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1 Toshiya Jitsuzumi INTRODUCTION 12.1 Recent times have witnessed the phenomenon of increasing congestion on the Internet; this is characterized by the ‘crowding out’ of average users by peer-to-peer (P2P) users due to a rapid spread of bit-intensive applications (Cisco Systems, 2008a, 2008b, 2008c; Swanson, 2007; Swanson and Gilder, 2008), and further, it is sometimes accompanied by the possibly anticompetitive conduct of network operators. In an attempt to deal with this, ‘network neutrality’, a term coined by Wu (2003), has come to be a focus of discussion among operators, academics and telecom regulators. For example in parallel with a series of controversial events, for example, blocking of Voice over Internet Protocol (VoIP) by Madison River Communications LLC in March 2005 and the allegedly discriminatory treatment of P2P by Comcast since 2007,2 the US Federal Communications Commission (FCC) has issued important statements. First, in 2004, the then FCC Chairman Michael Powell challenged the broadband network industry to preserve the four ‘Internet Freedoms’: freedom to access content, freedom to use applications, freedom to attach personal devices and freedom to obtain service plan information.3 Secondly, on 23 September 2005, the following principles were incorporated into a policy statement.4 ● ● ● ● Consumers are entitled to access lawful Internet content of their choice. Consumers are entitled to run applications and use services of their choice; subject to the requirements of law enforcement. Consumers are entitled to connect their choice of legal devices that do not harm the network. Consumers are entitled to competition among network providers,...