REPORT ON A FACT-FINDING TRIP TO JAPAN 5-14 June 1974

Cleve Hopkins Telecommunications Analysis Division Office of Telecommunications U. S. Department of Commerce

TABLE OF CONTENTS Page EXECUTIVE SUMMARY I. II. III. IV. INTRODUCTION OBJECTIVES SCHEDULE OF DISCUSSIONS FINDINGS IV-1 IV-2 IV-3 IV-4 IV-5 IV-6 IV-7 V. VI. VII. Ministry of Posts and Telecommunications (MPT) New Towns KDD--Kokusai Denshin Denwa Co., Ltd Tokyo Electric Power Corporation--TEPCo NTT - Nippon Telegraph and Telephone Public Corporation NTT Research Institute of TC and Economics (RITE) Nippon Hoso Kyokai (NHK) Japan Broadcasting Corporation 1 3 3 3 5 7 8 8 11 13 14 17 19 20 21

OVERALL IMPRESSIONS SUMMARY RECOMMENDATIONS

EXECUTIVE SUMMARY A fact-finding trip was made to Japan in the interval 5-14 June to discuss with elements of the Japanese government a) the effects of the oil shortage on the economy of Japan, b) identification of plans for energy saving based on telecommunications, and c) ideas and concepts for possible joint projects. These objectives were met. Mr. Tokio Kanoh at the Tokyo Electric Power Company described his company's reaction to the oil shortage to consist of the first rate increase in 13 years and a basic change in the rate schedule such that the cost per kilowatt-hour increases as the quantity used increases. This is a fundamental change of great basic importance as it will eventually cause redesign of most electric power using devices. At Nippon Telegraph and Telephone Corporation (NTT) and International Telegraph and Telephone Company (KDD), the public corporations for domestic and overseas communications respectively, it was found that an unquantifiable increase in telephone usage occurred in the six months following October 1973. At the Research Institute for Telecommunications and Economics (RITE), the multi-disciplinary operations research arm of NTT and KDD, the Institute President, Mr. Kiyomi Yukihiro, expressed a desire to activate joint projects with OT in defining for the Post Industrial Society of 1985 1) The Social order and economic structure, and 2) The nature and demand for technology with special reference to telecommunications. RITE has a joint project with American University on the quality of life, and would also like to collaborate with OT in the further identification and development of practicable ways and means to reduce TV receiver power usage. Mr. Masaaki Seki, head of the Communications Policy Division in the Minister's Secretariat of the Ministry of Posts and Telecommunications (MPT) expressed interest in seeing joint activities between OT and NTT as MPT does not have any laboratories. KDD has broadcast educational television (ETV) programs for many years; our hosts at this agency identified two other pilot -1-

ETV activities at the Tokyo Institute of Technology involving remote class rooms. Mr. Hidetaro Morikawa, Planning Division Manager at the Visual Information System Development Association, expressed a desire for consultation at the technical level. This agency is responsible for hardware and software development for the Tama and Ikoma New Towns. It is recommended that OT management action be taken to activate suitable projects and consultations as noted above.

Report on Fact-Finding Trip to Japan in the Interval 5 through 14 June 1974 Cleve Hopkins Telecommunications Analysis Division

I. INTRODUCTION This trip was carried out as a consequence of the energy shortage that occurred in the fourth quarter of 1973 and the first quarter of 1974 and the resulting desire to see if joint programs could be set up. II. OBJECTIVES The objectives were a) to obtain data on the immediate effects of the oil shortage in Japan with particular reference to telecommunications; b) identification of plans for energy savings based on telecommunications; c) telecommunications-related plans for use if the shortage reoccurs; and d) identification of possible joint programs for the reduction of energy consumption, based on further usage of telecommunications. III. SCHEDULE OF DISCUSSIONS. The following talks and joint discussions were arranged by Miss Kaarn Weaver and Mr. Masaru Kawajiri of the American Embassy Economic/Commercial Section in Tokyo: 1) 5 June: Mr. Hidetaro Morikawa, Manager of the Planning Division, Visual Information Development Association. This agency is working out the video systems for Tama and Ikoma New Towns in Japan; it was formed under the guidance of the Ministry of International Trade and Industry (MITI) in May 1972.

