JPRS ID: 10515 JAPAN REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000500060028-0
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 56
• Document Creation Date: November 1, 2016
• Sequence Number: 28
• Content Type: REPORTS

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFF~CIAL USE ONLY
- JPR ~ L/ 10515
13. May 1982 . ~
Ja an Re ort
p p
= '(FOUO 30/82 ~
FSIS FOREIGN BROADCAST INFOaMATION SERVICE
FOR OFFICFAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500064428-0
NOTE
JPRS publication;t contain information primarily from foreign
newspapers, peri~dicals and books, but also from news agency
transmissioiis and broadcasts. Materials from foreign-language
~ sources are translated; t~iose from English-language sources
are transcribed or reprinted, with the or~ginal phrasing and
other characteristics retained.
Headlines, editorial reports, and material enclosed in brackets
[J are supplied by JPRS. Processing indicators such as [Text]
or [Excerpt] in the first line of each item, or following the
last line of a brief, indicate how the original information was
proc:essed. 'W'here no processir~g indicator is given, the infor-
mation was summarized or extracted.
~ Unfamiliar names rendered phonetical.ly or transliterated are
enclosed in parentheses. Words or names preceded by a ques-
tion mark and enclosed in parentheses were not clear in the
original but have been supplied as appropriate in context.
Other unattributed parenthetical notes within the body of an
item originate with the source. Ti.mes within ~tems are as
given by source.
The contents of this publication in no way represen..t the ~poli-
c ies, views or at.titudes of the U. S. Government
COPYRIGHT LAWS AND REGULATIONS GOVERNING OWNERSHIP OF
~ MATERIALS REPRODUCED HEREIN REQUIRE THAT DISSEMINATION
OF THIS PUBLICATION BE RESTRICTED FOR OFFICIAL USE ONLY.
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500060028-0
FOR OFF[CIAL USE ONLY
JPRS Z/1051b
13 May 1982
JAPAN REPORT
(FOUO 30/82~
_ CONTENTS
MILITARY
Changes in Defense Bureaucracy Analyzed
{Hajime Kawaji; SEKAI, May 82) l
ECONOr:`IC
Structure of Nippon Telegraph, Telephone Analyzed
(CHUO KORON, Autt~:mn 81) 8
Business Structure, by Hitoshi Hiramatsu
Closely Related Private Companies, by Keni.chiro Hirota
Interview With NTT President Shinto -
Interview With Vice.President Kitahaxa ~
SCIENCE AND TECHNOLOGY ~
FMS Using Super High Performance Laser Project I?iscussed
(NIKI~AN KOGYO SHIlKBUN, 24 Feb 82) 48
- a - [III - ASIA - 111 FOUO]
. ~ ,
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
~ FOR OFFICIAL USE ONLY
i
i
~
I r~.zTaRY .
j
, ~
i ~
I
I
i
i
-i CHANGES IN DEFENSE BUREAUCRACY ANALYZED
i
Tokyo SEKAI in Japanese May 82 pp 193-196
jArticle by Ha3ime Kawa~i: ~''`Turbulence in the Defense Agency."~
~TextJ Mcdification of Secret Plans
When the new director-general of the Defense Agency assumed his post, the
chairman of the Joint Staff Council, who stands at the head of uniformed self-
defense officials, sfiowed tfie new direct~r~general into the war council room
; and showed him two-part top secret docu~ents. It is said that the documents
! respectfully sfiown to the director-general, after it was confirmed that every- ,
one had lefr the room and the door was tightly closed,~looked old and the
, ~ edges of the pages were worn and tumed up.
These secret documents are an analysis of fhe military situation completed
; by the Joint Staff Council, that is, the "~oint long range defense assessment"
and the "~oint medium range defense assessment." The long range defens.e as-
sessment analyzes the military situation over a period of up to 8 to 10 years;
~ the medium range assessment, for a period up to 2 to 5 years. Bssed on this,
~ they are the basic documents describing what condition and scale of aggres-
sion is possible and in such a case to what degree would the defense forces
have the ability to meet the aggression.
~ In particular, the ~oint medium range defense assessment is closely involved
; with the defense plan, in the sense that the chiefs o� the Ground, Maritime
and Air Self-Defe~:se Forces drew up the "mediuffi range operations asse~sment"
based on this. The "medium range operations assessment" is a five year plan
for improving the defense capability. Furthermore, the mechanism is that if
the ~oint medium range defense assesament is substantially modified, the di-
rector-general of the Defense Agency is suppoeed to propose to the National
Defense Council modification of the "fundamental principles of the defense
plan," and in the ~vent the fundamental principles of defense are re-examined,
revision of the ~oint medium range defense assessment will be the trigger for
~ ~ it.
Both *he long range and medium range defense ~ssessments were drawn up in
1978 b~at both were partially revised at the end of last year. The reason
~ 1
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAI, US~; ONI,Y
the De#ense ~geacy ~o~ually xecogn~ed t1~es~e..xe~r~~,o~s. ~zas hecau~e they wexe
hQUnded to do so hy the D~,et, .'Tf~~ coat~nt o~ the. xey~,s~oas ~s secxet, a~
course, and tfie on1y~ comrae.nt ~1de ~ta�, t~~t ~s~ notbi.ng .Tiut a xoutiae xe--e$am-
ination undextaken eve~cy three y~eairs,tr ~
However, renision~of the ~oint long range and~med~um rEnge defense assessments
deserves attention inasmuch as tFis opinion, ~~we should take a second look at
the fundamentai principles of~defense in response to tb~ buildup of the Soviet
threat," has become prominent withiag:tI~ Libe"ral Democrattc Party (LDP) and
the Democratic Socialist Party (bSP}. Tfiis will at least probably fiave some
kind of effe~t on~the "FY1981 medium range operations assessment" presently
being drawn up (the period covered by tfie ?981 medium range operations assess-
- ment is from 1982 to 1986).
~
1981 Medium Range Operations Assessment Faces Rough Going
Prime Minister Suzuki has repeatedly asserted in the Diet that he directed �
the Defense Agency to include the concept of Japan's own defense in the 1981
medium range operdtions assessment. However; things have not progress~d that
simply. The Defensc Agen.^.y's work on setting it up has reached a deadlock
at the stage of what will be tfie philosophy permeating the 7.981 medium range
~ operations assessment.
One confrontation is between the Maritime and Air Se1f-Defense Forces, which
aim at.the capabilfty to taking over in part the U.S. military's strategy
toward the Soviet Union in tfie western Pacific Ocean, planning tfie strengthen-
ing of the sealanes and air defesne set-up, by higfilight3.ng the "importance
of maritime and air defense in the prime minister's directives," and the
l Ground Self-Defense Force, which bases the nation's defense on preparing for
decisive action within the country itself, planning the development of self-
propelled artillery and anaor~d divisions, citing the prime minister's stra-
tegic concept of "defense of the beaches; hedgehog defense."
There is another confrontation between the prime minister's residence, which
will not allow any major changes in the ~ramework of "the standard of the
defense plan's fundamental principles" nor "defense expenditures of less than
one percent of GNP," and the Seif-Defense Forces and Defense Agency, for
which maintaining a dQfense capability in response to U.S. expectat:ions is
very difficult in this framework.
Because the 1981 medium range operations assessment is a five year plan with
FY1983 as its initial year~ its character is such that it must be concluded
and presented to the Diet by this summer when tbe FY1983 budget ceiiing will
be decided and reugh estimate requesLS, will be completed. But within the
Defense Agency, the situatio~ is such that it urill not be ready on time.
But it is possible it will have taken shape since it can be decided at the
same time as the FY1983 draft bud~et if it is ready by the end of this year
whe:~ the FY1983 draft budget will be decided in its final form.
- 2 .
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500060028-4
FOR OFFICIAL USE ONLY ~
On the othex hand ~ the .~ollo~;n~ ~eg,~~q~S,ti,c. y~e~L has hegun to a~peax', ~`~.t
seen~ a deci.s~i,on on .the 1Q81 .~ed~t xat~e o~e.x~t~,qns, assessw~nt wl,11 take un-
til neat yea~, sQ, ~,t ~ti:~.l.,mi:ss tfie:~X1~3 fiudge.t; but since tfis .I981
medium range opexat~ons� assesswent ~s.an eztens~.on o~~tfie 1478~medium range
opexat~on~ assessmen~, ~t ~11 not~be a contradiction if, for the time being,
FY1983 goes GrTth tfie 1g78~medium range operations assessment and the start df
the plan is formally postponed unt~l FY1Q83 after the 198I medium range opera-
tions assessment ilas been decided~.
The fact that *_he tormation of tfie 1981 medivm range operations assessment
has been hav~ng rougfi going evan tho~xgh tfie pri~ms minister personally issued
directions to the Defense Agency is ~vidence tfiat ti~ere is very strong prer~-
sure and resistance on tfie part of the faction~wfiicfi wants to build up the
defense capability and take a second look at tfie fundamental principles of de-
� fense.
Significance of Intra-agency Personnel Cbanges
Defense Agency related personnel changes whicl~ will be the key to divining
the direction of the 1981 medium range operations assessment will begin at the
end of the Diet session from May through July. Dependino on the results, it
is possible for formation work on the 1981 medfum range operations assessment
to advance. ,
~
The voluntary resignation of Toru Hara, permanent deputy director, and accom-
panying changes at the director level, such as the succeed3.ng permanent depu-
ty director and Defense Bureau director, are ezpected in May. The view is
strongly held that Defense Bureau Director Shioda, who is the person respons-
ible for tfie 1981 medium range operations assessment, will move to the direc-
torship of the Defense Facilities Administration Agency.
As for Defense Agency bureau directors level personnel, since no Defense Agen-
cy bureaucrats employed in the Defense Agency have.been trained, the reserved
positions are as follows: director of the Equipment Bureau, someone from the
Ministry of International Trade and Industry; the director of the Health and
Medical Bureau, from the Ministry of Health and Welfare; and the director of
the Finance Bureau, soemone from the Ministry of Finance. And those who have
come from the police forces are the councilors. ~'he deputy director-gener3l
post, in particular, has been a post monopolized by those connected with the
former Ministry of Home Affairs (Naimusho) and the police force since the
Self-Defense Forces s~arted in the past as a police�f~rce. However, with
Deputy Director-general Hara, who was assistant director of the Financial
i3ureau o� the Ministry of iinance, a Mintstry of Finance bureaucrat has held
the post of Defense Agency deputy director-general for two consecutive terms.
It is said that the re~son wYiy tfie deputy director-general post raas consecu-
tively held by someone from ttie Min~stry of Finance is liecause there was a
change from an era wfien the focus was on~apolo~iz~ng in the Diet tfiat the
defense administration ~s "not unconstitutionai" to an era when it is on how
much defense expenditures can fie grabfi.ed; and so naturally there is a roll-
back of tfie former Ministry of Hame Affairs and tfiose coming from tfie police.
3
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAI~ USE ONLY
, Fundamental ~ri~ci.ples k'act~,oa~'vex~ua ~und~ppntal Rxi:x~c~les Re--exa~~nation
Fact~on.
TEie first on the. list is Akira Sb.~oda~ dixector~ of the Defense Hureau, �aho
is from tfie M~nistry of Hnme Affa~xs G7'icfiisFiD) and who is connected with
the former Ministry of Home Affairs (Nai~musho), and it was reported that at
tfie time ~fiioda moved to tfie Defense Agency he was promtsed he could follow
Deputy Director-general Hara. However, witb fiis management of the F4 Phantom
improvement problem, his "lost points" are conspicuous. So, Minoru Yoshino,
director of the Defense Factlities Adminstration Agency, who was director of
. the Mint Bureau of the Ministry of Finance, suddenly surfaced as the next
deputy director-general, and it is highly probable tfiat Iiaruc Natsume, chief
secretary, will assume tfie office of Defsnse Bureau director af ter Shioda
moves up to director of the Defense Facilities Administration Agency. On the
other, hand, in order for those from tfie police to recapture the post of de-
puty director-general after Yoshino, it is necessary that Junko Sasa, direc-
- tor of Personnel and Education Bureau, who came from tfie National Police Agen-
cy, move into the position of director of the Defense Bureau, the top direc-
turship.
The opinion that Natsume wi11 assume tfie ~osition of Defense Bureau director
is understood to fiave more significance tfian a ministerial or agency level
terr~.torial dispute over tfie deptuy director-general post. Natsume was em-
ployed in the Defense Facilities Administration Agency, but early on he be-
came a member of tfie Defense Agency (a bureau administrator) and is actually
the first among the career defense bureaucrats in the Defense Agency. Not
only does this assumption of office announce the arrival of the era in which
the Defense Agency bread defense bureaucrats operate~the Defense Agency,
Natsume himsglf possesses a career of having participated deeply in the poli-
cy decisions on the defense plan's fundamental principles and the "basic de-
fense capability concept" which is its philosophy from the time he was de-
fense section chief and general affairs section chief in the secretariat.
The 1977 edition of the defense white paper which comprehensively developed
the basic defense capabi~.ity concept was pop.ularly known with the Defense
Agency as the "Natsume white paper." At the conference of councilors (the
Defense Agency's highest level conference) when the Defense Agency was shaken
over whether to dismiss Kurisu, it ia said that Natsume was critical of Kurisu
and ~asa argued Kurisu's defense. Naturally, it was leaked by an official
source in the defense fundamental principles faction that they wanted and
hoped Natsume would become Defense Buresu director, but conversely speaking,
the resistance from the fundamental principles re-examination faction can be
imagined. At any rate, if the new Defense Burea.u director concludes the 1981
medium range operations assessment in parallel with Prime Minister Suzuki's
directions and appropriate to Japan~s campact state of afiairs, he may have
to reduce the ramifications by being prepared to be resented by the Ground,
Maritime and Air Self-Defense Forces and to be looked at disapprovingly hy
the hawk faction of tfie LDP.
~
- FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPR~VED F~R RELEASE: 2007/02/09: CIA-RDP82-04850R000500060028-0
FOR OFFICIAZ USE QNLY
Who ~Iill Se Chaixman o~ the. ,Iq~.nt Staf~ Counc~.J.
Tfiere w3:11 ~e sufistant3.~1 person~nel clianges ~n tfie Sel#--De.f ense Foxces ~n July,
follo~rTng the personnel c~nge~ in tPie Buxeaus. TI~e focus is tbe personnel
change ~n the cfia~rmansfi~.p o# the ,Joint St~f� Ccuac~l. If Yu. Maeda, chief
of sta#f of tfie Mart~ue Sel~-Defense Force,~73rd naval class, retires volun~
tarily, it is certa~n tF`iat Tsug~o Yada, nfiairman of~tfie Joint Staff Council,
71st naval class, cfironolog~callp speaking, �~ou1d retire voluntarily. The
chairman of the Joint Staff Council fias generally been decided by rotation
among tfie vairous chiefs of staff of tfie Ground, Marfti~me and Air Self-De-
. fense Forces.
Consequently, since Chairman Yada was the maritime chief of staff and before
him, it was Chairman Takeda, cfiief of staff of the Air Self-Defense Force,
the Ground Se1f-Def ense Force is insisting tfiat naturally the next chairman
should be ~'umio Murai, chief of staff of the Ground Self-Defense Force. On
the one hand, it is seen that Osamu Aatame, chief of staff of the Air Self-
Defense For~ce, will voluntarily retire at the same time, and there is the
deeply rooted opinion that "there m ay possibly be an example where the order
was alterec~, ~nd in terms of talent, Hatame sfiould be made chairman of the
Joint Staf.f Council. Inasmuch as the Ground Self-Defense Force would not
escapte u loss of ground if the concept of Japan's defense, including the
1981 medium range operations assessment, shifts to that of placing importance
on maritime and air defense, the Ground Self-Defense~Force's posture, even
though it says "the cfiairman of the Joint Staff Council is like a chairman
with no representation," is that, right or`wrong, they want the next chair-
manship and tfi ey continue to feud with the Air Self-Defense Force.
