KEO Discussion Paper №162
State traditions, policy networks, and governance:
Emerging network neutrality co-regulation in Japan andthe UK
June 2021
Masahiro Mogaki

State traditions, policy networks, and governance:
Emerging network neutrality co-regulation in Japan and the UK

Keio Economic Observatory (KEO) Discussion Paper

Dr Masahiro Mogaki

Abstract:
This paper investigates how a sub-field of regulatory policy responds to changing
circumstances in the 2010s through the case studies of network neutrality regulation, asignificant Internet regulation issue, by examining two examples: Japan and the UK. In sodoing it reveals how a regulatory regime drawn from a specific political tradition – thepreference for self-regulation - has shaped its approaches in response to external challenges
and a possible transformation of the regulatory state. Although network neutrality has beena high profile issue attracting much attention among experts in the US and the EU, countries
such as the UK and Japan have chosen different approaches that emphasise co-regulation bystakeholders including industry actors. The response of the UK has revealed an evolving
process in which co-regulatory Open Internet approaches have changed into more explicit
regulation mobilised by the initiatives of the EU but with significant involvement of the
British authority. Elsewhere, with a different set of structures, the Japanese approach has
preferred co-regulation rather than statutory, without advocating stronger regulatory
remedies. What appears is the similarity of two examples that prefer benign approaches tothis issue, although they have significantly different political traditions and structures. In
pulling the above together, the paper argues that the reluctance of the state to intervene is a
key characteristic of both examples, with no strong actors and structures encouraging
stringent regulation, paying attention to the status of the UK and Japan as non-dominant
countries in the field of the Internet and the significance of state traditions and policy
networks.

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Introduction
The debate of network neutrality1 in the communications sector, which is usually regarded
as being first discussed by Wu (2003) (Zelnick and Zelnick 2013: 9; Marsden 2017: 29), has
the potential to reshape the body of communications policies in spite of its comparatively
short history, partly because it addresses a fundamental characteristic of networks that canbe traced back to the concept of the medieval British ‘common carriage’, which means‘essential services should be offered to everyone on the same terms’ (Pickard and Berman
2019: 14). Network neutrality debate has become a high-profile issue in particular in the US,
where the Democrats as its promoters and the Republicans as its opponents regard it as asymbolic issue of polarised partisan confrontation. In other developed countries, the issue
has not been met with extensive politicisation but has attracted relevant practitioners
including the government and industry. It is a new regulatory issue that affects thegovernance of communications networks: administering network neutrality can affect theextent to which communications networks can retain their status as an non-discriminating
infrastructure. It is an issue of governance that shapes and directs the communication sector

1 According to Hahn and Wallsten (2006), network neutrality: ‘usually means that broadband service
providers charge consumers only once for Internet access, don’t favo(u)r one content provider overanother, and don’t charge content providers for sending information over broadband lines to end
users’.

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as a whole. Even if network neutrality is not always a high-profile political issue, its nature
has a significant potential to affect the governance of the communication sector and thecountry.
Also, because network neutrality regulation is new, it has the potential to reveal how acountry can react to the emerging challenge of governance; without a set of previous events
shaping the path of policy development, how does a country respond to the emerging
challenge? This is a core theme of this paper.
Although a body of literature has highlighted a variety of topics on the US network
neutrality debate, this paper turns its attention to other key developed countries: Japan andthe UK. They have a fairly developed communications sector that has embraced market
competition for a comparatively long time, with a significant population and economies.
They are also significantly influenced by the external debates such as that inregional/international organisations and the US as their key political ally and economic
partner. Elsewhere, Japan and the UK have significant differences, such as the latter’s
complicated relationship and interaction with the European Union, let alone their respective
political tradition. As the following sections show, the impact of Europe through thenegotiation processes with the European Commission and at the BEREC (Body of European
Regulators for Electronic Communications) was a factor that reshaped the UK’s approach to3

network neutrality regulation.
For the benefit of research, this paper sets up a couple of simple questions: how has thestate and the regulator responded to the emerging challenge of network neutrality?; andwhy do they choose their path?
To pursue the above, the next section further contemplates the significance of network
neutrality as an issue of regulation and governance. The following two sections study thecases of network neutrality policy in Japan and the UK in turn. The fifth section offers anassessment drawing on the previous two sections. The final section concludes the paper,with suggestions on the limitation of this research and the possible future research.

