Japan, U.S. Telecom-Rate Dispute Nears End

Japan and the U.S. say their long-running spat about telecom rates should be settled today, and that could lead to opening Japan’s market and paving the way for a smooth meeting between their leaders before this week’s Group of Eight summit. Apart from agreeing on the deadline, senior officials have given little clues on how “last-mile” interconnection rates charged by Nippon Telegraph & Telephone Corp. will be cut, a step Washington says will open up the world’s second-biggest telecom market to greater competition. The U.S. says the rates charged by the former Japanese state monopoly are too high, making it hard for U.S. and domestic firms to compete. NTT has an iron grip on 90% of the local lines connecting Japanese homes and businesses. Japan argues that slashing the rates would jeopardize profit and jobs at NTT, and has resisted U.S. pressure for a 22.5% cut over two years, offering a three-year time frame instead. An impasse about the rates had threatened to cloud President Clinton’s talks with Prime Minister Yoshiro Mori on Thursday, before they head off to the southern island of Okinawa for the July 21-23 G-8 summit.