WebTV Networks K.K. (webtv Japan) plans to start its TV-based Internet service in Japan on December 1. The service will include e-mail, entertainment and travel information, karaoke, and a TV program guide. The WebTV service charge is \2,000 per month for up to 15 hours of use (and \5 per minute for over 15 hours). Each subscription covers up to six separate e-mail accounts (for individual family members).

Sony was to release a set-top box for the WebTV service on November 20. (In addition to the set-top box, users need only a conventional TV set with external video input port.) Sony's Internet terminal IT-WJ200 set-top box, with 33.6K-bps built-in modem, lists for \45,000. An optional wireless keyboard is available for \11,000.

The WebTV service utilizes Infoseek Japan as its default search engine, and offers Internet access through such providers as InfoWeb, InfoSphere, Sannet, and Teleway Sirius. WebTV Japan hopes to acquire 150,000 subscribers in its initial year, and to reach 1 million users by 2000.

"We believe that the introduction of WebTV will be the first step towards the future digital TV," declares Susumu Furukawa, president of WebTV Japan and chairman and CEO of Microsoft KK (Microsoft Japan). Furukawa has been devoting considerable time to building firm relationships with the broadcast industry for future Microsoft operations. "We also expect much from the WebTV technology, since [some of] their engineers came from Apple and were involved in the development of QuickTime - a sophisticated, state-of-the art technology."

WebTV Japan was originally slated to be formed as a joint venture between WebTV Networks and Fujitsu. After Microsoft bought WebTV, however, Fujitsu decided to pull out of the venture. As a result, WebTV Japan is 100% owned by WebTV Networks, with Fujitsu's involvement limited to the construction and operation of the network operation center and billing system.

On the hardware side, only Sony, which had released set-top boxes for the WebTV service in the US, has participated in the launch. WebTV Japan says that it has been approached by many Japanese TV manufacturers, but most are reluctant to commit because of unfavorable sales of their own Internet TV products.

Even Sony admits that selling hardware alone will not bring much profit. In the US, Sony was recently forced to halve the price of its WebTV set-top box, from about $400 to $199, after "considering the market environment." Since Sony's US set-top box uses such costly components as a 64-bit MIPS CPU, 56K-bps software modem, and 8MB of SD-RAM (for movie and graphics processing), the decision to lower the price was a tough one. But, "We think of it like our PlayStation business," says Yukio Kubota, a Sony vice president. "We are not thinking about getting money out of the hardware production. Rather, we will make money from the total business of this service."

WebTV Japan says that it plans to incorporate broadcasts of terrestrial, cable, and digital satellite TVs in the future. The company's success will largely depend on how big Microsoft Japan's network (or, more precisely, president Furukawa's personal network) can grow to involve other broadcast and entertainment business companies. For more information (in Japanese) on the WebTV service, see their website.

Sharp US Unveils Windows CE Handheld PCs

Sharp electronics corp., the us sales and marketing subsidiary of Sharp Corporation, announced in October that the company will release a new line of handheld PCs using Microsoft Windows CE version 2.0. These units will be available in the fourth quarter of 1997 only in the US.

Sharp's new handheld PC Mobilon line includes three models with built-in 33.6K/9.6K-bps data/fax modem. The HC-4500, the centerpiece of the new line, features a 256-color LCD touchscreen and 8MB of RAM. The 8MB HC-4000 and 4MB HC-4100 use a 16-grayscale LCD touchscreen. The 6.5-inch LCD touchscreens offer 640 x 240 pixel resolution and adjustable backlighting.

One of the Mobilon series features is an optional PC Card digital camera, the CE-AG04, which offers 16.7 million colors, 640 x 480 pixel resolution, and 2X optical and digital zoom. The camera capability can be utilized on both the color and monochrome Mobilon units. (For monochrome units, the captured images are stored in the same color file format as for the color unit.)

Sharp's Mobilon series also includes a number of exclusive multimedia features: Image Editor, which can edit or add to the images saved from the digital camera or other sources (such as the Internet); Voice Recorder, which records or plays back voice memos; and Multimedia E-mail, which creates e-mail with images and voice comments.

The Mobilon supports such Microsoft applications as Pocket PowerPoint for the creation of desktop presentations, Pocket Word for word processing, Pocket Excel for spreadsheet creation, and Pocket Internet Explorer for web surfing. For more information, see their website.

Electronic Certification Service Established

To address the need for a secure system of payment for electronic commerce, Fujitsu, Hitachi, and NEC have jointly established Japan Certification Services, Inc. The joint venture will work to ensure the security of electronic transactions by acting as a proxy issuer of electronic certificates using a public-key encryption system.

The security protocol to be used is SECE (Secure Electronic Commerce Environment), which was developed jointly by the three companies last year. While SECE is based on the standard SET (secure electronic transactions) protocol, it has its own variations to "accommodate certain Japanese ways of doing business." One example of such a "variation" is the Japanese custom of delaying the credit card payment for large purchases until the "bonus season," with the purchase paid off in one lump sum when the bonus comes in.

Consumers will be able to obtain an electronic certificate by applying directly to a certification authority (CA) - an organization, such as a bank or credit card company, that has purchased a set of certificate issuing rights from Japan Certification Services (JCS). The CA will investigate the creditworthiness of an individual (just as credit card companies normally do) and, if the individual qualifies, the CA will submit a request to JCS for an electronic certificate.