Network neutrality as a key question of regulation and governance
The nature and transformation of governance is a key topic of debate within social science
disciplines, as governance has been transformed in response to a variety of social challenges
since the 1970s. In the scholarly efforts addressing this issue, regulation has been a key topic
of research, because as a core function of the state it covers changing interaction between
the state and society. Regulatory reforms including deregulation and re-regulation haveattracted much scholarly attention in the exploration of society and governance.

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As a key public policy tool for practitioners, regulation was extensively employed by thestate in regulatory reforms such as privatisation and market liberalisation after the 1980s
across the globe. It was highlighted as a major policy tool after the privatisation ofincumbent public corporations in key infrastructure sectors such as telecommunications in
the 1980s. Regulatory reforms such as market liberalisation and privatisation have beenviewed as not only deregulation but also re-regulation; the development of regulatory
reforms in the communications sector in particular has been regarded as an example of reregulation (Vogel 1996, 2018).
As the communications sector has gradually changed its services from those based on the
Public Switched Telecommunications Network (PSTN) to those based on the Internet
Protocol (IP) since the 1990s, communications policy and regulation must respond to thechange. The period after the 1990s saw a gradual emergence of state involvement in theissues of the Internet throughout the world (Freedman 2016: 124).
Although Internet regulation has been a topic of debate for years, it has not always been asubject of stringent regulatory measures or the core part of the regulatory frameworks in thecommunications sector. Rather, the initial stage of the Internet can be characterised by amainstream view that highlighted the virtues of the Internet and argued for liberty. The
developers of the Internet in the 1990s were engineers and programmers who designed it in5the first place as a series of networks that were intrinsically hostile to outside interference(Freedman 2016). Their reluctance to embrace public policy intervention, let alone
regulation, shaped the path of the Internet as a field with strong preference for selfregulation and libertarianism.
With the increasing significance of the Internet within the communication sector and the
explicit reluctance of Internet specialists such as engineers to embrace government
intervention, the approaches to communication regulation have become more selfregulation based highlighting the cooperation among stakeholders. Indeed, the decline of
the PSTN and concomitant rise of the Internet as the key communications infrastructure of
the next generation prompted communications regulation to relax: regulation on market
entry and service conditions were dismantled and new approaches based on self-regulation
and benign encouragement to private firms became a new trend. The initial phase ofcommunications regulation in the twenty-first century concerned debates on human rights
and democracy rather than the nature of the communications networks and the sector.
Communications regulation tended to respond to emerging social events rather than thechallenges resulting from the core characteristics of the Internet, networks, and the sector.
The concern of network neutrality on the fair treatment of the content oncommunications networks directly addresses the governance of communications networks

