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1 A Web of Stakeholders and Debates in the NetworkNeutrality Policy: A Case Study of Network Neutralityin Korea Dong-Hee Shin & Tae-Yang Kim Dept. of Interaction Science SKK University, Seoul, Korea [email protected] [email protected] Abstract This study investigates the network neutrality issue in Koreaby focusing on the debatesamong the stakeholders.Itexaminesthe dynamic discussions of the issues by identifyinghow diverse groups of stakeholders are affected by various actions taken by the emergence of network neutrality. It also presents a quantitative analysis that reveals the factors implicated in the net neutrality debate and statistically significant differences among individuals on opposite sides of the debate. A qualitative analysis reveals insights into the connection between specific factors and positions in the net neutrality debate. The findings show that the issue of netneutrality is not only complicated,but also as complex as the parties’ diverse interests. The paper concludes that a careful combination of government intervention and market forces is an effective way to govern net neutrality. Keywords: Network neutrality;stakeholder analysis;web of stakeholders 1. Introduction

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A Web of Stakeholders and Debates in the NetworkNeutrality Policy:

A Case Study of Network Neutralityin Korea

Dong-Hee Shin & Tae-Yang Kim

Dept. of Interaction Science

SKK University, Seoul, Korea

[email protected]

[email protected]

Abstract

This study investigates the network neutrality issue in Koreaby focusing on the debatesamong

the stakeholders.Itexaminesthe dynamic discussions of the issues by identifyinghow diverse

groups of stakeholders are affected by various actions taken by the emergence of network

neutrality. It also presents a quantitative analysis that reveals the factors implicated in the net

neutrality debate and statistically significant differences among individuals on opposite sides of

the debate. A qualitative analysis reveals insights into the connection between specific factors

and positions in the net neutrality debate. The findings show that the issue of netneutrality is not

only complicated,but also as complex as the parties’ diverse interests. The paper concludes that a

careful combination of government intervention and market forces is an effective way to govern

net neutrality.

Keywords: Network neutrality;stakeholder analysis;web of stakeholders

1. Introduction

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The network neutrality (also called net neutrality) debatehas emerged over the last several

years. The issue sparked heated debates in telecommunications policy inthe U.S. and, to a lesser

extent, South Korea(hereafter Korea) and elsewhere.The basic idea isthat every content and

every service over the Internet and network should be treated without discrimination(Shrimali,

2008). With this key idea, the principle advocates no restrictions by the Internet service provider

(ISP)or government on content, sites, platforms, the kinds of equipment that may be attached,

and the modes of communication used (Lee & Wu, 2009).

Recently, the issues have also become a hot topic in Korea (Jeong, 2010). While Korea is

frequently held aloft as a broadband utopia, the country is struggling with therising net neutrality

debate. Lauded as perhaps the world’s most connected nation, Korea has always been considered

a model for Internet policy makers around the world (Sawyer et al., 2003). However, its net

neutrality policies are mediocre at best.The government claims to support net neutralityfully by

claiming that encouraging competition protects consumers and fosters growth in services and

applications. However, a series ofgovernment policies have directly contradicted this

commitment to promoting competition and thus net neutrality. For example, with the goal

ofprotecting Korean Voice over IP (VoIP) providers, the government has established a policy of

blocking traffic from any VoIP carrier that is not federally licensed (Shin, 2006). Furthermore, in

2006, several cable broadband providers blocked traffic from HanaTV, a new Internet video-on-

demand service, claiming that it caused excessive traffic. However, many claimed that the speed

of most Korean networks could easily handle the traffic and that the block was motivated by a

desire to prevent HanaTV from competing with cable television offerings. Although the Korean

government eventually forced ISPs to renegotiate bandwidth contracts with HanaTV, it hesitated

to act and did not criticize the anticompetitive action outright, which shows a lack of net

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neutrality when large corporate interests are at stake. As of 2011, Korea has not addressed the

issue well, foreshadowing more hurdles with the emergence of net neutrality.

Inthe ongoingstruggles, it is important for Korea to clarify the issues and resolve possible

conflicts before net neutrality is fully applied. Different stakeholders have diverse opinions and

interests in net neutrality, thus it is important to analyze the issue from an ecological perspective,

which examines the dynamic relationships between stakeholders and includes multiple levels of

social environmentperspectives. Together with the ecological perspective, a stakeholder analysis

investigates various relationships among stakeholders, which provide essential insight into the

way net neutrality has been discussed, prepared, and implemented (Cheng et al., 2010). This

study examines stakeholders, policy, regulation, market, society, and the interaction among them

to discover theprospects, limitations, and uncertainty embedded in the discussionof net neutrality

in Korea. The Korean case offers an excellent example of such dynamic interplays. Since Korea

has been pioneering the development of IT,networks, and one of the highest broadband

diffusions, Koreamay be the best test bed for the net neutrality debate. By identifying uncertainty

and possible destructive powers, this study finds a strategic frame of net neutrality that is suitable

to the Korean context. This study helps to clarify the government’s role in introducing net

neutrality.

The findings of this study show that there is no “one-size-fits-all” solution to net

neutrality, as the problem’s level of complexity is increasing. As Marsden (2010) argues, net

neutrality is an issue with potentially profound consequences that cannot be entirely left to

market stakeholders, however neutral or benign their motives. This implies the need for a careful

approach by the government, which can act asa regulator, facilitator, or merely a monitor. It

suggests that the government,including other stakeholders, should find the most suitable model

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of net neutrality for Korea. This study suggests a combinational model of legal regulation along

with transparency.

This paper is organized as follows: Section 2 introduces the theoretical framework,and

Section 3 examines the study’s methodology. Section 4 surveys the current challenges and

promises of net neutrality in Korea. The pros and cons regarding these issues and their potential

impact on the adoption of net neutrality are discussed in Section5. Section 6 describes

quantitative findings from a survey of stakeholders. Discussion is provided in Section 7, and the

conclusion suggests anet neutrality model forKorea.

2. Theoretical framework: Stakeholder analysis

A stakeholder analysisexamines organizational and politicalreform processes by

explaining and incorporating the needs of those who have astake or an interest in the reforms

under consideration (Choudrie et al., 2003). The analysisconsiders theimpact of reform on

political and social forces, illuminates the divergent viewpointstoward proposed reforms and the

potential power struggles among groups andindividuals, and helps identify potential strategies

for negotiating with opposingstakeholders.With information onstakeholders, their interests, and

their capacity to oppose reform, reform advocates canchoose how best to accommodate them,

thus assuring that adopted policies are politicallyrealistic and sustainable. Recently, stakeholder

analysis has been applied to broadband diffusion (Sawyer et al., 2003) and net neutrality (Cheng

et al., 2010).