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2)

7 June:

Mr. Tomoyasu Kawanabe, Assistant Staff Manager for Traffic Demand Forecasting, General Planning Office, Kokusai Denshin Denwa Co., Ltd. (KDD). This public corporation handles all international communications for Japan. Mr. Tokio Kanoh, Secretary of Marketing, and Mr. Takashi Kawakami, Assistant Secretary of Marketing, Tokyo Electric Power Company. This is a private for-profit corporation. Mr. Mitsuzo Yokota, Deputy Director, and Mr. Hiroshi Kawata, Visitors Officer, International Affairs Bureau, NTT. Mr. Masaaki Seki, Head of the Communications Policy Division, Minister's Secretariat, Ministry of Posts and Telecommunications (MPT). Mr. Kazutoshi Maruyama, Deputy Head, and Mr. Kageyama, were also present. At the NTT Research Institute for Telecommunications and Economics. Those in attendance were: Mr. Kiyomi Yukihiro, President Dr. Akira Arakawa, Director, Industry and Law Research Mr. Kan-ichiro Itoh, Director, Telecommunications Research Mr. Mitsuo Watanabe, Researcher, an engineer detailed from the Fujitsu Company, Ltd. Mr. Kazu Takeshita, Researcher, an engineer from Pansonic/National.

3)

10 June:

4)

11 June:

5)

11 June:

6)

12 June:

7) 12 June:

Mr. Sonoda, Promotion Division, and Mr. Shinichi Yamashita, Senior Liaison Officer, Foreign Relations and Program Exchange Division, Nippon Hoso Kyokai (NHK); this is the non-profit Japan Broadcasting Corporation; it will celebrate its 50th anniversary in March 1975. It is independent of government. Industrial tour by the Japan Travel Bureau through the Fujitsu computer plant and the Canon optical components factory, both in the Tokyo industrial suburb of Kawasaki.

8) 14 June:

*
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IV. FINDINGS The information accumulated during this trip is consolidated into the numbered paragraphs below, and retrieval or selection may be carried out by means of Exhibit 1 entitled Table for Locating Findings by Section Number. Some duplication in this mode of presentation no doubt occurs, but ease of topic identification and information retrieval is facilitated. The letters TC refer to telecommunications. Mr. Masara Kawajiri of the American Embassy Economic/ Commercial Section provided effective translation at all discussions. Appendix G is recommended for general background on TC in Japan. Column 6 of Exhibit 1 entitled Documents or References contains the paragraph numbers where general remarks on these papers may be found as well as the appendix number where they are contained, cited, or briefly described in some cases.

EXHIBIT 1 Table for Locating Findings by Section Number , Who 1 A New Towns KDD - International TC III-1 IV-3 What 2 IV-2 IV-3 When 3 III-1 111-2 IV-3 Electric Power Usage 4 Results t Docs. or or Refs. Data 5 6 A Remote Work Center 13

ow o.

Agency or Topic

Joint Projects 7

Teleconferencing 8

ETV 9

TC Usage 10 IV-2 IV-3

Tech Transfer 11 IV-2 V

TV Rcvr Design 12

C D

TEPCo NTT MPT' NTT/RITE NHK Teleconferencing

IV-4 IV-5 IV-1 IV-6 IV-7

IV-4 IV-5

111-3 111-4

IV-4

IV-4 IV-5

C D IV-1 IV-6

IV-4 . . IV-1

IV-4 IV-5

V V .

IV-5 IV-1

1V-5

E F G

IV-1 IV-6 IV-7

111-5 111-6 III-7 IV-6

IV-1 1V-6 . E F
.

IV-6 IV-7

IV-6

IV-6 . .

IV-6

Iv-7

IV-7

IV-7 .

IV-1

Ministry of Posts and Telecommunications (MPT)