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by highlighting how key communications operators manage their network in relation to theirpotential competitors. The dominance of strong private actors within the sector has been a
key regulatory challenge since the sector embraced the regulatory reform including
privatisation and market liberalisation after the 1980s. Network neutrality regulation
probably offers the first opportunity for the regulator to systematically engage with thepower of large companies after the rise of IP networks, whereas the previous Internet
regulation issues tended to respond to the harm resulting from behaviours and norms suchas cybercrime.
Many recognise Wu (2003) as the first commentator who explicitly discusses the concept
as a significant policy challenge, although network neutrality was recognised as a significant
regulatory issue as early as in 1999 when academics recognised the risk that cable TV
companies’ closed business model could overtake the Open Internet (Marsden 2017: 29).
The following debate of network neutrality in the US exhibits a set of politically polarised
events involving the Democrats as a key proponent and the Republicans as the opponents,
well documented by a body of literature.
The FCC (Federal Communications Commission) Open Internet Order in 2010 was asignificant watershed in the sequence of regulatory development in US net neutrality, withsignificant opponents of its approach to exclude mobile operators from the scope of the7order (Marsden 2017, Pickard and Berman 2019). The following debate between the
proponents and opponents of stronger regulation culminated in the enactment of the 2015
Open Internet Order and the following backlash by the Trump Administration and its FCC
chairman Ajit Pai, whose Commission voted to approve the Restoring Internet Freedom
Order, which rolls back the net neutrality regulations that were put in place by the FCC in
2015. This role-back has not come without reaction; indeed, California State passed a net
neutrality bill that goes further than the FCC’s 2015 Open Internet Order (Pickard andBerman 2019: 97).
Extensive politicisation that characterises the US network neutrality debate, however, is
not always present in other examples. Indeed, some large economies in the world tend tolook to the benefits of self-regulation drawn from consensus rather than the alternative of
statutory regulation. As examples of such approaches, this paper explores the cases of Japanand the UK.
These two countries have a significant population size and economy as members of both
the OECD and G8 and a developed communications sector including IP networks; they arealso under significant political, economic, and technological influence from the US including
its network neutrality debate and saw a significant policy development in network neutrality
in the 2010s. However, their approach to network neutrality regulation pursues co-8

regulation, strikingly different from the US, where partisan debate on network neutrality
aims at whether or not statutory network neutrality regulation should be enacted.
Co-regulation2 is a concept in which the state actor co-works with private sector
counterparts to formulate and implement regulatory frameworks including rules (Ofcom2008). In the light of the body of governance theory, co-regulation exhibits characteristics
compatible with collaborative/interactive governance, mobilised by the policy network(Pierre and Peters 2020: 56–57). Under co-regulation, the state joins the policy-making
process and refrains from engaging in explicitly exercising power as a single decision maker. It
pursues goals without explicit intervention.
The exploration of two cases of co-regulation reveals an account of how network
neutrality has prompted those countries to set up a different type of regulatory approach inresponse to the same issue, if compared with the US as an internationally illuminatedexample. In so doing, this paper offers an explanation of how a mode of governance isshaped in response to the emerging policy challenges in a sector of high modernism and2 According to Leveson (2012: 1739, para. 2.31.):
Co-regulation means any form of self-regulation with some sort of external, independent,
incentives, oversight or forms of backstop [including recognition] of a self-regulatory body by
Government, law or a statutory regulator; approval of codes by Government or a statutory
regulatory; and compulsory membership or funding arrangements.

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hyper-innovation (Moran 2003).
The next section first focuses on the Japanese example.

Network neutrality regulation in Japan: does it matter?
The debate of network neutrality regulation in Japan has been mobilised by the developmentof communications networks and the initiative of the government ministry responsible forthe issue: The Ministry of Internal Affairs and Communications (MIC). According to the MIC
2007: 1–5), network neutrality regulation in Japan became a significant policy issue forcontemplation prompted by the change from PSTN to IP networks in the communications
sector; this transformation led to the emergence of a new form of communication sector
composed of four layers: contents, platform, network, and device; the emergence of thissystem requires networks to treat its contents neutrally.
The MIC’s first move to engage in the issue of network neutrality can be observed in its‘Working Group on the Competition Rule in Response to Emerging IP’ between 2005 and2006. This working group probably offered the first explicit engagement in network
neutrality that set out two key principles: the equality of network usage and that of costallocation. Soon after the termination of this Working Group, the MIC set up ‘the Working

10Group on Network Neutrality’ that specialised in network neutrality issues. Its final report
reveals two specific policy issues, detailed in Table 1 (MIC 2007).

