5G regulation and law in Japan

This chapter was kindly submitted by Atsumi & Sakai.

5G

Comprehensive 5G technology verification tests took place between 2017 and 2019. These included testing for industrial uses such as remote control of construction machinery, smart agriculture, arrayed vehicles mobility, and telemedicine.

In April 2019, the four mobile telecommunication service providers (NTT DOCOMO, SoftBank, KDDI/Okinawa Cellular and Rakuten Mobile) won spectrum licences after applying to set up 5G base stations.

In 2019, experimental 5G services were launched, including services for audience experience enhancement at international sports events such as the Rugby World Cup 2019.

In March 2020, NTT DOCOMO, SoftBank and KDDI/Okinawa Cellular launched commercial 5G services, followed by Rakuten Mobile in September 2020. Based on the four mobile telecommunication service providers’ business plans, approximately 98% of the 10 km² of “meshes” (a unit of land in a grid used to determine mobile data coverage) would have 5G base stations by April 2024. These 5G services are currently non-standalone (NSA) services. However, the 5G licensees are planning to shift their services to the standalone (SA) standard in the next few years with NTT DOCOMO, SoftBank and KDDI/Okinawa Cellular planning to implement SA 5G services by the end of 2021.

In August 2020, the Ministry of Internal Affairs and Communications (MIC) amended the Regulation for Enforcement of Radio Act of Japan Act No. 131 of 2 May 1950, “Radio Act”) so that 5G licensees can use some of the existing 4G spectrum bands for their 5G services.

In November 2020, MIC announced its “Frequency Reorganisation Action Plan (FY2020 Second Revision)” in which it discussed its main activities relating to 5G: (i) a study of additional spectrum allocation; (ii) conversion of existing bands to 5G; and (iii) a study of additional spectrum allocation for Local 5G.

Nationwide 5G population coverage reached 93.2% at the end of March 2022, and the plan is to reach 95% by the end of March 2023, 97% by the end of March 2025, and 99% by the end of March 2030. MIC intends to establish an environment in which enhanced 5G services can be provided nationwide as soon as possible in order to facilitate people's daily and economic activities.

Local 5G

Local 5G is a system that regional entities such as companies or local governments can establish within a limited area, such as in their own buildings or on their own grounds, to meet the connectivity needs of local communities or businesses. In December 2019, the implementation of Local 5G regulations began, and the government has started treating licence applications for certain spectrum with a higher priority.

In locations where the progress of area-wide deployment of mobile service providers is slow, Local 5G, which can be implemented more quickly, can be introduced before the normal mobile networks become available. Local 5G also has performance settings that are flexible, and can be modified for various purposes. Additionally, compared to earlier mobile standards, Local 5G is less affected by telecommunication system failures and disasters in other locations.

Companies and local governments are conducting regional tests of Local 5G for development purposes, using combinations of different spectrum in different environments (cities, rural areas, indoors, etc). These tests will help determine, among other things, whether Local 5G can meet regional community needs.

Major telecom companies were offering 5G services at the same prices as 4G as of February 2023.

5G has been launched for both industries and consumers. Local 5G is expected to be used in sectors such as agriculture, infrastructure and construction, healthcare, manufacturing, education, security, entertainment, tourism and mobility.

Local 5G aims to allow a wide range of operators and industrial companies - regardless of their size - to gain access to frequencies. In December 2020, the Radio Act and related regulations were amended to allow Local 5G to use the 28.2 - 28.3 GHz frequency band. In December 2020, after further amendment of the Act, the 4.6 - 4.9 GHz and 28.3 - 29.1 GHz frequency bands became available for Local 5G use.

Local 5G has been tested in stadiums, airports, factories, farms, construction sites or other premises.

There have been no public tenders in the sense that applicants compete based only on who offers the highest price.

Under the Radio Act, MIC grants a licence to establish and operate base stations exclusively for a certain spectrum band for a certain period (the general rule is five years) once the authority has reviewed and approved the “base stations establishment plan” submitted by the applicant. Amendments to the Radio Act came into force in October 2019, pursuant to which a plan must also include a statement of how much the licence applicant will pay the government (the Specified Base Station Opening Fee). The applicant must consider the economic value of the frequency band when determining the fee, which the MIC will consider as an additional factor when reviewing the licence application.

In July 2019, MIC granted the four mobile operators 5G spectrum licences, under which the use of allocated spectrum bands to non-5G networks by a 5G licencee may lead to cancellation of those 5G licences.

However, MIC is considering holding a public tender process for the allocation of new spectrum licences in the future.

