A telephone subscription right is the right of a subscriber telephone contract holder to receive subscriber telephone service under that contract (Article 21 of NTT's telephone service contract tariff). In everyday use it means much the same thing as the "facility installation contribution," the fee paid when newly signing up for an NTT landline. For a single subscriber line, that contribution was once 72,000 yen (75,600 yen including tax). The right was carried as an asset on corporate balance sheets and could be sold or pledged as collateral.
The history of telephone subscription rights is closely tied to Japan's telecommunications infrastructure development. The facility installation contribution has subscribers cover part of the cost of building the subscriber line that runs from the local switching building to the customer's premises, positioned as an advance payment on the monthly basic fee. NTT West explains that the contribution played a major role in building the telephone network by raising construction funds for spreading telephone service quickly. The scheme dates back to the era of Nippon Telegraph and Telephone Public Corporation, established in 1952, and it was retained after privatization in 1985, when Nippon Telegraph and Telephone Corporation was founded.
On March 1, 2005, the facility installation contribution for a single subscriber line was halved to 36,000 yen (37,800 yen including tax). At the same time, the surcharge on the subscriber telephone Light Plan, which waives the installation contribution in exchange for an amount added to the monthly basic fee, was cut from 640 yen to 250 yen per month (262.5 yen including tax). The Light Plan did not start in 2005: it had been selectable for subscriber telephone service since February 2002, and by the time of the price cut most new subscribers were already choosing it. As mobile phones spread, demand for new landlines has kept shrinking. NTT West explains that while it does not itself guarantee any monetary value for the subscription right, a trading market for these rights has formed in practice and arrangements such as treatment as a non-depreciable asset under the Corporation Tax Act have been established. Because the asset is not depreciated, it stays on corporate books at its original acquisition cost.
Abolition has been debated for a long time. In its 2004 final report on how interconnection charges should be calculated from fiscal 2005 onward, the Information and Communications Council of the Ministry of Internal Affairs and Communications stated that if NTT East and NTT West wished to review the contribution with abolition as one option, that should be permitted, provided due consideration was given to existing subscribers and to the market for trading subscription rights. Both companies chose a price cut rather than abolition, and NTT West said it would consider any further review while watching trends in the trading market and the review of related institutional arrangements (its explanation as of 2005). On refunds, NTT West states that the contribution goes toward subscriber line construction costs and is returned to customers in the form of monthly basic fees set at a lower level, and that it is therefore not refunded even on cancellation. As migration from the PSTN to IP networks has progressed, services that carry no facility installation contribution are also available, such as Hikari Denwa, which uses a FLET'S Hikari fiber line for access, so there are few situations left in which a new contribution is paid. See How Japanese Phone Numbers Work for the landline numbering system and History of Phone Number Digit Lengths for infrastructure evolution.