Table 1: Key points of the Report of the Working Group on Network Neutrality

1. The three principles on network neutrality
The maximum benefits of consumers require the following principles:
Principle 1: Consumers are entitled to use IP-based networks flexibly and access thecontent/application layer freely.
Principle 2: Consumers are entitled to connect to IP-based networks freely through terminals thatcomply with technical standards provided by laws and regulations and these terminals
may connect to each other flexibly.
Principle 3: Consumers are entitled to use the communication layer and the platform layer free fromdiscrimination at a reasonable price.
2. Fairness in Network Cost Sharing
Increasing traffic on networks requires scalable networks, the approaches to packet shaping
including the formulation of the guidelines, and the assistance for contents distribution.
3. Fairness in Network Use
Network interconnection rules and asymmetric regulation need revision.
4. Other points
The Report calls for the further development of network technologies and new business models,the openness of the incumbent operators’ networks, and the response to internationalisation andthe changing nature of dominant market power. It also pays attention to consumer protection, theissues on devices, and international implications.

Although the Working Group was significant as the first substantial engagement by the11

MIC, its driving force was not necessarily actual disputes in the sector. Rather, it was led bypartly ideocratic interests referring to the development of relevant debate in other countries
including the US and involved mainly the regulatory ministry, the industry, and specialists
such as researchers (Interview with an MIC official, 2021; Interview with a trade association
official). The resulting policy package was composed of the benign approach of encouraging
the formulation of the packet shaping guidelines by the relevant private sector actors andthe revision of the traditional dominant career regulation. The lack of a wide range of
relevant stakeholders may be related to the fact that this issue was not extensively debatedhitherto. This means the issue of network neutrality was not significantly politicised.
The limited scope of the involved stakeholders in network neutrality reflected the extent
to which relevant technologies had been developed (Interview with a trade association
official). In other words, the violation of network neutrality did not cause a significant
problem in Japan at that time. The development of the communication sector afterwards
prompted a network neutrality debate and increasing involvement of stakeholders.
After the two Working Groups offered initial approaches to network neutrality, Japan’scommunications sector saw few explicit moves for a decade, except for a couple of technicalefforts, including the formulation of the 2008 guidelines of a packet shaping operation

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standard by four trade associations engaging in Internet related services3. However, in thisperiod the related structures including relevant communication technologies changed. They
include the rise of broadband services and smartphone devices and the increasing volume ofcontent services products; the introduction of 5 G mobile services is expected to further
exacerbate this trend (MIC 2018).
The second substantial review by the MIC was undertaken between 2018 and 2019 at the
Study Group on Network Neutrality. It came with the development of communications
technologies and services, including the rise of mobile communications services, theemergence of new large IT companies such as Google, Apple, Facebook, and Amazon (GAFA),
and the development of communications network technologies (Interview with an MIC
officials, 2020; Interview with an MIC official, 2021; Interview with a trade association
official, 2020; Interview with a consumer group official, 2021).
The outcome of the second review highlighted the three key issues: packet shaping,priority control, and zero-rating4. The review recommended revising the 2008 Guidelines on

3 The Guidelines on Packet Shaping Operation Standard were formulated by Japan Internet Providers
Association (JAIPA), Telecommunications Carriers Association (TCA), Telecom Services Association(TELESA), and Japan Cable and Telecommunications Association (JCTA) in 2008. The Guidelines wererevised in 2019 in response to the Interim Report of the Study Group on Network Neutrality at theMIC.
4 A zero-rating allows Internet Service Providers (ISPs) an exemption of certain websites or13

Packet Shaping Operation Standard, set out to further deliberate the issue of priority control,and declared the formulation of interpretation guidelines regarding zero-rating andsponsored data (see Study Group on Network Neutrality (2019) for more details).
After the completion of the Interim Report of the Study Group on Network Neutrality in
2019, the MIC launched the Working Group on Network Neutrality on 9 June 2020, which isdeliberating related technical issues such as how telecommunications network operators(carriers) have implemented packet sharing and provided zero-rating services, howconsistent they have been with the related guidelines, and how much their behaviour has
affected telecommunications markets and users (MIC 2020).
The MIC’s second review significantly differs from its first review in terms of its
involvement of stakeholders and their awareness of the significance of network neutrality.
The approach to the first review can be regarded as ideocratic rather than bottom-up, withthe policy challenges recognised by not a wide range of the public but a group of limited
specialists including the regulatory ministry, relevant private firms, and researchers.
Elsewhere, the second review between 2018 and 2019 involved a wider range ofstakeholders including not only the regulator, Internet Service Providers (ISPs),

applications from counting towards users’ data charges (Pickard and Berman 2019: 97).