In this paper, the stakeholder analysis-based view is used to explain the net neutrality

debate in Korea by investigating the process of interactionwhere stakeholders align the interests

of others with their own. Specifically, a stakeholder analysis is used in this study to:1) identify

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stakeholders,2) determine stakeholders’ claims,3) determine resources provided by stakeholders

andstakeholders’ influence,4) analyze stakeholder attributes of power,legitimacy, and interests,

and 5) classify stakeholders as pro, con, or neutral to net neutrality. Withinthe framework of a

stakeholder analysis, this study analyzes dynamic and critical relationships among stakeholders.

3. Methodology

This study employed multiple methods in order to facilitate a comprehensive

understanding of the net neutrality issues. First, archival materials, such as the industry report,

government publications, technical reports, and any materials pertaining to net neutrality, were

collected and analyzed. Informal supplementary data were collected through phone calls, emails,

casual talks, and faxes to clarify and follow-up. From the archival data, records of a total of 189

events related to Korea’s net neutrality from 2000 through 2011 were collected. The data

collected by these different means were cross-validated before use.

To analyze data, the creation of thematic networks followed quite naturally from the

recognition of issues in the interview topic guide, data from secondary sources, and topics that

arose organically during conversations. A thematic analysis allows for the interpretation of

events, perspectives, and phenomena and avoids a rigid interpretation of research results. Crucial

for this research, thematic networks allow for a comparison of strategic views to their

relationship with the qualitative data. As Strover (2010) shows regarding the validity of thematic

analysis on net neutrality, the analysis allows a reliable comparison of the effects intended by the

policy mandate to the effects suggested by the research. In the present study, data from

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interviews and secondary sources were organized into basic themes, which were then compiled

into organizing themes derived from the background literature.

Second, a survey method was usedfor quantitative analysis. A survey was designed in

order to identify people’s views on the net neutrality issues in Korea. Surveyswere conducted in

various ways—face-to-face interview, telephone, email, and mail survey. Respondents were

asked to fill out the survey questionnaire, which was composed of 10 variables representing net

neutrality. The variables in the survey were drawn from literature review (e.g., Crocioni,

2011)and expert suggestion (see Table 2 and Section 6 for the variables). Respondents were

required to score each variable on a 7- point Likert scale (from strongly disagree to strongly

agree). Respondents were also asked to express their opinions about the government’s role in net

neutrality. The mean scores were used to determine whether differencesamong the respondents

of different groups exist.After collecting two sets of data for statistical testing, one-way ANOVA

was used to test mean differences among different groups. The ANOVA F statistic was

calculatedby dividing an estimate of the variability between groups by the intra-groups

variability: F=(variance between) / (variance within).

The use of multiple sources of evidence increased the reliability and validity of the data

in this study by increasing confidence in the findings, strengthening the validity of the findings,

and reducing methodological bias.

4. A web of stakeholders and strategies in the net neutrality debate in Korea

4.1. Stakeholders in net neutrality of Korea

A familiarity with the stakeholders who have a variety of interests in any regulatory

deliberations on net neutrality is useful in understanding the net neutrality debate. The

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stakeholders in the debate can be broadly categorized into the following groups: the government

(KCC), network operators (KT, LG Powercom, and HanaroTelecom, which later merged to SK

Broadband), ISPs, cable operators, content providers, and users (see Figure 1).The common goal

of these stakeholders isfor Korea to become a world leader in IT by promoting competition in the

IT industry and to become a broadband utopia by establishing the next generation network,

Gigabit Internet. For this common goal, theseplayers work collectively to promote the IT

industry through settling on standards, policies, and business models that can help lead to the

best possible outcome for all actors. Yet there were rather different interests and varying

approaches in achieving the common goal. To KCC, net neutrality was a step-up opportunity to

advance Korea as one of the leading countries in broadband worldwide. KCC is pushing to build

Gigabit Internet (what it calls an Ultra Broadband convergence Network--UBcN), which is a

unified communications infrastructure for telephone broadcasting.

Internet users and their advocates generally favor net neutrality, while telecom companies

see it as a potential threat to the use of their own property. Cable companies and ISPs are on the

telecom companies’ side, opposedto net neutrality because,without the ability to tier Internet

services, industry would not have an incentive to invest in new equipment and technologies. On

the other hand, content providers favor net neutrality because they do not want to be

discriminated against. Overall, proponents of net neutrality argue that it protects freedom of

speech and encourages innovation by content providers. Opponents argue that net neutrality

principles inhibit freedom of contract between companies.This debate is becoming more intense

as more and more new technologies are introduced, such as smart TV, and as new business

models launch, such as the mobile virtual network operator (MVNO). Pressure is mounting for

regulatorsto decide how they will or will not regulate the industry.

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-The government (KCC)

Historically, something approximating net neutrality has been a part of Korea’s efforts to

build a modern telephone network starting in 1980. The experience with a massive telephone

service backlog and the social divisions it exacerbated made the goal of universal, equal service

for all Korean citizens a non-debatable issue.From the beginning, Korea set out to build

an“information welfare society” in which services and their tolls would be the same for residents

of farming and fishing villages as for the residents of Seoul.

These efforts have continued in recent broadband development. The Korean government

has led the development of broadband since 2000. The government’s strategic ICT plans

continued as the ICT Promotion Plan (1996), Cyber Korea 21 (1999), e-Korea Vision 2006

(2002), Broadband IT Korea vision 2007 (2003), and the recent IT839 Plan (Shin, 2007). Wu

(2004) explains that the development of a strongbroadband service was largely due to the fact

that over half the network is fiber optic and ready to provideadvanced services. Thus,government

was able to find huge financial resources in developing the network. The government provided

active funding tothe broadband rollout. Specifically, this occurred largely through the Korea

InformationInfrastructure Plan, completed in 2005 (Shin, 2007). The plans led to Korea being

one of the most advanced countries in broadband usage. Industries are taking the lead more than

before, though the government’s strategic decision still plays a significant role in the investment

decision making companies. ISPs are assured of the future demand of broadband services

because the government is at the forefront of maneuvering the new market.

