OKINAWA PRIVIDES LEADERSHIP ON INFORMATION AND

UNCLAS SECTION 01 OF 02 TOKYO 001302 SENSITIVE SIPDIS STATE FOR EAP/J AND EEB/CIP PLEASE PASS DOC ITA FOR DLEE, CDICKSON, AND NTIA FOR AHEINEMAN PLEASE PASS USTR FOR JMCHALE PLEASE PASS FCC FOR ADEY E.O. 12958: N/A TAGS: EINT ECON EINV TINT JA SUBJECT: OKINAWA PRIVIDES LEADERSHIP ON INFORMATION AND COMMUNICATIONS TECHNOLOGY TOKYO 00001302 001.2 OF 002 ¶1. (U) Sensitive But Unclassified. Contains Proprietary Information. ¶2. (U) Summary: Okinawa's information technology (IT) sector is breaking some new ground and represents a key sector in the Prefecture's economy, as shown in emboff's recent visit. Prefectural officials reported on successes attracting IT investment, making it the second largest sector of Okinawa's economy after tourism. A newly-opened education center demonstrated some innovative programs to train local teachers and students to incorporate IT and digital content better into their educational programs. American firm Qualcomm briefed on a test project that it and Japanese partner KDDI are conducting to prepare a 2010 bid for a radio spectrum license from the Ministry of Internal Affairs and Communications to offer mobile digital broadcasting. End Summary. -------------- Okinawa Promotion of the IT Industry -------------- ¶3. (U) Okinawa prefecture has been promoting IT investment for over ten years and officials we spoke with reported positive results. Using both national and local funding, Okinawa has aimed to attract investment, promote growth, and create jobs in the IT sector. It has also recognized its strengths, e.g., low costs, and sought to minimize its geographic and infrastructure disadvantages. Measures have included promoting training and R&D to improve local human resources, improving local IT infrastructure, providing incentives and support for larger firms to invest, as well as nurturing local new ventures and targeting a range of related industries to encourage a clustering of IT-related businesses. One example of its infrastructure incentives, the Okinawa government maintains a free trunk line to both the Tokyo and Osaka metropolitan areas, thereby making calls from users in Okinawa essentially local calls within both of Japan's largest urban centers. ¶4. (U) Okinawa's reputation as a host to call centers may be deserved -- the prefecture-provided list of recent IT investments shows 45 new call centers established between 1996 and 2005 -- with other listed ventures including software development, information services, data centers, and content creation. The training and experience they bring, along with the concentration of firms in the sector, have also reportedly led to a sharp increase in local IT firms. The prefecture estimates there will be 24,500 local IT jobs in 2010, a more than 300 percent increase over the 6,000 jobs in 1997. Further, the promotion of IT has also helped diversify Okinawa's local economy. According to local officials, tourism remains Okinawa's largest sector contributing an estimated 10.3 percent to the gross regional product. The IT sector, which contributes roughly 5.7 percent, is now the second largest sector ahead of prefectural figures for the U.S. military contribution, which they list at 5.4 percent. Finally, these successes create the real possibility Okinawa could provide leadership for other parts of Japan seeking to develop or better integrate their own IT industries. -------------- Applying IT in Education -------------- ¶5. (U) The American Chamber of Commerce in Japan (ACCJ) recently cited poor IT utilization as a challenge for Japan. The ACCJ singled out healthcare, government, and education as ripe to achieve both economic and social benefits with improved use of IT. ¶6. (U) Emboff and ConGen staff were given a tour of a new prefectural education center established to support better use of information and communications technologies in education. The facility includes classrooms and equipment both to train educators to use IT better in teaching and to schools' online activities and programs. The facility's director reported on efforts to make more online educational TOKYO 00001302 002.2 OF 002 content and better integrate such materials into school curricula. They also demonstrated connecting local schools to distant counterparts, such as in the case of a local student who met her host family and school online before going on her exchange program and then kept in touch with her home school while she was away. -------------- -------------- Competing to Offer a New Mobile Broadcasting Standard -------------- -------------- ¶7. (U) The telecommunications companies KDDI and Qualcomm are conducting tests in Okinawa in preparation for a launch of Qualcomm's MediaFLO, a digital content standard already in use in the U.S. They are using the test to gather data to support a future application for a nationwide license to deliver interactive digital content to remote devices. ¶8. (U) While the tests are local, and as a result the service will be available commercially first to Okinawans, the more important implications are for consumers throughout Japan. Japanese consumers already rely heavily on remote devices and ubiquitous Internet access, in some cases bypassing computers entirely and relying only on cell phones or other small devices to access digital content. For telecommunications services providers such use by customers, especially viewing video content, puts a heavy load on existing wireless networks. Service providers, therefore, want to shift some of the most popular content to another format and offload it from their primary networks. MediaFLO will also support a range of models or uses including content subscriptions, data services, interactive advertising, and value-added content such as sportscasts with accompanying sports or event information. ¶9. (SBU) The Ministry of Internal Affairs and Communications in 2010 will select licensees for a block of radio spectrum for multicasting (interactive broadcasting) to remote devices. The Ministry awards such licenses based on a detailed review of factors, including technical performance, business plan, and financial backing; the documentation required to support the application for a license is extensive. Qualcomm advised only NTT DoCoMo and KDDI/Qualcomm are currently conducting tests. Qualcomm therefore does not anticipate that other competitors could pull together a competitive bid. ¶10. (SBU) NTT DoCoMo is expected to apply to offer services using a Japanese-origin standard ISDB-T (Integrated Services Digital Broadcasting-Terrestrial),which Japan has promoted abroad, in places such as South America. There had been concern MIC might favor a domestic standard, but an MIC advisory group reported May 25 its recommendation that the Ministry adopt a pro-competitive and technology-neutral position and allow two competitors and standards to offer competing services. ¶11. (SBU) The Qualcomm and KDDI plan to continue testing through the end of 2009. In 2010, MIC will award spectrum licenses and providers will start network build-out and commercial trials. The companies hope then to launch commercial service around late summer of 2011, after Japan completes its transition from analog to digital broadcasting. KDDI is budgeting approximately $4 billion to invest for the network deployment, which it expects to recoup quickly with savings resulting from the reduced load of data traffic currently competing for bandwidth with voice traffic over its network. ¶12. (U) ConGen Naha has cleared this message. ZUMWALT