The discussions with Mr. Masaaki Seki, Head of the Communications Policy Division in the Minister's Secretariat, were held with.a view to generating interest at the Ministry level in obtaining approval for joint projects at other levels in the government. The author was referred to Mr. Seki by Mr. Masaru Isono, Second Secretary at the Embassy of Japan in Washington, D.C. Mr. Isono is also from MPT, and sent a letter to Mr. Seki advising him of our topics for discussion; this letter was sent prior to my departure for Japan. Mr. Seki had not had a survey made on changes in TC traffic after the oil crisis started in October 1973. They (the Japanese Government) have as far as he knows, no plans for activation if it occurs again. The use of foreign TC did change; it follows the levels of industrial activity in Japan. MPT is desirous of finding out what to do if the shortage occurs again. He didn't see any reason for an increase in TC usage as a consequence of the shortage, but thought that industry would tend to use more phone conferencing. He was interested in the substitution of TC for travel but has no data. They have an experiment in the planning stage whereby NTT would set up two TV conference rooms, one in Tokyo and the other in Osaka, the principal industrial center of Japan; the concept would be based on the use of microwave channels, with activation in about a year. Regarding a joint project for interactive TV with nterminals, MPT does not have an institute for new technology but NTT has this kind of laboratory -- he then wondered how the idea of a joint project would be carried out. I suggested that joint definition of project content at management level could take place. Perhaps such activities could go ahead with NTT and the good wishes of MPT. Since NTT is the action agency, he is unable to commit but thinks the ideas are good. Both NTT and NHK carry out development in the public interest in Japan. Regarding the TC installations in Ikoma and Tama New Towns, they will look hard at the results of these experiments. So far the energy shortage has not affected these development and construction schedules. These projects were not started with energy conservation in mind. Regarding ETV, it does not substitute fOr schooling, and there is no plan to so substitute. The discussion concluded with Mr. Seki expressing thanks for a very constructive discussion and for the diagrams of our proposed Remote Work Center on the brush board.

IV-2

New Towns

On 5 June, a three and one-half hour discussion was held with Messrs. Morikawa and Ohno of the Visual Information System Development Association regarding the oil shortage and the TC developments for the Ikoma and Tama New Towns. Mr. Morikawa referred to the schedules for both developments and said that the shortage had not caused an acceleration at either, that the original schedules were being met. There was no reduction of construction or development effort for these programs. The government has closed all gas stations on Sunday, and extraneous driving has been stopped. The Bank of Japan has made money harder to get by raising the interest rates, and some public works have been put off. The basic reason for the New Towns development was to save resources and to conduct an experiment to see what would happen. The developers expect the trend to a cashless society to continue. Tama is to provide information only to those connected, while the Ikoma subscribers will have a much broader array of services available as well as the ability to vote using the two-way capability of the system. Telemail was not included. The New Towns work is under the Ministry of International Trade and Industry (MITI) rather than MPT (Posts and Telecommunications). There is not much government--generated incentive or concept in Japan for increasing the tax flow from better education; most Japanese work hard in order to better themselves. They would like to engage in further talks at the technical level and asked for information on 1) storage and retrieval methods and 2) how to efficiently retrieve information on microfiche. A letter responding to these two requests was written on 27 June, citing the Intrex experiments at MIT and enclosing a copy of an Air Force document (AD 688-830) among others. IV-3 KDD--Kokusai Denshin Denwa Co., Ltd.

This agency is a public corporation, and provides facilities for all of the international telecommunications for Japan. Mr. Kawanabe had prepared a short document with two curve sheets entitled Map 1 and Map 2; this document is attached in Appendix B and summarized here with additions from the author's notes. Map 2 shows the drastic effects on international TC of the industrial cutback; a two-month lag is apparent, caused by the efforts of each enterprise in trying to cope with the new circumstances. The real impact on industry began in November 1973.

International calls had been increasing at a rate of 50 to 70% in 1973 but has now dropped to 30%. Telex and telegraph have also slowed their growth rates to about 15% and zero respectively. August is high because KDD uses an international accounting system with some lag. These reductions in growth rates have been brought about by the oil shortage as well as policies of the government to suppress demand by monetary control and other methods. The long term growth rates for international TC were 35% for telephone, 20% for telex, and 4% for telegraph. Since January 1974 the usage is 30% of what it was in 1973. For some years prior to 1971 the annual increase in overseas phone usage was about 40%. The sharp increase in 1972-73 was due to the activation of exchanges in the Republic of Korea (ROK) and Taiwan; usage on these circuits is still increasing. Prior to 1963 the increase was low due to the economy and the fact that service was provided by HF radio. In 1964 the first Transpacific cable was connected, and the numbers of calls have increased since that time. The first satellite went in service in 1967 but did not cause an increase in calls handled as there was a cable in operation. The Japanese GNP has had an annual growth rate of about 10%. In the future, this rate is expected to be around 6 to 7% due to 1) restrictions on the use of resources, 2) pollution control, and 3) voluntary restrictions on exports. As the GNP drops (in growth rate), the demand for international TC changes in a like manner. We now estimate an overall increase in overseas calls of 30% in 5 years regardless of destination with 35% for those to ROK and Taiwan. Referring to Map 1, by 1978 we expect 25 million calls, the sum of both originating and receiving. As the economy of Japan slows, the numbers of calls will also reflect this situation. As the cost of international travel increases we can expect a corresponding increase in the numbers of calls. I expect the growth will not be as great as in 1964. For 7-8 years after the first cable was laid there was great growth -- we now are in a time of more stable growth. Perhaps people will use TC more and aircraft less -- I expect TC use to increase. Question: Is there any evidence of more TC used since onset of the oil shortage? Answer: There is no pattern yet. There was a short period in January and February when the numbers of tourists declined but their numbers -9-