When there were multiple applicants that all satisfied the conditions, MIC reviewed whether the applicant:

1. planned to cover a wider area using 5G infrastructure, and install more base stations;
2. provided safer and more reliable maintenance plans for the facility;
3. planned to open up their network to more MVNOs;
4. had a better plan to use 5G for a wide array of industries; and
5. would ensure better 5G access for a larger geographic area and population

MIC required that applicants’ plans indicated compliance with the following minimum standards:

1. nationwide coverage for 5G infrastructure must be 50% or more, and services will be available in all 47 prefectures within two years;
2. a plan to maintain safe and reliable facilities;
3. a funding plan to cover necessary costs, and a plan to open up their network to MVNOs; and
4. an agreement that their business will not be transferred to other operators.

There was no standard for calculating the Specified Base Station Opening Fee in July 2019.

However, in August 2020, MIC published its “Study Group Report on Standard Amount of Specified Base Station Opening Fee.” This report aimed to define the economic value of frequencies, and set the criteria for calculating the specific base station establishment fee for future frequency allocation. The report explains that the economic value of a particular frequency band should be determined using factors such as the width of the frequency band, shared use of such band with other wireless communication systems, interference with adjacent frequency bands, and any termination promotion measures.

In November 2022, MIC published its “Frequency Reorganisation Action Plan (FY2022)”. The Plan states that MIC is considering using 2.6, 4.9 and 26 GHz for 5G. For 4.9 and 26 GHz, the Plan states MIC will allocate the spectrum licences to operators in 2025.

In 2019, the Radio Act was amended to include provisions for 5G spectrum licensing. The amendments also allow experimental WiFi and other services (such as smart speakers or AR glasses) to be operated for a maximum of 180 days without the relevant radio equipment meeting Japanese standards, as long as the service provider has met an equivalent international standard.

Another regulatory amendment established telecommunication facility technology standards and amended spectrum licensing rules for Local 5G.

Cell phone operators tend to curb their 5G capital investment, due to concerns that their telecommunication service revenues will not grow as they are required to provide high-quality services at low rates as an essential infrastructure against a backdrop of rising capital and R&D investments. In 2023, MIC established a "5G Business Design Working Group" to discuss the nationwide spread of 5G services, and is scheduled to produce a report summarising the discussions in June 2023.

Based on publicly available information, no operator that has been allocated 5G frequencies has been accused of violating its obligations. However, because of delays in the schedule for setting up 5G specified base stations. MIC has had to issue administrative guidance to KDDI (in June 2022) and SoftBank (in June 2021) to ensure that they promptly and properly implement their setting up plans.

Dynamic Spectrum Sharing System (DSSS) has been developed as a system for sharing spectrum based on flexible location and timing. In April 2020, the Radio Act was amended in order to implement DSSS.

MIC emphasises the importance of infrastructure sharing and revised the “Guidelines on the Application of the Telecommunications Business Act and the Radio Act to Infrastructure Sharing in the Mobile Telecommunications Field” in August 2022. The revised Guidelines clarify the application of regulations to the related parties.

Yes.

KDDI and SoftBank agreed on 3 July 2019 to jointly promote the early development of 5G networks in rural areas by sharing base station assets. They decided to consider a joint venture to promote the most effective base station construction design and management. They also began joint demonstrations in Asahikawa City in Hokkaido, Narita City in Chiba Prefecture, and Fukuyama City in Hiroshima Prefecture in autumn 2019.

On 1 April 2020, they set up the resulting joint venture, 5G Japan Corporation.

In December 2019, in order to ensure fair competition, MIC issued a request for mobile carriers to open their 5G networks to MVNOs. This request included the following:

1. Carriers open their own 5G networks to MVNOs when launching their own 5G services;
2. Carriers promptly provide MVNOs with information necessary for 5G services (such as network launch dates, service areas, telecommunication speed, connection fees, connection spots, technological details for connection, etc.); and
3. Carriers give MVNOs enough time for discussions, facility upgrade, network tests or other actions required for the MVNOs.

In September 2022. MIC released the “Sixth Report of Research Group on the Calculation of Interconnection Charges”. According to the Report, three MVNOs offer 5G services as of February 2022, and MIC desires the necessary information sharing from carriers to MVNOs for starting 5G services.

MIC released “5G Cybersecurity Guidelines” in April 2022. The Guidelines summarise 5G-related technologies, and threats and appropriate countermeasures. There are no official comments or regulations regarding the use of Chinese technology at the moment. However, in December 2018, the government announced that its ministries must, in principle, seek advice from the Information and Communication Technology (IT) Strategic Planning Office and the Cabinet Cyber Security Centre on measures to avoid “supply chain risks” in procurement procedures. This announcement is understood as a declaration that the government views Chinese technology as having “supply chain risks”. Since April 2019, the government has excluded Chinese technologies from its procurement process, leading 5G spectrum licensees to stop using Chinese technologies for 5G network services.