Introduction

　The six months of the first half of 2018 saw issues raised in various quarters regarding the future shape of broadcasting. These were, namely, the Ministry of Internal Affairs and Communications’ Commission on Questions Related to Broadcasting (hereafter, Commission on Questions), the Cabinet Office’s Regulatory Reform Promotion Council, which advises the government (hereafter, Promotion Council), and the Abe administration’s Policy Proposals for Broadcasting System Reform reported in the midst of these discussions (hereafter, Government’s Reform Proposals).
　Probably the greatest consequence of the discussions on the future shape of broadcasting taking place away from the Ministry of Internal Affairs and Communications, the organ responsible for broadcasting administration, has been to highlight, in an almost all-encompassing manner, fundamental issues which tend to be avoided the closer one approaches the organizations concerned due to the difficulties of balancing interests within the industry and revising existing business models. Most of the issues raised, however, are of such complexity that even the organizations concerned find them hard to resolve and it cannot readily be asserted that they have been properly understand by either insiders or outsiders, or that the relationships between the various points at issue have been disentangled and discussed according to a common timeline.
　In the latter half of 2018, the Ministry of Internal Affairs and Communications again became the main place for the discussions with their full-scale resumption scheduled for late November. The issues to be considered will include how and whether to make the best use of the questions raised during the first half of 2018.
　This paper first looks back chronologically at how the discussions developed during the first half of 2018. Six core issues raised which the author considers to be of special significance are then selected and discussed, including in terms of their relationships with each other. The discussions taking place at the Ministry of Internal Affairs and Communications from this autumn will be dealt with in a follow-up paper.

1. Review of Half a Year of Discussions Concerning the Future Shape of Broadcasting

Diagram 1



　Diagram 1 shows the various governmental discussions relating to the future shape of broadcasting at a glance. A striking number of reports was published around the summer of 2018. This paper considers three of them, namely those of the Promotion Council’s Working Group (hereafter, WG) on Investment etc., which deliberated the reform of broadcasting systems from October, 2017 to June, 2018, the Commission on Questions’ Sub-committee on the Effective Use of Broadcasting Frequencies in Relation to the Future Shape of Broadcasting, which commenced in late January, 2018, and published its second compilation of its findings in September (hereafter, Future Shape Sub-committee), and the three policies propounded in the Government’s Reform Proposals in March. These are described chronologically, as follows:

The Situation Prior to January, 2018

　First of all, it needs to be explained why the Promotion Council is discussing reform of the broadcasting system. This is closely connected to an important part of the current government’s policy labeled Society5.0. This policy consists of utilizing IoT and AI Internet technologies to tackle the solution of Japan’s mounting social problems and economic growth in tandem, and its realization will depend on having access to wider frequency bandwidths. Accordingly, the bandwidths allocated for use by terrestrial broadcasters have become a major target.
　From the very start of its deliberations, the Promotion Council addressed the question of how to enable other operators to use the bands now used by terrestrial broadcasters or, in other words, how far such terrestrial broadcasting bands could be reduced, as one of its major questions. In opposition to that, the operators termed terrestrial broadcasters in the Promotion Council’s discussions and by the Ministry of Internal Affairs and Communications have insisted that the broadcasting operators do still make sufficiently good use of their band allocations, the operators serve a public role through their use of dedicated bandwidths, and the operators will continue to endeavor to fulfil that role.

February 2018

　With the start of the year, Prime Minister Abe started making increasingly frequent mention of broadcasting system reform. On February 1st, the prime minister spoke at the government’s Future Investment Council of “technological innovation removing the fences between telecommunications and broadcasting” and said “a bold rethinking of how frequencies are allocated and the shape of broadcasting operations is required.” Besides, on February 6th in parliament, and at the New Year gathering of the Japan Association of New Economy, the business organization for IT-related companies such as Rakuten and CyberAgent, which manages AbemaTV, the prime minister spoke enthusiastically in favor of reform.
　The prime minister’s frequent references to this matter at this time may be interpreted in terms of his frustration with the slow progress of the Promotion Council’s deliberations mentioned above on the effective utilization of bandwidth currently allocated to terrestrial broadcasters by non-broadcasting organizations. As this was going on, the Ministry of Internal Affairs and Communications’ Commission on Questions established its new Future Shape Sub-committee on January 30th, and the Promotion Council resumed its discussions on February 7th. In effect, an unusual situation had emerged in which ministry responsible for supervising broadcasting frequencies was working to defend the status quo while the prime minister’s advisory council was seeking to take bandwidth away, each with sharply contrasting visions for the future shape of broadcasting.