are now back to normal. There is no indication that overseas TC use has increased due to the oil shortage. Some travel was delayed during January and February, and many messages were sent to explain the delay. Question: Why do numbers of calls still increase at the '63 to '71 rate when the GNP growth is dropping to 6 to 7%? Answer: Due to the oil shortage, the numbers of calls is expected to increase to substitute for travel, perhaps a 5% increase. There is presently no indication of this situation, but we assume that the airlines may not be able to supply enough planes, so we assumed that TC might be substituted. The shift to rail travel in Japan was not as pronounced as in the U.S., but a similar phenomenon took place. Due to the reduction in driving in Japan, an increase in domestic phone usage occurred. Question: Does KDD have any plans for more efficient use of the existing cables or for satellite use as the load increases? Answer: The seventh Transpacific cable will be in operation in November 1975 and some use of satellites may occur. Question: If the rate via satellite is less, will this cause an increase in international traffic? Answer: In Japan there is not much difference in rate or cost. The overall capacity of the cables and satellites are increasing and so the rate is decreasing--the chances are that the rate for calling may be reduced. An example - the first Transpacific cable had 128 channels, the seventh now being laid has 845. Intelsat 2 had 248 channels, Intelsat 4 has 5,000 channels. I expect that the rate could be lowered I then assume that the numbers of calls will increase. Another problem, even if the cost/call is reduced; there is another factor - as we have to consider the labor costs of station and switchboard operators in view of the 30% 1974 spring wage increase. Next year it will be less. This year the increase in equipment cost was 20% and I have no confidence that this cost will not go on up.

Question: With decreasing costs/call, do you expect the load to increase? What about elasticity of demand? Answer: We use an elasticity of demand ratio of 1:3, the ratio of increase in calls to the cost/call. This is the same as that used by SRI and AT&T. We think that about 5% of the increase will be due to the substitution of TC for fuel use; this is a very -10-

difficult figure to fix on and is only a rough approximation. Regarding the Remote Work Center you referred to, I believe NTT is carrying out a similar project for Japan; please look into it at NTT. IV-4 Tokyo Electric Power Corporation--TEPCo

This for-profit privately owned company supplies electric power to about 30 million people in the Tokyo area. Mr. Tokio Kanoh, Secretary of Marketing for TEPCo, had arranged his discussion in 4 parts: 1) Energy and Japan 2) Electric Power Supply and Demand in the TEPCo area 3) Power rates 4) Discussion by Mr. Isata, Director of the TEPCo Central Communications Office. Mr. Kanoh had his topics in outline form for the first three: these pages are in Appendix C-1 and contain the author's penciled notes as the conversation proceeded. Two other documents prepared by Mr. Kanoh are also attached in Appendix C: C-2 Electric Utility and Resources, a paper by Mr. Kanoh dated November 1972; C-3 TEPCo Summer and Winter Load Curves. Several other documents on TEPCo and electric power in Japan are listed in Appendix C; they are in the author's files if needed. The following remarks are from notes on the conversation with Mr. Kanoh and from his outline. The average annual rate of increase in the generation and use of electric power by TEPCo since 1960 is 11.4%, the average annual increase in the use of fuel oil is 18.3%. In FY-72, imported oil supplied 74.7% of the energy used, which was 3,443 trillion kilocalories: imported fuel supplied 86.4% of this energy. Table 2, Appendix C-1 has an instructive comparison of the use of basic resources by Japan, the U.S., West Germany, and France: with the unit as dollars/$1000 of GNP, they are Japan 75.7; U.S. 40.6; W. Germany 60.1; France 37.5. Japan has 0.3% of the total land area of the world and a population of about 108 million.

