This chapter will provide an overview of the current state of broadband and competition policy in Japan, and highlight the primary factors contributing to Japan’s ongoing success in implementing broadband. While referring here to Japan’s broadband success, I would also caution that this has not brought prosperity to all sectors of the telecommunications industry. Indeed, the center of gravity of the industry is shifting away from fixed to mobile telephony while the underlying technology is moving away from the public switched telephone network (PSTN) to an Internet protocol-based network, and the telecommunications industry as a whole is actually contracting. This is an unavoidable phenomenon when migrating from an old network infrastructure to a new network infrastructure. While Japan is clearly in the lead now in migrating to fiber to the home (FTTH) services and third-generation (3G) mobile services, we must remain cautious in observing future trends to see if this progress can be turned into longer term sustained success. Yet for Japan’s telecommunications industry to cease moving ahead at this point is most unlikely. Giving one pause is that at this stage Japan has both old and new networks, resulting in an industry structure that is inefficient and costly. This is a structural change that once embarked upon, must be followed through to the end. Paralleling the structural change of the industry, the government declared a paradigm shift in which competition policy is moving away from the competition creation and promotion stage to the competition maintenance and monitoring stage. In other words, an irreversible historical change has been set in motion. In this chapter, I address the question of why this historic transformation occurred in Japan, especially considering that Japan was assumed to lag behind the West in regulatory reforms. Here I will analyze Japan’s success in implementing broadband in terms of four factors: unintended consequences of competition policies, the intended consequences of Japan’s competition policies, the emergence of new common carriers with capability and drive, and NTT’s grudging but unavoidable efforts to reduce its operating costs.