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telecommunications network operators (carriers), and specialist researchers but also
consumer groups and content providers.
However, the development of the issue has not attracted political attention. Indeed,
network neutrality, let alone regulatory measures related to it, has not seen significant
involvement of party politicians hitherto. The case of network neutrality in Japan offers an
example of an emerging regulatory issue where policy-making is dominated by co-regulation
mobilised by relevant specialist stakeholders, keeping politicisation at arm’s length.

The British regulatory tradition and Open Internet
The regulatory tradition of the UK can be characterised by a mixture of the traditional mode
dominated by self-regulation by sectoral elites and the comparatively new mode mobilisedby high modernity and hyper-innovation (Moran 2003). The trial to replace the traditional
regulation mobilised by ‘club world’ with the new administrative approach that seeks to
avoid discretion and manipulation in favour of democratic transparency and accountability
inevitably contradicted the existing force aiming to maximize discretion and preserve as
much of the old club culture as possible and resulted in political instability and fiasco (Moran
2003, 2009). Others emphasise the impact of the entrenched British political tradition, which15can be summarised as ‘Westminster and Whitehall know best’ (Fitzpatrick 2016: 210), thatthe development of British regulation such as privatisation has been strategic processes thatmaintain the status quo by the capitalist state that serves the interests of political andeconomic elites (Fitzpatrick 2016: 95–136). The case of network neutrality regulation in the
UK reveals the extent to which preference for co-regulation, which reminds one of the
traditional British regulation of the club world, has dominated the process of policy-making
and implementation on the issue of high modernity and hyper-innovation. The findings ofthis paper concur with Fitzpatrick (2016) by revealing the impact of the traditional British
regulation on network neutrality. At the same time, the paper casts doubt on the uniquenessof the British political tradition in regulation; if other examples exhibit a similar pattern totheir British counterpart, one can argue that it is a characteristic of the modern regulatory
state rather than the British one.
The debate of network neutrality in the UK came with the dissemination of broadband
services. It has been mobilised by the regulator Office of Communications (Ofcom), theindustry including the Broadband Stakeholders Group (BSG)5 and trade associations such as

5 The BSG is the UK Government’s leading advisory group on broadband, whose network includes
telecoms operators, manufacturers, investors, ISPs, mobile network operators, broadcasters, newmedia companies, content producers and rights holders, as well as central and local government,

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techUK, and others such as academics and consumer groups. Although the impact of nonindustry actors in society was limited, the confrontation between key industry actors was
significant (Interview with a BBC official, 2020). Indeed, the absence of grassroots actors
characterised the European response to the network neutrality debate including the UK’s
(Powell and Cooper 2011), and this trend has not seen a significant change hitherto, except
for occasional side-shows (e.g. Consumer Focus 2012). The author of this article contacted acouple of key UK consumer groups and failed to obtain an interview account, partly becauseof their lack of interest and knowledge on this issue. Among those involved, Ofcom has
played a key role in shaping the course of action, with its reserved approach to explicit
intervention and statutory regulation. Elsewhere, Sir Tim Berners-Lee (TBL), a key World
Wide Web architect, has exercised significant influence over the course of the debate as the
key peer of Internet specialists (Marsden 2017: 159–184). Therefore, the UK net neutrality
debate can be characterised by the significant influence of business and technological elites,

devolved administrations, Ofcom and others. It provides a neutral forum for organisations across theconverging broadband value-chain to discuss and resolve key policy, regulatory and commercial
issues, with the ultimate aim of helping to create a strong and competitive UK knowledge economy. It
was established in 2001 by then Minister for E-Commerce and Competitiveness Stephen Timms, andsince 2006 has focused on next generation broadband issues. (BSG 2021)