Table 3, Appendix C-1 shows that Japan's 1970 fraction of imported oil in relation to the total oil used is 99.7%: In '73 the comparable figure for the U.S. is 35.0%. Table 4 is a statement of Total Generated KWH by TEPCo; this is about one-third of the total generated in Japan. The quantity in 1973 from thermal sources was 83.5 billion KWH, or 87.3%; most of this is from oil. Table 5 contains the ways that the usage of electric power was and still is regulated. The large customers in the three categories noted below were allowed the indicated fractions of their October 1973 usage based on the "Electric Power Business Law" providing "Legal Cutdown" directions:

Transportation, food Steel, petro chemical, mechanical processing Passenger car production, electric appliances, commercial customers

100

90

85

Neon signs and floodlights were prohibited. These restrictions were carried out between 16 January and 31 May 1974. The government carried out a conservation campaign by issuing "Administrative Guidance" inviting large customers to reduce their usage the same amount as in the legal cutdown, shortening the business hours of stores, and the shut off of electric signs. This campaign is still carried out. Table 6 shows that for the first time TEPCo reduced its amount of power generated so far in 1974, and Table 7 shows TEPCo's reduction in sales in late '73 and '74. Table 9 is a summary of the first TEPCo rate increase in 13 years, averaging 63%! The fuel cost is 42% of this total cost now averaging 11.57 yen or 4.13 cents/kilowatt-hour. Also, this table shows the new rate schedules that are based on an increasing cost per kilowatt-hour as the amount used increases! This is a situation of great fundamental importance since it will put a premium on careful power usage and cause redesign of countless electrical devices as time goes on. Mr. Kanoh said that a Wisconsin public utility commissioner had advised against such a schedule. These new rate schedules were effective 1 June 1974. TEPCo's use of TC is summarized as follows: 12

All service vehicles are equipped with two-way radio, including those used in substation, branch office, and transmission line patrol. All such vehicles for these uses in Japan are radio equipped. The communication system includes 462 microwave stations covering 3454 kilometers with 233,700 channel kilometers; approximately one-half of these circuits are used for control purposes. The oil crisis has not caused any further increase in the use of telephones. Some automatic gear, the ELDAC equipment, made by Toshiba for the control of hydrostations is used. Hydro and all other sources of power are controlled by the Central Load Dispatcher's Office, CLDO in Tokyo. Eastern Japan operates at 50 Hertz while the western part is on 60 Hertz. The small area of TEPCo does not require a video conference system. They can communicate with all power companies in Japan via microwave. The Tokyo Tower, an unmistakable landmark in the city, is 600 feet high and is used for micro-wave antennas. IV-5 NTT - Nippon Telegraph and Telephone Public Corporation

This agency operates all telephones, telegraph, data transmission, related exchanges, and lines in Japan, and has for many years. See Appendix G for further information on NTT. My principal question to Mr. Yokota, Deputy Director of the NTT International Affairs Bureau was in connection with any apparent changes in telephone use or other TC as a result of the oil shortage. Some loss, perhaps of 200 million yen, in total revenue compared to the forecasts, occurred; this may be due to the oil shortage, but it is not altogether clear that this is the case. The April '74 income was less than the forecast. There is no data on the numbers of calls, either local or long distance; the only measures available are the revenues from the various services. Japan has about 25 million subscribers, and it is difficult to get data. NTT is working on a project to count the numbers of calls; it will be two more years before it produces numbers. The revenue for December 1973 was higher than forecast; this posed a real question and they are still working on the problem. Tariff revisions occurred in the interval Nov. 1972 to Aug. 1973 when the basic charge was changed to a 3-minute interval and the distance charge was reduced. It was finally concluded that the effect of the tariff change was minor, and that the government policies as a result of the oil shortage Ti that the annual caused this increase. A compTICatiETTaCtorbacklog of telephones in Japan is and has been about 3 million; this means that this many potential customers are awaiting the installation of telephones. Most are potential new residential -13-

customers, and this source of added revenue must be accounted for. It is expected that this backlog will be eliminated by 1977. It is these constantly added numbers of new customers that complicates identification of the effects of the oil shortage. NTT has a project for the reduction of traffic congestion that was set up about a year ago to substitute TC for travel. The idea is to have a remote work place near home and be able to reach the office if necessary via TC. This project is now in the planning stage and no date has been set for its activation. Mass travel in Japan is via rail and subway. Most trains are quite crowded in spite of the relatively high frequency of operation. Mr. Yakota expressed a desire to see the OT Remote Work Center in operation; I suggested that we should have something to see in about six months. Appendix D contains two documents: D-1 is a 3-page summary of NTT revenues, for example the 1972-73 increase in revenue from residential use was 14.3%, and from industrial subscribers was 2.4%; D-2 is an illustrated compilation of telegraph and telegraph services in Japan. IV-6 NTT Research Institute of TC and Economics (RITE)

