.02 27.46

14. Review of the Allocations to Mobile, Fixed, and Other Services in the 5 GHz Band(WRC2003 Agenda Item 1.5) 2.4 GHz band 5 GHz band 97 MHz bandwidth 100 MHz bandwidth 2400 2497 Radio LAN(for indoor andoutdoor use) Radio LAN (for indoor use) Industry, science, and medical equipments (e.g. microwave ovens) Satellitecommunications Radar レーダ等 Radar, etc. 2400 2500 5150 5250 5350 5350 5725 [MHz] [MHz] [MHz] New allocations for Radio LAN on a worldwide basis 355 MHz bandwidth Under Study in Telecommunications Council Under Study in Telecommunications Council 100 MHz bandwidth 97 MHz bandwidth 2400 2497 Radio LAN(for indoor andoutdoor use) Radio LAN(for indoor use) Radio LAN(for indoor use)* Radio LAN(for indoor and outdoor use) Industry, science, and medical equipment (e.g. microwave ovens) Satellitecommunications Radar Radar, etc. 2400 2500 5150 5250 5350 5470 5725 [MHz] [MHz] * Limited outdoor applications are possible. • - The frequency band that can be used for outdoor applications has been greatly expanded. • ⇒ More users are able to use faster communications. • Common frequency bands that can be used on a worldwide basis • have been expanded. • ⇒ Users can benefit from improved convenience and less expensive equipment. Major frequency bands being used now

15. Promotion of establishment of experimental radio stations １　Background & Assignment <Background>(1) Serious tightness of frequency resources (2) Developing of New System as well as effective use technology industrial revitalization ＜Assignment＞Acceleration & Simplification of establishment of experimental radio stations 【 experimental radio stations】: radio stations used exclusively for experimentation aimed at scientific or technological development. (Valid term of licenses: 5 years) ２　View point of consideration 　　　　　 ・no interference to existing staions ＜Assumption＞ ・to specify area and frequency in advance 　　　　　 ・short-term limitation (1 year in principle)of license period） （Simplification of procedure, revitalization of activation experimentation） Ensuring of frequency for experimental stations & Simplification of licensing procedure

16. Towards Realization of Ubiquitous Network Society ＜Wire＞ ＜Wireless＞ Wireless Broadband Telephone line （ADSL, CATV） Optical fiber Usable No. of line: 16.8 milactual use: 0.7 mil Usable No. of line: 35 milactual use: 11.6mil Frequency Open Policy ・　guidelines for frequency refarming ・　expansion of frequency for “Broadband” ・　flexible use of radio spectrum environment 12.26 mil Broadband users Broadband Convergence of Wire & Wireless Advent of Ubiquitous Society Creation of New Industry （Infrastructure & Users industry） Creation of Applications the world’s most advanced wireless Network Rebirth of Economy Hopeful, affluent society Visible existence of Japan