study concludes: “[T]he government should refrain from attempting to mandate or evaluate
standards when the technologies themselves are subject to rapid change.... It is only after the
technologies have ‘settled down’ that government action is most likely to be fruitful .8 This
is why the National Cable & Telecommunications Association (NCTA) has recommended that
any approach to questions about video distribution navigation devices should begin with a
commitment to consumer choice and be “implemented flexibly to accommodate different
network architectures and diverse equipment options, and, to the maximum extent possible, serve
as the basis for private sector solutions, not government technology mandates.” NCTA’s
recommendation elaborates:

We believe these principles should be implemented in ways that facilitate

the deployment of different video device options in response to dynamic

and varying consumer demands, rather than requiring that all devices

include the same features for all consumers. It is also critical to

accommodate the flexible use of different architectures — now existing or

developed in the future — for accessing multichannel video provider

services... None of us can predict with any certainty which is the better or

more likely path and it is quite possible that multiple paths will emerge.”

V. LESSONS LEARNED

CableLabs draws these lessons from the three case histories examined above:

design choices. Unlike the first two effects of standardization, this effect is a cost. Limits on design choices can
lead to static losses from the reduction in variety. And they can lead to dynamic losses as firms are foreclosed from
certain paths of R&D that could result in innovative new products that could not comply with the standards. Note
that these limits impose costs both at the time a new product is created, and later when it is possible to introduce a
new generation offering greatly enhanced performance.”); Joseph Farrell & Garth Saloner, Converters,
Compatibility, and the Control of Interfaces, J. Industrial Econ., Vol. 40, No. 1, Mar. 1992, at 9-10 (“But
standardization has its costs. First, it may retard innovation. Second, the process of standardization may itself be
costly.... Third — the problem addressed in this paper — since standardization typically constrains product design, it
may limit product variety.”); Richard Gilbert, Symposium on Compatibility: Incentives and Market Structure, J.
Industrial Econ., Vol. 40, No. 1, Mar. 1992, at 2 (“One way to ensure compatibility is to require firms to produce
products that conform to set standards. This is, however, a potentially costly requirement. Standards limit
flexibility to offer products with specialized characteristics (standards limit product variety) and may constrain
technological progress by limiting firms to suboptimal designs.”).

* Besen & Johnson, supra note 7, at 135.

° Letter from Kyle McSlarrow, President and CEO, National Cable & Telecommunications Association, to
Chairman Julius Genachowski, Federal Communications Commission, GN Docket Nos. 90-47, 09-51, 09-137, CS
Docket No. 97-80 (Mar. 12, 2010).


technology is better suited than GSM. As another example, early (French) efforts to legislate
DRM interoperability in order to “open” the iPOD were halted. The result in music was
enormous investment by competitors into competing platforms, a change in Apple’s practices,
and greater consumer choice. In video, one result is Ultraviolet, a system designed to break
down video silos by embracing multiple DRMs and thereby serve the vast array of devices in
consumer hands.*

The communications, media, and information technology fields with which we are most
familiar are characterized today by an innovation “life cycle.” At first, experimentation is
diverse and seemingly chaotic, often uses proprietary solutions to respond to marketplace and
consumer demands, and is marked by multiple successes and failures. Later, with
experimentation, directed field trials, or use cases, targeted consumer input is gathered. One or
more solutions may actually reach the consumer market, but still often in proprietary form. As
companies seek to reduce costs, generalize solutions, diversify vendors and broaden adoption,
common interoperability specifications may be appropriate in specific targeted areas, such as
interfaces or lower level architecture. After much of the innovation and experimentation has
been allowed to occur in the open marketplace, standards or common specifications may play a
role. In our experience, premature standardization can short circuit innovation and shortchange
consumers.

Allowing multiple approaches in standards also provides choices in intellectual property.

