Request for Information: Effectiveness of Federal Agency Participation in

Standardization in Select Technology Sectors for National Science and

Technology Council's Sub-Committee on Standardization

Comments submitted by the Computer & Communications Industry

Association

The Computer & Communications Industry Association is pleased to submit

comments on agency participation in standards activity. With our longstanding

commitment to “Open Market, Open Systems, Open Networks,” CCIA has

abiding interest in enabling standards and standards development in information

and communications technology and its use throughout the economy. Our

members are engaged in the development, marketing, and continuing

enhancement of complex systems and services. They depend on standards and

the healthy evolution of standards to promote interoperability, innovation, and

new markets. Standards pose a number of policy challenges that should be

addressed transparently and explicitly, especially given the global nature of

supply chains and the widespread and expanding use of ICT in promoting growth

and addressing the world’s economic, social, and environmental challenges.

The Internet and the IETF

The development of Internet standards under of the Internet Engineering Task

Force (IETF) remains the single most important case of federal agency support

of standards. The Internet has transformed human activity in many respects,

contributing dramatically to productivity growth and to the competitiveness of the

U.S. economy. It has provided a platform for innovation that has continued to

spawn new infrastructure, services, applications, and products well after the core

standards were developed. 

The success of Internet standards has also had social and political impacts that

extend far beyond the original research constituency. Despite early support from

the federal government, the IETF became a model for industry self-regulation as

alternative to top-down policymaking. Its dramatic success, along with the work

of other “consortia,” has challenged the international standards system, leading

to difficult questions about the meaning of “international standard.” 

In early critical years, most of the participants in the IETF were academics on

government grants, researchers from the national laboratories, or technical staff

of mission-driven agencies – although some were contractors or research staff in

far-sighted companies. Because they all made practical use of the technology

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and standards they were working on, IETF’s processes were iterative, fast, and

informed by practical experience. No standard could be adopted without at least

two working implementations. Royalty-bearing technology was discouraged, and

Internet protocols remained free for anyone to implement. Drafts, standards, and

other documents were publicly available without charge. As a result, when data

communications was taught in computer science courses, it was the TCP/IP suite

that was taught.

Participation in the IETF was not restricted to U.S. experts, but the center of

gravity remained squarely in the U.S. Researchers were supported by several

mission agencies; DARPA supported coordinating functions at USC’s Information

Sciences Institute; and NSF subsidized the emerging infrastructure for higher

education. Yet the IETF remained an informal bottoms-up effort that had no

membership as such. Despite the government support, it became a model for

“self-organization” and contributed to an ideal of industry self-regulation and

governmental restraint that dominated Internet and electronic commerce policy

for many years.1 While this view was less appropriate for a more commercialized

Internet, it nonetheless served to defer formal policymaking that might have

inhibited the global growth of Internet services.

The success of the Internet testifies to the value of open access to standards. In

part, this derived from the fact that the Internet enabled the World Wide Web,

which was likewise a royalty-free environment that allowed anyone to build

applications without asking permission.2 During the 1980s and early 1990s,

other agencies under the auspices of the NIST’s Federal internetworking

Requirements Panel were following Open Systems Interconnection (OSI)

standards.3 The ambitious OSI protocol suite was the product of the traditional

international standards system and followed the vision for data networking of the

state-owned and monopoly telcos dominant in that era. The IETF and the

Internet protocols won out, because of their versatility, the support of the federal

research agencies, and the fact that the standards were freely disseminated and

usable.

It is important to reiterate that the U.S. government did not dictate the standards

(and was in fact simultaneously dictating the wrong standards to federal

agencies). Rather, federal research agencies were helping develop consensus

around standards that would enable a transformation not only of research but of

the whole economy. Although the Internet is an anomaly in many respects, it

remains a compelling study in standards and innovation. It enabled thousands of

small companies to spring up and offer low-cost service. It allowed for the rapid

implementation of the World Wide Web as overlay service, along with hundreds

1

 Framework for Global Electronic Commerce, July 1997

2

 Unlike the IETF, the World Wide Web Consortium (W3C) was a membership organization that

assessed dues, it adopted a policy on patents that was more explicitly royalty-free than IETF –

albeit after some internal struggle (see http://www.w3.org/Consortium/Patent-Policy-20040205/).

3

 The requirements were modified in 1994 to permit use of Internet protocols. See

http://www.osti.gov/bridge/servlets/purl/106597-YPV3Gd/webviewable/106597.pdf.

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of software applications and millions of websites. Its open architecture and

nonproprietary standards elicited a vast distributed outpouring of

entrepreneurship and investment. Had royalties been imposed, the rollout of the

technology would have been far slower and the need to negotiate license fees

would have limited entry. 

