Global Information Summit 2000
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Session 1 - "New Businesses Emerging with Mobile Networks and Digital Home Appliances "
Digital Divide Barriers 2
From: Bruno Lanvin
(11) Japan and Developing Countries
A related question. Softbank and IFC (part of the World Bank) just announced what could be the most significant venture ever in the area of e-commerce for developing countries (500 million USD is no peanuts):
is this a first sign of a new interest of Japan in this segment of development policies ? or part of a new global approach from Japanese business and government circles to Internet and IT matters (then, the recent NTT decision to diminish Internet access cost would be no coincidence) ?

From: Bradley L. Bartz
(12) A quick Japanese domain name Survey
There are certain rules of JPNIC, the domain name registration body, that I believe are a significant block to true Internet Venture Growth in Japan. Here are the rules:

1. One company can only own one domain name
2. You can not sell, lease or rent a .jp domain name
3. Foreign companies can not register .jp domain names without a legal entity in
Japan.
4. JPNIC has no trademark protection or dispute policies.
5. Propagation of a .jp domain name must be done by a member of JPNIC
(currently about 300 members) making .jp domain names the most expensive in the world.

There are quite a few real-life examples of JPNIC stopping, stalling and killing venture businesses who depend on domain brand strength to build there businesses. JPNIC even carries an active "blacklist" to encourage members not to do business with (yours truly is a member of that list). I confirmed the existence of the JPNIC Blacklist with their executive director personally.

The questions I have for all of you are:

1. Do you think a good domain name is important for Internet Branding?
Yes No ??

2. Do you own more than one domain name personally?
YES NO ??

3. Does your company own more than one domain name?
YES NO ??

4. Do you believe that domain names and the web sites that are built on them are like real estate and should be able to sell or transfer ownership with ease?
YES NO ??

5. Should JPNIC's monopoly be broken and competition be introduced for .jp domain registrations?
YES NO ??

6. Did you know that individuals can not register .jp domain names, except for geographic "foot long" domain names?
YES NO ??

7. Do you think individual entrepreneurs are the folks who start Internet Ventures? Should we change the domain registration rules to encourage "fire-in-the-belly" of Japanese Individual entrepreneurs?
YES NO?

My mantra is simple. Freedom of Capitalism.

From: Kazuaki Katori
(13) A quick Japanese domain name Survey
I think Mr.Bartz made a good point.

"one company, one domain name" policy is a big obstacle to introduce new services. For that reason, we usually obtain .com domain name, which is very easy to get. But this is not a sound situation.

From: Jim Johnson
(14) Moderator - Domain Name Registration
1. Brad raises some important questions. It would be helpful to him and to the Nikkei conference if you all could contribute your own experiences on domain name registrations. What is the practice in your own country?

What role is played by the government, or by the private sector?

What role should ICANN play in something like the situation in Japan?

2. Bruno's point about Softbank and the IFB (World Bank) raises an interesting question about whether there is a Japanese government/ industry policy that is behind this initiative. What do you think? Is Softbank really a part of the Japanese industrial power structure?

You thoughts please.

From: Jim Johnson
(15) Moderator - Questions?
We have some open questions for you to address to help the substance of the Nikkei meeting on March 3:

The context is a discussion on digital divide barriers: Some of you have raised the questions of Internet taxation, website security, registration of domain names, the status of developing countries.

What are some of the ways in which domain name registration is being handled in different countries. We have heard about the issues in Japan. What about your country? What is the role of the ICANN?

What are the next steps for developing countries? Can the examples of countries like Japan, or Finland, or France, or Germany, or Mexico help?

Speak up!

From: Ken Lyon
(16) 'real' practical issues
I have been following the discussions since the conference commenced and I would like to make the point that the issues raised regarding taxation, security etc. are already 'real' practical issues for many organizations and government bodies today.

I work in the area of the internet based international Logistics and as global trade becomes more dynamic these issues are being confronted almost on a daily basis. To give one example; A US based manufacturer of communications equipment moves products into global markets on a 'build to order' basis. The interesting points are that the company doesn't actually manufacture anything itself, it subcontracts to third party contract manufacturing companies in Asia, Europe and South America. It only designs and develops the brand from the US. It also moves the product into various markets based on picking the most favorable mechanisms to reduce its tax and customs duty liability (legally). It is constantly looking to exploit opportunities to do this as it's business and target markets become more dynamic.

Indeed many Customs authorities are actually looking to encourage this to help attract inward investment by these organizations. The Netherlands Customs authorities are very pro-business in this regard where (within EC rules) they interpret very liberally the legislation so that they provide the most flexible import/export regime within the European Union.

This kind of competition will probably increase as the more enlightened governments recognize that trying to globally legislate for maintaining the tax 'status-quo' is a lost cause and seek within sensible rules to get the best deal they can to keep businesses interested in locating in their domains.

This will certainly be an issue that highly developed countries such as Japan will need to address, especially considering the aggressive moves in this direction by their Asian neighbors such as Singapore and Hong Kong.

From: Takashi Arano
(17) A quick Japanese domain Name Survey
I am NOT responsible for JPNIC domain issues but IP address ones. Although I will try to explain JPNIC's standpoint as below, please regard this message as informal. I suggest the coordinator should contact JPNIC and ask for their formal answers.

(12) Bradley L. Bartz
There are certain rules of JPNIC, the domain name registration body, that I believe are a significant block to true Internet Venture Growth in Japan.
Here are the rules:
1. One company can only own one domain name
2. You can not sell, lease or rent a .jp domain name
As the above two rules have effects to minimize so-called cybersquatting in the .jp domain name space, they should not be relaxed without adopting some means to prevent it. JPNIC recognizes the current market needs which require freedom from these two rules and are now trying to set up the domain name dispute resolution policy and the rules.