CableLabs, like many voluntary standards organizations, establishes an IP policy to avoid “hold

* See Press Release, Digital Entertainment Content Ecosystem (DECE) LLC, Digital Entertainment Content
Ecosystem (DECE) Completes Design Of UltravioletTM (Jan. 6, 2011), available at
http://www.uvvu.com/press/CES_JAN_6 2011 Press Release_|_5_11_FINAL.pdf; Press Release, Digital
Entertainment Content Ecosystem (DECE) LLC, Digital Entertainment Content Ecosystem Unveils UltraVioletTM
Brand (July 20, 2010), available at

http://www.uvvu.com/press/UltraViolet_Brand Launch Release_07_20_2010_FINAL.PDE.



formal standards development organization (SDO) process, or an even lengthier, and more rigid,
government rulemaking process.

For example, it was through the CableLabs DOCSIS® specification—for which
CableLabs was recently awarded an Emmy for enabling the delivery of television via
broadband—that DOCSIS was cultivated as a global standard. The DOCSIS specification was
born from private collaboration, developed through the more formal CableLabs specification and
testing process, then became an ANSI standard, and then an ITU worldwide standard. New
DOCSIS 3.0 network innovations—such as “bonding” channels to enable speeds of 100 Mbps—
follow the same path. The success of the DOCSIS specification has not only revolutionized
broadband, but has demonstrated the renewed ability of the United States to exercise global
leadership through research and development and the rapid establishment of voluntary consensus
standards without awaiting government mandate or formal SDO processes. Today, the National
Broadband Plan can point to its 100 Mbps performance capabilities as a national goal,° without

needing to invent a DOCSIS 3 standard to get there.

Ill. SMARTGRID

Under the Energy Independence and Security Act (EISA) and the American Recovery
and Reinvestment Act (Stimulus Act), the National Institute of Standards and Technology
(NIST) is bringing together energy providers, manufacturers, service providers, consumers,
regulators and other stakeholders to develop “interoperable standards.” CableLabs is among the
participants in what is obviously an enormously complex undertaking, one that touches on
electrical networks, communications networks, almost everything to which they connect, and the

many complex interactions and relationships among them.

° Connecting America: The National Broadband Plan, at 9 (Mar. 16, 2010).

10


The government did not mandate a particular standard, but left it up to standards bodies
to create CALEA safe harbors. CableLabs administers and publishes the voluntary consensus
specifications used by the cable industry for services such as managed voice communications
over IP. This specification is known as the PacketCableTM specification. The FBI defined the
lawful surveillance needs of the LEAs, and CableLabs was then able to update the PacketCable
specifications in order to meet such needs. Unlike other organizations that chose to work with
the Administration at arms length, CableLabs’ close working relationship with the FBI enabled a
better understanding of the LEAs’ lawful surveillance problems and a cooperative approach to
solutions. This resulted ina CALEA safe harbor that not only addressed the government’s
needs, but did so in a manner that preserved the privacy of cable subscribers not subject to LEA
warrants, and accounted for the practical and technical aspects of the cable system. This
specification effort received special FBI commendation and is now also an international
standard. By coming to a private consortium, the government was able to work with us directly
to draw on our expertise; our institutional knowledge of the technology; our ability to shape
specifications with appropriate regard to actual costs; our knowledge of the practical application
of technology; our ability to address associated intellectual property issues through commercial
solutions; our familiarity with actual and possible implementations; our familiarity with multiple
standards-setting options; our relationships with key companies and individuals; and our ability
to build consensus and revise standards dynamically.

The version of the PacketCable Electronic Surveillance Specification published on
July 23, 2004, provided solutions to all of the issues the FBI identified in a practical, efficient

and least-cost manner that also preserved privacy.’ A similar Cable Broadband Intercept

4 Specifically, CableLabs succeeded by July 2004 in resolving every issue on the FBI's “wish list” for CALEA
compliance by cable's VoIP services, including:


up” IP situations. We have utilized both RAND (reasonable and non-discriminatory) and
royalty-free terms in order to reduce the risk of IP “hold up” and thereby promote development
and implementation of a common specification. But we do not believe that there is a single IP
answer for all standards and all implementations. Some may call for royalty-free, some may call
for RAND, some may take the further step of setting up patent licensing pools (as we did with
MPEG-2 and OCAP). Allowing multiple voluntary standards solutions also allows the market to
offer a choice of IP approaches. Addressing private commercial IP rights is something the
government is not generally equipped to handle.