March 2018

　The two discussion groups did discuss similar issues from time to time but their different stances also emerged vividly here and there and the relationship between the two forums continued to be strained. On March 15th, Kyodo News reported that a policy proposal for broadcasting system reform was being prepared inside the government. That was followed by the concrete headline on March 22nd, “The Abe administration wants to abolish broadcasting regulations for unification with network telecommunications.”
　Diagram 2 shows the “Road Map for Telecommunications & Broadcasting Reform” reported to have been produced within the Abe administration. This includes abolition of all broadcasting-specific regulations, including Article 4, which contains the political fairness clause. It also draws a sharp line between the “hardware” and “software” aspects of terrestrial broadcasting operations and observes that abolition of the commercial broadcasters’ obligation to endeavor to provide for universal reception would render broadcasting (excluding NHK) unnecessary, concluding in this manner that the resulting transfer of operations from radio waves to the Internet would free up surplus bandwidth. This would indeed constitute a thoroughgoing reduction of broadcasting bandwidth.

Diagram 2 Road Map for Telecommunications & Broadcasting Reform


April 2018

　A massive opposition campaign critical of the Government’s Reform Proposals arose not only from broadcasters but also in the newspapers directly after this first report. On April 16th, the Promotion Council convened a parent-body meeting in the presence of the prime minister, who spoke of emphasizing policy for the broadcasting content industry but said nothing about the system reforms described in news reports concerning the Government’s Reform Proposals. The WG on Investment etc. meanwhile slated three issues for deliberation, namely (1) The shape of business models during the fusion of telecommunications and broadcasting, (2) The provision of more diverse and high-quality content and extension of global reach, and, on the basis of the foregoing reforms, (3) the shape of the system that would make the most effective use of radio waves. In the press conference which followed the meeting, many questions were asked concerning relations between the Promotion Council, as the prime minister’s advisory organ, and the Government’s Reform Proposals, but the chairs of the Promotion Council and WG on Investment etc. only replied repeatedly that although they knew of the news reports, the items contained in the Government’s Reform Proposals were not being discussed in the Promotion Council.

May – June 2018

　After this, the Promotion Council and Future Shape Sub-committee did now endeavor to align their discussions. The Promotion Council conducted hearings with a wide range of people engaged in broadcasting, including producers, rights holders’ organizations and local commercial stations, and published its third report on this basis on June 4th. The newspapers highlighted the point that this report did not include abolition of Article 4 of the Broadcast Law advocated in the Government’s Reform Proposals. The Promotion Council further announced that it had no plan to continue discussions on the future shape of broadcasting beyond this report.
　The following Day, June 5th, the Future Shape Sub-committee, where the discussions had continued in parallel, published its findings. (This report was later collated with additional content in the second set of findings published at the end of September.) In addition to broadcast policy issues discussed by the Ministry of Internal Affairs and Communications until 2018, including the promotion of simultaneous distribution and stronger business foundations for local stations, it also included issues raised in the Promotion Council’s recommendations, such as the effective use of frequencies and future shape of transmission networks with the focus on changes in the telecommunications environment. This brought an extraordinary half year of concurrent discussions to a close. The Ministry of Internal Affairs and Communications’ Commission on Questions resumed discussions in November on the basis of these reports and recommendations.

2. Six Issues Relating to the Future Shape of Broadcasting

　Next, we will consider as best we can the issues indicated by the discussions which took place during the first half of 2018, including their relationships with each other. Essentially, this review concerns the Promotion Council’s third report (hereafter, Report) and the Commission on Questions’ second set of findings (hereafter, Findings), but we also wish to touch on the Government’s Reform Proposals that were not included in these and disappeared from view during this half year of discussions. The reason for this is that many of the issues on which the organs concerned could not agree must nonetheless be addressed at some time in the future.
　Diagram 3 shows how the six key themes are related to each other. We will discuss each in turn according to this diagram.