You can find what JPNIC is going to head for by reading the following announcement. (Sorry that it's in Japanese.)

----------
Announcement on the Domain Name Dispute Resolution Policy Tast Force http://www.nic.ad.jp/jp/topics/archive/19991215-01.html
----------
(excerpt)

JPNIC is going to consider to lift the ban on domain name transfer and allow it based on an agreement of the two parties. JPNIC also is going to introduce a sort of general-purpose second-level domain name in which any single individual or organization can register more than two domain names. However, to realize these things JPNIC thinks that some policy and means are necessary that prevent and/or handle to solve any disputes arose between domain names and intellectual properties, especially trademarks.
(12) Bradley L. Bartz
3. Foreign companies can not register .jp domain names without a legal entity in Japan.
ccTLDs are roughly divided into two groups; "Open ccTLDs" such as .to for Tonga which does not require local presence of registrants and "Restricted ccTLDs". .jp is one of the latter ccTLDs but we should know that it's not a rare case. There are many others that require local presence.

Whether a ccTLD should serve the global community or a local community is a policy matter. And JPNIC's policy is to place a high priority on serving the local community, that is, Japan. You know the global community is fully served by gTLDs such as .com, .net and .org.

In spite of this policy, I should add that JPNIC allows foreign companies to register .jp domain names if they are registered as a "Foreign Company" in the registration office in Japan, which is not to require them to incorporate in Japan.
(12) Bradley L. Bartz
4. JPNIC has no trademark protection or dispute policies.
As I said above, dispute resolution policy things are being discussed in the task force dedicated in this matter in JPNIC. According to the task force schedule, the proposed document will be finished in March, which will be made public for comments for two months, and finally it will become the JPNIC policy on June.

From: Lee A. Daniels
(18) Japan's Internet growth
As a broadband operator and a "foreigner" who has worked in Japan's telecommunications industry for over 10 years, I often have the opportunity to participate in numerous MPT advisory councils and task forces. In one specific meeting, we were discussing why Japan's Internet growth is lagging the US and Europe. I will always remember Masayoshi Son's simple comments that there were two reasons: NTT and the MPT. NTT's market dominance, anti-competitive behavior and close relationship with the MPT impedes the growth of Internet. NTT's dial up rates are excessive, the interconnect rates for carriers unreasonable, and the influence on the diet and MPT unreasonable. With only 1/2 of NTT being privatized and the remaining shares being held by the MPT, any regulation coming out of the MPT is suspect.

Reincarnating a holding company law that allowed NTT to appease the public by creating the appearance of a break up only perpetuates the current behavior of NTT that has curtailed Internet growth. Creating a weak link of NTT West was a brilliant strategy to keep regulators at bay with the threat of impending bankruptcy if the MPT follows through on implementing international commitments of cost-based interconnect rates. The current proposal from Japan on LRIC will insure that NTT will continue to be protected at the cost of fair competition and reasonable interconnect charges. Our business continues to suffer from the lack of number portability in Japan. If a customer wants to use our service, they need to give up their current telephone number and obtain a new one. Although the MPT has announced plans to introduce number portability next year, the track record on following recommended schedules (LRIC) is not stellar. There is no mystery why Japan's cellular growth has exploded in Japan. If you had the option of paying NTT close to $700 for a registration fee for a fixed wire line or go to Hikari Tsushin and pick up a free cellular phone, the choice is pretty simple. If Japan is to emerge as a global player in the Internet space, it needs to be more aggressive in tackling NTT and the MPT.

From: Bradley L. Bartz
(19) The Great Equalizer
Thank you for your comments on domains. Change is in the air.

I am interested in posing a question about careers for those that are blind in UNIX programming and system administration. Because UNIX base is a command line, text language text-to-speech applications work extremely well. The Internet offers everyone the ability to compete in today's web market. Without bias.

I wonder if the Nikkei Journalists can spell out tax advantages for hiring and training "shogaisha" (disabled) persons in Japan.

I have experience training blind folks to get careers on the phone. The disadvantage of my blind students did not come into play during a phone conversation. With good text-to-speech, UNIX will be a career thousands of Blind in Japan. Creating a large pool of loyal Internet Bricklayers.

From the larger corporate/government participants I ask what interaction you have had with the disabled community and bringing them online?

From: Jim Johnson
(20) Themes
In our wide ranging discussions on many topics we have covered much of cyberspace.

Japan has provided us with some interesting developments relevant to our topics: (1) the announcement by NTT that it was lowering rates for Internet access (only to its own customers, and not for interconnect access); and the (2) Ministry of Finance announcement that they want to tariff or tax purchases of online digital products coming into the country.

We have heard about the severe limits placed on registration of domain names within Japan.

We have heard about the concerns for security and privacy of websites, and the information which potential customers might be giving.

We have learned of the barriers to expansion of broadband capacity in many places, including Japan.

What are some of the other themes that have emerged?

Many of you have contributed significantly on developments in other parts of the world, including the US states on taxation of e-commerce; and the developments in the European Commission, Finland, Germany, etc.

What advice should we give to Nikkei on how they can influence, in the March 3 conference in Tokyo, the future of Internet and e-commerce policies in Japan? What editorial positions should they take? What points should be made clearly at the "face to face" conference?

I have suggested to the Nikkei organizers, that, with the many talents and experiences represented by all of you on this list, that you all might be willing to be interviewed individually for a series of articles to be published in Nikkei over the coming months. Are any of you interested? Let us know.

Keep on speaking out.

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