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FEATURE
Bandwidth Wagon




Well behind other first-world powers, Japan is finally emerging from the analog days.
Dan Grunebaum taps into Tokyo's DSL revolution.


At a glitzy Internet cafe near bustling Shinjuku station, crowds of young tech types sit in front of PC displays, transfixed by streaming audio and video downloading at speeds the likes of which they've never before seen.

But this isn't the latest technology from telecoms giant NTT - rather, it's the demonstration room for Tokyo Metallic Communications, one of several upstart Internet service providers that may prove to be the Trojan horse that topples the telecoms status quo in Japan, and in the process kick-starts the country in a broadband race that it is rapidly losing to nearby Korea.

Industry sources estimate the current number of Japan's broadband subscribers, including Digital Subscriber Line (DSL), cable and wireless broadband, at 570,000. This excludes NTT's far slower but widely used Integrated Services Digital Network (ISDN) service. The figure puts Japan well behind nearby Korea, which already has some four million broadband users, and light years behind the US.

Backed by 60 million dollars in pre-IPO financing from the likes of J.P. Morgan, Jardine Fleming, NEC and Hitachi, Tokyo Metallic is rapidly deploying its Digital Subscriber Line (DSL) technology throughout Tokyo. DSL can transmit large volumes of data over standard copper phone lines (hence the name Metallic) at low cost and speeds more than ten times that of ISDN or a standard dial-up modem.

Even as the Japanese government's IT Strategy Council issues edicts calling for Japan to bring fiber optics to each and every home and surpass the US in five years, Tokyo Metallic, eAccess and other DSL providers - with the quiet blessing of the Ministry of Public Management, Home Affairs, Posts and Telecommunications (previously the MPT) - are already supplying broadband solutions that may put paid to NTT's grandiose fiber-optic ambitions.



Last Place

The one-man revolution behind Tokyo Metallic and its newly founded sister Osaka Metallic is President and CEO Hiroaki Kobayashi, a former word processor salesman who has almost single-handedly managed to force NTT to open up its copper lines to Metallic's DSL technology.

While NTT continued to push the ISDN technology in which it had heavily invested, Kobayashi saw in DSL a golden opportunity to bring true high-speed broadband to his countrymen. After all, unlike Japan's fragmented cable network or still-limited fiber optic network, every home in Japan is wired with POTS (plain old telephone service). He faced just one small hurdle: convincing NTT, which has a monopoly on Japan's telephone network, to open up its lines to his DSL service.

Kobayashi's strategy in forcing NTT to allow Tokyo Metallic to set up its equipment in NTT facilities was to play patriotically on the government's anxiety that it is losing the broadband race. "MPT people feel that the Japanese situation is falling behind the world," says Kobayashi. "Even in Korea and Taiwan the local telephone companies now provide very high quality broadband DSL services. Japan cannot be defeated by other countries in broadband. Thanks to the MPT's help we could start this service last July."

Winning the right to run DSL over NTT's telephone lines was a stunning achievement and one that may be looked back on as the spark that set off Japan's broadband makeover. "It [NTT] deliberately tried to deflect attention away from DSL," comments Industry analyst Tim Clark, Strategy Director for The Web Connection Japan. "Because that means opening up its local loops, which of course are the crown jewels of its copper wire monopoly. That's why they keep talking about how wonderful fiber optic is."

With connection speeds between ten and 30 times faster than NTT's ISDN, Tokyo Metallic's DSL service is attracting between 100-150 applicants every day, says Kobayashi, who adds he is hoping to poach some ten percent of NTT's some eight million telephone subscribers in Tokyo. "I think at this moment DSL will develop quickly-the reason is that anyone can subscribe."

Tokyo Metallic and the other upstart DSL providers must be on to something, because NTT East along with Japan Telecom, Japan's third-ranked phone company, have now come online with DSL services of their own. At prices recently cut to as low as JY4000-over 20 percent cheaper than Tokyo Metallic's 5500-the upstart DSL firm will be hard-pressed to compete with its larger rivals.