At the time when the improvement of the F4 Phantom with bombing devices be-
came an issue in the Diet, Hatame, chief of staff of the Air Self-Defense
Force, declared at a press conference, "onF of the ob3ectives of the F4 im-
- provement is to make it the successor of the ground support fighter, the
F1 (fighter-bomber)," and disappointed intra-agency officials who tried to
be evasive by answering, "the ob~ective of the F4 improvement is strictly
the improvement of its interc~ptor capability and it is not in order to use
it as a ground support fighter." E~en in the opposition parties, there were
those who requested "Hatame's disposal." There was resentment toward this
in the Air Self-Defense staff who said that iC is strange that the def ense
bureaucracy which pointlessly hides the actua], facts from the public is not
criticized and the chief of staff of the Air Self-Defense Force, who spoke
accurately about the Air Self-Defense Force's concep:., based on military ra-
tionality, receives criticism. But the Ground Self-Defense Force staff holds
the view that "the line about Hatame~s cha~.rmanship has disappeared complete-
ly~n
With the regular cfianges in July, tfiere wi.ll not only be changes at the chief
of staff level, but for the first time, graduates of the first class of the
~ Defense Academy will be promoted to general officers. This w~ll gradually
and indirectly change tfie character of the Defen3e Agency and the Se1f-Defense
5
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2447/02/09: CIA-RDP82-00850R000500464428-4
FOR OFFICIAL USE ONLY ~
Foxces. The appeatxance o~ genexal ofJ;~eexa..o~ the puxely poat-waz genexation
who greu~ up under the U.S; ~1i.taxy~s.educat~.on syatem xanks w~th the coming
to tfie fo~cefront o~ De~en~e Agencp 3red' fiureaucxats~ and indicates t5at the ~
Defense Agency and Sel#-De#ense gorces haire reaciied~ a tnrning point,
Uniformed Personnel and LDP Aaark Paction '
Within the confrontation of various opinions about tfi.e 1981 medium range oper-
ations assessment, tfiere is a mo~vement whicFi mnst be given attention. There
is the inclination here and tFi,ere fox some of~the uniformed personnel to go
over the heads of the intra-agency Tiureaucracy and link themselves directly
with some of the influential LDP Diet members. Tfiat pipeline is being ac-
complished by fiigfi level uniformed personnel, sucfi as former chiefs of staff ;
who have retired.
For example, the names include Shigeto Nagano (former chief of staff of the
Grou~d Self-Defense Force), Ryohei Oga (former chief of s~aff of the Maritime
Self-Defense Force) and Motoharu Shirakawa (former chief of staff of the Air
Self-Defense Force) at the "Japan Strategic Research Center" where Shin Kana-
maru, former director-general of the Defense Agency, is employed as director.
They made a proposal on defense capability increase entitled, "Proposal con-
cerning defense capability preparations," in February last year. However,
in May of last year, ~ust before Prime Minister Suzuki�s visit to the U.S.,
America's Heritage Foundation, which is called President Reagan's think tank,
made a report concerning.shortcomings in Japan's defense capabil~ty and that
the defense capability should be increased. It may be said that the content
of these two is exactly the same. Tf?e Japan Strategic Research Center's pro-
posals, such as an increase in the P3C sub-spotting aircraft, building small
scale carriers which can carr_y vertical take-o�f and landing aireraft, pos-
session of a mine-sweeping helicopter force and paratroops both for land and
sea operations (sea mobile land brigade and air mobile land brigade) almost
coincide with the Heritage report. Since the Heritage report is a U.S. re-
port, it quite directly enumerates the following as "a re-examination of
meaningless taboos:" 1) the cabinet decision on expenditures of less than
one percent of GNP; 2) non-possession of offensive weapons; 3) three princi-
ples of non-nuclearization; and 4) three principles of weapons exports.
~ In the midst of the drama of the Diet's handling of the F4 Phantom, the LDP i
National Defense Group and officials of the Policy Research Committee pro- ;
posed the LDP opinion that "accompanying the international state o{: affairs
and advances in military technology, aircraft and naval vessels which Japan ~
r_annot possess will change." Chief Cabinet Seeretary Miyazawa shelved the ~
proposal. The naval vessels which this LDP proposal pointed out and tried
to open the way of having at the time of the uproar over the F4 issue are
clearly aircraft carriers whicfi are cons~dered offensive weapons in the pre-
sent government view. It has often been said tfiat "the defense question is
and echo between Japan and the U.S.," but what if the origination of the U.S.
pr~posed request was decided in Japan and these data were decided by former
Self-Defense Force officials?
6
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
' FOR OFFICIAI, USE ONLY
~ Considexing tI~t the ~apan Stxateg~;c Reseaiccli Centex ts pxoposal closely re- ~
~ semblea~ the mil.i.t~ry pxo~osai o~ ~ th.e~ 1981 iaediw~ xange operations assesament,
it see~us attenti;un' must be giyen to tfie' relationsTiip betwet>n the LDP haa~k '
faction and #ormer Sel~ De#ense ~'o~ece a~#icials~.
; COPYRIGflT: Twanami. SIioten 1I82
' 9400
' CSO: 4105/96
7
FOR ~FFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
ECONOMIC
~
STRUCTURE OF NIPPON TELEGRAPH, TELEPI~ONE ANALYZED
Business Structure ~
Tokyo CHUO KORON in Japanese Autumn 81 pp.146-157
[Article by Hitoshi Hiramatsu, journalist]
[Text] NTT Buffeted by "Third Wave"�
Its rigid structure is being questioned in the midst of
an international information and communications battle.
Caa this giant survive? '
Three Urgent Issues ~
As we enter the 1980's, which has been called the age of technology, NTT's
mode of operation has been called into question. As we approach the 21st ~
- century, th~ central core of technological innovation will be a hybrid
advanced technolo,^,y composed of machinery, computers, and electronic ,
connnunications. When we think about the information and communications
infrastructure that will be creaCed by m~ans of this data communications
technology and its spreading impact, the role to be taken by NTT, the
monopolistic enterprise which has thus far led the way in th~ development
of data communications technology in Japan, and the kind of technology that
will be used take on an importance tha~ we cannot ignore. ~
" On 5 August, NTT held a public lecture meeting at the Keidanren Hall in
Tokyo conceming "technology for achieving a high-level dr~ta communications
system" as a"proposal for a high-level informat~ion soci~ty." A high-level
information society, according to Toffler, will be characterized by expanded
office automation and electronization of the hame and "will change the course
~ of history in ~ust 20 or 30 years with a shock that will revolutionize society
from its foundations." It will be "the third wave," following the agricultural
revolution and the industrial revolution.
In preparation for the high-level information society to come, NTT is planning
to build a high-level information communications system (the information
network system of INS). It will be based on telephones, data terminals,
facsimile, and image terminals. It will be built as a common network unified
8
~ FOR OFFIC[AL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
~ FOR OF~ICIAL USE ONLY
by digital technology so that voice, image, and data information can be
freely exchanged between the c~ifferent types of terminals. Experiments are
scheduled to begin in the Musashino and Mitaka area~ in 1983.
This 21st century communications system is made possible by digital, optical,
and satellite communications technology which has been made possible by
_ rapid progress in electronic technology ~.tems such as IC and microprocessors.
This campaign is unusual for a public corporation. NTT is trying to
demonstrate the advanced technology it has accumulated and promote understandtng
of its new electronic communications system. NTT has achieved its two maj.or
objectives, pursued since it was organized in 1950, of completely satisfying
the national demand for telephone service and providing completely automatic
dial service for the entire cauntry. Now it is pursuing this new objective
for the era ahead.
However, the impact of the technological revolution leading to a high-level
information system, and the high-level information society which it will
create, will~necessitate great changes in NTT itaelf. Indeed, there are
in~.icdtions in the form of real pressures that require specific responses
from NTT. One of these signs is the issue of liberalization of materials
procurement which became a focus of concern in adjusting U.S.-Japanese
relations in 1979 and 1980. Second is the issue of opening communication ~
lines, and this has become an urgent issue in revising electronic communica-
tions policies in the 1980's. Third is th~ slackening in growth of NTT's
business income due to the achievement of balanc~ in supply and demand and
the exposure of financial weakness due to increased capital expenditures
through huge investments.
Pressure To Liberalize the System
Ttie issue of liberalizing materials procurement goes back to an international
agreement made at the Tokyo round of GATT (General Agreement of Tariff and
Trade). As one way of abolishing nontariff barriers fon the expansion of
- world trade, maeerial purchases by governments and.~government organizations
must, in principle, be made through competitive con~racts by public or private
- bidding, and an opportunity for equal participation in the bidding must be
given to foreign enterprises. This became the greatest unsettled problem
between the.United States and Japan because the United States was frustrated
at becoming "a weaker America" (BUSINESS WEEK) as the relative strength ~
relar.ionship of Japan and America underwent a change. A~erica reacted
agai�,.ist the growing threat of being overtaken by late-developing Japan in
the strategic areas of high-level electronics and data communicatiQns.
FurEhermore, NTT's procurement system, which accounts for $3 billion annually,
half the total procurement by government and government-related agencj.es,
has used a private contracting system by which it made planned orders from
special partner enterprises which have accumulated knowhow through joint
development with NTT. By this system, NTT, which does not have a manufacturing
capability, was able to apply its research results. All equipment and parts
were standardized on the basis of NTT specifications and a high level of
quality was maintained by a strict inspection system. Also, the comganies
9
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2047/42/49: CIA-RDP82-00850R400500460028-0
FOR OFFICIAL USE ONLY
were guaranteed a stable market for special-order products for NTT and were
able to T~~.~ production and cut costs through mass production.
However, this was a totally closed system of development, production, and
procurement between NTT and its special partners. Japan's information and
communic,^.tions industries formed an "NTT family" organized around the large
general manufacturers of computers, semiconductors, robots, and communications .
equipment. In coirmunications equipment alone, in 1979 the purchases by NTT
were 40 percent of the total. Even though this was down from 57 percent in
1965, it shows that these companies have had a huge profit base in the NTT
market. The influence of NTT has extended to achievements in information and
communications knowhow and quality control obtained through joint development
~ as well as in the aspect of market volums. These achievements have improved
Japan's international competitiveness in data communicatinns. The Jones �
Report indicated that "in order to make progress in communications technology,
- the technology of the future, Japan has rapidly advanced in the open U.S.
Market, while holding on to its domestic market." Since this report was
made, NTT has been known as the "symbol of the closed Japanese market" in
the United States.
The liberalization of procurement, which has obstructed U.S.-Japanese relations
and has become a political problem, was finally. brought about as the GATT
regulations took effect in January 1981. Purchases of peripheral equipment
were completely opened up to competitive bidding. A].so, N~T has opened up
the path to participation of foreign enterprises fn private contracts through
the Tra~k III program. Under this system, both domestic and foreign enter-
prises which apply for participation can be selected as partners for ~oint
development and production of prototypes of central equipment. Continuous
purchas~s are made of items which pass ogerating tests. This Track III .
- system is cau~ing apprehension among the friendly companies which have carried
out research and development for NTT and become used to carrying out joint
development as special partners: However, this liberalization of the
development and purchase system is inevitable for NTT. This is because ,
the increased need for high-level, more diversified data communications
technology has naturally increased the number of different research and
development areas to be dealth with by NTT. And it has made it necessary to
use more domestic and foreign companies as partners in joint development and
as sources of supply. In fact, even before adoption of the new liberalized
system, Matsushita Denso participated in development of facsimile equipment
and Motorola of the United States helped'with the pocket bell.
Liberalization of procurement is also a result of J~apan's success in reaching
world standards in data communications technology, beginning with technology
imports f rom the advanced countries, and then rapidly developing beyond world
standards in such areas of advanced technology as optical com~unications
and VLSI. Data communications technology is central to future technological
innovation and it will have a tremendous ripple effect. Therefore, pressure
- to liberalize will continue to mount.
In particular, the United States under the Reagan administration is trying
to fully bring out the great technical strength of the largest U.S.
10
' : USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFF[CIAL USE ONLY
communications enterprise, AT&T, tahtch had been curbed for a long time
under the antitrust act, in order to maintain relative superiority in this
strategic area and increase the competitiveness of U.S. industry. Last year,
the FCC (Federal Communications Commission) made a final decision on its
second computer survey and approved the provision of unregulaCed high-level
communications service if carried out through a subsidiary which had separated
from AT&T. "~'~~e 1981 bill concerning competition and deregulation of -
electrical communications proposed in the Senate to revise the 1934 .
communications act now in effect is also intended to remove the handcuffs
and shackles from AT&T.
Looked at in this way, liberalization of the development and procurement
system is a natural development in terms of improvement and diversification
of information and communications technology. It could be seen as one
international ad3ustment in the intensifying battle over technoZogy.
Problem of Liberalizing the Use of the Network
The problem of liberalization of the data communication network also arose
from the demand for improvement and diversification of data communications,
a result of a technological revolution which has shaken NTT's monopolistic ~
system. In data communications systems, computers and terminals are connected
in a unified data-processing and electronic communications system which
makes it possible zo use computers from a distance. Beginning with the
"green window" seat reservation system for the National Railways in 1964
and expanding Co the on-line bank system and the Social Insurance Agency
pension system, these systems have supportEd ever more complicated social
_ activities and penetrated every corner of our lives.
NTT entered the data communications field, a ti~ird ma~or form of communica-
tion following the telegraph and teiephone, in 1968 with the nationwide
regional bank system, the first ~oint-use system in Japan. Because of
industry's growing desire for on-line s,ystems, private industries were
permitted to connect computers and terminals to special lines (special
communications network li~es) under a revision of the Public Electrical
Communication Law, and NTT's data communications business was officially
approved.
However, because private enterprises had their own independently managed
data communications systems, NTT and KDD imposed stiff conditions~on them
, when they borrowed the special communication lines. An arrangement by
which two or more companies may borrow the lines fer 3oint use, or allow
another party to use them as a part of business, will only be allowed when
certain conditions are met. In cases of joint use, an investigation must
be carried out by NTT and KDD to determine whether there is a substantial
relationship between the companies and whether there will be obstruction
of other communications. Then special approval must be received from the
minister of posts and teleco~nunications. For use by another party, the
method of special approval is not even available. KDD will not even make '
the regulations for this p{~blic. Under the present communications system,
electronic communications are entrusted to the monopolistic management of
11
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2447/02/09: CIA-RDP82-00850R000500464428-4
i
" FOR OFFiC1AL USE ONLY ~
~ II
NTT and KDD. Exchange of inessages without chaaging the form of data is
- completely forbidden. That is why data transactions are limited to one
computer and one terminal, and transactions between multipl.e computers and
terminals are forbidden.
This is all very well in an era of single-function syst2ms with central �
process?ng by a large mainframe computer. However, under these regulations,
it is not possible to make efficient use of decentraliz~d processing through
intelligent terminals and networks and joint use of comprehensive networks, ~
computers, data, and software by different enterprises and different types
of business. It is impossible to use distribution systems connecting trading .
companies, manufacturing companies, warehouses and freight companies; joint
research systems which join government and private universities; dispersal
of the processing load to an affiliated company's computer when a company's
own computer. is overloaded or out of order; or the stratified processing
method in which ordinary daily work is done on micropressors and intelligent
~ terminals on the premises and large volumes of data are processed in a large
computer at a center.
The industry demand for liberalization finally resulted in action by the
Ministry of Posts and Telecommunication and NTT to make changes in policy
this year. Message exchange and mutual connections to public lines and
special communication lines have become matters subject to approval.
