『Broadband Economics』
Routledge (Taylor & Francis Group): London, pp.290, January 2009


The idea for this research came to me at Cambridge. I spent one year at the University of Cambridge in 2001-2002 and the verdant park-like atmosphere with stately old campus buildings was the ideal setting for serious scholarly pursuit. Steeped in a tradition of discipline coupled with originality, I could see why so many first-rate scholars had come from this small college town. I finished up the project I had brought with me from Japan, then was at a loss as to what to pursue next. Long dreary English winter days and walks along the banks of the river Cam did nothing to lift my spirits. I did not see much chance at this point of me making a groundbreaking contribution in the theoretical sphere. That led me to experimental research. And in network industries?my area of expertise?Japan lagged far behind the West in reform and restructuring of the power industry, and there didn't seem to be room for new research in that area. That led me to the telecommunications industry. It was thought then that Japan's regulatory reform of its telecommunications industry lagged about ten years behind the West, yet Japan was making steady progress in upgrading the infrastructure of both its fixed and mobile networks. It seemed likely that at some point there would be a reversal between the US and Japan, with Japan taking over the lead in high-speed data communications. Though I arrived at my primary research interest through a negative process of elimination, I did have one thing going for me: I decided to pursue broadband experimental research knowing that if this theme really took off in Japan then it would be equally significant the whole world over. It was the beginning of summer that I returned to Japan. This was the year that the whole country was so excited about the 2002 World Cup that was jointly hosted by Japan and South Korea.
Coincidences do happen, and right about the time I came back to Japan Softbank stunned the industry with its offering of ADSL service and NTT DoCoMo rolled out its FOMA service. This was the spark that ignited the broadband revolution. Right around this same time, Mr. Hideyuki Ohashi of the Ministry of Internal Affairs and Communications (MIC) paid me a visit at my office. The MIC was planning a comprehensive review of competition in the telecommunications field the next year in 2003, but the analysis of broadband demand, which was the basis of market demarcation for the review, had not yet been completed. I had the impression that Mr. Ohashi had already made the rounds of a number of other economists before he finally arrived to my door. Anyway, we had a very candid discussion. I laid out my ideas, and this was the beginning of a fruitful collaboration on broadband between Kyoto University and the MIC.
Trying to link individual ideas to policy is a gamble, and I have always been skeptical of overly simplistic applications of academic research to policy making. Indeed, there was a question in my mind as to whether economics was really mature enough as an empirical science to support this kind of application. The University of Cambridge's own famed economist Joan Robinson once observed that "the primary reason for studying economics is to avoid getting duped by economists." I also worried that to chase after both academics and policy might result in me succeeding at neither. If your policy work is successful, then you achieve very different goals as an economist than you envisioned, but if your policy work fails, then you become an economist that did not achieve much of anything. As to which category I eventually fall into, I will leave that to the verdict of you and of history.
Now to the subject matter at hand?broadband economics. Broadband has developed in Japan at a much faster pace than I ever would have predicted. A fairly evenly matched contest emerged with Softbank's ADSL service, K-Opticom's FTTH service, and Au's 3G service squarely challenging the giant incumbent NTT. In this context, Japan is moving to develop its own competition policy that draws out the originality and ingenuity of the new common carriers while continuing to draw upon all the latent strengths of NTT. Now apparently thanks to this winning triangle of stakeholders with NTT and the new common carriers and the government occupying the three corners of the triangle, Japan's broadband environment has evolved to become the most advanced in the world in both fixed and mobile networks. But no matter how ample the capacity, this will not mean much without a substantial improvement in the content that flows over those fiber lines. The Internet launched this revolution, but we are now stuck at a plateau and it's not at all certain whether these technological advances will be reflected in genuinely improved community services. To my mind, the real goal of this revolution is to enable public services?medical, welfare, education, and government?at lower than prevailing rates to information-disadvantaged communities in rural areas. But broadband is not a gift conferred from on high by the government, but rather is a common resource nurtured and developed by the people. This book will look back over these past five years of the broadband revolution, and look ahead to consider what prospects lie in store over the next five years. The leading role in this unfolding drama is you, the public at large.
Many will recognize their contributions in the pages of this book. Here I express special thanks to Hideyuki Ohashi and Takuro Imagawa of the Ministry of Internal Affairs and Communications; Toshihumi Kuroda, Masayuki Sato, Shin Kinoshita, Kai Sakahira, and Yuki Horiguchi of Kyoto University; and Yusuke Horiguchi of the Nikkei Business Daily for their unstinting guidance and support.

July 2008, Kyoto
Takanori Ida

Chapter 1: Competition Policy in Broadband Era  KUINEP1/7/2008
Chapter 2: Broadband in Japan  KUINEP15/4/2008
Chapter 3: Network Economics  KUINEP22/4/2008
Chapter 4: Discrete Choice Model Analysis  KUINEP13/5/2008
Chapter 5: Fixed Broadband  KUINEP20/5/2008
Chapter 6: IP Telephony  KUINEP27/5/2008
Chapter 7: Mobile Telephony  KUINEP3/6/2008
Chapter 8: Fiber to the Home  KUINEP10/5/2008
Chapter 9: Fixed and Mobile Convergence  KUINEP17/6/2008
Chapter 10: Digital Divide  KUINEP24/6/2008

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