The parent company's results have improved, but mainly because of reduced telecommunications costs.
But Germany, its largest overseas market, with 2.6 million members, is still hobbled by high telecommunications costs.
The trouble, Mr. Tachikawa said, is that Japanese people already spend an average of about 5percentt of household income, or $200 a month, on telecommunications costs.
Jason Katz, founder and chief executive of PalTalk, a site that fosters online video messaging, said innovation and falling telecommunications costs allowed him to offer his basic service free.
But the ministers, meeting in Brussels, intend to reject a broader call from Ms. Reding to harmonize telecommunications costs and regulations within the 27 countries in the European Union.
"In the United States, our telecommunications costs are low and our fraud rate, knock on wood, has been so low that the rationale for the chip card has never existed," Mr. Pascarella of Visa said.
In contrast to Europe, where smart cards have been used for a decade to fight fraud and reduce telecommunications costs, there is hardly anything that can be done with one in the United States.
Mr. Goldston also noted that dial-up Internet access had become phenomenally profitable in recent years as the wholesale telecommunications costs to providers like AOL have fallen from 45 cents an hour to less than 6 cents an hour.
Underlying the panel's recommendations is a concern that telecommunications costs have remained significantly higher in Japan than in other major industrial economies, hampering the expansion of high-speed Internet services.
To the surprise of many who had written off the AOL service as overpriced and a dinosaur, the company has been able to add subscribers and maintain its $22 monthly fee, even as its telecommunications costs fall 18percentt a year.