With the exception of some negative listings, there will be general
liberalization. However, with the coming of a high-level information sa~iety,
technological innovation and the increasing need for diverse data
communications systems will require free use of information exchanges, in the
form of voice, data, and images, using multiple computer and terminals with
the communications network and making joint use of files and software. This
will lead to the organic integration'of separate systems into a general
system. Also, diverse services will be sought which make full use of the
vitality of the private sector. Therefore a reform of the present communica-
tions system with its one-dimensional operation of communications will be
necessary. And it probably utill not stop with the use of data communication
lines alone.
Weakness of Financial Base
One big problem faced by NTT as it comes under pressure ;.o ~hange the present
system is the uncertain financial base with which it must support the
technological development necessary for high-level information systems.
With an annual income of 3.8 trillion yen, NTT has ~he highest sales of any
Japanese enterprise, excluding some trading companies. With construction
expenditures of 1.7 trillion yen and total assets of 8.9 trillion yen, it is
the largest enterprise in Japan. The difference between income and
expenditures, the figure which corresponds to profit in private enterprises,
is 450 billion yen, making it a superior business organization. However,
NTT has long-term liabilities of 5.5 trillion yen and its financing expenses
amount to 1.1 billion yen per day (as of the 1979 accounting settlement).
12
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02109: CIA-RDP82-00850R040500060028-0
FOR OFFICIAL USE ONLY
If it continues to make large investments, increasing capital exFenditures
required to f inance tho~e investments will put pressure on income. There
, is a danger that the resulting increase in borrowings will th~n cause a
further increase in capital expenses, creating a vicious circle. Prpsident
Shinto, who was recruited from private industry, is known as "Dr Rationaliza-
tion." He ways: "If this were a private ent2rprise, it would go bankrupt."
Also, "It is exactly like the National Railways when it began the Shinkansen."
The problem is that the growt?i of telephone income, which makes up 90 percent
of NTT revenues, has reached a ceiling because of a balance in the supply
and demand for telephones. Furthermore, the nontelephone services which
should take up the slack are very insignificant at present. While the
company continued to expand under the pressure of an Qver-grawing demand
during the period of high growth, scrap-and-build investment led directly
to increased income. Now there is a greater percentage of investments which
do not create income, such as equipment replacement projects for remodeling
of obsolete facilities. Because the market for new services and products is
- still undeveloped, NTT is facing competition with private industry and there
are continual cancellations and shifts of business even though, on the
surface, sales appear to be rising.
In addition, the major method used to raise outside funds for NTT's in~~estments
for rapid development was the system of making the purchase of bonds
obligatory for new subscribers. This was a system harldy used anywhere else
in the world. Also, the term of the Telegraph and Telephone Facilities .
Expansion Temporary Measures Act will expire in 1982. If an extension of this
system cannot be ~ustified now that there is a balance in telephone supply
and demand, NTT must diversify its sources of funds in the general bond market.
And the market is likely to see problems in NTT's financial condition.
NTT's research and development projects, for example, VLSI, electronic
exchange systems, and computers used for data communications, are getting
larger and spreading to more advanced fields. The so-called "incubation
period," from the start of research to testing, used to be 2 or 3 years.
It has now grown to 7 or 8 years. There are a large number of examples of
basic research which are put in the freezer with no prospects of application.
Each year, 70-80 billion yen, 2 percent of business income, is used for
research and development. President Shinto has stated explicitly that for
the sake of future generations, this percentage will not be reduced. However,
the technological prospects for data communications are not entirely clear.
In allocating limited resources to the growing number of research and
� development areas, NTT faces the problem of how to make its research and
development more efficient at a time when more originality is required for
advanced technology. ~
Thus, the issue for NTT management is how to get through the transition from
its traditional telegraph and telephone services to more diverse nontelephone
services, such as high-level information services, while maintaining financial
health and carrying out forward-looking investments and development of
advanced technology. However, this will require a management revolution in
13
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2447/02/09: CIA-RDP82-00850R000500464428-4
FOR OFFICIAL USE ONLY
the business structure of NTT, which has, until now, raced forward with
priority to technology and new facilities.
� Going Beyond the Issues of the "Period of Transition"
As we enter a period of great changA, the three problems faced by NTT
demonstrate that a reassessment of the existing system of the company is
beginning to take place. ~
However, as we approach the 21st century, looking ahead to a high-level ~
information society, the questioning of the present system will not stop
simply with reforms in business a?anagement during the transition period,
such as liberalization of NTT's development and procurement system, improve-
ments in the system for use of data communications circuits, and financial
reforms. This is because data communications in the high-level information
society and the process of technological, innovation necessary to make it a
reality, will have a wide enough impact to shake the foundations not only of
NTT but the entire framswork of Japan's telecommunications policies and
systems.
The need for improved data communications aiming at a high-level information
society will sh~.ft information processing by computer from single functions
- to multiple functions and from centralized processing to decentralized
processing as the interdependent relationships of society grow and become mor~
complicated. There will be a demand for communications networks in which
voice, data, and image information can be exchanged efficiently through
multiple computers and terminals, a system in which computers are fused with
electronic communications. It is certain that the rapid progress of IC,
which has increased by 10 orders of magnitude in level of integration and
decreased by one half in price in 4 years time, and other technological
innovations such as optical communications, satellite communications, and
pattern recognition, will meet these needs and revolutionize data
communications.
It is already common knowledge that this compound technological revolution,
through robotronics, office automation, and an information communication
system with a glob~l network, has made possible the rationalization of
industry and dramatically increased international competitiveness.
The hybrid technology of data communications has produced a highly integrated,
high-growth data communications industry. But through the formation of an .
organic data communications system, going beyond the boundaries of single
enterprises or business fields, it has led to the joining of enterprises,
the reorganization of industry, and a greater refinement of the industrial
structure. Also, the growth of the network of business couununications and
the introduction of data communications into the home, known as home
electronics or media technology, will probably change the structure of regional
connections and the city. A big change in the manner of life is another
part of the scenario of the high-level information society.
14
~
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONL"1
This technological revolution will create pressure for change in the content
of telecommunicatioiis service in private industry as well as in NTT. At the
same time, the data communications of the future will be an intricate
combination of business co~nunications which connect many corporate activities
with a variety of types of data co~nunication, personal communications in
the home, and mass communications using new media. If.a variety of services
are not allowed under the freedom of the private sector, there is a definite
danger of unification and control of the media. The development of high-
level information systems in itself will require reforms in systems and policy.
A Competitor for Both Giants.~
The international aspect of the high-level information business will also
require a new response from NTT which until now has coacentrated on domestic
business. The liberalization of procurement, as previously mentioned,
resulted from one form of outside pressure which broke down the wall.of the
closed systean of procurement and NTT technology development.(which reached
- world standards). However, the international battle over data communications
technology has shown signs of ~ntensifying to the point of being called a
"technology war." As the technol.ogical gap narrows and the relative
relationship of economic power changes, a readjustment is taking place among
the advanced countries.
NTT concluded a cross3.icensing agreement with IBM, the company which controls
60 percent of the world computer market. Then it proposed.modifications
in the long-standing unequal patent license agreement with Western Electric,
the company with control over�Bell System patents. NTT has besn trying to
, catch up with these two giants in information and communications. ~Now it
is gaining attention for attempting to exchange technology from an equal
- position. .
IBM entered the field of satellite communications, foreseeing the combination
of computers and comanunications. It noticed the communications technology
of NTT, which had grown to the.point of leading the world, and it approached
NTT on a cross-licensing agreement. IBM has carried on a continuous "battle
of the titans" with AT&T over the field of data communications. Some believe
tliat IBM approached NTT, which has a closa relationship with AT&T, as a new
strategy to recover its leadership in the data communications field. In any
case, IBM proposed a bilateral agreement which recognizes all rights,
including the granting and sale of licenses and th~ righ~ to commission
production. Also, although the applicability to the world market is limited
to computers (including electronic switching systems), an exchange of
technology will actually take place in the global arena between the multi-
national IBM and NTT. ~
The agreement with Western Electric was an unequal contract in which Western
Electric was able to use NTT's patents for production and sales while NTT,
which was not allowed to commission production and does not have its own
manufacturing division, was only able to obtain technological information,
and was forced to pay $200 to 700 million annually in patent use fees for
manufacturers in the NTT family. The NTT proposal for revision of the
15 ~
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2407/02109: CIA-RDP82-00850R040500060028-4
FOR OFFICIAL USE ONLY
agreement asked to extend the applicable region beyond Japan and the United ~
~tates, the region desired by Western Electric. It will recogniza the
existing right of Western Electric with respect to patenL's which h~ve
al.ready been developed but aims for reciprocal rights for newly developed
technology.
In the past, Western Electric transferred overseas assets to ITT because of ,
t;he antitrust act an~ limited itself to domestic production and sales a.nd '
overseas sale of licenses. However, because of the recent U.S. strategy,
seeking global development of data communications and strengthening its
international competitiveness., and to zdvance into nonregulated fields, it
established an international company, AT&T International, to consolidate the
Bell System's overseas operations and advaace more aggressively overseas. .
Previously NTT was like a younger brother, taking instruction from Western
Electric. Now it has emerged as a competitor. There is no telling how
Western Electric will receive this NTT proposal. However, it is certain
that an adjustment of the world market is beginning with a new arrangeme~t
with the Bell System. �
- If we think of cross-licensing as a tool frequently used to readjust r_he
market at a stage where the gap in technology has narrowed, for NTT the
patent exchanges to be made with IBM and Western Electric are the beginning
of technological exchange with leading enterprises amid serious international
battles over technology. Along with 3oint development with foreign
enterprises under the new liberalization of procurement, there will be an
acceleration of NTT's research and development arid greater international
application of results. ~ .
The International Politics of Information Distribution
High-level information systems naturally go beyond the boundaries of single
countries. In satellite communications, for example, a satellite launched
by the United States at the request of Indonesia is being jointly used by
ASEAN countries such as Thailand and the Philippines. France is developing
satellites as strategic export technology. When the space shuttle becomes,
practical, the abovegro~md exchange network of each country may become a
subsystem of a global network enveloping the earth which is controlled from
satellites. What role would Japan and NTT play in such an international
network? At present, this question has hardly been examined at all.
There is a rapidly increasing flow of information across national boundaries
through the international network formed by the technological revolution in
data communications. This distribution of international information is
showing a tendency to depend increasingly on the United States, tha country
with overwhelming control over the network and the data base. Excessive .
dependence on .~verseas data processing leads to increased weakness and is
an inevitable threat to privacy and the security of a country's politics,
economics, and social activities. Therefore, there are growing regulation
campaigns in the countries of Eur~pe and the Third World.
16
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007102/09: CIA-RDP82-00850R000500060028-0
FOR ~FFICIAL USE ONLY
In response, the United States advanced the idea of international rules for
- data communication services in the Reagan Round. In order to adjust policies

~ to ma.intain a free flow of data, the U.S. Senate and House of Represeutatives
are considering three related bills with the aim of unifying domestic ~
, policies and systems. This problem of transnational data flow (or international
information flow) will surface sooner or later in multil.ateral or bilateral
negotiations between OECD countries or in the GATT talks.
How will NTT respond to this trend of internationalization? It has the
~ disadvantage of being unable to make a full effort because of obstacles in
the system crEated by its avowed commnitment to domestic operations.
,
Factors That Have Made the System Rigid
Twenty years have passed since the founding of NTT. Aiming at a prosperous
society, its ob3ective was "immediate telephone installation" and "immediate
telephone connection." The achisve~nerit of these common social goals was
~ entrusted to NTT. NTT actively imported the results of technological
innovations and rationalized and expanded its operations. Its data
communica~ions technology was 20 years behind, but it obtained technology
for cross-bar switching equipment from Kellog of the United States, for
parabola antennas for micxowave communications from STC of Great Britain,
. and for coaxial cable from ISE of the United States and SH of West Germany.
~ It imported PCM's created in France and transistors invented in the United
States. In the process of absorbing and digesting these technologies to
~ produce a domestic technology, NTT technology became much more sophisticated.
Rationalization of operations with the use of these technological advances
~ led to rapid expansion and made econnmical service possible. If the second
- and third 5-year plans had been carried out with the technology of the first
plan, they would have cost an additional 1.1 trillion yen. If the fifth
plan had been carried out with the technology of 10 years ago, it would have
cost an extra 700 billion yen. Stated differently, during the 25-year period
of the five 5-year plans, there was a savings of 13 percent in the amount of
in~estment. Also, NTT was able to spend more time and money than would have
been possible for private industry in gathering data on details such as each
~solder joint and finsling the causes of breakdowns. It improved reliability
~ by a strict inspection system for quality control that would not allow a
speck of dust in the factory. It achieved the world's highest rate of
reliability--only one telephone malfunction per subscriber in 14 years.
Furthermore, in applying the results of development, total uniformity of
parts and equipment ordered from a number of different companies was
maintained, and the level of standardization achieved was regarded as a
mystery overseas. It then aligned these standards with those of the Comite
Consultatif International Telegraphique et Telephonique (CCITT) and made the~,
internationally applicable. The search for this technical perfection and
standardization has undeniably raised the data communications technology of
Japan to world levels in a short period of time.
17
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFIC[AL USE ONLY
However, NTT's sense of mission and pride, which provided leadership for
Japan's data communications, also created a closed and rigid system within the ~
walls of that technological expertise. There have been many examples which
demonstrate tt~is. For example, NTT was late in developing and applying ;
high-speed facsimile technology. This was partly because its guide, AT~T, had
little interest in it. However, it was also because Ricoh, a company outside
the NTT family, was able to use its position of freedom from NTT to import ~
advanced technology from the United States quickly and dominate the market.
In electronic switching systems, the time-sharing system was not in favor for
a time at Bell Laboratories, so NTT stuck to the space-sharing s,ystem and was
unable to shift to the time-sharing system. Because of this, it was forced to
make a double investment, for both systems, by communications equipment
manufacturers under pressure to do business overseas. Its video telephone, ~
following in the footsteps of Bell Laboratories and AT&T, failed because of
inadequate study of users' psychology and human engineering rather than for
economic reasons.
Throughout, NTT followed Bell Laboratories and concentrat~d on racing straight
ahead to catch up and overtake Bell, so it did not have the flexibility to
accurately pinpoint new needs and determine the direction of new systems by
itself. As demonstrated by the lack of researchers in human engineering and
the social sciences in its laboratories, it failed to.make an assessment of
the impact of technol.o,gy on human beings and socieCy. More than anything, ,
the rigid posture of NTT bound up within the strictures of the present system
has made it impossible for it to respond flexibly to a variety of data
communications technology developments and services. Therefore, we cannot
overlook the fact of the overall negaCive effects on data communications.
For example, the restrictions on connecting terminals to the communications
network have been a cause of delaying the development o� terminal equipment
in Japan. .
Questioning of the Existing System ~
Previously, I wrote that NTT h:ad a remote existence. This is partly because ,
electronic communications is a highly sophisticated technology system and is
difficult for us to understand. But more than that, the electronic
communications business, entrusted to the monopoly of NTT and KDD, is hidden
behind the walls of technological expertise and has become a"black box."
' It has become a sacred prec3nct, inaccessible to the ou~side, which was created
by the hands of politicians, bureaucrats, and technical specialists.
Telephones have become a very intimate form of inedia. As the technical
revolution in high-level information $ystems is abont to unfold, NTT will
have a central role and a great~effect on the state of the telecommunications
of the future and the high-level information society that it will bring about.
So it will become an enterprise that is more and more i.mpossible to ignore.