Cable Competition
Meanwhile, cable broadband holds the lead in a market that the government's IT Strategy Council is projecting to hit 30 million by 2005. Japan's first commercial cable TV Internet service launched in 1996, and major operators such as Tokyu Cable and J-COM are now offering bundled video, voice and data services at highly competitive rates (JY6500/month for J-COM). J-COM says it is signing up new subscribers at the torrid pace of as many as 45,000 a month.

Cable service is more widely available than DSL right now, since NTT is not involved, says Clark, noting that NTT is clearly trying to thwart upstart DSL providers. Clark adds that cable has higher bandwidth than DSL, but says, "One disadvantage of cable is that it was not originally designed for two-way communications, and congestion can be a real problem."

Other broadband solutions set to challenge DSL and cable are also on the horizon. One of them is fiber-optic cable, which promises lightning fast connection speeds.

"Japan leads the world in optical fiber connections to individual homes," explains Clark. As of the end of 1999, NTT claimed that its fiber-optic coverage of individual households was 36 percent. And they have massive government support for their fiber-to-the-home project, which has been going on for years. So fiber-optic cable is a major contender.

Meanwhile, cable radio provider Usen in March launched what is being billed as the world's fastest Internet connection service, at speeds of up to 100 Mbps. The fiber-optic service is presently limited to Shibuya, Setegaya, Suginami, Meguro and Ota wards, with blanket coverage of Tokyo's 23 wards to be rolled out by October.

Other potential competitors include NTT's Biportable personal wireless broadband service, a solution aimed at the PDA market currently in trial testing in the Shibuya Bit Valley area, and the next generation of high-speed G3 iMode cell phones.

Nonetheless, with 100 percent penetration of POTS, DSL has an advantage that cable and fiber optics will probably never be able to duplicate. But can the DSL upstarts survive the NTT challenge? The politics and payment shenanigans involved in getting NTT to open its local stations to the DSL providers are not to be underestimated," grants Clark. "But I think that history and logic favor the upstarts. Frankly, I hope they kick NTT's ass."

Portions of this article previously appeared in the International Herald Tribune.

Broadband ISPs
Asahi Net www.asahi-net.or.jp tel:03-3569-3522 (English support)
At&T WorldNet: www.att.ne.jp tel:03-5561-5678 (English support)
eAccess: www.eaccess.co.jp tel: 0129-2754-37 (English website)
Global OnLine: www.gol.com tel: 03-4354-0030 (English support)
J-COM: www.jcom.co.jp tel: 0120-889-816 (English website)
NTT East: www.ntt-east.co.jp tel: 116 (English support)
PSINet: www.jp-psi.net tel: 03-5574-7121 (English support)
Tokyo Metallic: www.tokyometallic.com  tel: 03-5827-3910 (English website)
Tokyu Cable: www.catv.ne.jp  tel: 0120-109-199
TWICS: www.twics.com tel: 03-5740-1151 (English support)
Usen: www.usen.ne.jp  tel: 03-3509-7111

Internet Cafe Necca: The Broadband Future Is Now
In South Korea, they're called PC bangs, and they're the center of a booming broadband gaming culture addicted to speed. In Japan, a Korean electronics giant is hoping to duplicate the success of its Korean bangs, with one of its high-speed Necca Internet cafes-opened in Dec 2000-in the heart of Shibuya.

Situated a stone's throw from the police box on Inokashira Dori, Necca competes with game centers, telephone clubs, record and department stores for attention, announcing its offerings with catchphrases such as Music Download, Net Phone or Visual Chatting.

A closer look reveals that this is an Internet Cafe with a difference: The latest Pentium III computers are outfitted with ultra fast 1.5 megabyte per second lines (provided by Tokyo Metallic), available for JY500/hour. Computers in the Net Game Zone (there is also a Net Contents Zone and a Business Zone) are kitted out with game joysticks and game titles such as Diablo and Quake, enticing the networked gaming fanatics that the cafÈ is hoping will make it as successful as it has been in Korea.

On a recent Monday afternoon, one of Necca's young, personable hosts, Yuzuru Miura, explained that the gaming freaks had yet to materialize in great numbers. Things are taking off a bit different than we had planned, he admitted, but we already have 5000 members and repeaters are growing. Miura also notes that on weekends Necca sees many foreign and business costumers who come in to take advantage of the free international calls available with the installed telephony software. MP3 junkies will also be pleased to learn that Necca welcomes customers to download music and burn your own CDs with the cafe's CD writers.