17the explicit coordination by Ofcom, and the absence of a significant impact by thegovernment ministry, party politicians, and non-industry actors in society such as consumer
groups.
Like its Japanese counterpart, the UK’s approach explicitly embraces the concept of coregulation as key, with an approach cautious and modest rather than ambitious. Althoughthrottling in the UK communications network was witnessed by BT as early as 2001, theregulator did not explicitly acknowledge network neutrality as a challenge of their own until
2006 (Marsden 2017: 160). For Ofcom (2006: 4), network neutrality issues: ‘may or may not
emerge in the future’. This tendency was retained with the incoming Cameron Government’s
significant resource reduction for Ofcom and the impact of the News International Phone
Hacking Scandal, which resulted in the transfer of the responsibilities for the ICT sector fromthe Department for Business to the Department for Culture in early 2011. The UK’s stance on
network neutrality in this period can be revealed by Ofcom (2011: 26), for example:

We recognise that any regulatory intervention in this area must be based on careful considerationof the risks of unintended consequences and, as discussed above, we recognise that the market isdynamic. Our current view is that we should be able to rely on the operation of market forces toaddress the issue of blocking.

This stance has shaped the path to a co-regulation approach, in which a set of guidelines

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by the BSG in Table 2 administered the ‘Open Internet6’:

Table 2: Open Internet Guidelines issued by the BSG
July 2012

Open Internet Code of Practice: 25 Jul 2012 (The first and original)

May 2013

Open Internet Code of Practice: 25 Jul 2012 (Minor amendments and clarifications)November 2014

Open Internet Code of Practice: 25 Jul 2012 (Amended)

November 2015

Review of the Open Internet Codes: 16 November2015 (Independent review byWissenschaftliches Institut für Infrastruktur und Kommunikationsdienste (WIK)
GmbH)

June 2016

Open Internet Code of Practice: 8 June 2016 (The revision in response to Regulation(EU) 2015/2120)

According to BSG (2016), the key points of the latest version of the guidelines ‘Open Internet
Code of Practice: 8 June 2016’, are:

The new Code continues to preserve the concept of an Open Internet – one in which users canaccess all lawful content without providers discriminating on the basis of commercial rivalry. It also
ensures that traffic management practices employed by communication providers to manage their
network are compliant with the new EU Regulation. In addition, the signatories to the Code will
maintain the transparency that they already have in place around these practices by ensuring thatthese are communicated to the user effectively. The Code also clarifies the context in which someinnovative services, which may become more prevalent as the Internet of Things becomes a reality,

6 Open Internet is the term preferred by many in the communications sector as an alternative term
to network neutrality. According to Hooper (2015): ‘The term “Open Internet” is one that the digital
minister, Ed Vaizey and I agreed some years ago was a better term for the UK than the American term
– net neutrality’.

19could be provided alongside the Open Internet.

Elsewhere, the network neutrality debate in the European Union (EU) significantly
affected the policy-making and implementation in the UK as a member state. Although theEU’s initial approach to network neutrality in the early 2010s was not significantly different
from that of the UK, the change of its stance aiming at more explicit approaches resulted in
the formulation of the EU Regulation on Open Internet Access (Regulation (EU) 2015/2120);
following its adaptation on 25 November 2015 by the European Parliament and the Council,
EU rules were applied as of 30 April 2016 (Marsden 2017: 14–17; Ofcom 2019: 1; European
Commission 2021). In response to the reference by the European Commission and other
European bodies, the BEREC issued ‘BEREC Guidelines on the Implementation by National
Regulators of European Net Neutrality Rules’ on 30 August 2015 (BEREC 2016).
The approach of the UK Government and Ofcom was to offer their view in the process of
formulating the EU laws and BEREC Regulation (Marsden 2017: 181; Interview with an Ofcom
Official, 2020). In July 2015 Minister for Culture, Communications and Creative Industries Ed
Vaizey reported to Parliament that given the nature of the new network neutrality European
regulation as principle based and service/technology neutral and its provision that ensures
an Open Internet across Europe where all legal traffic is treated equally and to end the unfair
blocking of rival services, the regulation fully met the wider criteria in the UK Government’s

