IIJ Announces its Plan for the Annual Dividend for the Fiscal Year Ending March 31, 2007.

TOKYO -- Internet Initiative Japan Inc. ("IIJ", NASDAQ: IIJI, TSE1: 3774), one of Japan's leading Internet access and comprehensive network solutions providers, today announced that it plans to pay an annual cash dividend for the fiscal year ending March 31, 2007 ("FY2006") in consideration to the recent financial results.

         The plan for the annual cash dividend for FY2006
             (From April 1, 2006 to March 31, 2007)

        Dividend per one share of common stock*: JPY 1,500

* 400 American Depository Shares represent one share of common stock

IIJ continues to make efforts to pay dividends to shareholders continuously and stably, while simultaneously enhancing its financial position, expanding its business in the mid and long-term and retaining earnings for new business development.

IIJ eliminated its accumulated deficit in its non-consolidated financial statements by reducing additional paid-in capital and common stock in August 2006. As a result, IIJ expects to have retained earnings in its non-consolidated financial statements. IIJ's financial results for FY2006 have been in the favorable trend as it announced today. IIJ expects to pay dividends to its shareholders for the first time in its history for FY2006.

IIJ plans to propose the dividend payment at its general shareholders' meeting that is scheduled to be held in June 2007.

About IIJ

Founded in 1992, Internet Initiative Japan Inc. (IIJ, NASDAQ: IIJI, TSE1: 3774) is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group of companies provide total network solutions that mainly cater to high-end corporate customers. The company's services include high-quality systems integration and security services, Internet access, hosting/housing, and content design. Moreover, the company has built one of the largest Internet backbone networks in Japan, and between Japan and the United States. IIJ was listed on NASDAQ in 1999 and on the First Section of the Tokyo Stock Exchange in 2006. For more information about IIJ, visit the IIJ Web site at http://www.iij.ad.jp/en/.

Statements made in this press release regarding IIJ's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements that are based on IIJ's and managements' current expectations, assumptions, estimates and projections about its business and the industry. These forward-looking statements, such as statements regarding FY2006 revenues and operating and net profitability, are subject to various risks, uncertainties and other factors that could cause IIJ's actual results to differ materially from those contained in any forward-looking statement. These risks, uncertainties and other factors include: IIJ's ability to maintain and increase revenues from higher-margin services such as systems integration and value-added services; the possibility that revenues from connectivity services may decline substantially as a result of competition and other factors; the ability to compete in a rapidly evolving and competitive marketplace; the impact on IIJ's profits of fluctuations in costs such as backbone costs and subcontractor costs; the impact on IIJ's profits of fluctuations in the price of available-for-sale securities; the impact of technological changes in its industry; IIJ's ability to raise additional capital to cover its indebtedness; the possibility that NTT, IIJ's largest shareholder, may decide to exercise substantial influence over IIJ; and other risks referred to from time to time in IIJ's filings on Form 20-F of its annual report and other filings with the United States Securities and Exchange Commission.