Three case studies of the public-private standards-setting process will illustrate the

wisdom of continuing this flexible approach.

IL. LAWFUL INTERCEPT

Lawful Intercept is the process by which law enforcement agencies (LEAs) conduct
electronic surveillance as authorized by judicial or administrative order. Communications
providers must provide LEAs, with the appropriate warrant, certain call identifying information
and/or call content as prescribed in the Communications Assistance for Law Enforcement Act
(CALEA). Failure to meet CALEA subjects communications providers to fines. As broadband
penetration and voice-over-IP (VoIP) applications grew, Federal law enforcement authorities
began to seek a means for receiving the same types of call identification and call content for calls
placed over a VoIP service as for calls made with traditional wireline telephones. Lawful
intercept obviously represents a core government functionality, but a standard means for meeting
CALEA obligations was not being addressed by the major local exchange carriers or providers of

“over-the-top” voice services. As broadband penetration grew, the need became urgent.


CableLabs regards its experience in providing for lawful intercept through the
PacketCable Electronic Surveillance and Cable Broadband Intercept Specifications as strong
validation of current U.S. standards-setting policy to use commercially developed “voluntary
consensus standards” where practical, and to treat solutions from consortia, informal multi-
company standards, development activities, and even single-enterprise standards-setting
activities on the same footing as formal standards-setting organizations. The many benefits of
this approach were illustrated in CableLabs’ work on lawful intercept. A core government
functionality was not being met in the market, but, by working cooperatively with CableLabs and
utilizing its existing expertise, relationships, and specification and certification processes, the
needs were met. The government did not prescribe a standard. It did not insist on a lengthy
formal ANSI process. It did not require the FCC to legally “reclassify” new services as legacy
services, which would have introduced regulatory confusion and suppressed broadband
investment. Instead, it worked with a private consortium to fine-tune existing voluntary
consensus standards. And as a voluntary “safe harbor,” rather than a prescribed agency rule, the
standard allows the industry to rely on the specification but to preserve the opportunity for
continued rapid evolution and alternative innovative methods for compliance that keep pace with
ever changing broadband networks.

The use of private consortia, specification and certification programs is a highly effective
tool for voluntary consensus standard development. It enables specifications to be drawn rapidly
to translate business needs into efficient technical requirements, which are, in turn, validated
through test plans and certification programs. In many cases, this approach helps to build

markets and to accommodate rapid innovation without awaiting what can be a far lengthier


CableLabs.

Cable Television Laboratories, inc.

Standardization Feedback for Sub-Committee on Standards
Docket No. 0909100442-0563-02

Comments of Cable Television Laboratories, Inc.
March 7, 2011

Cable Television Laboratories, Inc. (CableLabs®) welcomes this opportunity to submit
comments in response to the National Institute of Standards and Technology’s request for
information on the effectiveness of Federal agencies’ participation in the development and
implementation of standards."

CableLabs is a non-profit research and development consortium of cable television system
operators that is dedicated to pursuing new cable telecommunications technologies and to helping
its cable operator members integrate those technical advancements into their business objectives.
CableLabs was incorporated under the National Cooperative Research and Production Act, which
encourages research and development among companies in order to strengthen the
competitiveness of the United States in the world marketplace. CableLabs’ specifications are
developed through an open process with input not only from cable operators, but also from more
than 500 consumer electronics, IT, software, content, and other companies, as well as the public.
CableLabs does its work cooperatively with manufacturers and developers so that the resulting
specifications reflect what manufacturers can actually build for the commercial marketplace.

CableLabs also performs certification testing for equipment built to its specifications. CableLabs

' Department of Commerce, National Institute for Standards and Technology, Request for Information in Docket No.
0909100442-0563-02, 75 Fed. Reg. 76397 (Dec. 8, 2010). The time for comments was extended in Request for
Information, Extension of Comment Period, 76 Fed. Reg. 3877 (Jan. 21, 2011).



