Japan fine tunes cable TV regulations to spur industry growth

CABLE television is poised for a growth spurt.

That's the unshakeable view of William Kelly, the president of Turner International Japan, a subsidiary of Ted Turners's Atlanta-based Turner Brodacasting System. Although he won't release sales figures, Mr. Kelly claims that his company is growing ``nicely.''

``Nicely'' may be an understatement. The number of cable television subscribers in Japan is growing by 51 percent annually, according to Japan's Ministry of Post and Telecommunications (MPT). About 150 or 10 percent of the all Japanese cable operators offer Turner's Cable News Network, a 24-hour news channel.

Kelly's optimism may surprise many Japanese because cable is still relatively uncommon in this country. Politics and awkward geography have stymied its growth. Now a combination of government deregulation and spending programs are likely to catapult Japan into the information age, industry analysts say.

There's certainly the potential. In Japan, cable household penetration lags years behind the United States. One-quarter of all Japanese homes have cable TV, compared to 62 percent in the US. But programming access is even more limited here. Only 4.7 percent of Japanese households receive cable-originated programs, such as CNN and MTV, the music video channel.

The problem, Kelly says, is that most of Japan's 1,532 local cable TV operators do not have the capacity or government permission to accept Turner's satellite transmissions and relay them to viewers. Only 172 operators have this ability, he says. And the MPT classifies them as the smaller, ``urban type'' operators.

Many industry observers blame the government for the slow cable growth in Japan. The MPT claims it has been promoting the nation's information infrastructure. Yet some of its regulations have stymied cable in Japan. ``We originally hoped that the cable operator and telephone companies would operate on a local level,'' an MPT official says. The MPT limited the geographical range of operators: Tokyo needed separate operators for each of its 23 wards.

Other regulations barred cooperation between cable operators and telephone companies. Foreign investment was also limited to 20 percent - all part of the MPT's plan to prevent a few big companies from dominating the market.

The MPT's small-is-beautiful policy was designed to win the support of local governments, who hoped that small operators would create jobs and reflect hometown concerns. In practice, however, it has Balkanized the cable TV industry.

The MPT does not deny its mistake, although it claims that geography and tradition are partly to blame. Unlike the US, Japan did not need cable to reach rural areas, the MPT official says. ``We believe that it was sufficient to broadcast by radio waves alone. We built 14,000 stations for this purpose, and we did not start to build a cable TV infrastructure until after the US did.''

The MPT has finally begun to revamp these regulations. The new three-pronged policy will: not restrict cable operators to a specified geographical area, allow cable operators to cooperate with large telecommunications firms, and allow cable operators to sell up to one-third of their companies to a foreign concern.

Industry has reacted enthusiastically. On May 24, telecommunications firms, cable companies, hardware manufacturers, and diversified trading companies formed a committee to promote multimedia services. The ``FULL Network Committee'' will conduct a variety of field tests, including experiments with video-on-demand and home shopping.