Officials from Japan and the United States on Wednesday suspended talks over the interconnection fees charged by Nippon Telegraph and Telephone Corp., as the U.S. side rejected a proposal from Japan that left its previous rate cut offer intact.
Washington had already labeled the proposed rate cut -- a 22.5 percent reduction -- inadequate.
Although Tokyo had hoped its "new" proposal -- which would have introduced the cut in three years rather than four -- would lead to a settlement of the long-standing bilateral dispute, it is now compelled to consider an additional proposal.
But it may take some time for talks to resume because Japanese negotiators are under heavy pressure from the Liberal Democratic Party to avoid further compromises.
On Tuesday, Washington had rejected Tokyo's offer to achieve the 22.5 percent reduction in the phone hookup charges NTT levies on other carriers from four years, as earlier proposed, to three.
U.S. officials are apparently holding to their original demand, made in late March, that NTT reduce the interconnection rates by 22.5 percent in two years and then swiftly reduce them further by a total of 41.1 percent. It is threatening to take the case to the WTO if no progress is made by the end of the month.