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negotiating position (Marsden 2017: 181).
The introduction of European regulation prompted not only the publication of the revised
BSG guidelines ‘Open Internet Code of Practice: 8 June 2016’ but also Ofcom to set up the
implementation programme in 2017, which specifically illuminates the two following issues(Ofcom 2019: 1; bold in original): The commercial practice of ‘zero-rating’ data traffic, where data used for specificapplications, or types of applications, is not counted toward a user’s data allowance; and Traffic management practices, where ISPs implement measures to optimise their
network.

Ofcom as a National Regulatory Authority (NRA) has also issued an annual monitoring reportto the European Commission and the BEREC since 2017 (Ofcom 2020).
If this sequence of UK network neutrality policy development is reviewed, what appears isthe embedded tradition of co/self-regulation in network neutrality and its response to theexternal influence by the European Commission. Some argue that the existence of strong
service-level competition has led the UK to choose this path (Interview with a BSG official,2020). Others highlight the UK’s superior position to engage in network neutrality issues
when compared to its European counterparts; in simpler terms, the UK has been ‘better than21the others… more ruled… [the UK did not] really need to do anything because we have [theUK had] Open Internet Code of Practice’ (Interview with a trade association official, 2020).

Assessment of the cases
Network neutrality regulation in Japan has been led by the regulatory ministry (MIC), withthe gradual increase of stakeholders prompted by the development of the sector, including
those related to technologies and services. With no significant involvement of party
politicians in the debate, network neutrality in Japan has been led by sectoral elites, with theimpact of external actors as an ideocratic factor rather than a direct influence. What is
unusual is the secrecy of communications has been a significant normative concept that hascontributed to the debate (Interview with a trade association official, 2020).
The UK example reveals a different pattern of network neutrality policy development, inwhich state actors have opposed the introduction of stringent approaches such as statutory
regulation and pursued co/self-regulation, in which industry actors play a key role informulating the rules for network neutrality. The impact of the European Commission as anexternal actor significantly affected the UK network neutrality policy by changing the coregulatory approaches to those of statutory regulation based on the EU Regulation on Open22

Internet Access (Regulation (EU) 2015/2120); the negotiation process to formulate thisregulation allowed the UK to successfully set the regulation in line with its policy line
(Marsden 2017). From the viewpoint of the UK industry community, the UK’s efforts on
network neutrality were advanced to the extent that no substantial change was required inits domestic network neutrality measures (Interview with a trade association official, 2020).
If one refers to the development of the British regulatory tradition by Moran (2009: 2), what
appears is the re-emergence of the traditional pattern of the British regulation in the form ofco-regulation in a sector of high modernity and hyper-innovation, with skilful response to theEuropean influence that resulted in titular changes to its guidelines as the core co-regulatory
policy tool.
If these two cases are compared, what appears is the strong preference for theapproaches in which the state actors such as the government ministry and the NRA play therole of a monitor rather than an intervener in the emerging sub-sector of Internet services. In
the emerging sector that has no strongly embedded regulatory approach, the state has
discretion to set up the framework of governance. Both Japan and the UK have chosen thepath of setting up a framework of co-regulation. This selection contrasts the choice of otherexamples, e.g. the US, the Netherlands, Slovenia, and Austria, where the formulation of
statutory regulation was selected (Interview with an Ofcom official, 2020; Marsden 2017).