Diagram 3



Effective Frequency Use

　As noted already, effective frequency use was the foremost goal of the Promotion Council’s discussions. This goal can be divided into two main targets. One is the participation of new operators in existing services. The other is to open up broadcasting bandwidth to non-broadcasting services.
　Regarding the first, tangible indicators are being produced in the case of satellite broadcasting. For present right-handed polarization bandwidths very fully occupied by the BS and 110 degree East CS services, the Council seeks to examine new applications and review each five-yearly renewal with respect to effective use of bandwidth. To deal with cases where the effective use of bandwidth is not anticipated, it proposes that systems for securing the effective use of bandwidths allocated by the Minister of Internal Affairs and Communications should be laid down clearly in law, and intends to commence the examination of what it calls objective, quantitative standards.
　Regarding bandwidths presently used for terrestrial broadcasts, the Promotion Council is still looking for solutions. The Report and Findings refer concretely only to the bandwidth formerly used by the Open University of Japan, which halted broadcasts at the end of September, 2018, and the V-High band, which is not currently in use, and state only that technical surveys will be performed regarding the more efficient use of bandwidth in the case of frequencies currently used by terrestrial broadcasters.
　A massive reduction of the bandwidth used for terrestrial broadcasts came in range of the discussions which took place in the first half of 2018 and there were also various statements that could easily be taken to imply that the taking of bandwidth. In consideration of these developments, the present lull may be regarded as a major victory for the broadcast operators. The important question of how terrestrial 4K broadcasts will be conducted has, however, only been postponed. Should they be broadcast, or distributed via telecommunications networks, or should there be a combination of both? Also, what should happen to the 2K broadcasts provided at present? Without decisions on these matters, the policy foundations for the effective use of the broadcast bandwidths will still be unclear.
　With 5G due to start in 2020 and the further progress of IoT services, it is easy to imagine that the tight crowding of frequencies will only grow more severe. In these circumstances, it is undeniable that the pressure on broadcast operators is likely to increase.

The National Minimum

　The Promotion Council focused attention on the effective use of terrestrial broadcasting bandwidths because these frequencies are also easy to use for telecommunications and other services for which there is high demand. In contrast to this prioritization of economic efficiency, the author’s understanding is that the discussions taking place at the Minister of Internal Affairs and Communications prioritized the services’ importance to society, recognizing the necessity of distributing bandwidth to terrestrial broadcasting operators in view of their social role and basing their deliberations on the future shape of broadcasting on that premise. The representative phrase used in the ministry’s Findings is the National Minimum. This is the same phrase as used in Article 25 of the Constitution of Japan in guaranteeing all citizens a lifestyle which satisfies minimum standards with regard to health and cultural opportunities. In the Findings, it is stated that terrestrial broadcasting is a dependable core medium under the present legal system that serves the function of satisfying the national minimum in regard to providing citizens with information and that it will continue to be needed for the dependable fulfillment of this role in the future.
　Special emphasis is placed within this on the dependability of information and propagation of information from each region. Regarding the first, these services are expected to counter the spread of fake news, respond to expanding disaster and, as media organizations, perform important roles in raising issues and expanding public awareness. How, then, will broadcast operators fulfill these expectations in the future?
　Article 4 of the Broadcast Law, especially the principle of fairness, is particularly important to their role as media organizations, and we may suppose that the question of how the operators themselves interpret this is going to be a major point for debate. The operators united in their opposition to the Government’s Reform Proposals announced in March, which included the abolition of all regulations particular to broadcasting, including Article 4. The events of two years ago in 2016, when the regulations became a major issue on an entirely different vector, are still fresh in the memory. This was when a statement by the then Minister of Internal Affairs and Communications, Sanae Takaichi, to the effect that broadcast operators that repeatedly transmitted broadcasts which lacked impartiality could be stripped of their frequency allocation under the Radio Law, precipitated a debate on the operators’ freedom of expression. Is Article 4 a practical requirement which entails sanctions, or should it be understood merely as a moral obligation for broadcast operators? The views of the Ministry of Internal Affairs and Communications and broadcast operators remain divided on this issue.
　In the midst of the furore launched by the Government’s Reform Proposal, the broadcasters themselves possibly preferred to let sleeping dogs lie rather than reigniting this debate. In order, however, to retain the people’s trust it may essential for broadcast operators, as media organizations responsible for providing a national minimum, to face these issues fearlessly, head on, and engage in serious public debate.

