Searching for clues from treatment of broadband in the U.S. and Japan

1. Shape of universal service policy for IoT:
an exploration from US and Japanese
policies on universal service for broadband.
Tomoaki Watanabe, Project Associate Professor, Graduate School of
Media & Governance, Keio University
International Telecommunications Society Regional Meeting,
Los Angeles, Oct 25-28, 2015

2. What is universal service like for IoT?
- Can U.Serv. handle the diversity of IoT world?
- How can we even define IoT?
Sources of ideas:
- Transition (or discussion thereof) of U.Serv. to broadband
in the U.S. and Japan
- Focused on the process of changing the scope
- i.e. how to define covered services, and how to change the coverage - as
opposed to economic analysis, etc.

3. Four Challenges IoT may present
1. Many different services
2. Not a simple network
3. Including critical services for minorities
4. Changing rapidly
----
Base assumptions: IoT will create many different network-system-
device packages.

4. Multiplicity of services
Hypothetical Example
Health monitoring, home safety, electricity management, air
conditioning, remote controlling for home, pet tracking, inventory
management … funding all of them might not make sense.
Response
Create smaller, multiple “funds,” for different services to cover.
Learn from
U.S. Connect America Fund and Mobility Fund for broadband

5. Diversity of applications and networks
Hypothetical Example
health monitoring system: wearable, installed in the bathroom as a part of smart
home system, or …
home security system: based on fixed surveillance cameras, drones, embedded
sensors also monitoring weather and plant health, auto-responsive electric wiring
as a part of home energy management system, or …
…network requirements: mobility/ upstream burst/ constant upstream/…
…some service bundled with others; demarcation arbitrary
Response
fund the part of network relevant to the covered service
Learn from
Japan’s partial funding for broadband to support IP telephony

6. Critical services for minorities
Example
A useful service for the hearing impaired, adopted only a minority of
the population.
Response
Go back to the higher-level policy goals, such as social inclusion,
innovation, etc.
Learn from
Possibly U.S. inclusion of broadband for universal service, before it
reached majority status. Or Japanese deterrence of broadband
inclusion.

7. Speed of change
Hypothetical Example
Popular or important home safety/ health monitoring/ service may
change in every three years.
Designing a “fund,” and changing or ceasing it may take too long to
keep up.
Response
Combine universal service with other welfare, innovation, and other
relevant policies to ensure timely intervention.
Learn from
Nothing in particular.

8. In Sum
IF IoT is characterized with
- multiplicity of applications
- diversity of services, applications and underlying network
requirements,
- fragmentedness of markets, and
- speed in change
then unified, stable universal system may become unfit

9. U.S. trajectory
2007: Broadband support for rural healthcare institutions
2007: Fed-State Joint Board recommendation for broadband support
(Broadband Fund and Mobility Fund)
2009: Obama Administration’s ARRA
2010: Nat’l Bband Plan
Nov. 2010: NPRM: Hi-cost telephony support phase-out proposed
Feb. 2011: R&O & Further NPRFM: Connect America Fund & CAF
Mobility Fund proposed
Oct. 2011: R&O: phase-out and CAFs creation decided.

10. Process Characteristics
US
- Joint Board advises
- FCC decides
- Political leadership played a role
Japan
- Ad-hoc research meetings advises
- Info. Comm. Council advises
- (MIC proposes legal amendments)
- Political leadership not that influential

11. Japan’s trajectory I
2005. Info. Comm. Council to MIC
- rejected broadband inclusion
reasons cited:
- cost of expansion,
- speed of tech. change, and
- difficulty of timing.

12. Japan’s trajectory II
2006 (Higher-level policies reformulated):
1. IT New Reform Strategies: Realization of Benefits of ITs anytime, anywhere, for
everybody. (IT Strategic HQ)
- 100% broadband coverage, without universal service
2. The Agreement between the Administration and Incumbent Parties on
Telecommunications and Broadcasting :
- Final Report from Informal Gathering on Competition Policy Response to Increasing IP-
tization
- Ministry’s Roadmap Program for Reform in Telecommunications and Broadcasting
 2006. Info Comm Policy Council to MIC: recommended discussion & reform toward
2009.
- “universal access” concept discussed
- reform 2006 has just finished, another should wait until 2009

13. Japan III
2007 Research Meeting on the Future Vision of Universal Service
System
- rejected immediate inclusion
- recommended shorter schedule for next reform
- focused on IP telephony, not broadband in general
- functional inequivalence deemed a problem
2008 Info. Comm. Council
- mostly in line with 2007 Research Meeting

14. Japan IV
2010 Info. Comm. Council (under new incumbent party)
- 90% fiber coverage; 30% adoption
- no immediate broadband inclusion
- Broadband inclusion an agenda in the future, when the “transition
period” is over

15. U.S.-Japan difference
US – vast geography, declining international bband ranking
political interest: strong
Japan – smaller country, extensive fibre (90%+), take-up still limited
(less than 25%)
political interest: elsewhere
coverage expansion via competition policy/ political pressure, not
universal service