Before the gamers and day traders materialize, the 24-hour Necca provides an crowd-free, comfortable environment in which to get a taste of Japan's broadband future-a future on hold as the country's government and corporations struggle to wire the country.

Necca: 3F Chitose Kaikan Bldg, 13-8 Udagawa-cho, Shibuya-ku. Tel: 03-5728-2561. www.interpia.ne.jp

FEATURES:

OCTOBER

395: Generation Next
The world-first launch of NTT DoCoMo’s third generation mobile phone network represents a quantum leap into mobile cyberspace. Stuart Braun goes online.
394: Sister act
Celeb sisters Kyoko and Mika Kano have taken Japan by storm, but can they win over the West? Chris Betros and Maki Nibayashi spend an evening with the divine duo.
393: Reel time
Matt Wilce gets a close-up of the Tokyo International Film Festival's hottest tickets.
SEPTEMBER
392: Lap it up
Michael Schumacher is champion again, but the unpredictable Suzuka circuit is still set to offer up a surprise-packed Japan Grand Prix on October 14. Stuart Braun goes trackside.
391: Everything old is new
You might think Azabu Juban is all swanky dining and dancing 'till dawn.....
390: Cooking the books
Celebrity chef Nobu Matsuhisa’s in town with his new book in hand.....
389: Up from the underground
Japan's literary superstar Haruki Murakami is home for the duration
AUGUST
388: First wave
John McGee dives into Japan's art extravaganza
387: Water world
Matt Wilce explores Tokyo DisneySea
386: Open house
Many people are sleeping on the streets of Tokyo
385: A moveable feast
Some of the city's best yatai fare
384: Hair
A look at Tokyo's salon industry
JULY
383: Summer in the city
20 ways to make August a little more bearable
382: Tokyo Tomorrow
Stuart Braun tracks the future of the metropolis
381: From zero to hero
81-year-old Zero fighter Sadamu Komachi looks back
380: Island escapade
Journey to Odaiba
JUNE
379: Open-air fare
Tokyo's alfresco dining spots
378: Reel story
Reel in the summer's hottest movies
377: Sonic relief
Gear up for the summer's hottest music festivals
376: All at sea
No shortage of fun in the sun on the beach
375: Your cup of tea
Tea time in Tokyo
MAY
374: No time to waste
Tokyo's mounting problems with garbage
373: Freetown
Tokyo's stylish suburb, Jiyugaoka
372: Broken record
Tokyo's ecclectic array of record stores
371: Bottoms up
Tokyo's finest martini bars
APRIL
370: Admit one
Regulations for foreigners wanting to live and work on Japan
369: After a fashion
Spring trends from the catwalks to the streets
368: Bandwidth wagon
Japan's move towards DSL
367: Just for sports
How to play ball this summer
MARCH
366: Life's a hitch
Helpful hints for hitch hiking in Japan
365: Altered state
Try Tokyo's tailors on for size
364: The Fringe Club
Shinjuku's infamous Golden Gai bar district
363: Take two Tomatos
Design gurus Michael Horsham and Steve Baker
362: Stage left
Innovative and intimate shogekijo (little theaters)
FEBRUARY
361: The lowdown on TC
Everything you ever wanted to know about TC, but were afraid to ask
360: A reversal of fortune
Tokyo's home of racing, Fuchu Racecourse
359: Funny Valentine
How to do Valentine's Day in Japan
358: Two-faced
Heartthrob Katsunori Takahashi
JANUARY
357: Read all about it
Amazon.com comes to Japan
356: Daikanyama
Central Tokyo's hippest hood
355: Wash out
Heaven Sento
354: Means to an end
Some good ideas to inspire you
352/3: Last Laugh
TC's rosey re-cap of the year
Signs of the times
Horoscopes for 2001
351: It's a wrap
TC's holiday gift tips
350: Cable ready
Cable and satellite broadcasting renaissance

ISSUES 349-
ISSUES 299-
ISSUES 249-

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