Its technological development ~*ill be directed toward t'he solution of such
social issues as energy conservation and more efficient medical treatment,
education, distribution, and government administration. In addition, it will
be called upon to deal with international issues such as the technological
18
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FC1R OFFICIAL USE ONLY
i ,
assistance desired by the developing countries and an international division
; of labor with the advanced countries. Are the things about to be done
t desirable for us? An open forum for discussion should be sought and the public
function of NTT, including the business structure of the company now being
; studied by the Temporary Administration Study Committee, should be examined.
i
COPYRIGHT: Chuo Koronsha 1981
i
i Closely Related Private Companies �
~
Tokyo CHUO KORON in Japanese Autumn 81 pp 158-169 _ -
~
i [Article by Kenichiro Hirota, Future Technology Institute
j
[TextJ Discussion of NTT Technology Based on Experience
~ The author, a previous director of the Electrical
i Communications Laboratory, a ma~or position in NTT, the
; mecca of technological development, te11s about NTT and
' its family.
Electronic Mecca
The word electronic is a daily co~onplace. However, telecommunications
technology, a major field, perhaps the central field of electronics technology,
is not very familiar to ordinary people. This is mainly because the terminal
equipment for telecommunications seen by most people is usually limited to the
telephone. Compared to radio, television, and desk calculators, it seems very
ordinary. Few people are aware of the tremendous amount of social capital in
the telecommunication network that lies behind the telephone, costing more than
~ 8 trillion yen and spanning the entire country, or of the fact that this
network can carry data communications and television signals as well as tele-
phone messages, unless there is a break in communications due to an accident.
In this sense, telecommunications has an existence in people's minds similar
~ to air.
This network is sustained by telecommunications technology. And in the history
of technology, the major portion of present-day electronics technology
developed as a branching off from either wire or wireless communications ~
technology. Today as well, telecommunications technology, along with computers,
is performing a"locomotive" role for overall electronics technology.
~ I have placed telecommunications in opposition to computers here, but techni-
; cally speaking, the borderline between these two technologies is beComing more
! and more obscure, and it is getting difficult to separate them. Historically,
of course, one application of computers has been clerical processing. However,
, the first digital logic circuits used were built with parts and technology
; for telephone switching equipment during World War II in the United States.
' Present electronic switching systems and computers are essentially identical
~ with the exception of some items that I will explain later.
19
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
;
FOR OFFICIAL USE ONLY '
f
This situation is symbolized by tfie changes in the name of the Institute of j
Electronics and Communications Engineers of Japar~ (incorporated) which is made !
up of 28,000 Japanese electronics researchers. Beginning in the Mei3i era, '
it changed from the Telegraph and Telephone Institute to the Electrical ~
Communications Institute and then again to the Institute of Electronic and ~ ~
Communication Engineers. If the present English name of the association were . ~
retranslated into Japanese, it would be the "Institute of Optoelectronics and ~
Communication Engineers." This probably expresses the true nature of the '
association. ~ ~ ~
i
Traditionally, the central role in this institute has been played by engineers ;
from the Nippon Telegraph and Telephone Public Corporation, and among them, by !
the 3,000 researchers of NTT's Electronic Communications Laboratory (knowr. as ,
"Tsuken"). NTT hires about 300 university graduates from scientific or
technical departments every year. This is a gathering of the best students ,
from the various universities, and NTT is seen by people in the field as a
mecca for electronics research.
The aim of this article is to examine the type of telecommunication technology
held by NTT, how it ranks internationally, the background of its development,
and some issues for the future.
Technology at the Top International Level
I would like to begin with the issue of the international standing of
Japanese telecommunications technology. �
Recently, articles dealing with telecommunication itself, rather than the ,
general topic of electronics, have begun to appear in the popular media. This
includes the problem of the isolationism of NTT technology in r.elation to GATT,
which was hotly discussed for about 2 years until last fall, and more recently,
the issue of a patent agreement with NTT which is reported to have been
requested by IBM. More specifically, the internationally important research
' results of NTT's Electrical Communications Laboratory (Tsuken) in optical
fiber communications and VLSI are frequently reported. It seems thab even the
ordinary citizen who has no direct contact with communications technology is
somehow increasingly gaining the impression that NTT's technical level is
rather high and that it has been drawing international attention.
Amid voices calling for a nation founded on science and techology and a growth
beyand secondhand development, how can we rank Japanese electronic communication
technology internationally? It is difficult to express quantitatively, but
if we s~mnmarize the opinions of people in the field, we aan say that we are
leading the world in development along with the United States. In research,
there are some areas, though not all, where we are beginning to surpass the
United States. Overall we are evaluated as being close to the top level.
Here are a few examples that do not extend into specialized ar.eas. First, in
the area of development, there is the C-400M multiplex transmission system
which NTT opened to commercial.use about 3 years ago. This system can transmit
400 million bits of signal data per second (5,760 simultaneous telephone calls)
20
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
on a single coaxial cable. The American counterpart to this can handle only
270 million bits. In 1976, the Government of France stated ~hat it wanted to
use our standard electronic switching system, the D-10, and a deal was almost
made. Unfortunately, the domestic industry protection policy of President
Giscard d'Estaing took priority, and the negotiations were ultimately
unsuccessful. However, the technology itself received high praise from French
engineers. Although this is not a domestic example, 127 of the world total of
397 earth stations for satellite communications are products of Nippon Electric
Company. If the stations using NEC pa~ts are included, this number grows to
296 stations or 75 percent of the total. As a basis for this success, the
- technology developed jointly with NTT played a great part.
Next I will give two or three examples of results of basic research at the
Electrical Communications Laboratory. In VLSI research, we developed the
world's f irst 64-kilobit NOS memory (in 1977). Since then we have continued to
produce similar top-level data, and in Jur!e of this year we produced the world's
first 256-kilobit memory. In optical f~ber communications, as I will explain
later, we pianeered in long-~aave, long-domain technalogy. Since then we have
continuously been in a position of leadership in international scient3fic
organizations. In another example, the basic principle of Texas Instruments.'
"Speak and Spell," which is also marketed in Japan, is said to be identical to
the "Par Call" invented at Tsuken.
With the reader's indulgence, I am going to discuss samething a little off the
subject. Bell Laboratories of the United States has held the top position~in
the world of telecommunications both in name and in fact. It has 16,000
researchers and has produced a number of Nobel Prize winners. In postwar
Japan, a"pilgrimage to Bell Laboratories" was the ardent desire of peo~le
from NTT and related manufacturers for a long time. Furthermore, the gate of
Bell L~~.boratories was kept tightly shut. In 1958, three engineers were able
to receive "training" there for 2 weeks. A similar situation persisted for a
number of years after that.
However, as Japanese ability increased, the situation slowly changed. In 1966,
a mutual technological assistance agreement between NTT and Bell Laboratories,
undertaken at NTT's requent, took effect. When Vice President Fisk of Bell
Laboratories visited Tsuken for the first time the previous year, he saw that
the wo~k going on in our laboratory was unexpectedly advanced. His new
awareness was one factor that led ta the agreement. After that, in contrast
to the one-way relationship of the past, a number of people from Bell began
to visit our laboratory. Then in 1976 a remarkable event occurred. There
were more people from Bell visiting Tsuken than;the other way around. It could
be said that Bell had reached the point of clearly recogniz~ng Tsuken as an
equal. ~ '
Previously, I mentioned the recent cross-licensing agreement between IBM, the
computer king, and NTT. This agreement was proposed by the other party and
is reportedly moving toward realization.
I have given a number of examples and, in brief, it seems fair to say that NTT's
telecomanunications technology is first-rate internationally. Of course, as we
21
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOit OFFICIAL USE ONLY '
can see from the relationship with Bell Labora~ories mentioned above, this
status was arrived at only recently. There is a long history vehind it which
- I will explain here.
History of Autonamous Development of Technology ~
Before World War II, Japanese telecommunications was under the jurisdiction
of the Communications Ministry along with mail, shipping, and aircraft. After
the war, it was under the Electrical Communications Ministry according to the
orders of GHQ. In 1952, the Nippon Telegraph and Telephone Public Corporation :
became independent and has remained in the same form up to the present.
Recently, there were several changes in the technology development system. ~
During the Communications Ministry period, in terms of the present concept of
R& D, research was carried out by the Electrical Laboratory and development ;
was carried out be the Engineering Bureau of Che ministry, criefly in the
Research Section.
In the Meiji era, telegraph and telephone systems were introduced a little
behind those of the United States and Europe. We were especially behind in
automatic telephone switching. This was finally introduced with equipment
imported from Britain and G:~~any when telephone service was restored in Tokyo ~
and Yokohaiaa after the great Kanto earthquake. Hcwever, domestic production
began as soon as 1935. The leadership for this domestic production was ~
prc~-iiied 'oy the Engineering Bur~au. ,
The technocrats in tlie Engineering Buresu of the Communications Ministry at
- t:ie time were extremely earnest about moving from domestic production to
- autonomous development of technology. It is not difficult to imagine that '
this attitude was encouraged by a sense of responsibility for electrical
~ communications as the nation's central nervous system, and at the time there
- was a strong feeling of impending troubles. The main flagbearers for this
movement were the director of the Engineering Bureau,~ Tsuyoshi Kajii (later the
first president of ~TTT), and the manager of the Research Section of the
Engineering Works Bureau, Shigeyoshi Matsumae (later the president of the ;
Communications Academy, now the president of Tokai University).
Matsumae developed the world's first unloaded carrier system in 1932. With
Ka3ii's support, he overcame fier~e opposition and was able to complete the
� Japan-Manchuria long-distance communications line based on this principle. He
strongly advocated the importance of autonomy in elec~_rical communications
technology to his subordinates. Under Matsumae's leadership, for example, in
_1940, an engineer named Yonezawa (later the third president of NTT) succeeded
in developing the world's first very-h~.gh-frequency wireless telephone. This �
can be seen as one result of that leadership.
At the same time, some results were obtained in basic research in the Electrical
Laboratory, but unfortunately, there were few cases which were linked directly
to development. For example, in 1936, Engineer Takeo Seki (later joined
Hitachi Electronics) applied i~r a patent which is considered Che basic
= 22
F(1R OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
~ FOR OFFICIAL USE ONLY
principle for today's optical fiber communications. Unfortunately, the
surrounding technology was not developed to the point where this idea could
be further nurtured.
World War II destroyed the Japanese cammunications network. The largest
number of telephones before the war, 1 million sets, was cut in half, and the
people connected with the Communications 4tinistry worked feverishly to restore
the system. During this period, GHQ interfered quite oppressively in Japanese
communications operations. As a result, the Electrical Communications Ministry
was born. In 1952, domestic operations became separate under the Nippon
Telegraph and Telephone Public Corporation. As far as electrical co~unications
~ was concerned, this interference by GHQ had several fortunate, results.
Many of the officials of the GHQ Civil Communication Section were from the
Bell System, and through the Civil Communication Section, we were able to
obtain many advanced elements of both technology and management from the
United States.
As a result, in the area of a research arid development system, the Light
Electrical Division of the Electrical Lal~oratory was separated with the
creation of the Electrical Communications Ministry, and the Electrical
Communications Laboratory was organized as~ an organ of the new ministry:
This is today's T~uicen, and it was clearly set up after the model of Bell
Laboratories.
Probably with some gcidance from GHQ, the first head of the Electrical
Communications Laborar_ory, Goro Yoshida, set "jitsuyoka" (development), as
the highest objective of the laboratory, a revolutionary.concept at that
time. This was the p;:anciple that there is little significance in simply
carrying out research and reporting it at meetings of professional associa.tions.
- The important thing is to make direct use of the results in the real world.
This is the significance of development.
One important function of the Technology Bureau is to consolidate the demands
from all the divisions and bureaus, such as sales, facilities, and maintenance,
and make a summary of the requirements of the entire company for technology.
Then these requirements are received at Tsuken, and development is carried out
to meet them. The results are then sent to the Technology Bureau as "technology
reference materials." The contents are extremely detailed and include
specifications and operating instructions for systems azd equipment. The
Technology Bureau draws up the specifications for procurement of materials and
the methods for applying standards necessary for design, construction, and
~ maintenance.
Research and development takes place according to this general system. However,
a specific "Technology Research and Development Plan" is proposed jointly each
year for this purpose by the Technology Bureau and the Electrical Co~unications
Laboratory (technically, by the Research and Development Group representing the
three Electrical Communications Laboratories). This report must then be
deliberated in the head office Executive Council and be approved by the
president. A progress report is made quarterly to the Executive Council. Under
23
FOR QFF[CIAL, USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
this system, the items to be researched at Tsuken are recorded and are managed
by the policy of the organization rather than by the predilection of individual
researchers. Even in basic research, no research is allowed which is not
related to electrical communications, at least in its aim.
Thus, the research and development system of NTT is marvelously well-organized.
There is probably no other laboratory with the same strictness in its organi2ed
research activities as Tsuken, established, as it was, under the slogan of
"deveiopment." However, not all the activities of researchers are controlled .
by the "Research and Development Plan" mentioned above. In some areas a great
deal of freedom is allowed. Research.items at a stage where 5 years:~:or more is
required before results can be sent out in the form of the technical documents
mentioned above are not listed in the all-company plan. They are left to the
discretion of the general manager of the Research and Development Group.
- In any case, the organized research activities mentioned here have functioned
- as a great motive force for the business operations of NTT. Looking back on
NTT's achievements since its establishment in 1952, without listing each
example of research results, we find that during this 28-year period the
number of subscribers grew by 40 times, to 39 million, while the number of
employees only doubled, from 160,000 to 320,000 people. Furthermore, while
there has been a small increase in the basic charge for telephone service,
the unit charge for telephone calls has only risen slightly, from the 7 yen
charged 28 years ago to the 10 yen of today. The major force behind these
achievements was the modernization of facilities using new technology and the
large savings in equipment investment itself made possible by technological
- progress. In this connection, although these figures are a little old, the
equipment investment for NTT's fifth 5-year eaipansion plan for the period
from 1973 to 1977 showed a saving of 700 billion yen when compared with what
it would have cost with the technology used 10 years before.
At the beginning of this article, I gave a number of specific examples of
NTT's technology. The contribution which the technology made to company
operations was its greatest achievement.
I may have spent too much time discussing the research and development system
together with historical reflections. Here I would like to consider the
special features of electrical communications technology in some detail.
The Electrical Communications System
At the beginning of this article, I stated that telecommunications was the
primary source for electronics technology. However, while telecommunications
is a major part of electronics, it is not the whole. In that case, what are
the special features of telecommunicatiuns? To begin with the conclusion, the
main features of telecommunications are its great size as a system spread out
over the entire country and the entire world, the organic qualities that
integrate this system, and its high reliability. I would like, as an example,
to consider the telephone, the most familiar part of telecommunications, and
at present, the part which performs the greatest role.
2L~
' ~ USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
i
i
; We dial the telephone. The other party answers. We talk. This is an
' everyday occurrence for all of u$. However, in order to be able to do this
~ at any time and from any location, it is necessary for each automatic switching
~ machine at telephone company staLians to handle several tens of thousands of
connections per hour aith no~mistakes and in real time. If even one of the
relay amplifiers set every 25 kilom~ters along the long-distance.call xoutes
! broke down, communication:would be impossible. Also, this same kind of
; assurance is needed for every pairing of two telephone sets among the 39
~ million in service throughout the country. It will not do if a conn~ction is
made but the voices cannot be heard well. For the telephone to conquer
distance, voices should ideally be just as audible in calls between flokkaido
~ and Okinawa as in local calls. '
In order to achieve this ideal, the telecommunication facilities of Japan,
~ which are reported to have cost ~ore~than 8 trillion yen, must be very large.
But more than that, the service must be maintained by determining the functions
of each of the billions of parts under a unified system design concept and
making the whole function organically as if it were a living body.
This domestic system must be connected to foreign countries so that
, international calling is possible. It is also necessary for the domestic
network to function as a subsystem of the international network. Therefore,
there are international conferences almost every year with representatives of
the telecommunication engineers of all countries. The issues for discussion
at these conferences are the conditions for design of present and future
telephone networks. These international meetings are held by the International
Telecommunication Union (ITU) and its various consulting com~ittees. The ITU,
which celebrated its centennial 3 years ago, is an organ of the United Nations
with headquarters in Geneva.
