The Tencent Inc.’s lawsuit against Qihoo 360 Technology Co. Ltd. for unfair competition is a typical network event which epitomizes “the tragedy of the commons.” In the verdict, the court cited unprecedentedly the related provisions both issued by the government and the guild, indicating the function of major participants, especially those of social self-organization, on the regulation system of Internet service providers, based on whose characters, it is therefore necessary to innovate and develop its regulation system. The regulation on Internet service providers involves three major participants: the government, the public and Internet service providers including their guild. Currently in China, the Internet service providers are regulated from top to bottom, i.e., the government plays the role of the leader, the dominator and the supervisor while the other participants the follower. With the evolution of its definition and function as well as innovation in regulatory means, problems of the mode arise. The government relies heavily on self-judgment in decision-making, lacking in mutual communication, demonstration and negotiation with other main parts due to its complete dominance in the regulation model. However, Internet service provision deals with interest appeals from multiple subjects, which deserve equal opportunity to express their value standards. In the meantime, defects exist in the statute law on which the government is dependent, such as the absence of market incentive and self-regulation, the weak legal basis for the others in the controlling and the incoordination of the standard system. In addition, the guild lacks autonomy resulting from the strict control of the government and its strong directivity in member selection fails to promote self-development. As the pact for self-discipline in the industry, the “soft law” also has problems in quantity, operability and deterrent force. The public has little access to partake and the public rules are unorganized and dispersed. Besides, the value standard of public participation is affected by various factors, thus requiring measures to adjust personal preference developed in unreasonable conditions so as to promote scientific rationality. To solve the problems in the current pattern, we should set up a “Polycentric Governance” theory based Internet service providers system, which is stipulated by multicenter collaboratively and characterized by mutual trust, openness, compatibility and interactivity. As the key function shifts, the government should impel other participants to intervene in the regulation, keep a harmonious relationship among principal parts and actively leave the right to social self-organization. The guild serves as the bridge between the government and the public and develops itself by coordination and collaboration, thus improving the two-way communication between the internal Internet service providers and the external Internet users. Under the premise of more approaches to participate, the public gains full access to information and exchanges with other major bodies using the institutional arrangement and Internet service platform, which renders the suggestions more scientific and feasible. The new regulation system is in accordance with not only the tendency of social governance but also the features and requirements of the stipulated. It continuously exerts positive influences on the participants, which boosts the overall development of the industry chain and considerably increases the effectiveness of the regulation.