This Agency is a non-profit multi-disciplinary "think tank," formed in November, 1967. Agencies involved in RITE's formation are NTT, which supplies 80% of its funds, MPT, KDD, NHK, and associates from industry. Objectives are to examine the relation between the present and future social orders and TC with a view to 1) identifying the social needs that TC can satisfy and 2) providing a basis for policy formulation. Appendixes E-1 and E-2 contain further general information about RITE. Advance preparation for this discussion enabled Dr. Arakawa, head of the RITE Group on Industry and Law, to prepare the numerical information shown in Appendix E-3. From these data it appears that the NTT revenue increased between 1 and 2% during the second half of FY-73 that ended in April 1974: RITE ascribes this to the substitution of TC for travel. From Part 2 of Appendix E-3 the effect on NTT's construction expenditures of the government's policy regarding public investment reduction is dramatic in that the FY-70-71-72 growth rate was about 23%, dropping to 6% in '73 and 5% in '74. Section II of Appendix t-3 shows that about 150 million yen/year is being saved by reducing the hours of operation of NHK television stations, with certainly some saving in TV receiver power. Section IV of Appendix E-3 is a brief discussion of RITE contract research for NTT relating to national planning and the roles of TC. One specific project is on the substitution of TC for transportation: this work includes the development of PR (public relations) materials for NTT's radio, TV, and newspaper campaign to increase the innovative uses of TC. NTT is cooperating with the Chamber of Commerce of Japan in a -14-

continuing "Clean Up Japan" campaign by sponsoring an increasing use of TC, this program is just starting, with RITE generating much of the basic material. Other work for NTT includes research on human behavior and TC, cities and TC, and a 5-year project on changes in urban environments and the roles of TC. RITE's engineers, represented by Mr. Watanabe in this discussion, are active in generating ways and means for reducing TV receiver power usage. Recently-built TV receivers in Japan have a circuit to preheat the CRT, and government action has been taken to induce TV viewers to keep the switch on this circuit turned off. Sony has recently developed a new CRT that will heat in 5 seconds; other manufacturers in Japan are Matsushita, Pansonic/ National, and Hitachi, and with foreign manufacturers Phillips and Sylvania are all expected to put this tube on the market in autumn '74. When these sets are in use in Japan, a monthly saving of 2 million kilowatt-hours is estimated. Japan now has 24 million TV sets, with a change estimated every five years. Another TV power-saving scheme is based on the reduction of CRT beam current by 60%; 12 watts can be saved in a 12" tube, which will be in production in autumn. An idea by RITE engineers for the automatic control of TV contrast or brightness would mean a further power saving. Mr. Yukihiro, RITE President, next went over the descriptive brochure attached as Appendix E-1, calling attention to his multi-disciplinary organization and mode of operation, and citing their contributions to policy formulation. He referred to the international conference that RITE held in 1972, as well as one on innovation to be held in 1975. He concluded his remarks by saying that "... we must make an effort to exchange research efforts." Dr. Arakawa then resumed the conversation by referring to one of their major problems. It is the question of how to forecast future social needs and the related nature of the new technology. They expect the Post Industrial society to arrive in Japan about 1985; at that time they need to know 1) the population, 2) the industrial structure, 3) nature of the city, 4) travel media, and 5) modes of education. Their aim is to identify and define the ways and means available from technology at that time to influence and affect these social and economic circumstances: they want to "... open the door of TC on the Post Industrial society." He concluded his remarks by saying that they are quite anxious for joint projects with OT and cited one now getting started with American University on the quality of life and telecommunications. My reaction to the RITE operation is that this group of about fifty people are charting their country's reaction to and use of new TC technology, and that these plans will be followed. A perhaps comparable American activity was the U.S. Air Force use of long range planning by the Rand Corporation