Through the series of broadband projects, the KCC has been a key player. As a statutory

independent body of the government and the nation’s top telecom regulator, the KCC is in

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charge of telecommunications, information, and communication policies.The KCC has been

credited with establishing the unified regulatory frameworks and guiding the commercial launch

of next-generation services, such as IPTV.Since its inception, the KCC’s consistent goal has

been enhancing fair competition in telecom markets and increasing public welfare. In 2010, the

KCC announced, “KCC’s top policy focus is to loosen the rules of telecom policy and to

introduce new telecom operators as consumer-friendly measures. Such schemes will help users

utilize related services with further discounted prices, as more players mean more competition”

(KCC, 2010). Though it is not explicitly stated, this strategic frame is in line with net neutrality,

and the KCC has considered the net neutrality option to reduce consumers’ telecom expenditure

becausenet neutrality has been considered to be one compelling tool for achievingthis goal

(Jeong, 2010). Under government protection, three incumbent carriers have dominated the

telecom arena for decades, but the new government administration seems determined to lower

entry barriers into the market in a bid to fuel competition and price cuts (Kim, 2009). Under the

Gigabit Internet project, the government plans to force incumbent carriers to lease their networks

to new entrants that offer telecom services without the need for owning a spectrum license or

infrastructure. In this context, the KCC’s future goal to introduce net neutrality is to stimulate

market competition and to generate new revenue streams through the creation ofan open network.

To encourage competitiveness for improving the content market structure, the KCC revamps the

open mobile Internet network and galvanizes the wireless resale. However,the KCC should also

be also cautious that an execution of net neutrality that is too abrupt could discourage network

operators and ISPs from participating and investing in the Gigabit Internet. To the KCC,

government-private partnership is essential in building such large-scale networks. In terms of net

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neutrality, a majordilemma for the KCC is the fact that a consistent approachhas not been

adopted;instead, the KCC has taken a case-by-case approach.

-Consumers

As consumers expand their use of the Internet and as new multimedia services become

more commonplace, control over network quality also becomes an issue.This is truer to Korean

consumers who have been seen to be both technology innovatorsandIT prosumers who produce

many of their own contents and services. The innovative nature of consumers works well with

net neutrality, which aims to build an open network. In addition, as multi-media services are

increasing, the best effort delivery method is not enough for these multi-media services. The

quality ofservice needed for the delivery of the most popular uses, such as video, online gaming,

and voice service, and the need for uninterrupted streams ofdata becomes important. As the

demand for such services continues to expand, networkbroadband operators are moving to

prioritize network traffic to ensure the quality of theseservices. Consumer groups argue that,

without net neutrality, consumers’ favorite Websites and online services will not be in the fast

lane, which means service may be unreliable or blocked. Net neutrality policies are important for

empowering Korean users by preventing telecom companies from restricting access to blogs,

wikis, and independent podcasts.

-Internet content provider vs. ISP

The Korean Internet service market has been dominated by three telecom companies that

maintain a backbone Internet network: Korea Telecom (KT), LG Powercom, and SK Telecom

(SKT). They are aggressively pushing new business lines that can be easily linked to the Internet

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access service with undue influence. Unlike ISPs, companies that produce content are relatively

smaller than network backbone operators. NHN and Daum represent the largest Internet portals

in Korea, as Google and Yahoo do in the U.S. However, the market values and the revenues of

NHN and Daum are not comparable to those of KT. CJ Media Group and OnMedia are also

known to be major media groups,but the market value of OnMedia in 2008 was less than 3% of

that of KT. In this situation, the bargaining power seems to exist between content providers and

network operators. KT has enjoyed being the significant market player for a long time, before

and after the deregulation of the Korean telecom market. KT was privatized in 2002 and recently

began to acquire content production companies. Such a strategic move is considered a vertical

expansion effort to penetrate into the content provider industry. Given the aggressive move, net

neutrality will become a more significant issue once KT begins to provide content viaits own

network. Along with KT, ISPs want to charge Internet content providers for enhanced services,

while content providersargue that regulations are needed to prevent abuse by ISPs.

-Network operators

There are three network operators in Korea:SKT, KT, and LG Telecom. These network

operators are the mother companies of the three incumbent ISPs. KT Cook, SK Broadband, and

LG Powercom are the subsidiary companies of KT, SKT, and LG Telecom, respectively. This

subsidiary system represents vertically integrated structure in the Korean telecom and Internet

market. Naturally, these network operators are vehemently against net neutrality in supporting

their subsidiary companies. Companies that own the physical pipes of the Internet argue that they

have the right to control the use of those pipes in a way that is most profitable to them. The

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telecom companies also complain that government regulation may hinder return on investments,

deterring them from expanding the broadband infrastructure.

-Cable operators

In general, cable operators in Korea are conservative about net neutrality.Cable operators

have been preparing for the digitization of broadcasting content, but they have a short history of

providing Internet and other information services. Only a few merger and acquisition deals have

been realized. Cable operators act as local retail ISPs and they have accepted transit relations

with backbone providers with minimal resistance except for an increasing fee. Cable operators

constitute one of the members in the local ISP market, but they are not at all influential in the

Internet backbone provider market. In 2006, cable companies and the new broadband provider,

Powercom, have blocked an estimated three million customers from watching broadband video

from HanaTV, a new service from Hanaro Telecom. More than 60,000 customers signed up for

the service (which requires a set-top box) in its first three months.

4.2. Legislation fornet neutrality in Korea

The Korean government enactedthe Electronic Communications Business Act in 1999

with the goal of promoting e-commerce. The act defines the broadband service as facility-based.

Owners of the facility have the responsibility to share the facility with reasonable fees. The law

supersedesthe Fair Trade Act, leaving little space for the Fair Trade Commission. Since its

inception, the act has served as a basic rule of net neutrality. Though the net

neutralityrequirements have been enacted through the act, conflicts from the smaller ISPs and

content providers have continued. Conflicts usually occur in the area of pricing and privacy.

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While the pricing problem stems from negotiation between companies and can eventually be

resolved, privacy is a more serious issue that should be given further consideration because once

a problem occurs, the effect remains for a long period.

Realizing the continuing problems, the government enhanced net neutrality by

introducing another regulation, the Internet Multimedia Broadcasting Business Act. The act

passed Congress in 2008 and enablesthe IPTV operation to define net neutrality in a weak form,

requiring open access and non-discrimination from the network or platform operator. The act

emphasizes fair competition and consumer protection as the goal of policy.

While these two acts play roles in establishing net neutrality indirectly, a more specific

and direct provision of net neutrality has been recently introduced. The governmentis also

planning to improve net neutrality by requiring telecommunications operators to open their

fixed-line and wireless networksfurther. A component of the Plans for 2011 (KCC, 2011)

includes“activating competition in the communications market by advancing broadcasting

industry,increasing the public functions of broadcasting, preparing political measures for net

neutrality andconverting consumptive marketing expenses to future investment.” This plan will

provide the base for MVNO and other policies to revive the industry’s vibrancy and ensure fair

competition between different platforms.