IV. SET-TOP BOXES

In contrast to the previously discussed CableLabs successes, CableLabs offers a third
case study as an illustration of what can go wrong when there are major departures from the
course we recommend above.

In today’s world cable, satellite, and telephone companies offer consumers competing
multichannel offerings. We are in a period of rapid innovation and experimentation: Internet,
gaming devices, televisions, smartphones, and tablets offer access to multiple sources of Internet
video programming through competing set-top boxes or via navigation functionality embedded
directly in DTVs, and cable companies are engineering their services to appear directly on
“smart” televisions without the need for set-top boxes. It is hard to recall that 15 years ago,
Congress felt compelled to adopt a statute directing the FCC to adopt rules promoting a retail
market in set-top boxes so that consumers would not be limited to renting a set-top box from a
cable company to enjoy multi-channel programming. At the time, DBS was just beginning,
telephone companies were prohibited from entering the MVPD business, and broadband did not
exist.

In response to that statute, the cable and consumer electronics industry negotiated a 2002
solution based on a removable CableCARDTM and the FCC placed the specific implementation
into regulation in 2003. The results did not pan out as hoped. Today, in 2011, consumers access
video programming from competing MVPDs and from a staggering variety of Internet sources
and Internet-based retail devices that did not exist at the start of the decade, but only a handful of
retail devices rely on the CableCARD. Yet, extricating the 2002 solution from Federal
regulation has proven quite challenging. Part of the regulations, which mandate one particular

digital video interface (IEEE 1394), stayed in regulatory mandate until 2010, even though


Our experience has been relatively brief, but it suggests that the intended approach begins
from a similar premise: that the government and stakeholders could collect existing standards,
identify the gaps, and then facilitate gap filling by working through an industry-driven consensus
process. In theory, this could invite innovative approaches from multiple consortia and informal
standards bodies on the same footing as formal standards-setting organizations, as called for by
OMB Circular A-119.

In execution, the Smart Grid Interoperability Panel should be alert to opportunities for
structuring standards in a way that attracts multiple approaches from multiple vendors. For
example, we are aware of concerns from State Public Service Commissions that some of the
standards being developed and adopted in the Smart Grid Interoperability Panel, such as
OpenADR (Open Automated Demand-Response), are predicated on the Advanced Metering
Infrastructure (AMI) energy management architecture used only by utilities, effectively
precluding a competition of ideas in the marketplace, and possibly displacing much of the
innovative work by others in home networking and energy management.

One approach that could invite innovation is for the government to identify business
requirements (such as a national capability for demand response in homes and businesses) and
then permit multiple approaches from multiple vendors to connect with open interfaces providing
meter and grid status. Many “non-standard” solutions could meet the national goal, and in time a
market standard could be widely adopted through market acceptance. This approach creates a
market-driven, innovation-inducing environment in which the government is not called upon to
pick winners and losers. Once a market is established, the “right” standard will emerge, not the

other way around.


Specification was issued on June 11, 2007, to effectuate lawfully authorized broadband
electronic surveillance in accordance with CALEA. As a result, in spite of technological
differences and complexities, LEAs will receive the same types of call identification and call
content for calls placed over a PacketCable-compliant VoIP service as in calls made with
traditional wireline telephones. The FCC accepted the Cable Broadband Intercept Specification
and the PacketCable Electronic Communications Surveillance Specification as CALEA “safe
harbors.” The PacketCable Electronic Communications Surveillance Specification is now also
an international standard. Equipment built to the PacketCable specification has since been
deployed widely. CableLabs provides PacketCable certification testing, which includes tests to
show conformance to the CALEA requirements.

FBI Assistant Director Kerry E. Haynes explained the importance of meeting the core
government need: “real-time technical interception capabilities are to the war against terrorism
what radar was to the Second World War - without it our ability to see enemies approaching is
extremely limited.” He also praised the specification produced through FBI-CableLabs
cooperation as “an extraordinary example of law enforcement and industry collaboration in the

public interest. It stands as a model for future industry-law enforcement cooperative efforts.”*

« Subject-initiated conference calls - provides law enforcement with the content of subject-initiated
conference calls.