After the individual receives from JCS a CD-ROM or floppy disk that contains the special software needed, he or she can then connect with the CA homepage to register and receive an electronic certificate (which may be stored either in the user's computer or on a disk). From then on, each time the consumer wishes to purchase an item from a member store online (that is, a store certified by JCS), the software automatically identifies the consumer and verifies the store. Initially, JCS will only issue and manage certificates. The computer systems will be outsourced to Fujitsu, Hitachi, and NEC. Certification system operation procedures will conform to standards in a guideline being prepared by the Electronic Commerce Promotion Council in Japan (ECOM).

The three companies each contributed \80 million to capitalize the company, and together hold a 51% share. The other 49% is shared among 46 other companies, including several major banks, insurance companies, and securities and other financial firms.

The certification authorities established as of early October were UC Card, Fuji Bank, Sakura Bank, and Asahi Bank. JCS charges \18 million a year to the certification authorities, which gives each authority the right to issue up to 15,000 certificates. Each certificate after 5,000 will be cost \450 each.

For stores wishing to receive a certificate, the price is \36,000 per year. Japan Certification Services is initially targeting sales to banks and credit card companies, but plans to expand into other areas such as securities and insurance. JCS is aiming for sales of \2 billion within five years.

The president of JCS is Katsuyuki Tokura, formerly general manager of Fujitsu's software and services business promotion group.

NTT Int'l Procurement Agreement Extended

In early october, the ministry of posts and telecommunications (MPT) announced that both the Japanese and US governments have agreed to extend the arrangement on international procurements by NTT. Based on negotiations between the two governments, it was decided that the agreement (which was to expire on September 30) will continue in effect until the planned 1999 restructuring of NTT. [For more on the background and issues of the negotiation, see "Telecom Becomes Latest Japan-US Trade Dispute" (October, page 10) and "Negotiations Held on NTT Procurement Agreement" (November, page 9.-Ed.]

Regarding improvement of the procurement procedure at NTT, items requested by the US side and agreed to by the Japanese side include the provision of more detailed information on major procurements of public telecommunications equipment, procurement announcements through NTT's Internet website instead of only the Kampo (official gazette), abolition of NTT's requirement that suppliers submit subcontractor listings, and provision of more detailed information on the technical specifications of the products to be procured. Also agreed to were greater commitment by NTT to international standardization activities, and allocation of procurement volume based upon price, quality, delivery, and other commercial factors.

"We are appreciative of the US government's effort to attempt to further open NTT's procurement practices," says William Archey, American Electronic Association president and CEO. "However, it is NTT's actions that will determine whether or not this agreement is a success. The fact that we have extended for the sixth time the NTT procurement agreement demonstrates the difficulty in obtaining true market access in Japan. After 17 years of an agreement, the US share [percentage] is only one-third of our global share."

The NTT agreement was first negotiated in 1980 and has been renewed every three years since (except for the 1994 enhanced agreement, which was negotiated simultaneously with framework talks on government procurement). The agreement will likely be reviewed again in 1999 to determine changes required in the present arrangement after the restructuring of NTT.

New Competition for ZIP

In mid-october, sony corporation and fuji photo film Co. announced the development of "HiFD," a new 3.5-inch floppy disk system with a storage capacity of 200MB and transfer rate of 3.6MB per second. (Normal 1.44MB floppy disks have a transfer rate of only about 0.06MB per second.) Although current 3.5-inch floppy disk drives cannot read HiFD disks, the new HiFD disk drives will be backward-compatible (able to read standard 1.44MB 3.5-inch floppy disks).

A HiFD drive contains a "dual discrete gap" head, which means that the head has a narrow gap for reading HiFD disks and a wide gap for reading conventional 1.44MB floppies. And because the head is of the "flying-head type," it does not come in contact with the disk surface when data is being read, so there is less wear and tear on the disk.

Plans call for the HiFD system to be simultaneously introduced in the US and Japan in spring 1998. The HiFD specifications have already received support from Alps Electric Co. and TEAC Corporation, and Sony Corporation will license the technology to interested parties.

Tentative pricing on HiFD disks and drives was not available at press time.

Distributed Object Promotion Group Formed

The Distributed object promotion group was established in Japan in October to promote distributed object technology and to verify the inter-connectivity of member companies' products. The member companies include prominent computer hardware and software vendors, such as Fujitsu, Hitachi, IBM Japan, NEC, Nihon Sun Microsystems, Nihon Unisys, Oracle Corporation Japan, Toshiba, and Toyo Information Systems, as well as BEA Systems Japan and Osaka Gas Information System Research Institute.

Distributed object technology is often characterized as difficult for the layman to understand, since it is a system infrastructure and usually invisible to the user. However, the group considers distributed technology to be a key basis for corporate information systems, and intends to verify interconnectivity among CORBA (Common Object Request Broker Architecture)-compliant products and to ensure the portability of application programs.

The verification results will be presented through technical seminars and exhibitions, and also contributed to the Object Management Group (OMG), which set up CORBA. The first Distributed Object Technology Forum, being held December 3 through 5 in Yokohama, will comprise technical sessions, case studies, and panel discussions.

IIJ Launches US-based Services

Japanese internet service provider Internet Initiative Japan (IIJ) has launched an Internet access business in the US through IIJ America, its New York-based affiliate. IIJ America, established in March 1996, last month (November) began offering 1.5M-bps leased-line access on the US East Coast for a setup fee of $5,000 and a $5,000 monthly connection fee; the company will eventually expand its services to include higher speed lines. IIJ America also plans to offer the services to customers on the US West Coast next year.

IIJ has already begun building a backbone network connecting America's East and West Coasts. This new backbone network will join IIJ's 245M-bps capacity US-Japan link, and the A-Bone backbone network that directly links countries in the Asia-Pacific region. (The A-Bone is operated by IIJ-affiliate Asia Internet Holding.)

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