ITU conferences differ from ordinary international scientific conferences.
They are not an occasion for reading papers and exchanging opinions. They are
special conferences for determining design conditions for each country as a
part of the world network. Basic conditions for the domestic system, including
the sensitivity of tielephone receivers, the assigning of telephone numbers,
the sound volume of long-distance calls, and the assignment of wave use
frequencies, are determined from a global point of view. Detailed specifi- .
- cations for domestic systems are then determined on the basis of these
decisions. Measures are taken to ensure economy and reliability, and new
- technology is created. ~
Since the word reliability has come up, I would like to briefly discuss the
reliability of technology for telephone networks.
One example is the electronic switching system. Although the electronic
switching system is technically similar to a large computer, its function is
limited to telephone and data switching. Therefore, it is often supposed to
be much simpler than a general-purpose computer. However, there are
difficulties in the function of the electronic switching system which differ
' from those of the general-purpose computer. These include the extremely large
number of input and output circuits and the requirement for literal real-time
25
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000500060028-0
FOR OFFiCtAL USE ONLY
processing. A large switching machine must handle up to 100,000 telephone
- sets and it must process several hundred thousand dialing signals that come
from those telephone sets each hour with no delay. Because of the nature of
public communications, no momentary 3elay in the switching functions can be
allowed.
Because of this, the design conditions for the D-10, NTT's standard switching ,
machine, specify that the probability of occurrence of a.system breakdown of
30 minutes or more is once in 20 years per machine. These conditions are
about three orders of maguitude more severe than the conditions necessary for
a general-purpose computer. Therefore, the component parts of these systems
must have an incredible rate of reliability, within IFIT (no more than one
breakdown in 1 billion hours, or about 10,000 years). However, the fact that
breakdowns can still occur, such as the 8-hour breakdown in the Kobe Moto~machi
Telephone Office last September, shows the difficulty of designing for
reliability.
The only technology with higher reliability than :hat of electronic switching
systems is probably the space technology used for the ~r3ce shuttle. It would
probably not be a good policy from an economic point of view to expect the ~
same level of reliability in a public communications system. High reliability ~
is unbelievably expensive. Methods of reducing breakdowns in communications
within economically feasible limits will always be an issue for
telecommunications technology. Our engineers will continue to make efforts.
The NTT Family
The facilities for this organic, highly reliable, and very large system that
I have described are not at all the kind of thing that can be simply purchased
on the open market. Therefore, all countries determine detailed specifications
for the equipment that makes up the telecommunications network. itself, if not
the telephone sets, selects manufacturers with sufficient experience, and keeps
close contact with them as they manufacture it. Fur~~hermore, because this is
the central nervous system of the nation, it is natural that in making this
selection, priority has been given to domestic manufacturers.
For this reason, the Communications Ministry took great pains from the Meiji
period on to nurture the growth of domestic manufacturers of communications
equipment. Private contracts became systematized in 1922, and the ~osition of
the four companies that stand at the head of the so-called NTT fam~ly, Nippon
Electric Company Ltd, Fujitsu Ltd, Oki Electric Industry Company Ltd, and
Hitachi Ltd, was already established by 1935.
This way of thinking is not unique to Japan. The American Telephoae and
Telegraph Company (AT&T), which controls 85 percent of American telephones,
has under it a manufacturing company, Western Electric, and Bell L.~boratories,
which has 16,000 researchers. It is well known how this company has carried
out unif ied operations from research to manufacture.
Three years ago, this same United States pressed for the opening up of NTT in
connection with the government procurement issue at the Tokyo round of the
26
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPR~VED F~R RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFIC[AL USE ONLY
GATT talks. It asked that com~unications equipment be opened up to
international competitive bidding. As I have indicated, AT&T was actually
filling its own needs independently and not using competitive bidding at all.
However, because it is a private company, it was not subject to the GATT
proposals. European companies were excluding communications equipment from
GATT as a basic principle. Considered in this light, the U.S. request was
naturally seen as unreasonable by communications people.
In spite of this, people inside and outside the government in Japan took a very
detached attitude toward this problem. Some sectors of the media turned the
- problem inside out. They expressed indignation at the monopolizing of NTT
orders by the 200 odd companies,~led by the:four companies mentioned above,
~ which make up the NTT family. Not even waiting for the U.S. demand, they
demanded liberalization inside Japan.
As I said at the beginning of this article, the telecommunications network
cannot be seen and its structure is difficult to understand. With respect
to the GATT problem, it is regrettable that NTT did not make an attempt in
ordinary times to obtain general understanding of the social significance of
the network using "Japanese language" instead of "NTT language."
As I have repeatedly pointed out, the special features of the telecommunications
network are its great size, its organic qualities, and its reliability.
Anothex~ feature that should not be overlooked is the fact.that, because it
extend~~ to every part of the country, it is impossible to rely on a
manufacturer in case of a breakdown. It must be possible to repair and
operate the system with NTT's own personnel.
Because of this, it is necessary for NTT engineers to thoroughly understand
every feature of the parts and every detail of the software. In other words,
we cannot allow any black boxes. However, NTT does not have a manufacturing
capability and even the researchers ~in the Electrical Coffiunications Laboratory
are not conversant with all the details of manufacturing technology. The
manufacturers, on the other hand, cannot possibly know all there is to know
about the design conditi.ons for this huge network. Therefore, the fastest
way to develop a large-scale system like the electronic switching system is
to have researchers from Tsuken and design personnel from the manufacturing
companies sit down at the same table for discussion. This is what is known
as joint development.
Since the days of the old Communications Ministry, although there may have
been greater or lesser involvement depending on the piece of equipment, there
has been some form of joint development with the manufacturing sector,
especially the four companies mentioned. As a result, the so-called NTT family
- was formed. It is fair to say that it was created because of technological
necessity for the large-scale system described above.
Although it may be repetitious to say this, the joint development system set
up between the major communications enterprise and manufacturers is not
unique to Japan. As a result of the GATT problem, the door has been opened,
formally, for ~oint development with foreign manufacturers for rather important
27
~ FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY -
facilities. flowever, because of the nature of the teleco~unications network, ~ '
great care should be exercised in actually carrying this out.
- The Future of Autonomous Research and Development
Toward the fi;rst of this article, I stated that NTT's technology was on the , i
highest i~vel in the world in the area of development. In the area of research, ~
it is close to the top. Furthermore, we can be congratulated on arriving at
this point in such a short time after World War II, starting from the level ~
of a semideveloped country, from the international viewpoint. However, it is ;
probably necessary to take a more sober point of view. For a long time after
the war, Japanese industry was ruled by the custom of secondhand development. ;
"The seeds of developmeiit are in foreign countries. We can just take them and ;
make products with the world's best perfoumance." Sas telecommunications been
an exception?
If we make a fairly strict evaluation, it seems best to say that it was not an
exception. Particularly during the period up to 1965, NTT was busy trying to
catch up with the performance of Bell Laboratories, which was regarded as the
- world leader in telecommunications. Even though it produced many small items
of technology that were worthy of attention, the model was always Bell
Laboratories in s,ystem development ob3ectives such as electronic-switching
systems or multip~~.ex transmission.
The research and development system of NTT which I have described was certainly
the most effective system possible during this period of secondhand development.
As a result, NTT was able to perform like a good student in the area of
development. However, because of excessive emphasis on practical applications, ;
basic research was shunted off to a corner for a time. This is indicated by
the fact that the name of the "Basic Research Department," which had a
tradition going back to the old Electrical Laboratory, actually disappeared
for about 10 years. ~
Looking back, it seems that 1966 was a banner year for Tsuken. For one thing,
the previously mentioned technological assistance agreement with Bell
Labaratories went into effect. Another event was the reactivation of the Basic ~
Research Department (present personnel: 200 people). The former event marked ~
the end of a phase in the catching up process. The latter can be seen as the ;
start of original development. Tsuken furiously and one-sidedly pursued
practical applicatiuns, and recently it has begun to realize that i~ has
reached an impasse.
Generally speaking, in any field of technology, large amounts of original
technology cannot be produced simply by creating an organization. Fortunately,
however, in the 15 years since the Basic Research Department was reestablished,
there have been several good results. Among them were at least two world-c].ass
- achievements.
One was the "Par Call" principle of synthetic speech jointly invented by
Itakura and Saito in 1970. I have mentioned that the "Speak and Spe11"
machine produced according to this principle is being marketed all over the
world. .
28
FOR OF~FICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
! The other achievement was in optical fibers. I have already mentioned that
the original invention for optical f iber communication was made in the old
Electrical Laboratory. However,"the invention which anticipated the form of
today's technology was, unfortunately, made by Cowe [phonetic] of Great Britain
(.in 1966). In response to this, Norihil~o Mizushima of Tsuken made a theoretical
analysis and made the first prediction, in 1975, that the domain through whfch
light could physically pass most easily would be a long-wave long domain
greater than 1 micron in wavelength. This was verified by a joiat research
team made up of researchers from the Electrical Co~unications Laboratory a~nd
~ the manufacturing companies. Since then, Jagan has continued to hold a top
position in optical fiber research, recognized at home and overseas.
' From these results, we can probably say that Tsuken research has begun to move,
if only in some areas, toward original development.
Even in the field of telecommuaications, a more active effort to develop
original technology will be required. For this, the unique NTT r~search aad
development system which I have described in some detail in this article will
probably be forced to undergo some changes. Here I would like to point out
two problem areas.
One problem is the research repertory--how wide a range must be covered in
electronics technology to provide sufficiently for the future of telecommuni-
cations. By law, NTT has a mission of providing public telecommunicatio.ns
services. In compliance with this, the Electrical Communications Laboratory
has been quite scrupulous in not pursuing research or development in areas not
' directly connected to communications. As a past example in computer research,
Tsuken developed the Musashino No 1 in 1958, and it was considered revolutionary .
for its time. Hotaever, wor~ was stopped because it was not considered a part
of the laboratory's main duties. Work on iti finally recommenced in 1968, when
~ data communicatio.n operations were approved by the Diet. Another example
concerning computers is the fact that the science and technology supercomputer
does not appear on the Electrical. Communications Laboratory ageAda because it
is not actually related to communications. Today, however, when the boundary
between communications and data processing is gradually becoming blurred in
terms of pure technology, it would probably be a good idea to include at least
' the architecture and parts of the supercomputer in basic research. This is
just one example, but essentially, I am afraid that if we do not expand the
categories of research, we will have reason to regret it ia the future.
Another problem is related to joint research done with the manufacturers.
During the period when the goals of systems to be developed were clear and it
was certain that the products would be adopted by NTT, the manufacturers could
rely on future purchases, and because of this, it was easy to carry out jotnt
research. However, now that the expansion of the telephone r,etwork has reached
a fairly complete stage, the new services to be offered by NTT have not yet
taken conc,rete form. Of course, the INS (Information Network System) advocated
by Vice President Kitahara seems to anticipate a rather large range of services.
However, because it involves such a wide range, it does not seem to offer any
clearly attractive development ob~ectives to the manufacturers at present.
29
- FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
;
FOR OFFICIA~ USE ONLY ~
. )
,
.
!i
Unlike the catch~tng up period, the period we have entered is one in which we
must choose our own objectives, and the role of NTT, as leader of the entire i
telecommunications industry in Japan, includiag the maaufacturers, has taken I
on more and more importance. In~proposals for new systems, greater emphasis ~ j
should probably be put on basic research. In this respect, we can say that I
the time has arrived for some reforms ia the practical development-oriented ~
research and development system. ~
Use of Brain Power Collection ~ '
_ . I
Electronics has spread its effects to all industries, and it is certain that
it will have the position of a major basic industry in Japan from now on.
Within this industry, telecommunications technology will continue to play an
important leadershi,p role because of .its level of sophisticatioa and
reliability. Fortuuately, as I have stated in this article, Japanese
technology in this area is on a very high level interaationalty.
However, it we look over the entire field of electronics, not 3ust telecommuni-
cations, the mass production techaology, with high reliability and low cost,
may be first rate, but most development is secondhand. Even many VLSI's are
still manufactured with American equipment. In the area of technology trading
with foreign countries, there is still an overwhelming excess of imports from
the United States. This is exactly the opposite from product trade. Of course,
this is oae reason for the friction in trade. We hope that electronics, as a
basic industry, will be able to break out of this situation as soon as possible.
However, there are limits to the ability of the private sector, in terms of
spending and risks, to undertake all development of electronics technology
as it becomes further mi~iaturized and more sophisticated. It is often repor~ed
= that ripple effects from military and aerospace development in the United Stat$s
make a great indirect contribution to technological development in this field.
~ For a similar reason, while NTT'will naturally continue to focus upon its own
business, because it is a public enterprise, it should use part of the large
collectioa of brain power at Tsuken to provide assistance in fields where the
burden is excessive for the private sector.
~ COPYRIGHT: Chuo Koronsha 1981 ~
Interview With NTT President Shinto
Tokyo CHUO KORON in Japanese Autum~a 1981 pp 170-179
[Interview with NTT President Hisashi Shinto by Hitoshi Hiramatsu] .
[Text] From a'Geocentric Theory' to a'Heliocentric Theory'
Will the 180-degree change in coasciousness succeed? A
discussion with the president brought in from private industry
and known as "Dr Rationalization."
30
FOR OFFICIAL USE ONLY .
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
~ T~ao Objectives �
. Hiramatsu: I have heard leaked reports of "Shinto statements" during your 7
months in office as president of NTT, and my interest in NTT has grow�n. Today
I w~ould like to have as wide ranging a discussion as time permits.
Shinto: Well, a public corporation has certain characteristics that make it
different from a private enterprise. In fact, after bei.ng here for~a half year,
it seems that there is a growing gap between what I say and any concrete action
within NTT in response to it. Lately I am feeling that I may be accused of
being all talk and no action (laughter).
Hiramatsu: Oh, that's probably because you are concerne3 with a revolutioa in
consciousness. It is natural for guch a gap to exist at a tuming point.
There are many issues facing NTT during this period of change. Today, I would
like to ask about NTT's role in relation to data communications technology,
which is held to be the centerpiece of a technological revolution that will
occur between the 1980's and the beginning of the 21st century. Data
communications technology will have a great impact on future industry, daily
life, and society. The way it is handled will have a great effect on our
future. It naturally has a strongly international character, and we can expect
more intense international competition in the area of technological innovation.
I believe it is appropriate to give high marks to NTT for its role so far in
developing Japan's data communications technology. From now on, this technology
is likely to become more di~terse and complex. I would like to ask.what you
think about the state of data communications and the ob3ecti.ves and issues
' of NTT's research and development.
Shinto: It is just 7 months since I came here, sa you should regard what I
say as what I have learned by cramming during that time. At any rate, what
NTT is considering now is a switchover of the entire com~nunications network
from an analog to a digital system.
Right now, some circuits especially prepared for linking computers are
_ digital. However, if the entire system is made digital, then the same
transmission technology can be used for sending telephoae voice signals,
computer signals, and image signals. The signals could be converted into
~ounds, images, or computer data depending on the capability of terminal
equipment, so the system could be used in many different ways. Our next
objective is to change the system so that it can be applied flexibly to a
wide range of uses over the long term. .
Another goal is to change our preaent co~unications network, made of copper
- wire, to an optical fiber system in order to meet the increased demand for new ~
co~unications.
Even if things go well, it will take 15 or 20 years to carry out both of
these objectives together. However, we have already acquired the basic ~
31
FOR OFFIC[AL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
- FOR UFFICIAL USE ONLY
technology necessary for this within NTT. The problem is how to finance it.