¢ Timing Information - allows law enforcement to correlate call identifying information with call content.

¢ Subject-initiated dialing and signaling - provides law enforcement with access to all subject dialing and
signaling information such as use of flash hook (call waiting) and feature keys.

¢ — In-band/out-of-band signaling - notifies law enforcement whenever subject's service sends a tone or other
network message such as if a line is ringing or busy.

¢ Party Hold/Join/Drop - allows law enforcement to identify the active parties to a subject-initiated call.

¢ Dialed Digit Extraction - provides law enforcement those digits dialed by a subject during a call.

5 Press Release, Federal Bureau of Investigation, Federal Bureau of Investigation Calls Cablelabs®' Release of Its
PacketcableTM Electronic Surveillance Technical Specification “A Positive Development” For Cable Industry
Compliance With The Communications Assistance For Law Enforcement Act (CALEA) And The Lawful Access
Needs Of Federal, State And Local Law Enforcement (Sept. 7, 2004), available at

packetcabletm.


use across MVPD, media and IT companies—including UPnP, DTCP, Ethernet, DLNA, HTML,
MoCA, and MPEG—are not ANSI-accredited standards. CableLabs works actively with such
organizations, in order to develop solutions that can be broadly adopted. For example,
CableLabs is an active participant at DLNA with cable, satellite, telephone, and CE participants,
developing home networking approaches. In turn, one of DLNA’s strengths is to strive for
guidelines incorporating multiple, rather than exclusive, solutions. For example, it has defined
multiple content protection technologies, content formats, output interfaces, and IP transport
protocols, rather than setting a single standard. This is sufficient to obtain widespread
interoperability, but allows for the reality of network differentiation, a variety of services and
approaches, and the need for manufacturers to serve the changing marketplace and a variety of
consumer tastes and devices.

Many creative solutions are often initially developed as proprietary implementations in
business ventures, consortia, and incubating “founder” groups. From that initial entrepreneurial
effort, the de facto best solutions may then later be brought to well-established specifications
development bodies, ANSI-accredited standards organizations, or even ITU world standards
bodies. It is common in technology to allow design to evolve from competing solutions to
specifications and then eventually to move specifications into standards. This is how CableLabs
has designed the cable specification development process.

The real test for the success of standards processes is not whether a standard emerges
from one particular standards body rather than another, but the extent to which it ultimately gets
marketplace adoption. For that purpose, variety is essential. For example, some would argue
that the U.S. decision to allow deployment of CDMA (and competing mobile phone standards)

preserved CDMA for later incorporation into multimedia 4G, for which its bandwidth


1, We should maintain the approach of the NTTAA and OMB Circular A-119: Rather than
assuming the need for government mandated standards, effective public-private
partnerships can be created with consortia, informal multi-company standards,
development activities, and even single-enterprise standards-setting activities as well as
with formal standards-setting organizations.

2. The diversity and flexibility invited by NTTAA and OMB Circular A-119 drives
innovation and helps to promote U.S. leadership and competitiveness. We should
continue to embrace a market-driven, innovation-inducing environment by avoiding top-
down government prescription and allowing voluntary consensus standards to emerge—
including multiple, competing approaches to similar technological challenges. As stated
in United States Standards Strategy, “Voluntary consensus standards are at the
foundation of the U.S. economy.... The United States is a market-driven, highly
diversified society, and its standards system encompasses and reflects this framework,”
including “through professional and technical organizations whose membership is on an
individual or organizational basis; and through consortia, whose membership is typically
technology based.”!°

3. Government intervention is most appropriate (and successful) when it is addressing core
government functionalities, such as safety, health, disabilities, and defense, which are not
being met in the market. Lawful intercepts are one example. Emergency alert signaling
(or common alert protocol) is another. Closed captioning is yet another. We do not
believe that the distribution and navigation technologies for entertainment video fall
within this category of core government functions, and we believe that market needs are
being met and will continue to be met with the participation of expert and highly
professional industry participants who are accustomed to working through a wide variety
of voluntary standards organizations. Recognizing when intervention is in service of a
core government function and when it is not will become even more imperative as
various non-core activities are “touched” by an increasingly interconnected
communications networks.

