Press Releases 2004

SOFTBANK Announces the Commencement of Legal Action to Demand a Suspension in the Execution of the Draft Plan for IMT-2000 Frequency allocation in the 800MHz Frequency Band and the Formulation of a New Allocation Plan, and Acceptance of New License Applications

Oct. 13, 2004

SOFTBANK BB Corp. (Head office: Chuo-ku, Tokyo; President & CEO: Masayoshi Son), SOFTBANK CORP’s wholly owned subsidiary, announces that today it has filed a lawsuit with the Tokyo District Court and filed a petition for a suspension of the execution of allocation activities as well as a preliminary injunction, demanding (1) a suspension in the execution of the Ministry of Internal Affairs and Communications’ Draft Plan for IMT-2000 Frequency allocation in the 800MHz Frequency Band and (2) the formulation of a new allocation plan and acceptance of new license applications.

At the same time, SOFTBANK BB also filed a petition of preliminary injunction against the Ministry of Internal Affairs and Communications (hereinafter referred to as “MIC”), NTT DoCoMo, Inc., and KDDI Corporation prohibiting the destruction of documentation for the preservation of records on discussions relating to assignment of the 800MHz band.

Japan has the highest mobile phone charges when compared to other advanced countries. A major factor in this is the fact that radio wave allocation by the government is extremely unclear and unfair, which hampers the entry of new carriers and prevents any really fair and free competition.

The free price competition that ensued after the SOFTBANK Group’s entry into the ADSL market has made Japan’s ADSL charges the lowest in the world. In terms of fixed telephone basic charges too, price competition has sprung up quickly, with the SOFTBANK Group’s announcements of low-cost services immediately being followed by similar announcements by competitors.

It is our firm belief that if unfettered competition can be realized in Japan’s mobile phone market with the entry of new carriers, then this will also spark a drastic reduction in mobile phone charges.

However, if MIC decides on the particular allocation plan now at hand, new carriers will not be granted the opportunity to acquire licenses for the 800MHz band until 2012. This will enable the existing carriers to retain their dominance over this market, which consequently will make new market entry increasingly difficult and be disadvantageous to users who will have to continue to pay expensive mobile phone charges.

The SOFTBANK Group maintains that the fact that MIC’s unclear and unfair radio wave administration is preventing any fairer and freer competition cannot be overlooked, and thus has launched this legal action in respect of the following points of issue.

MIC’s announcement of the Draft Plan, approval of this plan and actions to implement this plan are in breach of the licensing system administrative procedures and are illegal.

1. Breach of basic licensing policy procedures

MIC has an obligation to use screening procedures that are in line with appropriate comparative judgment methods and to grant licenses to broad spectrum of parties, including new carriers. However, the Ministry has breached these procedures and has acted illegally in making arbitrary judgments.

2. Illegality of managing frequency bands in a way that contravenes fair use

MIC gives special consideration to radio wave use by certainorganizations, including particular companies which use MCA* system,for example. Such actions are in breach of policy guidelines (FY2003 Radio Policy Vision) that call for the effective utilization of radio waves and the thorough restructuring of radio wave usage rights, and are illegal.

3. Illegality of policies for the protection of vested interests and the exclusion of new market entrants

MIC’s draft allocation plan recognizes and protects the vested interests, which should not exist, of current carriers. In addition, the draft plan does not address the promotion of rational use and fair licensing, completely excludes new market entry and clearly contravenes the basic principles of the Radio Law, and therefore goes beyond the reasonable exercise of discretionary powers and is thus illegal.

4. Illegality of hampering and discriminating against new market entry

MIC arbitrarily and unjustly gives preference to existing carriers, and provides no allocated frequency bands for new carriers that express a desire to enter the market, thereby providing substantive impediment to their licensing applications. Moreover, in the allocation of the 800 MHz band, the Ministry was required to permit entry to the market by all carriers and announce its plans and widely publicize opportunities for market entry accordingly. Yet despite this, the Ministry, through some undisclosed decisions, gave exclusive preference to existing carriers, and substantively discriminated against the entry of new carriers, which is illegal.

[Note]
  • *MCA: Multi Channel Access

Appendix

Chain of events

History of 2GHz band IMT-2000 guard band allocation

Oct. 2003 SOFTBANK BB makes request to Minister of Internal Affairs and Communications for 2GHz band guard band assignment
Dec. 2003 - Feb. 2004 Ministry invites comments on draft plan for the handling of the 2GHz band guard band
Mar. 2004 - Apr. 2004 Ministry invites comments on draft plan for the handling of the 2GHz band guard band(2nd time)
May 2004 Future policy announced
Additional allocations to be made to existing carriers (allocation to SOFTBANK BB rejected)

History of 800MHz band IMT-2000 frequency allocation)

Aug. 2004 Ministry of Internal Affairs and Communications(MIC) announces “Draft Plan for IMT-2000 Frequency allocation in the 800MHz Frequency Band”
Aug. 6, 2004 Ministry opens invitation for comments on “Draft Plan for IMT-2000 Frequency Allocation in the 800MHz Frequency Band”
Sept. 6, 2004 Ministry closes invitation for comments on “Draft Plan for IMT-2000 Frequency Allocation in the 800MHz Frequency Band”
Sept. 6. 2004 SOFTBANK BB puts forward their comment that, “If the issue is not addressed now, Japan’s mobile phone charges will continue to remain high indefinitely.”
Sept. 24, 2004 SOFTBANK BB questions “Aren’t the opinions of users taken into account?”
Sept. 30, 2004 MIC announces measures for the “securing of radio spectrum for mobile phones”.
Oct. 13, 2004 Legal action launched calling for a suspension in the execution of the Draft Plan for IMT-2000 Frequency Allocation in the 800MHz Frequency Band.
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