The Korean National Assembly is preparing to address net neutrality in the near future as

the debate begins to intensify. The new net neutrality billis garnering more attention in the public

sphere than previous legislation attempts and could signal a new battle between net neutrality

proponents and opponents.

4.3. Conflicts concerning net neutrality in Korea

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There are several incidents that characterize Korea’s approach toward net neutrality. So

far, Korea has not established clear regulation of net neutrality nor has it showed a clear stance

toward net neutrality, which has added confusion to the ongoing issue.

1) Blocking ISP content

The first breach of net neutrality in Korea occurred in 2006 when Korea’s two largest

cable ISPs, KT and LG Powercom,began to block subscriber access to an Internet television

service, HanaTV, originating from rivalISP,Hanaro Telecom (Burns, 2006). KT and LG

Powercom have over three millioncombined subscribers.Hanaro, second to KT in broadband,

signed up 60,000 customers for video-on-demand in its first three months. The Korea Cable TV

Association is maintaining that “IPTV is a broadcasting, not a telecommunications service” and

is boycotting the Hanaro offering. Cable networks have been fighting a regulatory battle to keep

telecom companies out of the TV business. This may be the first large-scale breach of net

neutrality for commercial purposes.

KCC intervened in December 2006, and as a result HanaTV and LG Powercom reached

an agreement on connection charges and other matters in January 2007. Shortly thereafter,

HanaTV’s VOD service connection was reopened. However, HanaTV’s conflict with KT and

other CATV operators has remained at an impasse. In April 2007, KCC announced the

“Communications Regulation Policy Roadmap,” which called for a team of experts to convene in

mid-2007 to examine the issue of “freedom of choice for internet consumers.” Net neutrality in

Korea was first interpreted as a consumer’s free choice for Internet service.

2) Slowing the traffic of other services

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Another Korean case involving the blocking of certain sites resulted in a moreambiguous

outcome. After resolving the first incident, HanaTV started to provide IPTV services. However,

many network operators, including cable providers Curix, C&M, HCN, andLG Powercom,

slowed traffic to it or blocked it altogether. The cable operators claimed HanaTV used excessive

bandwidth, while HanaTV countered that those cable providers that were restricting access

hadtheir own television services that faced direct competition from HanaTV.Theissue was not

resolved until the KCC found fault with bothHanaro Telecom and LG Powercom and ordered

them to renegotiate connection charges,which they did in January 2007. However, the decision’s

ambiguity means that overallresponsibility for satisfying the increased bandwidth demand

remains undetermined.In the end, Korean law changed to require nondiscriminatory treatment of

broadband customers.

3) Blocking VoIP service

Korea initially did not allow the cable providers to provide broadband services. Instead,

Thrunet and Hanaro leased space onthose networks to provide broadband (Wu, 2004). While that

separation between ownershipand operation appears on its face to favor neutral networks, Korea

has demonstrated awillingness to manage its network in ways that most Western countries would

considerviolations of net neutrality.For example, Korea allows only authorized companies to

provide VoIP serviceunder the Korean Telecommunications Business Act. In mid-2007, Korea

forced theAmerican military stationed in Koreato switch to approved Korean VoIP service

providers. Thisdecision effectively blocked the US military from using Vonage, which had been

the mostpopular VoIP service. Later,the US government stepped in and brokered a temporary

deal to leave service on.

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Currently, Korea only allows authorized companies to provide VoIP service under the

Korean Telecommunications and Business Act (Wallsten&Hausladen, 2009).According to the

KCC report (2011),twelve VoIP companies are nowauthorized to operate in Korea.

4) Blocking mobile VoIP

The recent advent of mobile VoIP retriggers the debate of net neutrality in Korea. Mobile

VoIP is a major concern to operators due to the anticipated presence of free riders benefiting

from net neutrality. The regulatory bodies are facing bottlenecks over the issue as 3G and

WiMax are new technologies. Hence, regulators are concerned about IP calls originating from

the 3G data and WiMax without any restrictions. With the KCC taking a strong initiative to

boost the smartphone market, the KCC is considering issuing guidelines concerning net

neutrality to allow mobile VoIP over smartphones. There are no control mechanisms or

regulations in place yet to monitor such calls.

Telecom operators are vehemently against allowing mobile VoIP. Most mobile operators

have prohibited the use of mobile VoIP over their cellular networks, with some imposing a

surcharge to avoid cannibalization of their circuit-switched voice revenue streams. Moreover,

mobile operators face intense competition from the more popular Web-based VoIP alternatives

that are permeating the mass market (Kim et al., 2009). However, smartphone users already use

VoIP over smartphone operating systems, such as Symbian or Windows Mobile, as well as Wi-

Fi networks in Korea. Korean operators are already challenged by falling voice revenue due to

the expansion of mobile VoIP applications. Since mobile VoIP is likely to be widespread,

Korean operators are likely to allow it in response to users’ demands and policy guidelines. A

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more realistic choice for Korean operators is contracting with mobile VoIP companies to tackle

this threatproactively.

5) Government censorship

Ironically, unlike the KCC’s implicit and often explicit support for net neutrality,

government censorship on the Internet is generally considered an inhibitor of net neutrality.

Korea’s Internet censorship policy is highly political and particularly strong toward suppressing

anonymity in the Korean Internet (Shin, 2007). In 2007, numerous bloggers were censored and

their posts deleted by police for expressing criticism of, or even support for, presidential

candidates. This has even led to some bloggers’ being arrested by the police. In 2009, Google

Koreablocked users of the local version of its YouTube video service from uploading material

after the government imposed rules requiring contributors to register with their real names

because Korea has made such regulation a matter of first importance. In 2010, Korean police

investigators raided Google’s Seoul offices on suspicionof illegally gathering personal

information for its street mapping service. Google Korea was charged with violating privacy

laws with Street View, a map service that includes photographs of streets taken by Google

cameras.

4.4.Positive signs toward net neutrality

While there have been several incidents that have inhibited the imposition of net

neutrality, there are also positive factors that may facilitate net neutrality.

1. Approving MVNO service

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On December 19, 2009, the MVNO bill was approved by the National Assembly of

Korea. This bill obliges the existing mobile service providers to lend their network to newcomers.

With the passage of this bill, industries are actively preparing to provide services. SKT is to

collaborate with financial firms to launch new MVNO services.KTagreedthat it is opening up its

network to MVNOs and launching MVNO services for the first time in Korea. KT has partnered

with Entaz, a mobile content provider, and with Free Telecom and Evergreen Mobile, both of

which are prepaid service providers. KT will open its mobile network to these selected MVNOs

so that they can utilize KT’s network infrastructure to offer inexpensive data and voice services,

especially to consumers within a niche market.Both SKT and KT hope that their massive

subscriber pool and retail networks will allow them to hit the gold trail of mobile financial

services.