Can we come up with the funds soon enough to respond to the rapid changes in
society and prevent any inconvenience to the public? This is what I take to
be NTT's basic path for the future.
Hiram~atsu: Since NTT was established, it has had a long-term technology
plan baised on 5-year plans in order to eliminate a lag in telephone
communications and build up an automatic telephone network throughout the
country. And now you will also make an ultra-long-range plan....
Shinto: It will probably be necessary. Right now we are at a turaing point.
By 1982, the telephone netwqrk will reac:h every corner of Japan. The growth
of telephone subscriptions has reached a ceiling. Therefore, our pre~rious,
objectives will soon be met completely. From now on we will have to make
basic qualitative changes on an expanded scale.
Not Going To Increase Borrowing
Hiramatsu: The biggest pi.;blem in achieving these new goals is how to raise
the huge amount of money for investment through sound management.
Shinto: That is correct. Our ability in this area will determine how many
years it will take.
Hiramatsu: However, if we actually look at NTT finances right now, it seems
that the enterprise is close to death. With less than 4 trillion yen in
income, it labors under a debt of 5.5 trillion yen. Furthermore, the .
"expansion.law," under which subscribers.were obligated to purchase NTT
diversifies its methods of financing, so the bond market will require a
sound financial condition.
, Shinto: That's right.
Hiramatsu: Not only that, until recently, new investments for scrap-and-build
pro~ects led directly to increased income. The need for nontelephone services
is unclear, and investment will not necessarily lead to higher income.
Shinto: Therefore, what I am saying in the company is that, regardless of
what anyone says, I will not increase borro~aing. I will only renew old loans.
Hiramatsu: By not increasing borrowing, do you mean to reduce the scale of
investment?
Shinto: Even without expanding borrowing, we have 1.5-1.6 trillion yen of
our own funds which can be put into investment in the immediate future.
Hiramatsu: Depreciation and equipment fees?
Shinto: Right. Therefore I am saying that for the time being, we will keep
investment within these limits. ~
~ 32
' ?FICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
Hiramatsu: Does that mean at least during the sixth 5-year plan?
Shinto: No, ~ust for a while. At least while I am in office.
Hiramatsu: During that time, 1.5-1.6 trillion yen for investment?
Shinto: Accarding to my co~onsense, even though we keep talking about the
inforanation industry, I do not believe that there will be a demand as large
' as the talk would have it. I am saying that for the time being, we should
concentrate on the areas where there is an actual demand.
In previous facilities planning, the thinking was that it did not matter if
investments were somewhat uneconomical. Because of what would happen in
10 or 20 years, we should act on a big scale now Xo avoid having to do twice
' as much later. I am telling people to give up these luxurious standards for
decisionmaking. Of course, we should avoid duplication of effort, but there
is no reason to dtscuss what will happen 20 years from now. If we work
according to present conditions, now that the demaad for telephones has
levelled off, we should be able to do ~ust fine with this much self-financing.
This will not lead to any inconvenienc~ for society.
Hiramatsu: Considering the nature of the public corporation, this kind of
thinking is not in their line, is it?
Shinto: Not at all (laughter). However, no matter what anyone else says, I
will not budge on this poin~. They bring up the public responsibility of
NTT at every opportunity, but if the financial base is destroyed, how can we
fulfill our public responsibility2 If we go ahead with the present way of
thinking, expanding borrowing every year by 300-400 billion yen, the debt will
be 10 trillion yen in no time. We would have to borrow more money to pay
interest on debt. Isn't that the reason for the present insolvency of
Japan? Isn't that .:'~v the National Railways are ba~krupt? Sinae the public
responsibility cannot be fulfilled that way, they say they'll raise the rates,
raise taxes, and cut welfare and social security. Do you want NTT to end up
like that too? Right now I'm doing a lot of this kind of criticizing.
Hiramatsu: This relates to the problem of the financial base. Income has
reached a ceiling, and Japan stands out among the advanced nations as the
only country where this has happened. It seems to me that this is because
the system and policies have not been flexible enough.
Shinto: The old Public Telecommunications Law was obeyed too strictly.
Right after I took office, I told everyone t;zat even if they tried to resist
liberalization of the communication network, it would be impossible~to resist.
If we do not get~rid of these restrictions quickly, NTT's income will not go
up. You're building a fence by yourself that keeps your income from expanding.
That's ridiculous. Al.though your income grows by less than 4 percent per
year, your expenditures grow by 6 percent. Isn't it clear that the
difference between incr;me and expenditures is a minus 2 percent or 80 billion
yen a year? To rectify this, the Public Telecommunications Law should be
radically rewritten as ~oon as possible. I talk about this persistently
33
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
within NTT, and I have made a request to the M~nistry of Posts and Tele-
_ communicatinns to submit a bill in the next session of the Diet.
Hiramatsu: Liberalization of the communication network has been debated for
the last 10 years.
Shinto: More than 10 years.
Hiramatsu: For NTT, it should be fine if the lines are~used freely a~d traffic
(volume of comm4unications flow) increases, shouldn't it?
Sh~nto: Yes. But now it is building a fence. ,
Hiramatsu: However, if the network is opened up to private enterprise, there .
is the argument that "cream skimming" will occur, that good income sources will
be taken away by the private sector.
Shinto: Therefore, I am saying that we should specify what should be li.mited
and make a law for liberalization of all other areas. ' .
Hiramatsu: Then specifically you are proposing that certain rules should be
accepted by the communications industry on message switching or added.value
co~unications?
~ Shinto: Yes. It would take the form of a clear negative lit~t.-and everything
else would be left free. It should be made so that demand for nontelephone
services can grow easily. Then while discussing the various issues, we could
provide equip^~:ent corresponding to the demarid. Otherwise, if we continue as
is, the gap between investment and income will grow even wider. .
Pushing into the Area of Communications
Hiramatsu: It is a fact that restrictions in the system and policies have
cebstructed the socialization of data communications technology. At the same
time, when we consider the further diversificatian of needs, isn't it necessaxy
to remove these restrictions and also make NTT more open and create a more
diverse research and development system. .
Shinto: I feel that very strongly. I've been saying this over and over to the
people inside NTT, and they have generally come to accept it. NTT has been
totally enveloped inside the system of the Ministry of Posts and Telecommuni-
cations. However, the world has changed and the hardware manufacturers, the .
information industry, is under the Ministry of International Trade and
Industry. Therefore, MITI created the Machinery and Information Industries
Bureau. NTT, the president himself, will have to move into MITI's area, as
necessary, and actively sell NTT's techaological development capability.
Recently, we held the first regular coaference related to trade.
Hiramatsu: Trade?
34
~ ICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500460028-4
FOR OFFICiAL USE ONLY
Shinto: Yes, because it is necessary for us to work internationally.
Therefore, we have decidea to make the first contact with the Machinery and ~
Information Industries Bureau in the last part of August and work with them
regularly.
At any rate, unless we provide easy access to NTT, there will be a ridiculous
situation. I have known the new chief secretary, Ogura, for a long time. I
told him to handle things at MITI and I'll take charge at NTT. This arrange-
ment seems to be working.
Hiramatsu: As a concrete example...
Shinto: Essentially, we are purchasers of equipment, so we must open up to a
wider range of suppliers, not jLSt the NTT family.. Also, we must become more
' international. Therefore, we must provide them with informa.tion or they will
not know what to do with NTT. They will not be able to come up with the good
ideas necessary. We must open the necessary information. With a system
where what we are doing is hidden and nobody can know any~hing about it, we
' cannot expect anyone to cooperate with us.
Hiramatsu: This same sort of thing has been said before. However, the
restrictions of the present system took priority, and it was not carried out.
Shinto: If we do not change our position 180 degrees, NTT will go way into
the red. That sense of crisis was lacking until now.
"Post-Family" System
Hiramatsu: A liberalized system is also being called for internationally.
However, NTT is under the restriction of the Public Corporation Law which says
it is a domestic enterprise. During the admiaistration of the first president,
Ka~ii, a foundation known as the Overseas Technical Cooperation Agency was
created to serve as a tunnel organization. However, I think it would be
unable to fulf~.ll the role in an age of intemational technological cooperation.
Shint~: There is an organization called JTEC (Japan T~lecommunications
Economic Cooperation (foundation)). It~can be done freely through the action ~
of this organization. I do not think it is necessary to make special changes
in the system now. The problem is people. If the NTT people change their
thinking and their response to the job of the JTEC peoFle, there will be no
problems. Some NTT people can be temporarily loaned to JTEC as necessary.
Hiramatsu: There are also talented people among previous employees,
Shinto: Yes, many. It is not necessary to be limited to the present
personnel.
Hiramatsu: These organizations .are related to the developing countries.
What about "cooperation" with the advanced countries.
~ 35
" FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY ~
i
Shinto: Well, fortunately, an agreement was made recently between the U.S. ~
and Japanese Governments for that. ~
I
Hiramatsu: For material procurement? ~
i
Shinto: Not only material procurement.
v
Hiramatsu: Joint development with both domestic and foreign companies?
Shinto: If we carry it out seriously, and if we open up to the other side
so they can work seriously, I believe that agreement is sufficient. pfter I
that, everything depends on how it is carried out.
Hiramatsu: It will be difficult until NTT gets used to it. From the '
beginning, NTT has claimed that liberalization is not compatible with public
telecommunications operations.
Shinto: This is rather strange. NTT has a mistaken conception of be3ng
above everything. In a closed society. In this frame of mind, no system
~ would work.
Hiramatsu: In this new open system, I understand that you have given out
homework to everyone to reexamine all systems, from development to production
a:~d sales.
Shinto: That is because until now everything has been done with the NTT
family. However, because the agreement was made between Japan and~the United
States, we have a clause prohibiting us from working with the domestic NTT
family as in the past.
~ ~iiramatsu: At least, there must be no discrimination between foreign and
dome:. c ic companies
Shinto: In that case, even when the laboratory is looking for a partner to
carry out 3oint research, it will take much more time and trouble than before.
The laboratory people are getting irritated about this, so they are requesting
construction of a,r;:ototype production facility as part of the laboratory
organization.
Hiramatsu: Now that you mention it, there has been talk of creating a
prototype production facility for VLSI.
Shinto: So I am asking thean to wait a little. I am also aware of the ~
problem, but even if a prototypF shop is b~ailt, ~there is no guarantee that
things will go well. I gave ttiem a homtwork assignment to think until the
end of the year about how to do this without inconvenience and without
reducing the speed of research.
Hiramatsu: In other words, there is no change in the policy of not directly
having a production capability?
36
FOR OFFIC[AL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY .
Shinto: I believe it is wrong for us to have one. Therefore, I think of three
categories of research methods for Tsuken (E1:ectrical Commun:'.cation Laboratory).
One is research for modification of existing hardware or productio.n of new
hardware. Another is research for improvement of.elements which have a
' decisive effect on the hardware at hand. The other~is research in basic
materials for use in the ~lements we use. It is necessary to think in terms
' of these three stages. And it is desirable to have technological cooperation
' at each stage.
Hiramatsu: Recently, AT&T of the United States is actively moving into
overseas markets with AT&T International. Of course, NTT can only go inter-
' national with technological cooperation.
Shinto: As you say, NTT cannot enter foreign markets by itself. The things
produced under technical cooperation between NTT and domestic manufacturers
which are competitive may go into Che international marketplace. ~In a typical
development for Japanese industry, during ttie 3 years that have been spent
dawdling in negotiations with the United States, the situation has changed
completely. ,
Hiramatsu: What do you mean?
I Shinto: The amount of exports has become far greater than the amount of
; supnly to NTT.
Hiramatsu: However, the private sector had many difficultiF.s to overcome
since "export specifications" were completely different from "NTT specifi-
cations."
~
~ Shinto: However, this is the typical approach for private sector work. The
private sector can make a vigorous r~sponse in order to make sales.
Satellites and Big Projects
' Hiramatsu: Actually, from the private sector's point of view, what is expected
of NTT is a long-range development plan for the future of data communications
and public systems--for example, satellites....
Shinto: �Actually, there are two exceptions to my principle of not increasing
borrowing. One is orders for the data commuhications network on a national
scale where expenditures and income will clearly cancel each other out. The
second is communications satellites. For these two things, I am saying that
I will borrow money.
I say that the communications satellite network and the present NTT network .
can be compared like airplanes and trains. Therefore, if NTT did not create
the lines used for public communications with the use of communications
satellites, we might be all right today and tomorrow, but in ~Q ~r 40 years
we would be in a sad situation. I also say that there is plenty of danger
that it will become difficult to maintain the public character of the network.
37 ~
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY �
Hiramatsu: The problem is that satellites are a new network, right?
Shinto: I believe that we are entering a period when we must move quite
quickly in both technological development and policy decisionmaking.
iiiramatsu: That time is closer than people think. '
Shinto: I agree. That is why I am in such a hu~rry.
Hiramatsu: However, the next problem is what to do with the system.
Shinto: One thing that surprised me~ upon coming here was that this is not
being considered seriously in the Ministry of Posts and Telecommunications
or in the Diet. The tim~ has come for them to get serious.
Hiramatsu: You said that another exception to your rule was data communi-
cations on a national scale. Specifically...
Shinto: For example, there is an attempt ~o link all the financial insti-
tutions in the country. Then there are things like the national network of
the Meteorological Agency and the air traff ic control system.
Hiramatsu: That's right. There was some discussion in NTT about the
Meteorological Agency network, w~an't there?
Shinto: I told everyone to come up with ideas and prepare a plan for getting ~
orders so that the budget of the Transport Ministry could be used. Essentially,
the Transport Ministry handles most of the work related directly to meteorology
- such as~the Ports and Harbors Bureau, the Ships Bureau, the Civil Aviation
Bureau, the Meteorological Agency, and the Maritime Safety Agency. Right now,
- only the ground system for the Meteorological Agency has been constructed.
~ Items related to meteorology in the air could be handled in connection with
the air traff ic conCrol system. For the sea, the Secretariat's Technology
Section has started a maritime survey. If these things are all connected,
one good system will be created.
Hiramatsu: A total system.
Shinto: 'rhe Meteorological Agency will use part of the system and the Civil
Aviation Bureau, the Ports and Harbors Bureau, and the Maritime Safety Agency
will all use parts of the system. I am saying that this can be done.
. Hiramatsu: You will not stop w3.th only the Ministry of Transport, will you?
Shinto: We will connect up with the Fishery Agency and then the Ministry of
Agriculture, Forestry, and Fishery. ~
Hiramatsu: There is one more, the Self-Defense Agency.
Shinto: No, no that's taboo (laughter).
38
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
~ FOR OFFICIAI. USE ONLY
i
Hiramatsu: In short, you will actively move toward large national pro3ects,
. data communications systems as foundations for society.
! Shinto: This is~ not profitable for private businesses. It is something that
NTT's data oroup must do.
Hiramatsu: There is also the CATV network which America has and Japan does
I not. If a network is not possible, CATV will be stopped at the present s.tage
; of small, separate stations.
~ Shinto: If we use optical fibers, CATV would be simple. If it becomes
, digital.
' Hiramatsu: Technologically, that's correct.
Shinto: If the investment can be recovered in a reasonable period of time
; from CATV income, there is no reason not to do it. I am saying we will borrow
money. However, I am saying that we will not increase borrowing to make an
~ outright investment in the name of public responsibility.
The Meaning of the Greater Public Good
. Hiramatsu: Finally, the reexamination of the management system now being
undertaken by the temporary study committee.
When NTT was organized as a public corporation, it was stated that it would
use the good elements of private management as much as possible. Up to the
present, at least, it has done the opposite. Of course, in arguing about the
management system, it is necessary to sort out the advantages to be gained
from using private management and what can be done by modifying the present
system without using private management. However, the debate over the
~ management system has serious repercussions, especially for research and
development. What is your position on this?