Strengthening the Business Foundations

　Another element of the national minimum is the local commercial stations which engage in the transmission of local information. The Findings talk of a need to furnish an environment in which local stations can supply as many programs rooted in their locality as is possible.
　Although this statement bundles all local stations together, there are in fact 122 such stations nationwide (out of 127 commercial stations altogether, adding the 5 key stations) serving regions with widely different economic circumstances and under diverse conditions regarding their own operations as well. These differences of operating environment are necessarily also reflected in their program production activities. Looking at the proportion of in-house productions at each operator, the present figures are over 30% for stations serving large areas in the Osaka region, around 20% for stations serving large areas in the Nagoya region and Hokkaido, and, conversely, less than 10% for half of all stations, falling to about 5% in several cases.
　Needless to say, it is not necessarily the case that these ratios are so low because all of the stations concerned are struggling financially. Many stations are producing costly in-house productions while also securing non-broadcasting revenues from such sources as content sales and other business activities. Even so, it is quite meaningless for discussion purposes to lump so many different local stations operating under such a wide range of circumstances together in one breath.
　The Promotion Council’s Report states that in order for local stations to carry on their function of propagating local information, they will need horizontal relationships with each other, both within and beyond their localities, as well as vertical relationships with the key stations. The Ministry of Internal Affairs and Communications has been seeking, on this basis, to study regulations concerning and ways to strength the stations’ business foundations and also the licensing system. The ministry’s Commission on Questions is setting up a sub-committee to discuss these matters from November.
　The Ministry of Internal Affairs and Communications has already produced various policies for strengthening the business foundations of local stations. The divesting of “hardware” and “software” can be pooled by up to seven stations serving neighboring broadcasting areas, though this option has not in fact been used. Amidst all of this, what new ways of doing business might be demanded by the local stations, and what systems might the Ministry of Internal Affairs and Communications prepare? Will the deliberations extend to questions of changing the premises of diversity, pluralism and local character which have underpinned policy so far? The coming discussions must be watched carefully.

The Reform of NHK

　NHK has frequently reiterated its goal to serve a pivotal role in the social foundations in regard to the exchange and distribution of information ever since the publication in 2015 of NHK Vision 2015-2020. Constant, simultaneous distribution on multiple media is an important element of this. The discussions on this core theme of being part of the social infrastructure overlaps with the debates on the national minimum.
　When, on July 13th, the parent Commission on Questions met for the first time in half a year, it expressed partial recognition of the rationale and validity of NHK’s longstanding demand to be allowed to distribute information constantly and simultaneously on multiple media while also stating that this had to be premised on the understand of viewers and the general public. The Ministry of Internal Affairs and Communications announced that concrete deliberations should begin on changes to present systems etc. We may say that the constant, simultaneous distribution discussed by the Commission on Questions since November, 2015, may finally be moving towards implementation.
　That said, the ministry’s position is that this implementation should be considered as a part of the tripartite reform of operations, receiving fees and management and, in its summing up, it talks of pressing forward with the review of the receiving fee system and level of the fees. In effect, tangible conditions, including consideration of lowering the receiving fees, are attached.
　In response to these conditions, NHK reported to the parent Commission on Questions on September 29th that it would give tangible consideration to the level of its receiving fees during the next two years until the next economic plan is settled. The Japan Commercial Broadcasters Association responded, however, that it wanted more concrete details. The ten Vice-minister Fumiaki Kobayashi asked for policies and decisions with a clearly stated timeline, saying that the receiving fee cuts and constant, simultaneous distribution must be implemented together with no time lag. Then, on October 9th, Susumu Ishihara, Chairman of the NHK Board of Governors, spoke of the possibility of reducing receiving fees within the current business plan. In a press conference on October 12th, Ryoichi Ueda, President of NHK, speaking about the receiving fee system and level of the fees, said that he would conduct a careful examination of medium-term revenues and expenditures and wished, on that basis, to add receiving fee reductions to the policies for returning value to viewers and listeners contained in the current business plan. He said that the Board of Governors and executives would press forward with discussions so that the method, scale and timing of the reductions could be considered and announced by the end of the year. In the end, this was a substantial revision and bringing forward of the content of the report made to the Commission on Questions.
　NHK’s receiving fee revenues have been growing ever since the Supreme Court ruled in NHK’s favor on the receiving fee system in 2017, but this revenue growth has also served to place the corporation under increasingly severe scrutiny. What sort of decision will NHK make before the end of this year? The corporation now faces a major moment of truth.
　A second heavy condition placed on NHK is the requirement to coordinate and cooperate as much as possible with other operators in such areas as the services and infrastructure for the distribution etc. of programs made for broadcast. This will be considered in the following sections.