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for the development and substitution of long range ballistic missiles for manned bombers; this was done in the late 1950's and early 60's. Appendix E-4 is a clipping from the Japanese-language Tokyo daily Denki Shimbun for 6 June 1974. It summarizes the RITE programs for 1973 and 1974. The 1973 work included the following: 1) Changes in individual lives and telecommunications 2) Optimum land use development plans centering around regional use 3) Analysis of economic and social uses of TC emphasizing the evaluation of end uses 4) Management and communications 5) New TC system structures for the solution of city problems in the U.S. and Europe 6) Status of marketing activities in private corporations 7) Recent activities in TC in Europe and the U.S. Topics for work in 1974 include: 1) Status of recent TC activities in the U.S. and Europe 2) Status of data communication in the U.S. and Europe, including the principles of rate setting and the rates in these countries. 3) City Problems and TC - optimum land use plans 4) Identification of data communication services that individuals need for daily living 5) Status of the introduction of data communications in U.S. and European governmental agencies 6) How should welfare and the private corporation be included in the present and future situations at home and abroad 7) Policy design in private corporation management: its present and future status 8) Design of an information collection system for TC subscribers -16-

9) Construction of management plan models 10) History of Public Relations activities by broadcasting in Japan--for NHK 11) Status of the TC industry on the U.S. and Europe 12) Status of international TC in underdeveloped countries 13) Status of regional international organizations in TC--for KDD 14) Forecasting of posts and TC for MPT. IV-7 Nippon Hoso Kyokai (NHK) Japan Broadcasting Corporation

This non-profit agency celebrates its 50th anniversary in March 1975, and to mark this occasion has moved into a new headquarters building in Shibuya, Tokyo. The broadcasting system of Japan is defined in the Broadcast Law enacted in 1950, which provides for the parallel operation of NHK as the public broadcasting activity and the private stations operated on a commercial basis. The financial basis of NHK is the fees on receivers paid by viewers throughout the nation; NHK does not receive either government grants or other assistance, and it is prohibited by law from broadcasting advertisements. NHK is required by law to broadcast so that its programs can be received all over Japan. Two television, two A.M., and one F.M. services are provided for domestic audiences. An overseas service known as Radio Japan is also operated. NHK is also a member of the Asian Broadcasting Union (ABU) and of European Broadcasting Union (EBU). Further general and some statistical information in NHK may be found in Appendix F-1 in the document entitled This is NHK '74; most of the above is taken from this document. Our principal interface at NHK was Mr. Yamashita, Senior Liaison Officer; he had taught for two years at the Harvard Center for International Relationsand uses flawless English. Our principal question was on video conferencing, and Mr. Yamashita described an experiment being carried out by the Tokyo Institute of Technology (TIT) for remote classes via video. Students can be located in dormatories or other locations where there are terminals, with the instructor in a classroom with or without other students. Remote class rooms may be located in annexes as far as 30 miles away from the point of origin where the instructor is located. Another course is entitled Media Methodology where two-way interactive audio and video use one cable; two receivers and one monitor, all with framegrabber equipment are used. There are two TIT professors involved in these experiments, both in the Department of Engineering: -17-

Professor Kanihiro Suetake for hardware, and Professor Takashi Sakamoto for software. The address of TIT is 2-12-1 Ookoyama, Megura-ku, Tokyo. Mr. Yamashita spoke at some length of the educational broadcasts of NHK, summarized in the NHK 1973 Annual Report on this subject. A copy of this document may be found in Appendix F-2. Special emphasis is now being put on junior and senior high school levels as shown on pages 8 and 9 of Appendix F-2. About 80% of the high school graduates go on to higher education, and high school graduates recently have had offers of six or seven jobs. This reflects Japan's phenomenal growth over the past 20 years, and the corresponding effort to find capable employees. Thus NHK educational activities are emphasized. Appendix F-3 contains the listing for NHK programs for 7 June 1974 as printed in the Tokyo Japan Times for that date. English is the second language in Japan, and is taught in all schools. Other educational topics with high TV demand is aid for young housewives, child care, and kindergarten instructions. The International Educational Programme Contest was held by NHK in Tokyo in October 1973, where contestants from all over the world competed for the Japan Prize. Appendix F-4 contains a booklet describing this contest. Attention is invited to the Japan Prize Lecture for 1973 given by Dr. C.B. Carpenter of the East-West Center, Communication Institute at Honolulu, Hawaii. Dr. Carpenter's remarks are a cogent statement of the responsibilities and challenges facing radio and television people. Appendix F-5 is a document that describes the activities of the Japanese group called Zemporen, the All-Japan Teachers Federation for Studying the Use of Radio and Television in Education. Zemporen was founded in 1950 and now consists of teachers from about 57,000 schools, with more than 90% of the country's schools through senior high being represented as well as special schools for the exceptional. The work is organized into the four groups of Nursery and Kindergarten, Primary, Junior High, and Senior High school Teachers Federations for Radio and TV Education. Their third 3-year plan to promote the effective use of radio and TV in education will be completed in 1975. An annual convention is held, training courses are conducted, and prizes given for outstanding achievement. Zemporen has also participated in the establishment of standards for audio-visual aids, TV sets, transistor radios, and tape recorders. A publication program and annual contests for high school students in program production are also carried out. The Zemporen Secretariat is at MIK Headquarters in Shibuya, Tokyo. -18-