4. If government intervention is considered appropriate, it should have clearly defined
objectives, should avoid incorporating specific implementations into regulation, and
should be flexible to accommodate rapid evolution and innovation. In our first case
history, by solving lawful intercept with a “safe harbor,” rather than a prescribed agency
tule, the solution allows the industry to rely on the specification, but preserves the
opportunity for continued rapid evolution and alternative methods for compliance.

5. When deciding whether intervention is appropriate, the government should also consider
the risk and cost of “non-market failure.” In other words, even when the government
believes there is a problem that the market has not yet solved, intervention may actually
do more harm than good.

'° American National Standards Institute, United States Standards Strategy, at 4 (2005), available at www.us-
standards-strategy.org.

15


Different technologies compete with each other for marketplace dominance. In the cable,
video, and entertainment space alone, we have many examples. Dolby competes with DTS
audio formats; multiple video codecs compete with each other; different image formats are
optimized for different purposes (low memory, detail, faster video processing, etc.); and multiple
approaches compete for home networking. MVPDs (Multichannel Video Program Providers,
ie., cable, satellite and telcos) and new entrants alike (for example, online video distributors)
engage in service and equipment differentiation and use complex interactions between networks
and access devices to innovate quickly and deliver new features to consumers. They do so using
different technology, but rapid innovation by one spurs competitive response by others in the
market. For example, satellite uses QPSK; cable responds with QAM, DOCSIS 3.0, and
tru2way®. Verizon devotes an entire fiber wavelength to its linear video offering and goes all-
digital; AT&T switches all channels to gain bandwidth; cable responds with switched digital
video of its own. Consumers seek video on tablets and other IP devices, and each MVPD creates
applications to make its services available to them and in other new ways. Standards emerge
over time as the marketplace and consumers, not the government, make their preferences known.
That competition, and continued innovation, also fuels job growth. If, at any time, a single
standard had been mandated, that rapid innovation and the human resources required to develop
innovative solutions could have been squelched.

From a standards perspective, this means that Federal agencies should continue to prefer
voluntary consensus standards to governmentally prescribed standards, and should continue to
put consortia, informal multi-company standards, development activities, and other standards-

setting activities on the same footing as formal standards-setting organizations. Technologies in

Clinton Administration praise for the model of private standard setting and conclusion that it was “unwise and
unnecessary for governments to mandate standards for electronic commerce”), available at

http://ssrn.com/abstract= 1003432.


testing follows published, objective tests drafted in cooperation with manufacturers, administered
by trained professionals, subject to quality assurance, a review panel, and an appeals process.
CableLabs processes have been emulated by the WiMAX Forum for wireless broadband and
other organizations.

After reviewing the market-driven, innovation-inducing approach which currently
animates U.S. standards-setting policy, CableLabs offers three case studies of the public-private
standards-setting process in order to illustrate three different approaches and lessons learned

from those approaches for future U.S. policy.

1. CURRENT STANDARDS POLICY ALLOWS RAPID MARKET INNOVATION
BY FAVORING VOLUNTARY CONSENSUS STANDARDS OVER
GOVERNMENT PRESCRIPTION

One of the great strengths of U.S. policy, and one which distinguishes it from foreign
regimes, is to embrace a market-driven, innovation-inducing environment by avoiding top down
government prescription and allowing voluntary consensus standards to emerge—including
multiple, competing approaches to similar technological challenges. The National Technology
Transfer and Advancement Act (NTTAA) calls for Federal government agencies to use
commercially developed “voluntary consensus standards” unless doing so would be against the
law or otherwise impractical. OMB Circular A-119 endorses consortia, informal multi-company
standards, development activities (including those that implicate “patent pools”), and even
single-enterprise standards-setting activities as on the same footing as formal standards-setting
organizations in meeting Federal government requirements for “voluntary consensus standards.”