The approval of MVNO service can be seen as an incentive given bythe government to

network operators to facilitate net neutrality. With MVNO licenses, network operators realize the

benefits of net neutrality by themselves. Indeed, the introduction of MVNO signals the positive

governance of net neutrality in Korea.

2. Smart TV

Korea is now set to introduce smart TV, a service of incorporating smartphones into

TVs.Smart TVs enable viewers not only to navigate programs live, but also to check online

content such as news, weather forecasts, stock market information, maps, and games. Smart TVs

present new opportunities to consumer electronics manufacturers for product differentiation and

value creation through user-driven product innovation. The smart TV industry argues that a

prerequisite of smart TV is net neutrality.Preserving an open Internet that is accessible to

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innovators — regardless of their size or wealth — will promote a vibrant and competitive

marketplace where consumers have ultimate control over the content and services delivered

through their Internet connection.

3. The rise of social Web

Korea is famous for itsprospering social Web. The rise of the social Web has tipped the

balance of information sharing power from corporations to users.This has two important effects

on the net neutrality debate. First, social media has rewired people to expect an open and

unrestricted Internet. It is clear to most Web users that a controlled Internet is not in the best

interest of the user. Second, consumer choice is at a high level. Most users are not restricted by a

single point of access, both to the Web as a whole and for discovery of the information it

contains.Both points are relevant for framing the reason why the social Web will ultimately save

net neutrality. Social media has trained users to demand neutrality. Especially, Korean Internet

usershave become so used to open access to an open Web. People will continue to expect an

open Web, regardless of regulation – especially since the social tools used by millions of users

are predicated on this openness. Whether telecom companies, cable, or ISPs are trying to place

restrictions on Internet access and artificially promote their services over others, social Web has

given Korean users and many entrepreneurs a warrior mentality when it comes to defending net

neutrality. The social Web will balance things out, and consumers will continue to dictate what

types of content they access and from where.

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Figure1.Stakeholders in net neutrality

5. Stakeholders’ values in net neutralityThe purpose of the quantitative analysis conducted in this study was two-fold: (1) tomore closely examine how different stakeholders think about the specific factors of netneutrality, and (2) to examine how they view the role of government in net neutrality.5.1. Factor analysis of net neutralityThe analysis of quantitative data reveals that stakeholders’ views are clearlydifferent in each component of net neutrality and these componentsor factorsvaryaccording to stakeholder groups. Stakeholders such as government officials (KCC, ETRI,KISDI, and related agencies), telecom companies (network operators),academics(professors and researchers), and individuals (users, consumers) were largely balanced forand against net neutrality. However,the content providers argued for netneutrality

-Content provider-Web/Internet portals-Civic media activists;-Academia-User groups

-ISP (SK Broadband, KTCook, & LG Powercom)-Cable-Network operators (SKT,KT, & LG Powercom)

Con:

Pro - - - - - -

Blockingcontent

Slowingtraffic

BlockingmVoIP

BlockingVoIP

Censorship

MVNO Smart TV Socialweb

E-com Bus Act Internet MultimediaBroadcasting Biz Act

KCC Planfor 2011

Korea Comm.Commission

NationalAssembly

MVNO license: netneutrality incentive

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regulation, while the service providers argued against it (see Table 1). Often, governmentofficials showed noextreme views. Rather, they tended to show a neutral position.Table 1. Stakeholder groups and positions

Government Telco ISP Content

providers

Academics Individuals

(Users)

Total

Pro 7 8 4 29 28 33 109

Con 7 30 29 5 8 4 83

Neutral 26 1 5 6 2 4 44

Total 40 39 38 40 38 41 236

Table 2 provides a detailed summary of the views of all factors among therespondents,including the mean and standard deviation of net neutrality(for pro/conindividuals). Proponents andopponents of net neutrality from different stakeholdergroupscan be distinguished not only by their stancetoward net neutrality, but also by their values,indicatinga connection between values and policy.Table 2. The means and standard deviations of factorsStandard deviation MeanValue Pro Con Neutral Pro Con Neutral

Non-discrimination (Equality) 0.624 0.376 0.363 6.24 3.10 4.01Freedom 0.267 0.324 0.384 6.18 3.91 4.06Competition and unbundling 0.299 0.491 0.492 5.32 4.29 4.38

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Control of data 0.092 0.382 3.32 5.03 4.98Quality of service 0.673 0.012 0.298 4.91 4.01 3.90End-to-end principle 0.382 0.191 0.391 5.20 3.29 3.99Investmentand innovation 0.329 0.322 0.692 4.05 4.93 4.02Counterweight to server-side

non-neutrality

0.193 0.401 0.527 3.91 4.85 4.01Bandwidth availability 0.293 0.391 0.202 3.01 4.12 3.99Opposition to additional

legislation

0.283 0.492 0.231 3.41 5.00 3.53

A one-way ANOVA was used to test for mean differences among the three groups. Table

3 shows the results of the variance between groups and the variance within groups. For non-

discrimination, the significance level=0.000signifies that there is a significant difference in the

mean responsesbetween different groups (F (9, 235) = 9.014, p=0.113). There are also

significantdifferences in the mean of freedom between the pro group and con group at the p

<0.05level (F = 7.113, p= 0.000). Likewise, other variables (opposition to legislation,

counterweight, control of data, and bandwidth availability) show significant differences in means

among the groups. However, significant differences do not exist in five factors, freedom,

competition and innovation, quality of service, end-to-end principle, and investment, which

implies that the three groups all agree that these five factors are important.

Table 3. One-way ANOVA of group differences

Factors SS df MS F Sig.

Non-discrimination (Equality) Between groups 1.442 9 0.360 9.014 0.113

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Within groups 42.943 235 0.302

Between groups 0.293 9 0.074Freedom

Within groups 16.291 235 0.112

0.113 0.000

Between groups 0.293 9 0.073Competition and unbundling

Within groups 16.291 235 0.112

0.014 0.341

Between groups 1.234 9 0.337Control of data

Within groups 22.522 235 0.291

6.332 0.103

Between groups 1.234 9 0.337Quality of service

Within groups 42.851 235 0.291

0.014 0.323

Between groups 0.389 9 0.134End-to-end principle

Within groups 25.482 235 0.198

0.114 0.171

Between groups 0.389 9 0.137Investmentand innovation

Within groups 23.525 235 0.199

0.102 0.109

Between groups 2.163 9 0.540Counterweight to server-side non-

neutrality Within groups 68.232 235 0.475

5.673 0.103

Between groups 2.163 9 0.540Bandwidth availability

Within groups 12.632 235 0.278

5.231 0.090

Between groups 2.163 9 0.540Opposition to legislation

Within groups 42.245 235 0.478

6.014 0.239

*SS: Sum of Squares; MS: Mean Square

The following section provides an overview of the factors that arise within the net

neutrality discourse (interview, phone calls, email, and documents).