Shared Platforms

　The commercial broadcasting operators, while all competing with each other with the services they distribute, are also advancing towards the creation of common platforms. The simultaneous distribution service for radio is called radiko, and the free on-demand catch-up portal for TV, inclusive of TV commercials, TVer.
　NHK has been participating in radiko on an experimental basis since October, 2017 and intends to continue to do so. The presidents of the commercial stations have repeatedly called on NHK to participate in TVer as well. NHK currently operates the pay NHK On-Demand (hereafter, NOD) catch-up service but the Ministry of Internal Affairs and Communications’ Findings propose that it would be rational in the case of constant and simultaneous distribution to provide a standardized catch-up for a given period of time. This suggests that the methods used by NOD and participation in TVer will be tabled as subjects for deliberation in the future.
　NHK’s big concern in this matter is how the TVer platform will be developed in the future. The questions include whether it will provide simultaneous distribution as well as on-demand services, how it will serve local stations, and whether customers will be introduced to the pay distribution services. It goes without saying that TVer also needs to know NHK’s intentions regarding future distribution policy and, without that knowledge, the overall shape of the joint platform can only remain unclear. Aside from the platform, the same sorts of issue apply to the distributions servers, and the CDN content delivery networks which deliver content to users efficiently from the server nearest to them. Much is expected of NHK in these respects, too, but NHK will, of course, need to give the Japanese people a satisfactory explanation of why the receiving fee should be used for such purposes.
　Responding to the debates of the first half of 2018, the operators have started to discuss among themselves about what sort of connectivity should be realized between NHK and the key commercial stations. The question is how far both sides can overcome their conflicts of interest and establish a common vision.

Future Transmission Networks

　Distribution is not the only field in which the relationship between NHK and the commercial broadcasters has to be addressed. Quality improvements and the issue of how to proceed with the introduction of terrestrial 4K broadcasting are just as important as the distribution questions and possibly more so. In the Findings of the Ministry of Internal Affairs and Communications, we find reference to consideration of whether to approve terrestrial 4K, issues to be tackled in the case of its implementation, and the need for a clear schedule which takes account of how the frequency resources are to be secured. The ministry’s reference to approval was particularly significant because the ministry had hardly ever referred tangibly to terrestrial 4K at all in the past. The debate on approval will, however, be extremely complex. Implementation will necessitate high investment costs for new facilities. Not implementing the service will mean the use of telecommunications circuits and extreme separation of the “hardware” and “software” elements. In fact, it will also be necessary to provide a definition of “broadcasting” itself. The ministry’s Findings state that whereas broadcasting shall for the time being be based on transmission on broadcasting frequencies, in future, responding to the diversification of broadcasting service needs, flexible and resilient broadcasting networks that make use of FTTH, 5G, clouds and other variegated infrastructure will have to be built and operated.
　The Ministry of Internal Affairs and Communications is convening a liaison council involving representatives of broadcasting, telecommunications infrastructure, cloud and other fields from October. The discussions are intended to address solutions for the technological issues which span the fields of telecommunications and broadcasting but these are issues which reach beyond the technical fields to connect with fundamental questions of how broadcasting should be performed. Where will these discussions lead?

In Closing

　This paper has described the discussions which took place in the first half of 2018 and presented a summary of the main issues addressed. The discussions on the future shape of broadcasting are extremely wide ranging and intertwined in complex ways and it is noteworthy that new forums for considering these issues directly were established in the latter half of 2018. How, as these questions are combined and resolved, including with regard to those entangled relationships, will the Ministry of Internal Affairs and Communications’ Commission on Questions perform as a forum for debating the future shape of broadcasting? And how far will the various broadcasting operators engage in the debate with full awareness of their own position within it? The developments will have to be watched very closely.