V. OVERALL IMPRESSIONS The picture I have as a result of this trip is of Japan as a managed economy with controlled growth. Most of those I spoke with said that the government has now adopted policies to reduce the country's rate of growth from perhaps 10% a year to 5 or 6%. Such a high growth rate has been sustained because of the willingness of the people to work hard for their country and themselves. Japan is now the world's most expensive country with a high standard of living for most of the people. Contrasted with the impression I gained during a month's visit in 1955, tremendous gains are evident. They are actively transferring technology in all areas of science and engineering that will contribute to their goals. Their only national vulnerability, a serious one, is the lack of resources found in Japan. The Japanese use of telecommunications is little short of phenomenal as evidenced by their increasing use of telephones and broadcasting. The red pay phones on the streets seemed in constant use. See Appendixes D-2 and G. They are a people that use what they have to their best interests and they make the best of what they do not have. They are innovative, ingenious, and hard working. Japanese business practice seems to be based on the idea of much more talk and discussion prior to decision-making, contrasted with the American tendency for decisions being reached more abruptly. Another difference was noted: the Japanese do not use lunch and other comparable events as times for the transaction of business. These times are apparently used to enable the participants to become better acquainted. The section on Japan in the World Communications Study by Arther D. Little contains excellent background. Appendix G cites some problems of Japanese electronics manufacturers from the June 1974 Spectrum. The weekly thin paper publication entitled The Japan Economic Journal contains much useful information about Japanese international business activities. It is published at 1-9-5 Otemachi, Chiyodo-ku, Tokyo 100, by Nihon Keizai Shimbun.

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VI. SUMMARY 1) It is clear that there was an increased use of telecommunications due to the oil shortage in Japan (Paragraphs IV-4, IV-5, and IV-6). 2) The government took decisive steps to conserve fuel as a result of the oil shortage (Paragraphs IV-4 and Appendix C-1). 3) The annual growth rate of Japan has been reduced to about 6% from about 10% (Paragraph IV-3). 4) There is and has been a concerted effort to transfer technology from laboratory to end use (Appendix G, IV-2, IV-6). 5) The NTT Research Institute for Telecommunications and Economics (RITE) is actively developing the basis for large scale use of advanced telecommunications technology throughout Japan (Paragraph IV-6). 6) RITE would welcome joint projects in TV receiver power usage reduction, technology forecasting, and the effects of new technology on social needs (IV-6). 7) The on-schedule development of the telecommunications for Tama and Ikoma New Towns was not accelerated by the oil shortage (IV-2). 8) NTT is promoting the substitution of telecommunications for travel (IV-6, Appendix G). 9) Educational TV and radio has had a relatively long and fruitful period of continued growth in Japan (IV-7, Appendix F).

VII. RECOMMENDATIONS 1) It is recommended that joint projects be set up for a) the reduction of TV receiver power usage b) the pooling of ideas, ways and means, and results of long range forecasting for both social trends and technology. 2) It is recommended that consultations be carried out at the technical level with the New Towns Telecommunications development people, possibly leading to joint projects. 3) It is recommended that invitations be issued to appropriate individuals and institutions in Japan for attendance at functions that OT deems desirable. These could include Airlie House meetings and formal program reviews as well as more technical meetings at Boulder. The list of names and agencies in Section III could serve as a point of departure. 4) It is recommended that jointly sponsored information exchange meetings be sponsored where papers are discussed and reviewed, ideas exchanged, and summary documents distributed. 5) It is recommended that the names in Section III be added to the OT Annual Report mailing list.