Satellite-Based Internet Beams Down to Japan

Koji Kaneko is senior managing director of Direct Internet, and also serves as president of Parallel Technology Inc. In his 35-year career in Japan's information system business, he has been an executive vice president of Microsoft Co., Ltd.; president of Alliant Computer Japan, Inc.; and president of Microware Systems KK. The interview was conducted in Japanese.

interviewed by Noriko Takezaki

Could you briefly explain your business?

Koji Kaneko: We are about to start digital satellite data communications services in Japan and the Asia-Pacific using Hughes Network Systems' DirecPC system. Basically, we intend to combine satellite communications with the Internet. Many Internet users have been complaining about the slow speed of data downloads; our service will drastically improve download speed by utilizing the capabilities of satellite communications.

We've set up a network operation center in California, in PanAmSat's uplink center there. When Internet data is downloaded through the PAS-2 communications satellite, via our network operation center, download speeds are much, much faster than those of existing Internet services.

What kind of services will you provide?

Kaneko: Basically, we have three types of services: Turbo Internet, Package Delivery, and Multimedia Pipeline.

Our Turbo Internet Service provides high-speed data downloads from the Internet. At 400K bps, the data delivery speed is 14 times faster than a 28.8K-bps modem, and 3 times faster than a 128K-bps ISDN connection. This service is suitable for both the individual and corporate markets.

Package Delivery Service is for such applications as software distribution, distance learning, and online shopping. It delivers digital data to many sites simultaneously, such as branch offices in Japan and other countries. To ensure reliable data transmission, we use duplex communications. We have adopted the Data Encryption Standard (DES) for security, and also provide user IDs for authentication.

Our Multimedia Pipeline Service is suitable for such real-time data delivery applications as news, weather reports, and stock information. We intend to provide not just a TV-like service, but one that supplies sufficient information to meet user needs.

Are these services expensive?

Kaneko: No, I think our fees are quite reasonable. Here in Japan, the Turbo Internet Service is available at a monthly fee of JPY5,500 for up to 64MB of data. Additional data costs just JPY100 per megabyte. The Package Delivery Service is just JPY200 per megabyte, and we offer a nighttime discount. The Multimedia Pipeline Service is JPY300 per megabyte.

What equipment do I need to use these services?

Kaneko: To utilize our services, you'll need a DirecPC Access Kit, which consists of an antenna, adapter card, cable, and software. This costs JPY98,500. Individual users can use their PC, and corporate users can use a server.

How are you going to develop the inter-continent businesses?

Kaneko: Here in Japan, we [Direct Internet] are in charge of the operation. We've set up offices in Sapporo, Nagoya, Osaka, and Fukuoka for our nationwide services, and we will sign contracts with about 70 agents in Japan for sales of the system.

In other countries, we use franchisees - one for each country. We feel our services should satisfy the local market needs, so they may vary slightly in range depending on the country. As far as I have seen, the Japanese tend to focus on intranet applications, while people in other countries are very interested in educational applications.

What are your current tasks to be cleared?

Kaneko: In the early stages of preparing to establish this company, we had difficulty convincing people that satellite communications are safe and secure. Only a few potential users really understood the benefits of satellite communications; they blindly thought that the risks were high. But now, owing to the dissemination of PerfecTV [a digital satellite broadcasting service in Japan], many people are excited about using our new satellite services.

In particular, Internet service providers predict that our service will grow quickly. Cable TV operators, too, are now enthusiastic about their connection to the Internet, and many cable modems for this purpose will appear on the market this year. So, I think it is quite timely for us to start this new Internet business.

However, we have to take cautious steps if we are to make this business successful. Although we will use the established Hughes Network Systems' DirecPC system, we can't simply introduce the system and its business method into Japan and other countries. We have to make sufficient efforts for localization, by considering each country's conditions and situations. That is why we decided to adopt the franchise method for operation in other countries.

For localization in Japan, we are developing software adapted to the payment system in Japan. We are also preparing user documents in Japanese.

And what are Hughes Network Systems' expectations for your DirecPC business in the Asia-Pacific?

Kaneko: They're very excited, since our business will extend the Hughes Network Systems' intra-continent Internet service into being intercontinental and global in scope. Hughes had been thinking about worldwide deployment of their service, but their original idea was to set up services separately in each continent or area, not to extend their existing service to a global scale. We believe we can help build a private-sector version of the GII [Global Information Infrastructure].

What are your own business objectives?

Kaneko: One of my dreams is to let the world know more about Japan and Japanese culture. Because this is an island country and we don't use English, we tend to be isolated from the rest of the world. But through the use of the Internet, I think we can send more information on Japan to the world.

Some people say that the Internet boom will soon dissipate. I really would like to overcome such pessimistic predictions by changing the way that the Internet is used by the Japanese, to ensure that everyone can enjoy the benefits of Internet technology.