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-Non-discrimination

Discrimination was the most frequently touted term in the debate, and perhaps non-

discrimination is a key issue in net neutrality. The principle is to prohibit service providers such

as KT and SKT from using their network resources to prioritize data as it crosses their networks

so as to improve the performance of specific applications.

Generally, proponents claim that the current Internet is not neutral as its implementation

of best effort generally favors file transfer and other non-time-sensitive traffic over real-time

communications. User groups argue that a network that blocks some nodes or services for the

customers of the network would normally be expected to be less useful to the customers than one

that did not. Content providers said that network providers often enter into peering arrangements

among themselves, andthese agreements often stipulate how certain information flows should be

treated. They also present terms of service that often include rules about the use of certain

applications as part of their contracts with users.They gave example of KT’s iPhone, which

would not be possible if KT did not ensure thatits network could handle the increase in data

traffic that the iPhone would require.

Network providers and ISPs showed low scores on non-discrimination, whereas

individuals, academics, and content providers showed high scores. The mean of government

officials showed a balanced view. Government officials expressed the challenge associated with

creating policies that protect users from harmful traffic discrimination while allowing beneficial

discrimination.There was a statistically significant difference among the respondents in the non-

discrimination factor. Figure 1 illustrates this finding.

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-Freedom (digital rights and freedom)

When asked about freedom in terms of digital rights, respondents showed divergent

views. Proponents, who include individuals and academics, argue that net neutrality ensures that

the Internet remains a free and open technology, fostering democratic communication.

Proponentsargue that net neutrality guarantees digital civil rights, and freedom should be

preserved on the Internet. Opponents, namely network providers and ISPs, counter-argue that

over-freedom in using digital contents on the Internet will be harmful to content creators by

decreasing their incentives to create new content. On the other hand, government officials

generally expressed neutral views in that appropriate digital rights management systems should

be established that can provide checks and balances.

-Competition and unbundling

Proponents and opponents of net neutrality generally agree that competition can mitigate

netneutrality concerns because users could simply switch providers if they do not like the way

acertain provider manages network traffic. However,they differ in theirjudgmentsof what types

of competition to emphasize and how much competition is sufficient. Proponents argue that

allowing content providers the right to demand a toll to guarantee quality or premium delivery

would create an unfair business model.Proponentsclaim that by charging every Website, from the

smallest blogger to portals, network owners may be able to block competitor Websites and

services, as well as refuse access to those unable to pay. Proponents of net neutrality argue that

allowing for preferential treatment of Internet traffic, or tiered service, would put newer online

companies at a disadvantage and slow innovation in online services. Proponents argue that net

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neutrality creates an “even playing field” and that “the Internet has always been driven by

innovation. Websites and services have succeeded or failed on their own merit.”

The debate over unbundling is based on whether or not the benefits of promoting intra-

platformcompetition outweigh the possibility of reducing infrastructure investment through

decreasing theprivate returns to incumbents’ investments by requiring them to share their

infrastructure. Korea did not require unbundling until 2001. Proponents argue that unbundling

can create incentives for an operatorto maintain a neutral network. In particular, they argue, an

infrastructure operator has lessincentive to favor one type of content over another if it does not

sell retail services to end users oris just one of many service providers.

Government officials expressed the opinion that unbundling is an alternative to imposing

specific net neutrality rules. They said that unbundling increases the incentive for an

infrastructure provider to behave in a neutralmanner. User groups also argue for unbundling

because it may prevent an incumbent from having the incentiveor ability to discriminate.

-Control of data

Proponents of net neutrality want a legal mandate ensuring that ISPs and network

operators allow content providers free access to their cable lines, which is called a common

carriage agreement, and is the model used for dial-up Internet. They want to ensure that cable

companies cannot screen, interrupt, or filter Internet content without a court order. Proponents

accuse cable and ISPs of wanting to be “Internet gatekeepers, deciding which Websites go fast or

slow and which won't load at all.”Academics and individuals argue that the Internet is designed

with no gatekeepers over new content or services. On the other hand, opponents argue that

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“thefundamental flaw in net neutrality policy is that it assumes that service providers are in a

position to dominate Internet service and applications.”

-Quality of service

With the emergence of convergence services, such as VoIP, IPTV, and other applications

that benefit from low latency, various attempts to address the inability of some private networks

to limit latency have arisen, including the proposition of offering tiered service levels that would

shape Internet transmissions at the network layer based on application type. These efforts are

ongoing in Korea and are starting to yield results as wholesale Internet transport providers begin

to amend service agreements to include service levels.Proponents argue thatlegislation should

ban the charging of fees for any quality of service that would allow networks both to implement

quality of service and remove any incentive to abuse net neutrality ideas. Since implementing

quality of service does not require any additional costs over a non-QoS network, there is no

reason implementing quality of service should entail any additional fees.

-End-to-end principle

This principle states that, whenever possible, communications protocol operations should

be defined to occur at the end-points of a communications system, or as close as possible to the

resource being controlled. Proponents argue that net neutrality is needed in order to maintain the

end-to-end principle.This is the end-to-end design of the Internet that has made it a powerful

force for economic and social good.Proponents argue that under the end-to-end principle, the

Internet is a dumb network, merely passing packets regardless of the applications they support.

Opponents counter-argue that network intelligence does not relieve end systems of the

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requirement to check inbound data for errors and to rate-limit the sender or for a wholesale

removal of intelligence from the network core.

-Innovation and investment

Opponents of net neutrality argue that prioritization of bandwidth is necessary for future

innovation on the Internet.Network providers, ISPs, and cable companies argue that telecom

providers should have the ability to provide preferential treatment in the form of tiered services,

for example, by giving those online companies that are willing to pay the ability to transfer their

data packets faster than other Internet traffic. The added revenue from such services could be

used to pay for the building of increased broadband access to more consumers. They have also

argued that net neutrality regulation would have adverse consequences for innovation and

investment in the market for broadband access by making it more difficult for ISPs and other

network operators to recoup their investments in broadband networks.

Network providers argue that they will have no incentive to make large investments to

develop advanced fiber-optic networks if they are prohibited from charging higher preferred

access fees to companies that wish to take advantage of the expanded capabilities of such

networks.