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Interviewees highlight the rapidly changing nature of the relevant technologies in thecommunications sectors and the development of both the technologies and services as key
factors shaping the framework of network neutrality. These points obviously look significant,but the author of the paper also highlights the existing structures of self-regulation in bothcountries.
The rise of self-regulation in Japan’s political economy after the 1990s is reported as a
new mode of governance in response to the challenge of governance and the resulting
decline of the traditional bureaucratic approaches (Schaede 2000). With regulatory reforms
including privatisation and market liberalisation since the 1980s and the gradual impact of
neo-liberalism and New Public Management since 1990, the Japanese state and its politicalelites have shown significant preference for benign state intervention in relation to industrial
actors. The resulting co-regulation drawn from the consensus among political and economic
elites depends upon a set of depoliticised processes that involves the policy networks ofspecialists explicitly monitored by civil servants. That could imply a future possibility ofpoliticisation, given the close relationship between civil servants and party politicians inJapan (see Mogaki 2019, for example).
Elsewhere, although the impact of the New Right was more explicit and distinctive in the
UK than Japan, the response of the former to the challenge of network neutrality exhibits the24extent to which the regulatory approach of the British political tradition that pursues theinterests of political and economic elites in the form of self-regulation affected policy-making
processes in a sector that can be regarded as an example of high modernity and hyperinnovation. The explicit intention of party politicians and the government department topursue co-regulation rather than more interventionist approaches means that the group ofpolitical and economic elites collectively selected the policy direction of keeping politics andthe government at arm’s length. At the same time, like the Japanese case, the nature of
involved stakeholders sets the direction of specific measures.
In pulling the above together, the cases of Japan and the UK have divulged the examples
in which the state chose the embedded approaches in an emerging policy issue by setting up
the frameworks of co-regulation. The state tradition and the selected policy networks seem
key in shaping the path of network neutrality policy development in both cases. The paperargues that without significant contingent factors such as a crisis, the state turns to theapproaches that correspond to the existing political tradition in response to a new regulatory
challenge and are shaped by the policy networks whose specific characteristics are
determined by the selection of stakeholders.

25Conclusion
The case studies of network neutrality in Japan and the UK reveal how a sector of highmodernity and hyper-innovation responds to a new policy challenge, referring to the state
tradition, involved stakeholders, and external influences. The research result reveals thesignificance of existing structures in regulation and an explicit preference of sectoral elites forco-regulation. Emerging regulatory challenges prompted the state and elites in the sector to
set up a framework that corresponded to the structures such as political traditions andexisting policy networks rather than the influence of agency when no contingent factor suchas a crisis affected political arenas; as a result, a new mode of governance emerged in the
sub-sector of communications network neutrality.
This topic obviously requires further research. For example, the paper offers only a vague
explanation of why network neutrality regulation in both countries has avoided politicisation,
which has characterised both Japanese and British regulation. The current research did not
identify a party politician who can offer an account specifically for network neutrality, partly
because the issue is considered specific with no political implication. Perhaps, the issue canbe considered with a broader scope; for instance, if the research examines the nature of thepolicy regarding the Internet, party politicians may better respond to enquiries to provide an
account. Also, regarding the UK, the significance of the responsible government department

26

(Department of Culture, Media & Sport), which exhibited few substantial engagements in
network neutrality, requires further scrutiny. Research with a broader scope can reveal theirrole and impact in policy-making and implementation.
The research can also pay attention to examples of a different state tradition. Whereas
Japan and the UK happen to have a similar approach to communications network neutrality,
others such as the US and the Netherlands have responded differently. Exploring these cases
will offer an account of how a state introduces a different set of regulatory measures on theissue.
The examination of network neutrality offers a clue to understanding the nature of
regulation in a country under a specific mode of governance by revealing the significance ofpolitical traditions and policy networks in shaping a new mode of governance. Although thispaper offers an account that will allow further contemplation, its generalisability andspecificity of the issue deserve further attention, together with the long-term transformationof governance factors.

Acknowledgements
This research was funded in Financial Year 2019 and 2020 by the Telecommunications

27

Advancement Foundation, Japan [Denkitsūshin fukyū zaidan] and draws on the paper
presented at 71st PSA Annual International Conference (Queen’s University Belfast (QUB),
UK, 29th-31st March 2021).

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