TOKYO- Japan, worried about falling behind the rest of the world in Internet technology, is pushing a sweeping five-year plan to link all homes to high-speed Net connections and encourage competition in telecommunications.

"Japan hopes to join the club of the world's most advanced IT nations within five years," Kenji Kondo, a Cabinet official overseeing the "e-Japan" program, said Monday. "We have to take things one step at a time."

One point in its favor is that e-Japan acknowledges that steep access fees due to a "monopoly" in the telecommunications market - referring to the domination of Nippon Telegraph and Telephone Corp. - have been a major obstacle to the spread of Internet use.

And the plan promises to take legal steps to break the powers of NTT if it continues to hold an unusually large share of the market. NTT, formerly a government-owned corporation with a monopoly on domestic calls, still controls more than 99 percent of Japan's telephone lines.

Although more than half of American homes are hooked up to the Internet, that ratio is about a third in Japan. Flat-fee access to the Net is rare for Japanese homes. Local telephone calls still cost about 9 yen (7 cents) for three minutes, making Internet surfing a costly pastime.

Critics say the government's program is too little too late because the world's No. 2 economy has fallen far behind the United States, Singapore and other nations in Internet proliferation.

"Government help in setting up the infrastructure is good news," said Hironao Kawashima, a Keio University professor and expert in Internet technology. "But that doesn't mean Japan is going to catch up instantly with Singapore or the United States."

The government needs to exercise more leadership in streamlining regulations and unifying standards to ease the use of such new technologies, Kawashima said.

Although the Japanese government has for years promised to ease regulations and free up the market, progress has been slow.

Kondo said Tokyo has earmarked 2 trillion yen ($16.7 billion) in the upcoming fiscal budget for the plan, which includes tax incentives for laying high-speed optical fiber, cable and mobile Net systems.

E-Japan, whose outline was worked out by a special government panel, is set to be adopted as government strategy by the end of this month, he said.

The plan will invite 30,000 foreign experts to work in Japan, allow Japanese to pay their national taxes electronically by 2003, train public-school teachers in personal computers and change laws to expand electronic commerce.

But much of the driving force for e-Japan will come from the private sector, Kondo said. The government will merely make it easier for the private sector to carry out the changes, he said.