-Counterweight to server-side non-neutrality

Opponents argue that the Internet is already an unlevelplaying field; large companies

achieve a performance advantage over smaller competitors by replicating servers and buying

high-bandwidth services. Network operators argue thata richly funded Website, which delivers

data faster than its competitors to the front porches of the Internet service providers, wants it

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delivered the rest of the way on an equal basis. They argue that theneutralitysystemactually

preserves a more fundamental inequality.On the other hand, proponents claim that the current

Internet is not neutral as, among all applications, its implementation of best effort generally

favors file transfer and other non-time-sensitive traffic over real-time communications.

-Bandwidth availability

One of the main arguments of the opposition comes fromlimited bandwidth availability.

With new technologies in place, Internet traffic has increased drastically. Network providers

argue that they should have the right to charge portals and smaller companies offering free video

content using substantial amounts of bandwidth. They said that YouTube, MySpace, and blogs

are put at risk by net neutrality. ISPs argue that net neutrality would prevent broadband networks

from being built, which would limit available bandwidth and thus endanger innovation.

-Opposition to additional legislation

Opponents raise a questionable doubtwith respect to the government’s ability to make

and maintain meaningful regulation that doesnot cause more harm than good.Telecom network

providers said that telecom has already been heavily regulated and do not want additional

legislation. Given previous failures of policy made by the Korean government, ISPsargue that

poorly conceived legislation could make it even more difficult for ISPs to legally perform

necessary and generally useful packet filtering, thereby preventing the spread of computer

viruses. One respondent from a network provider said,“It is absurd to come up with another

regulation for net neutrality, which is essentially laissez-faire.It is actually very difficult to create

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net neutrality laws.”Some proposed pieces of legislation would even make fair queuing illegal as

it requires prioritization of packets based on criteria other than that permitted by law.

5.2. Analysis of the role of government

In addition to the factor analysis of net neutrality, respondents were asked to discussthe

role of government in net neutrality. This study used the scheme ofthe government role created

by Cordeiro et al. (2001) and used by Shin (2007).This study provided respondents with the list

of government roles and respondents rated the items ona 7-point Likert scale. As expected,

respondents see the government’s role quitedifferently (Table 4). The six differentiated

categories set forth by this group of respondents can be divided into two groups: (1) the

government as a direct intervener (controller, builder, regulator, and producer), and (2)

thegovernment as an indirect facilitator (strategist, guider, leader, and integrator).

(1) The government as a direct intervener

Acontroller– the government sets goals and guidelines for private industries to follow.

The government maintains effective market conditions for industry players to facilitate

effective competition.

Abuilder–the government provides the physical infrastructure so everyone can access

information from around the world.

Aregulator –the government creates a fair business competition ground without

allowingillegal, undesirable businesses to thrive.

An investor –through tax incentives and special grants, the government can encourage

local enterprises to invest in networks so as to exploit the new medium of trading.

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(2) The government as an indirect facilitator

Astrategist – the government is the main body of organization in developing a vision for

the country.

Aguider–the government creates the proper environment for innovation and growth in

networks, channeling and mobilizing financial and human resources to the network sector

and related activities.

Aleader–the government establishesnetworks as a national priority, providing a national

plan for networks and networked readiness, launching large network projects.

An integrator –the government ensures that the various programs and projectsthat are

aimed toward the realization of the network environmentare well integrated with a

cohesive strategy.

Most respondents viewed the government as the single most influential body to help

bring Korea into the next generation of networks, with its main responsibility in developinga

competitive network environment. Most respondents also generally agreed that the way in which

net neutrality is governed will be directly related to a competitive net environment. As expected,

respondents see the government’s role quitedifferently (Table 4). In general, pro groups see

government as playing a proactive role, whereas con groups see government playing a

facilitating role. On the other hand, neutral groups see the government role as both proactive and

facilitating.

Table 4

The pro group’s responses on the government’s role (N=109)

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Korean government’s role Mean SD First choice

selection

Controller 5.67 0.376 0

Builder 5.34 0.324 22

Regulator 6.22 0.491 29

Proactiveintervener

Investor 5.34 0.391 20

Strategist 5.25 0.012 9

Guider 4.91 0.191 11

Leader 4.52 0.322 8

Facilitator

Integrator 5.13 0.401 10

Total 109

The con groups responses on the government’s role (N=83)

Korean government’s role Mean SD First choice

selection

Controller 0.376 0.267 1

Builder 0.324 0.299 3

Regulator 0.491 0.092 7

Proactiveintervener

Investor 0.391 0.673 10

Strategist 0.012 0.382 29

Guider 0.191 0.329 21

Leader 0.322 0.193 5

Facilitator

Integrator 0.401 0.322 7

Total 83

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The neutral group’s responses on the government’s role (N=44)

Korean government’s role Mean SD First choice

selection

Controller 0.267 0.363 2

Builder 0.299 0.384 5

Regulator 0.092 0.492 4

Proactiveintervener

Investor 0.673 0.382 7

Strategist 0.382 0.298 8

Guider 0.329 0.391 7

Leader 0.193 0.363 5

Facilitator

Integrator 0.322 0.384 6

Total 44

A one-way ANOVA was used to test for mean differences among groupsin responses

related to the government’s role. Table 5 shows the variance between groups and the variance

within groups. Overall, the mean differences between proactive intervener and facilitator show a

significant difference across the three groups. Only two items were found to be insignificant in

mean differences (controller and investor). It can therefore be inferred that no groups agree on

the role of controller or investor.

Table 5

Differences between and withingroupsdetermined by one-way ANOVA

Factors SS df MS F Sig.

Controller Between groups 1.442 7 0.360 0.014 0.112

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Within groups 42.943 235 0.302

Between groups 0.293 7 0.074Builder

Within groups 16.291 235 0.112

4.113 0.003

Between groups 0.293 7 0.073Regulator

Within groups 16.291 235 0.112

4.014 0.342

Between groups 1.234 7 0.337Investor

Within groups 22.522 235 0.291

0.332 0.102

Between groups 1.021 7 0.260Strategist

Within groups 22.533 235 0.102

8.014 0.109

Between groups 1.193 7 0.174Guider

Within groups 15.291 235 0.012

5.113 0.105

Between groups 1.293 7 0.273Leader

Within groups 15.791 235 0.412

6.002 0.044

Between groups 0.234 7 0.237Integrator

Within groups 10.522 235 0.191

5.201 0.107

5.3. Summing up the ongoing discussion

Just like the U.S., the issue of net neutralityhas become a major focal point in the debate

in Korea. Those opposed to the enactment of legislation to imposespecific net neutrality

mandates claim that such action goesagainst the long-standing policy to keep the Internet as free

as possible from regulation.The imposition of such requirementsis not only unnecessary, but

would havenegative consequences for the deployment and advancement of broadband facilities.

