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Introduction
Network neutrality (also referred to as "net neutrality" or "Internet neutrality") is a principle proposed for access networks on the Internet that advocates no restrictions on content. It proposes that data on the Internet be moved blindly and impartially, irrespective of content, destination or source. Network neutrality is a sensitive issue worldwide, and numerous studies have explored its costs and benefits (Shin, 2014). For example, Crocioni (2011) investigates the status of the regulatory debate in Europe and provides an economic regulation framework. Shin and Han (2012) review Korean information policy and propose a combination of legal regulations and transparency. Moreover, Carter et al. (2010) compare the approaches used in the USA, Japan and the European Union.
An analysis of the relevant literature suggests that the proponents and opponents of network neutrality currently disagree on the best way to develop the Internet to maximize consumer gains. Proponents assert that the market power of vertically integrated Internet service providers (ISPs) will spillover from the network layer into the application layer when the ISPs discriminate between non-integrated application service providers (ASPs) and content providers (CPs). They insist that governmental network neutrality regulation is essential because ISP discrimination will deter the development of the Internet and harm consumers and entire societies by limiting network investment incentives and stifling innovation at the application layer. Conversely, opponents argue that vertical integration increases efficiency in the market and that network neutrality regulation is unwise because it reduces network investment incentives and deters innovation. They further claim that authorizing ISPs to manage networks will lead to the optimized development of the Internet industry.
Ongoing debate on the issue has narrowed the gap between the positions of proponents and opponents of network neutrality. However, the two sides have not reached an agreement and researchers approach the issue from a variety of standpoints (Shin and Shim, in press). Some researchers support or oppose network neutrality from the perspective of innovation and investment, whereas others support or oppose it based on vertical integration and discrimination. Therefore, it is important to review the literature on this issue to clarify the current state of theory and research and provide a reference for researchers and practitioners.
This paper presents a critical review of the current network neutrality...