Japan's Co-Regulatory Approach to Net Neutrality and its Flaw: Insufficient Literacy on Best-Effort QoS

With the boom in bit-intensive and live streaming content in the broadband Internet ecosystem, the phenomenon of increasing and persisting congestion on the Internet is no longer a mere engineering possibility, but a grave and imminent reality in developed nations. To deal with this problem, "network neutrality" has become the focus of discussion among operators, academics, telecom regulators, and various interest groups in recent years. From an economic viewpoint, this problem is nothing but a combination of a congestion problem with a limited network capacity and the potential for anti-competitive behaviors by dominant Internet service providers (ISPs). Thus, from a theoretical viewpoint, it is not difficult to develop a set of "optimal" solutions. However, since the development and execution of such policy must take into account the everdeveloping broadband ecosystem and changing market conditions, each telecom authority must develop its own solution. In Japan, where competition rules have successfully maintained competitiveness in the retail ISP market, the Ministry of Internal Affairs and Communications (MIC) has introduced a co-regulatory approach that focuses on congestion control. However, it is flawed in that it lacks sufficient participation from the demand side. Using a web-based questionnaire, the author discusses the remaining missing piece in Japan's efforts to address net neutrality issues, that is, possible government action to disseminate relevant QoS information to individual subscribers.