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><http://www.washingtonpost.com/wp-dyn/content/article/2007/08/28/AR2007082801990.html?hpid=topnews>http://www.washingtonpost.com/wp-dyn/content/article/2007/08/28/AR2007082801990.html?hpid=topnews
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>[There are informative charts embedded in the article.]
TOKYO -- Americans invented the Internet, but the Japanese
are running away with it.
Broadband service here is eight to 30 times as fast as in
the United States -- and considerably cheaper. Japan has the
world's fastest Internet connections, delivering more data
at a lower cost than anywhere else, recent studies show.
Accelerating broadband speed in this country -- as well as
in South Korea and much of Europe -- is pushing open doors
to Internet innovation that are likely to remain closed for
years to come in much of the United States.
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.
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 Japan
meet its goal of doubling the number of people who work from
home by 2010.
"For now and for at least the short term, these applications
will be cheaper and probably better in Japan," said Robert
Pepper, senior managing director of global technology policy
at Cisco Systems, the networking giant.
Japan has surged ahead of the United States on the wings of
better wire and more aggressive government regulation,
industry analysts say.
The copper wire used to hook up Japanese homes is newer and
runs in shorter loops to telephone exchanges than in the
United States. This is partly a matter of geography and
demographics: Japan is relatively small, highly urbanized
and densely populated. But better wire is also a legacy of
American bombs, which razed much of urban Japan during World
War II and led to a wholesale rewiring of the country.
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.
In short order, broadband exploded. At first, it used the
same DSL technology that exists in the United States. But
because of the better, shorter wire in Japan, DSL service
here is much faster. Ten to 20 times as fast, according to
Pepper, one of the world's leading experts on broadband
infrastructure.
Indeed, DSL in Japan is often five to 10 times as fast as
what is widely offered by U.S. cable providers, generally
viewed as the fastest American carriers. (Cable has not been
much of a player in Japan.)
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's
largest phone company. With the help of government subsidies
and tax breaks, NTT launched a nationwide build-out of
fiber-optic lines to homes, making the lower-capacity copper
wires obsolete.
"Obviously, without the competition, we would not have done
all this at this pace," said Hideki Ohmichi, NTT's senior
manager for public relations.
His company now offers speeds on fiber of up to 100 megabits
per second -- 17 times as fast as the top speed generally
available from U.S. cable. About 8.8 million Japanese homes
have fiber lines -- roughly nine times the number in the
United States.
The burgeoning optical fiber system is hurtling Japan into
an Internet future that experts say Americans are unlikely
to experience for at least several years.
Shoji Matsuya, director of diagnostic pathology at Kanto
Medical Center in Tokyo, has tested an NTT telepathology
system scheduled for nationwide use next spring.
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.
"Before, we did not have the richness of image detail,"
Matsuya said, noting that Japan has a severe shortage of
pathologists. "With this equipment, I think it is possible
to make a definitive remote diagnosis of cancer."
Japan's leap forward, as the United States has lost ground
among major industrialized countries in providing high-speed
broadband connections, has frustrated many American high-
tech innovators.
"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 Vinton G. Cerf, a vice president at Google.
Japan's lead in speed is worrisome because it will shift
Internet innovation away from the United States, warns Cerf,
who is widely credited with helping to invent some of the
Internet's basic architecture. "Once you have very high
speeds, I guarantee that people will figure out things to do
with it that they haven't done before," he said.
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.
The proposed laws would probably save billions for companies
such as Google and Yahoo, but consumer advocates say they
would also save money for most home Internet users.
U.S. phone and cable companies, which control about 98
percent of the country's broadband market, strongly oppose
the proposed laws, saying they would discourage the huge
investments needed to upgrade broadband speed.
Yet the story of how Japan outclassed the United States in
the provision of better, cheaper Internet service suggests
that forceful government regulation can pay substantial
dividends.
The opening of Japan's copper phone lines to DSL competition
launched a "virtuous cycle" of ever-increasing speed, said
Cisco'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
United States -- decided to "unbundle" copper lines.
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 U.S. broadband services.
In the United States, 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 Federal Communications Commission
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.
"The Bush administration largely turned its back on the
Internet, so we have just drifted downwards," said Thomas
Bleha, a former U.S. diplomat who served in Japan and is
writing a history of how that country trumped the United
States in broadband.
As the United States drifted, a prominent venture capitalist
in Japan pounced on his government's decision to open up the
country's copper wire.
Masayoshi Son, head of a company called Softbank, offered
broadband that was much cheaper and more than six times as
fast as NTT'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's share of DSL business in Japan has exploded in the
past five years, from zero to 37 percent. As competition
grew, the monthly cost of broadband across Japan fell by
about half, as broadband speed jumped 33-fold, according to
a recent study.
"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 Konan University in Kobe.
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 Japan will soon be connected -- for phones,
television and nearly all other services.
"NTT is becoming dominant again in the fiber broadband
kingdom," Sato said.
That infuriates its competitors. Yahoo BB and others are
demanding that the government once again compel NTT to
unlock the lines.
In Japan, the regulatory wars over broadband are far from
over.
Special correspondent Akiko Yamamoto contributed to this
report.
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