This chapter will provide a critical evaluation of the extensive literature on the economic features of networks (Ida, 2004). As a result of rapid innovation, network industries such as telecommunications, electric power, city gas, and railway, have played an important role in determining a country’s economic growth. The US and the UK have rapidly furthered regulatory reforms in these industries, whereas the pace of Japan’s reform, which used to be quite slow, has finally overtaken other countries. We can summarize the regulatory reforms of Japan’s network industries as follows:

• The telecommunications industry: The Nippon Telegraph and Telephone Public Corporation was privatized as the Nippon Telegraph and Telephone Corporation (NTT) in 1985, and New Common Carrier (NCC) has also commenced business since 1987. NCC has steadily improved its share of the long-distance toll market, and this figure has reached more than 50%. NTT was reorganized as one long-distance telephone company and two regional telephone companies under a holding company system in 1999, and fair competition in this industry has significantly progressed.