Shinto: Recently, in the Diet, I was asked what I~hought about the idea of
private management. I stated then that I was not in a position to say whether
; I favored or opposed it or hoped for private management or not. That is
something for you to decide. However, if the stage of serious discussion were
reached, I would, as a concerned party, take the responsibility of providing
the necessary reference materials for discussion. That is what I said.
Although we are involved in this, we are not in a decisionmaking position.
Hiramatsu: That may be true. However, it is a fact that after becoming
president, you have come to have many doubts about the manner of operation
of the public corporation.
Shinto: I have yery many doubts (laughter).
Hiramatsu: Could you be more specific? ~
39
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
Shinto: The problem is how to get efficiency from this huge organization.
There are several different possible responses. If a two-dimensional, narrow
public enterprise is what is wanted, that is one possible kind of operation.
But if, as first principles, we want to lead the world in technological
development capability, make the fee for telephone service the lowest in the~
world, and meet new demand, and then da other things with our remaining '
strength, then there is a manner of operation appropraite for these ob3ectives.
Therefore, I am telling the temporary study committee to begin by saying what
the world is demanding of NTT in the process of examining the business
structure of the public enterprise. I have said that I will provide reference
materials to indicate what form may be best for that direction. However,
we are no~ in a position to say this is what should be done or this is what
_ we want.
Hiramatsu: In order to provide good service at a low~price, freedom should ~
be granted to the enterprise and efficient management should be expected.
This was argued when NTT was first organized as a public enterprise.
- Shinto: The.first article of the Public Corporation Law has the words
"universal and fair." If "universal and fair" becomes defined too narrowly,
the system will break down.
Hiramatsu: If there is something wrong with "universal and fair," what is
your view of public responsibility?
Shinto: I did not say there was anything wrong with it. I:sm asking whether
that should be emphasized or whether a more broadminded view of public .
responsibility should be emphasized. ;
Hiramatsu: What do you mean by a broadminded view of public responsibility?
Shinto: To operate with the primary objective of promoting the economic
activity of society. With this kind of capability, the financial base can
be made sound. Then it is not what everyone would call "universal," but
we should pay careful attention to the social welfare aspects and investigate
it carefully. That is my kind of public responsibility. If we destroy our
financial base, what kind of public responsibility is that? ~ .
Hiramatsu: However, isn't a wider deba~e necessary on public responsibility?
At least until recently, NTT was not understood well enough.
Shinto: Yes, until recently. However, it will be explained clearly. I will
take responsibility for that. It is clear that we cannot cope with the
present situation with NTT's previous ways of thinking. However, it has
already changed a lot.
Hiramatsu: In any case, it is necessary to put an end to the "geocentric
theory" that NTT is an absolute institution in data communications.
40
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
Shinto: We have already moved to a"heliocentric theory."
COPYRIGHT: Chus Koronsha 1981
Interview With Vice President Kitahara
Tokyo CHUO KORON in Japanese Autumn 1981 pp 180-186
jlnterview with NTT Vice President Yasusada Kitahara by Hitoshi Hiramatsu]
[Text] Hope for Success in International D.ata Communications
War
The famous vice president, who produced the "INS concept"
and has devoteci himself totally to the telecommunications �
field, is asked about NTT's technology development system.
A New Relationship With the Two Giants
Hiramatsu: I got the impression on a recent trip to America that since the
Reagan administration took power, aiming for a"strong America," the United
States is putting a lot of effort into data communications as a strategic
area. Of course, it's the same in Europe. The intensified technology war
between the advanced countries over this strategic field and technological
cooperation, which is significant in international read~ustment in this
field, will be a matter of concern from now on. Therefore, I thought I
would like to reexamine the role of NTT in terms of the international aspects
of data communications, the core of the emerging technological revolution.
Kitahara: What you say is certainly true.
Hiramatsu: Recently, a cross-licensing agreement was made between NTT and
IBM. Also, the patent licensing agreement between NTT and Western Electric ,
(WE), which was known as an unequal treaty, will be revised soon. According
to one way of thinking, this is a phenomenon showing that there is a great
increase in the provision of technica~ expertise by NTT. It also signifies
that NTT has emerged as a competitor with these two giants in the world
marketplace.
Kitahara: With respect to the WE agreement, we had a lot to learn, at least
until now. Therefore, rather than saying that it was "unequal" or whatever, .
I am grateful that WE let NTT use that many patents so freely. .
Hiramatsu: However, you are paying royalties, right? It isn't quite right
from the viewpoint of reciprocal noncompensated granting of licenses.
Kitahara: There were many things that were not quite right from the time the
agreement was first made (laughter). However, there was nothing we could
teach them, so there was no use in putting up a front. That was how it was.
Hiramatsu: What are some specific examples of knowhow supplied by WE?
Ltl
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY ~
i
Kitahara: One example was the cross-bar switching system. We received '
that in complete form including drawings. Of course, the manufacturers paid
a license fee.
Hiramatsu: Was knowl~ow included? .
Kitahara: Yes, we also received the knowhow. Even the production plants were
shown to employees of NTT. Even the maintenance system was shown to us. So
we were taken good care of. We were like children (laughter).
Recently, however, as you say, in VLSI research and development and optical
technology, Japan is ~robably running ahead of the pack. If things remain as
they are, we cannot avoid the scorn of the people. Therefore, from now on,
when we obtain patents, we have made a proposal to do it with crose=licensing.
Hiramatsu: That proposal suggested that the range should be expanded beyond
Japan and the United States.
Kitahara: That's right. ~
Hiramatsu: This is related to the problem of international reorganization.
Another development is that AT&T International recently opened an office in
Tokyo. It seems that it is aiming at the Chinese market. But there is also
reason to believe that it is aiming at joint development with NTT.
Kitahara: This is a domest~c problem in the United States. There were
various problems between AT&T and ITT, and as a result, AT&T was given
permission to operate overseas. It first moved into Iran, but eventually it
decided to enter the world market in earnest under the name AT&T International.
Once its position became clear, more areas of competition emerged. .And we
decided that cross-licensing was necessary.
When the present agreement was made in 1965, AT&T was blockaded inside the
United States, so there were no such problems. I think we have been fortunate
to do as well as we have during the last 15 years without trouble. However,
from now on, as you say, AT&T will enter upon the world stage. So will �i
Japanese manufacturers. Therefore, we must arraage things so that when NTT
patents are used, we can also use corresponding American patents.
So, in answer to your question about our relationship to AT&T International,
from the long-range point of view, we would like to do research and
development in which NTT and AT&T work together as one.
~ Hiramatsu: The cross-licensing agreement with IBM is bilateral, isn't it?
Kitahara: This agreement will probably be formalized when the IBM vice
president comes ~.n September. This is probably the first time that IBM has
made a cross-licensing agreement with a government organization.
Joint Research Requires Give and Take
1~2
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000500460028-4
' FOR OFFICIAL USE ONLY
~
i
Hiramatsu: With referen~e to the ~oint development you have just mentioned,
the material procurement liberalization agreement "Track III" will open up
development and equipment orders to foreign companies in aa extension of the
- ~ private contracting system. Is it possible Bell Laboratories and Tsuken might
l work together on the development of long-range.projects, for example, an
~ automatic translation machine?
' Kitahara: Yes, it is possible. I do not think it is.a dream. ~
I
~ Hiramatsu: Have there been any proposals from Bell?
~ Kitahara: Nat from Bell. Sowever, we have informally ~enpressed a desire to
work on such pro~ects. ~
Hiramatsu: For ~cample?
� Kitahara: For example, development of a single-~mode undersea cable using
optical fibers. American products are used in 70 to 80 percent of the
world's oceans. This research and development would be advantageous to their
side as well. As you know, the best fibers right now are those made in
Japan, but relay equipment is an American specialty. With tris thought in
mind, I am souading out the New York office informally.
Hiraanatsu~ With the opening up of material procurement, there has been a
great change in the environment surrounding the previous development and
~ production system of the NTT family. There are still some problems remainin~,
but what is your view concerning the ideal state of the futuse development
~ and production system2
~ Kitahara: There are many difficulties to be solved before realistic
solutions can be found to this problem. ..In Europe, all count~ies have several
trial production companies. However, we are not thinking of having a
production company. I believe it is impossible. ~It is noasense when, as
today, the private sector is so fully developed.
Therefore, as a method of expanding the range of things that we have developed,
or for which we seek coaperation in the process of development, we will ask
' companies which are suited to a certain type of research to continually carry
out research above a certain level. Furthermore, we will try to maintain
fairness as much as possible in this. The patents obtained through this
process now are, of course, bei~g publicly announced, and I believe that these
patenCs, including knowhow, should be made public.
For example, the development of VLSI technology has been carried out between
NTT and three other companies. The biggest problem in 3oint research is
balancing give and take. For this purpose, it is necessa~y to align the
standards of development to some extent. Therefore, we must continually
keep track of information on these things.through exchange of documents and
mutual discussion by researchers. Previously, certain things were,put on
the table for ~oint research, and everything bey4nd that was considered ~
imgossible. Now these things must be shown openly.
43
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY ~
At any rate, VLSI research has been carried out with three companies. Are
three companies enough? We plan to extend this as much as possible as a
sample.
Hiramatsu: What about ~oint development with foreign companies other than .
IBM and WE?
Kitahara: I do not know yet. MITT ~.s proposing 3eint development on an
international scale. In September, the British minister of industry came
to Japan and set some joint research objectives. I understand that computers
are included. We wauld like to watch such movements and consider the proper
form of "liberalization," or if that term is not appropriate, the form of
"cooperation."
Expectations of Facsimile
Hiramatsu: During this discussion, several development issues have come up.
Looking ahead to the year 2000, we can imagine a great divexsification of
data communications technology. Whea we.think about setting ob~ectives, it
is impossible to go in only one direction. What is your view of the future
development objectives for NTT?
Kitahara: By way of a preface, it is a fact that NTT has spent the 30 years
since it was established in 1952 totally ab?zorbed in installing telephones.
With 45 millian subscribers, it formed the second largest telephone company
in the world. ~ '
However, in the 3nformation society that will follow the telephone society, ;
we will have a deep relationship with the national life and economy. We
have not made a sufficient appeal or attempt to gain the understanding of
the people with regard to the "NTT of the future." I believe this was a
failure in management.
I actually wrote a paper entitled "NTT of the Future" and p{~blished it in
the laboratory report of May 1968. In that article I stated that the delay
in telephone service would be eliminated in 10 years. I asked the question,
"What will be waiting for us after that?", and answered it in my own way.
One part of the answer is facsimile. The Japanese are a nation of writers.
However, they do not take easily to the typewriter or other machines using
the alphabet such as the TELEX. They also dislike using the kana syllabary
alone. It is desirable to have something that accepts writing with a mixture .
of the kana syllabary and Chinese characters. Therefore, facsimile is bound
to succeed, and it is an ob3 ective that Japan should work toward in its
role as the most technologically developed country of Asia. With this in
mind, we began to work on facsimile in 1970.
A fundamental part of success with facsimile is the problem o� paper. How
can copies be made in the most compact and economical way? Ultimately, a
- thoroughgoing application of electronics is necessary. In the process of
radically reducing costs, IC research emerged as a"secondary" research
ob3ective and we saw that this would be a basic element in future technology.
~
LtL~
. FOR OFF[CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFiCIAL USE ONLY
Mr Yonezawa, the president of NTT at the time, went to the United States
in 1973 and asked to see Bell Laboratories with this in mind. Aowever, Bell
was very cool toward facsimile, and we found that it had been left to the
private sector. Therefore, as we found out, the standards were different
for each company. But overall, facsimile technology was very advanced.
In the course of this process, we seriously began working on facsimile with
the idea of making it our own in 1975. The cost of IC had been greatly
reduced. So we decided to go ahead. We were able to use size A5 paper and
we produced the facsimile service which will go into practical application
soon. And we are making a proposal to CCITT (Comite Consultatif International
Telegraphique et Telephonique) for drawing up international standards and
making common international connections possible.
This will be most inconvenient for America because of its variety of standards
_ for existing equipment. But the United States is a country of rapid
regeneration, so another new star will probably emerge soon.
The Pros and Cons of F~anily-Style Development
Hiramatsu: I knew that you had been enthusiastic about facsimile for some
time. An example of one of the characteristics of U.S.~Japan technological ~
development came up in what you just said. That is, NTT has always followed
the international standards of CCITT. However, Bell Laboratories has a kind
of pride and does not use anything not developed in i~s own laboratories.
America has taken its own independent path with respect to standardization.
K~itahara: When I attended the CCITT conferences as a younger man, AT&T h~id
an air of superiority. It was generally accpeted that the things they had
developed were the best. One reason for this was that, because of the
antitrust act, AT&T was shut up inside the United States and did not need to
go overseas.
However, Japan has to earn its b~ead by exports. For this reason, it always
had to meet international standards and work hard inside that framework.
~ Hiramatsu: I understand that. However, this was done within the closed
system of the NTT family. And did this tiot actually delay NTT's product
development?
For example, there is the facsimile which you just discussed. In spite of
your enthusiasm, the product directly under control of NTT was late in
achieving high-speed facsimile service. Ricoh has obtained a very large
share of the market. And Ricoh is an outsider, not a part of the NTT family.
I believe that this demonstrates a weakness of the closed joint development,
production, and sales system known as the NTT family.
Kitahara: One reason that the facsimile was delayed, as I mentioned before,
was that NTT was intent on building a telephone company and missed its
timing for starting development of the facsimile. Another problem was that
facsimile research was not very advanced at Bell Laboratories, and so it
45
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFF[CIAL USE ONLY i
failed to stimulate us. Also, there is the problem of division of labor ~
between us and the private sector. ~ ' ;
With respect to the general facsimile service in use today, only the products
purchased by NTT were used during *he first year. After 1 year, the standards
were made public, and there Was nothing to prevent anyone who could meet the i
standards from operating freely. Therefore, I want ~rou to realize that we '
plan to have the public sector participate actively.
i
Hiramatsu: Another similar problem is the electronic switching system.
For a long time, NTT mainly used the space-sharing sys~em. Because this
differed from the system used in other parts of the world, private
manufacturers had a difficult time. They were farced to make double research i
investments.
The same thing was true for AT&T, wasn't it? � ;
Kitahara: Yes. � ~
Hiramatsu: AT&T overcame this with the No 4 ESS, but NTT was unable to change ;
its policy for a long time. �
Ritahara: I believe there was some poor 3udgement on.our part. We were ;
weak in giving directions to the people in charge of switching. In retrospect,
it was mistaken for NTT to change the electronic switching system twice using ;
the space-sharing system lcnown as the D10. Rather than doing that over again, ;
it would have been better to switch to a time-sharing system. ~ !
ARd, as you say, WE also continu~d to stick to the spaee-sharing system.
T.elecommunications technology is truly a difficult field. One mistaken i
decision on the system and you can get caught in a deep valley in some areas. :
Development in an Age Without Precedents ~
Hiramatsu: I see. Data communications technology can be partially understood ' ,
for the 1980's. Most observers see Japan as strong in this area. But there '
are many things which are not yet understood. '
Kitahara: Very many. .
Hiramatsu: Among these, what do you think the dev~elopment objectives of NTT
will be? ~
Kitahara: What I am thinking about wi'-h respect to the network are the
f ields related to distribution of apticatl fiber communications to the home.
This involves large numbers. There wil'. b~ a large number of elements such
as connections. However, we will find solutions in these fields. I believe
that the technology for the INS (information network system) is fairly
complete. The next problem is to prepar,'2 the functions of coum~unications
processing and data processing related tc? this system.
- 46
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004500060028-0
FOR OFFICIAL USE ONLY
- By preparing the fuactions of communications processing and data r~ocessing,
we can produce a system that is very economical and efficient to use, that
. can be used easily by everyone from young children to the elderly.