A flexible approach enables rapid innovation, competition, and consumer choice.”

? See, e.g., Phil J. Weiser, Making the World Safe for Standard Setting, Univ. of Colorado Law Legal Studies
Research Paper Series, Working Paper No. 08-06, at 7, 35 (July 27, 2007; revised October 13 2008) (quoting


Ethernet, USB, and other connectors had long since eclipsed it. The CableCARD itself remains
mandated in what is now well more than 20 million set-top boxes, only 2% of which are the
retail devices for which they were originally intended. The FCC proceedings addressing the
CableCARD consumed enormous resources, often had ill-defined objectives, and frequently
displaced the research, development, innovation and commercial negotiations which eventually
led to far more innovative approaches.

The CableCARD saga is a good lesson in what expert economists call “non-market
failure.” That is, when government intervenes to address what it perceives to be a market failure
and directly mandates a standard, it runs a high risk of unintended and undesirable consequences.
It may lead to standards that rapidly become obsolete, yet are hard to change. It may redirect the
energies of market participants into government advocacy, rather than into innovation and
commercial negotiations. There is considerable economic and academic literature documenting
that the risks of non-market failure and the costs to innovation are particular high when the
government intervenes in new markets that are rapidly evolving—such as we have in the

converging communications, media, and IT industries today.’ Besen and Johnson’s seminal

7 Paul A. David, Some New Standards. for the Economics of Standardization in the Information Age, in Economic
Policy and Technological Performance (Partha Dasgupta & Paul Stoneman, eds., Cambridge Univ. Press, 1987) at
210, 234 (“The second is a dilemma posed by the realization that governmental agencies are likely to have greatest
power to influence the future trajectories of network technologies, just when a suitable informational basis on which
to make socially optimal choices among alternatives is most lacking.”; “[P]remature reductions of gateway costs
may exact unforeseen economic penalties by discouraging investment in R&D programmes aimed at establishing
the technological dominance of one system over its rivals,”); Michael Katz & Carl Shapiro, Systems Competition
and Network Effects, J. Econ. Perspectives, Vol. 8, No. 2, Spring 1994, at 113 (“{E]ven if policy-makers try to
maximize total surplus, they may lack the information needed to do so. In the case of choosing a standard at the
start of the product’s life, it may be very difficult to determine which standard is the ‘correct’ one. Moreover, the
government may have a significant informational disadvantage relative to private parties when emerging
technologies are involved.”); id. at 95 (“Although compatibility has obvious benefits, obtaining and maintaining
compatibility often involves a sacrifice in terms of product variety or restraints on innovation.”); Stanley Besen &
Leland Johnson, Compatibility Standards, Competition, and Innovation in the Broadcasting Industry, Rand,
Prepared for the National Science Found., Nov. 1986, at ix (“Formal standard setting, either by government or by
private parties, should be avoided during the time that the technologies in question are rapidly changing. ”) (italics
in original) (hereinafter Besen & Johnson); Carl Shapiro, Setting Compatibility Standards: Cooperation or
Collusion? in Expanding the Boundaries of Intellectual Property (Rochelle Dreyfuss, Diane Zimmerman, & Harry
First, eds., Oxford Univ. Press, 2001) at 88 (“The need to adhere to a standard imposes limits on firms’ product

13


NIST can serve an important role in assuring government commitment to these
principles. For example, for transparency purposes alone, NIST could collect and make publicly
available the standards activities underway by the different branches. It could identify the
specific objectives to be served, and possibly serve as an advisor to other agencies on how well
their approach reflects the principles of NTTAA and OMB Circular A-119.

CableLabs appreciates this opportunity to submit comments, and welcomes the
opportunity to continue partnering with the Federal government in finding creative technology

solutions.

Respectfully submitted,

Ralph Brown

Chief Technology Officer

Cable Television Laboratories, Inc.
858 Coal Creek Circle

Louisville, CO 80027-9750

March 7, 2011

16