They claim that further expansion of networks by existing providers and the entrance of

newnetwork providerswould be discouragedas investors would be less willingto finance

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networks that may be operating under mandatory build-out and/or accessrequirements. They

argue that application innovation could also be discouragedifnetwork providers are restricted in

the way they manage their networks or arelimited in their ability to offer new service packages or

formats. Opponents also claim thatadvocates of regulation cannot point to any widespread

behavior that justifies the need toestablish such regulations and note that competition between

telephone and cable systemproviders, as well as the growing presence of new technologies, will

serve to counteract any potential discriminatory behavior.Furthermore, opponents contend, even

if such a violation should occur, KCC already hasthe needed authority to pursue violators. In

light of these arguments, opponents argue that the government should be an indirect facilitator,

minimizing the government’sintervention in net neutrality.

Proponents of net neutrality legislation, however, counter-argue that, absent some

regulation, ISPs will become gatekeepers and use their market power to thedisadvantage of users

and competing content and application providers. They raiseconcerns that the Internet could

develop into a two-tiered system favoring large,established businesses or those with ties to

broadband network providers. While marketforces should be a deterrent to such anti-competitive

behavior, they point out that today’smarket for broadband delivery is largely dominated by only

two providers, the telephoneand cable television companies, and that, at a minimum, a strong

third player is neededto ensure that the benefits of competition will prevail.The need to formulate

a nationalpolicy to clarify expectations and ensure the openness of the Internet is important

toprotect the benefits and promote the further expansion of broadband. Theadoption of a single,

coherent regulatory framework to prevent discrimination, supportersclaim, would be a positive

step for further development of the Internet by providing themarketplace the stability needed to

encourage investment and foster the growth of newservices and applications. They claim that

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relying on current fair competition laws and case-by-case enforcement is too arbitrary, slow,

andcostly, particularlyfor small start-up enterprises.For these reasons, proponents argue that

government should play a role of direct intervener as far as net neutrality is concerned.

6. Discussion

Considered as perhaps the world’s most connected country, Korea has always been

citedas a model for Internet policy makers around the world. Its net neutrality policies, however,

are unclear when considering the inconsistent rules and ongoing conflicts. It appears that net

neutrality has been established by law and backed by the government. However, net neutrality in

Korea has been struggling. Officially, the government claims to support net neutralityfully,

arguing thatthey encourage competition, protect consumers, and foster growth in services and

applications (Jeong, 2010). In fact,Korea has done a lot to encourage the policy, although not

through direct regulation. First, as part of the 800 million dollar“Korea Information

Infrastructure Plan,” the government invested strategically in the development of a variety of

broadband technologies, including DSL and fiber optic networks. These technologies now

compete fairly equally for control of Korea’s broadband market, an achievement that the

government believes discourages monopolistic behavior amongst network operators and ISPs. It

is difficult for network companies to discriminate against certain content without risking the loss

of their consumers, who can easily switch to alternative broadband providers.Additionally, Korea

forcibly decoupled telecom network companies from ISPs when broadband networks were first

created. Although this policy is no longer in place, its legacy ensures that there is still ample ISP

competition within single networks. Additionally, the country still considers network companies

common carriers, so they have not been able to discontinue bandwidth leasing.

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However, several Korean policies have directly contradicted its commitment to

promoting competition and thus net neutrality, such as blocking VoIP providers and stopping

traffic of HanaTV. Although the Korean government eventually forced ISPs to renegotiate

bandwidth contracts with HanaTV, it hesitated to act and did not condemn the anticompetitive

action outright, which some say shows a lack of commitment to net neutrality when large

business interests are at stake.This kind of illusive issue will likelyberaised againwith emerging

technologies and innovative business models, such as MVNO and smart TV. While one side

argues that an open and innovative network is threatened and government action is needed to

protect it, the other side counter-argues that regulation will be flawed in practice, or is a bad idea

even in principle.Koreaneeds tomake a difficult decision between the two conflicting arguments.

7. Conclusion

The qualitative and quantitative analyses togetherimply that the emergence of net

neutrality will likely continue to be a socially intricate and technologically complex development.

Socially, the issue involves diverse organizations, structures, legal entities, industries, and user

groups. Technologically, net neutrality accelerates cognate technologies of infrastructure,

applications, and services evolving toward a next-generation network environment. Socio-

technically, the advancement of net neutrality debilitates current regulatory structure, destroys

current markets, and gradually introduces a new structure of market, industry, and regulation

(Frieden, 2007). With the increasing demand and the trend of open networks with increasing

competition, it is very likely that Korea will be facing a severe debate. Thus, it is suggested that a

clear model will help to avoid confusion and minimize the social cost of such debate.

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Given this complicatedness, legislation alone cannot guarantee net neutrality in Korea.

Though net neutrality has been put into the law in Korea, problems continue. Thus, a careful

approach with multiple strategies is necessary to interpret the overall situation of conflicting

interests while successfully retaining policy goals. Strover (2010) suggests four models of

governing net neutrality: (1) legal regulation, (2) transparency, (3) non-neutral Internet, and (4)

government control. Considering the current situation, Koreashouldemploya combination of

legal regulation and transparency. That is, the government may impose strict rules to control how

ISPs and network operators lawfully manage their network traffic. At the same time, the

governmentshould avoid strict regulation of network management and order ISPs to provide full

disclosure of their network management practices. This combinational model can be effective

because Korea shows a typical type of facility-based competition in which vertical integration

and separation commonly occur (Kim, 2009). No matter how perfect legal regulation might be,

ISPs can exert influence over competitors. The effect is likely to be broader and more significant

in Korea, where network operators are expanding the content industry and will cover the entire

vertical chain spanning from the content production, to distribution channels, to retail local ISPs.

Since they are not required to set up a separate entity for vertical expansion, entire operations

will be executed within one company. Thus, allowing some autonomy and facilitating a fair-

competition environment would be an effective solution.

The futuregovernance of net neutrality in Korea is likely to comprise multiple stages

predicated by several conflicts: deployingspecific provisions, resolving content sharing issues,

establishing appropriate protocols, and introducing new regulatory frameworks. Given

thesechallenges and possibilities, it is critical for the government to establish appropriate policy

and to encourage industry to forge relationships with the service, application, and content

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providers.Further research in this area should trace the actual evolution of net neutrality with a

focus on the conceptual discrepancy among the stakeholders identified in this study.

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