Communications processiag includes four kinds of systems. These are tha
telephone system, the facsimile system, systems which produce printouts
such as those used in data commuaications, and systems which produce video
; images such as the CAPTAIN system. The netwark will be made up of these~four
~ types of systems in spite of differences i.~ size, speed, newaess, or oldness
of the systems.
For the other element, data processing, the only approach is to expand the
computer to a very large size. In order to build a machine that can "talk
to human beings," a sug~r computer is necessary, a computer which can learn
and combine information as complex as the billions of human brain cells.
The basic research directed toward this new age will be very important.
Hiramatsu: Finally, with an emphasis on Tsuken, I would like to ask about
problems related to the motivation of NTT's researchers, personnel
management, and management of research and development. With respect to the
ideal state of future resedr~h and development where originality must be
brought out.
Kitahara: Just recently, I discussed this with some managers from the
laboratory. Essentially, we have entered an era in telecommunications
research and development in which we have no models in the rest of the world.
However, it is not a situation where we do not have even a whiff or a gliffipse
of something. Everyone goes to international scientific conferences at least
once a year. There is always something startling among the things tallked
about there. Everyone says that there are. The problem is how to develop
these things into something original. .
Putting it another way, from now on we may need people who stand out. If
"stand out" is the wrong word, perhaps "stick out"...maybe that'~ a worse,
expression (].aughter) .
Hiramatsu: Basically, people who are unususll, have unusual talents.
Kitaha.ra: The view was expressed that perhaps we should encourage this type
of pei~;~aon more, and I listened carefully. The era of control, of creating
model.~tudents, is paat.. We were able to follow after certain things with
model sLUdents. Model students will probably be necessary from now on too,
but now ti:e�:~~nportant issue is how to nurture and encourage outstanding
individuals. i ieceived the impression that this is what the new era will
require of us.
COPYRIGHT: Ch~~o Koronsha 1981
9651
CSO: 4105/73
47
~ FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
~ i
FOR OFFICIAL USE ONLY ~ . ~
t
~
~ I
. ;
i
I
SCIENCE AND TECHIvuLOG? i
I
i
~
~
' ~
~I
- 'I
1
,
. ~
FMS USING SUPER HIGH PERFORMANCE LASER PROJECT DISCUSSED ,i
'I
Tokyo NIIQtAN KOGYO SHIMBUN in Japanese 24 Feb 82 pp 43 ,j
[Text] In the industrial field of small-quantity production ,j
of diverse products, much attention is being given to FMA=- :
the "flexible manufacturing system"--which is called the
manufacturing sy`stem of the future. Small quantities of ;
diverse products are efficiently produce by FMS, an assembly ~
of "mechatronics" (electronically coatrolled machinery), i
represented by NC (numerically controlled) machine tools ~ i
such as industrial robots and MC (machining centers), with ~
a computer at the center. This is an unmanned system which ~
requires almost no human intervention, and it holds the key I
to economical and rational production. One attempt at .
realizing the ideal of FMS is the "combined~manufacturing ~
system using a super high performance laser which has gone ~
forward under a national pro3ect; it is hoped that a pilot
plant will be built in 1983, with eff ects which will spread �
to other sites. Attention is therefore focused on the ' .
present situation at national laboratories attempting to {
advance and systematize mechanical tec~hnology, primarily for
this pro~ect. ~ '
. ~
Eff icient production methods using automation, primarily of machinery, are !
firmly established in the fields of mass production represented by automobiles ~
and electrical appliances. But in.the f ields of small-quantity production of ?
diverse products, wh~ch make up about 70 percent of total machine production, ~
labor reduction and rationalization of processes are difficult and diversi- ~
fication of demand is expected to increase, so improvement of pr~ductivity has
become a major topic in these fields. '
Accordin~?y, the pro~ ect for a combined production system using uper high ~ ;
performance laser is intended to solve the many and varied problems in the ~
field of small-quantity production of diverse products, and to develop
innovative new technology which is in no way inferior to the automation
technology of mass-production industries. That is, the goal is "to establiah '
a combined production system capable of quick and flexible production~of
amall qunatities of diverse macfiine parts using a system which is integrated '
from metal raw materials through the completed parts." ~
~
~
1~8
. FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
~
~ This project was planned for 7'years, from 1977 to 1983, with a total
investment of about 13 billion yen. Research and development is being
~ carried out as a national pro3ect, with close coordination of three national
~ research organs, including the Mechanical Engineering Laboratory of the
i Agency of Industrial Science and Technology, and universities and 20 private
~ companies under the umbrella of the Technical Research and Development
. Association.
i ~
~ The research and development is organized into four subgroups: cutting and
~ assembly, raw material processing, laser use, and diagnosis and control.
~ Research and development of the total system has been carried out through
; the cooperation of the various subgroups: Five or six companies participate
in each subgroup.
~
In order to bring about rapid advances in production technology in the f ields
~ of small-quantity production of diverse products, the concepts of combined
~ and modular processes have been taken up~as new production technology,
resulting in developmen t of a new production system which is capable of
carrying out a variety of processes at one time in one location. This.has
meant the development of new processing components, including raw materials
processing machinery, combination cutting machinery, combination assembly
~ machinery, product inspection machinery and laser machinery, as well as the
development of related new basic techniques. �
The plan also includes development of design and control technology and
~ automatic dia nostic technolo pment of system design technology
g gy, the develo
~ for the total system, and also integrated technical development of the
combined production system. The various subgroups have already completed
' research and development on their elements, and the final design of the
~ combined production system will be completed around March. The machinery
~ will begin to be manufactured in April, and construction of a pilot plant in
' the Mechanical Engineering Laboratory is to begin in May.
Although the design of the pilot plant has not yet been decided, the intention,
according to industrial Technology Director Shotaro Ozaki of the Mechanical
' Engineering Laboratory, is "to design a practical system through experimenta-
tion in the pilot plant." This is risky, advanced industrial technology
including processing technology, assembly technology, inspection technology
~ and laser technology, and the ripple effect will be immeasurable.
The fusion of electronic and mechanical technology, for example, will
facilitate automation of small-quantity production of diverse products and
24-hour operation with few operators (none at night), and the combining of
. processing and assembly and application of lasers will cut machine production
. time in half. It is also hoped that this technology will serve to reduce the
; shortage of skilled workers for machinery production and improve the work
~ environment by handling dirty and hazardous operations.
~ The goal of total system research and development is to facilitate efficient
production of the products in question by establishing system operation �
technology centering on planning and control, and system design technology
~
49
;
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2447/02/09: CIA-RDP82-00850R000500464428-4
~ FOR OFFICIAL USE ONLY .
which combines and concentrates such processes as processing of raw materials, ~
cutting, assembly, laser processing, and product inspection. It is thought ~
that the products which can b e produced using this system will include a (
broad range of inechanical components produced in small quantities, such as ~
construction machinery and machine tools. It will use a carbon monoxide ~
gas laser with a 20 kw output for production of transmission devices and i
hydraulic devices weighing 500 kg, measuring 1 meter and having up to 300 ~
. parts. ;
The companies particpating in the project are Toshiba Machine Co, Toyoda '
Ma^.ine Works, Makino Milling Mach~ne Co, Hitachi Seiki Co, Yamazaki Machinery ~
h'o~cks and Yasukawa Electric Mf g Co in the cutting and assembly group; !
Ishikawajima-Harima Heavy Industriea Co, Kobe Steel Ltd, Mitsubishi fleavy
Industries Ltd and Aida Engineering Ltd in the raw materials group; Mitsubishi i
Electric Corp, Toshiba Corp, Nippon Electric Corp, Matsushita Laboratories, ,
Horiba Ltd and Sumitomo Electric Industries Ltd in the laser group; and
Fu3itsu Fanuc, Okuma Machinery Works, Nippon Steel Corp and Oki Electric
Industries in the diagnosis and control group. .
The details of research and development are as follows: '
First, the raw meterials processing technology will require development of
super-free forges to form the larger shafts, hot hydrostatic particle presses '
to form particles into parts with irregular shapes, disk and ring shapers to i
form circular parts, and prec ision multi-axis forges to form small, graduated ;
spindles. Each of these machines will requi*_�e shaping technology such that !
they can respond with a certain degree of flexibility to changes in the shapes
~ of parts, using only a small number of tools. !
Next, the cutting process technology will require combination cutting ~
equipment which will incorporate technology of six types: (1) technology to
comb ine interchangeable units and put together combination cutting machines ;
which cut, grind and measure; (2) technology for feeder mechanisms capable of i
separations or combination, having improved mainshaft performance, fewer
varieties of mainshaft units, and more compact structure; (3) technology for '
improved cutting efficiency and methods of cutting away scrap pieces and '
preparatory cutting; (4) �technology on supports adaptable to varied processing
of parts having different shapes; (5) technology for control and drive systens ~
suited to comb~ination cutters with modular construction; and (6) technology ta
diagnose operating conditions, sense impending malfuntions, and make
adjustments. Through use of these technologies, the processes now performed �
by separate machine tools can be handled in a single location, and the number
of processes and workers can b e reduced aignificantly.
In regard to automatic assemb ly tec?inology, the goal is to develop varied
technology for small quantities of diverse products for which atandard
- automatic assembly is not possible. Standard assembly machinery uses separate
stations for different processes such as screw-tightening, in~ection or
insertion, and each station performs a single, specialized function. For
that reason, such machinery can be used only for mass production. With
comb ination assembly machinery, on the other hand, it will be necessary to
50
FOR OFFICIAL USE ONLY �
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
develop the capability to exchange assembly tools within an assembly machine,
and to develop technology to perform a variety of functions, such as determin-
ing the location of a unit and picking up parts to be assembled, or in.specting
and replacing parts. In this system, the work will continue automatically
until the product is completely assembled.
The use of lasers--a carbon monoxide gas laser with an output of 20 kw in this
case--is one method for reducing the time and the number of processes needed
' for small-quantity production of diverse products. Lasers can combine the
cutting off of minor distortions (to save subsequent processing), welding, and
case hardening with rough formation and cutting pracesses. The national
_ research organization with responsibflity for this aspect is the Electrotechni-
cal Laboratory of the Agency of Industrial Science and Technology; it is
~ pursuing the establishment of the basic technology.
Because laser beams can be used f or a number of purposes like cutting,
welding and hardening, there is no need for automatic exchange of tools.
Moreover, robot or unmanned operation is possible; this is related to the
individual process times. Lasers are expected to be a trump card in the era
of new materials, since they can eff iciently handle diff icult materials like
ceramics and composites. Director of Electronic Processing Research Masayuki
Ikeda of the Electrotechnical Laboratory says: "Laser beams can be used
together with other processing methods, in addition to uses combining such
functions as processing and measuri*~g." Fram thi~, it appears that the era of .
laser processing will arrive even sooner than had been anticipated.
Basic Technology To Be Established To Meet Demands of Industry
Mechatronics devices have been i.ntroduced to reduce manpower and costs to the
minimum, and employees have begun to escape from simple tasks and dirty work.
Completely unmanned factories which efficiently produce diverse products in
small quantities will soon make their appearance. What kind of research
and development have national research organizations embarked on? We visited
- the Industrial Technology Agency's Mechanicdl Engineering Laboratory in
� Ibaraki Prefecture's Tsukuba Research Park.
It appears to be true that "mechatronics is no more than improving the
performance of machines" (Deputy Director Makoto Kimura), and that "there are
many things the national research organizations should be doing, and they
haven't done research on mechatronics" (machine tool section chief Kataro
Yoshida) .
The advancement and systemization of inechanical technology is the basic
direction of research at the Mechanical Engineering Laboratory, but it has
played a central role in research and development of the combined production
system using a super high performance laser, a large-scale industrial
technology research and development project. It has carried out research
in some 10 basic areas, including cutting, molding, automatic assembly, ~
automatic diagnosis, and design and control technology.
The demands on processing technology have increased from micron range
� tolerances to the submicron range. Superprecision processing technology
51
FOR OFFICIAL USE ONLY ~
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
FOR OFFICIAL USE ONLY
has not yet been firmly established in Japan, and the transfer of technology
from the United States has become impossible. For this reason, special
resea.rch on superprecision metal mirror processing technology began in 1981.
This was intended to develop technology for processing metallic mirrors
(aluminum alloy, deoxidized copper) up to 500 mm in diameter, involving
turning and cutting technology including evaluation of processing character-
istics, design of high-precision processing devices, and technology for
precise control of movement in the X, Y and Z axes.
~
Robots can be called the "representative player" of the mechatronic team.
The Mechanical Engineering Laboratory has developed seeing-eye dog robots
(machines with the function of leading the blind) and systems, to aid those
with serious physical impairments, which comb ine manipulators controlled
~ through dialog with the operator and self-propelled vehicles which can move
in any direction. These are all aimed at physical welfare, but "welfare
equipment always involves risk; it is a problem with which the national ~
research organizations and universities are experienced" (industrial technology
director Ozaki).
Robot research has attempted, from a number of different angles, to give
machines and computers the functions of the eyes and ears of inen and anim~ls
(functions such as pattern recognition, visual information processing and
, voice recognitian). This smart robot research "has the prima.ry purpose of
,developing functioris wh{~ch can be used in future industrial robots" (robot
engineering section chief Ei~i Nakano) . ,
~ In order to automate operations like manned assembly, the laboratory has
developed adaptive manipulators with actuators resembling human muscle
movemer?t functions. It has become clear that simple control logic can make.
- these manipulators execute basic assembly operations ltke pressing, handling,
aligning, or inserting shafts. "As~these basic techniques are established,
one by one, assembly robots will become a reality" (chief researcher Hidetoshi
Ito).
Computer-assisted design (CAD) has, with the miniaturization of microprocessors .
and advances in image processing, appea.red in workplaces where energy conser-
vation and automation were thought impossible, and has been called "the second
industrial robot." The Mechanical Engineering Laboratory has developed
~ automatic design systems capable of very eff iciently designing press molds
~ whfch require a high degree of dexterity. Research to achieve commercial
. utility has continued on the basis of this success.
In any case, the Mechanical Engineering Laboratory, which handles a broad
range of inechanical research topics, will play~an important role in
"establishing basic techniques one by one" in response to industry's deinands
for "machines that can use the new tools that appear and new tools for
high-performance and high-speed machines" (Deputy Director Kimura).
;
~
t
52
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0
. FOR OFFICIAL USE ONLY
' S) t)
' - ~
' o) P J~ r~ u)
~ n) r ' '
i ^ ~ V~ .
I . 1~+
~ . F
I ' � �
I 'w, .~iJ / ~
~ . �
I
I �
1 `
' ' k) 1'~` i f~ ' ~
� - �
~ r ~
J ~ t. ^ ~ ~ K ~ y,~ ~ I. b / .
'PrV~',' ` .s ~
~ .
- g . ~ .~d) ~
, ~tia~~" , ~ ' e)
i~ ~ h~.,.. . . f~.
, Flow of Combined Production System
(a) Conveyer mechanism
(b) Production control device
(c) Heat treatment area
(d) Ingot processing mechanism .
(e) Induction oven
(f) Raw material conveyer mechanism
(g) Raw material records desk .
(h) Materials preprocessing device
(i) Materials input ~
(j) Materials meltdown head
(k) Laser beam polarizer .
(1) Ingot stockyard
(m) High-output laser oscillator
(n) Laser beam splitter
(o) Laser beam guide
(p) Welding head
(q) Combination cutting mechanism
(r) Case hardening head
(s) Purchased parts input
(t) Medium-output laser oscillator
(u) Combination assembly mechanism
(v) Product inspection mechanism
(w) Product output
COPYRIGHT: Nikkan Kogyo Shimbunsha 1982
9601 END
CSO: 4106/81
53
- FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000500060028-0