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