Global Implications

The Internet’s success illuminates the potential economic significance of open

standards – “open” in the sense of open access not just the limited focus on open

process espoused by traditional standards organizations. The recent PCAST

report, Designing the Digital Future, observes [p.16]: “The ecosystem that

emerged from the open interfaces of the Internet has led to U.S. domination of

innovation in that area.” The report goes on to offer an economic rationale for

open standards in embedded information technology: “If the United States

creates the open architectures and standards, U.S. industry will gain an early

advantage. NIST, in consultation with NSF, should lead an interagency effort to

build consensus and fund reference implementations.” At least where the

fundamental management of research (i.e., data, information, knowledge)

is involved, there is a strong case for federal support, and creating a critical mass

of early-stage innovative activity within the U.S. clearly remains very much in the

national interest.

Conversely, if other countries perceive that the US favors standards that

favor U.S. companies, they may pursue alternative standards. The

Technical Barriers to Trade Committee of the WTO has articulated

principles for the development of international standards: 

All relevant bodies of WTO Members should be provided with meaningful

opportunities to contribute to the elaboration of an international standard so that

the standard development process will not give privilege to, or favour the

interests of, a particular supplier/s, country/ies or region/s.4

Since patents offer a marketplace advantage as an incentive to

innovation, royalty-bearing patents conspicuously favor the interests of

particular suppliers. Even when patent holders are formally committed to

licensing on reasonable and nondiscriminatory (RAND) terms, the

licensing process is dispersed and opaque, allowing patent holders to deal

with potential licensees one-on-one from a position of strength. This may

not be a problem for similarly situated patent holders, especially if they too

hold patents that are needed to practice the same standard. However, it

disadvantages newcomers that wish to implement the standards but lack a

portfolio of patents to trade.

4

 Technical Barriers to Trade Committee, World Trade Organization, Decision Of The Committee

On Principles For The Development Of International Standards, Guides And Recommendations

With Relation To Articles 2, 5 And Annex 3 Of The Agreement, G/TBT/1/Rev.9

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Conflicts between patents and standards have increased as U.S. policies

encouraged a high volume of patenting. (From 1996 to 2002, the mission of the

patent side of the USPTO was “to help our customers get patents.”) In contrast

to the highly focused technical dialog among experts that takes place within

standards development processes, the proliferation of patents in the ICT sectors

has made disclosure problematic and uncertain. As Frederick J. Telecky of

Texas Instruments (TI) explained to the U.S. Federal Trade Commission:

TI has something like 8000 patents in the United States that are active

patents, and for us to know what’s in that portfolio, we think, is just a

mind-boggling, budget-busting exercise to try to figure that out with any

degree of accuracy at all.5 

The uncertainty of disclosure in the standards context is ironic in light of

the public disclosure function that the patent system is designed to

perform. Instead, this indeterminacy spills over into the process of

standards development where it adds to opportunities for strategic

behavior, including the ambush of standards by nonparticipating third

parties.

Individual agencies cannot be expected to police standards efforts or to

limit the proliferation of patents that may make standards setting

treacherous in their field. However, the legitimacy and integrity of the

standards development, including its relationship to patent policy and

practice is a matter of a national and international concern, especially

given how widely and deeply IT standards reflect and shape innovation

policy, economic growth, and international trade. 

In the past, the peculiarities of ICT standards played a far more limited

role. Standards were set as technologies matured rather than in

anticipation of new markets or in the expectation that they would continue

to evolve over time. Moreover, the U.S. was by far the world’s largest

market, foreign producers had to accept U.S. practices if they wanted to

export to the U.S. and realize the economies of scale if offered. 

Today, China is the world’s second largest economy and has an internal

market that is potentially much larger than that of the U.S. Yet China is

still a developing economy and can speak for the interests of other

developing economies. From this perspective, China has promoted

“indigenous innovation” policies for both patents and standards. On the

patent side, it has emulated the high-volume, low-quality U.S. model but

on its own terms through subsidies, procurement policies, and easy-to-get

“utility model” patents.6 On the standards side, it has pursued standards

5

 Frederick J. Telecky, “Statement at FTC/DOJ Hearings on Competition and Intellectual Property

Law and Policy in the Knowledge-Based Economy,” FTC/DOJ hearings (February 28, 2002).

Available at http://www.ftc.gov/opp/intellect/020228telecky.pdf.

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and standards policies in ways that seek to exploit the scale economies of

its internal market. 

While China’s interest in going it alone for certain standards has been

criticized, it is not irrational, especial given that the lack of consensus on

the meaning of “international standard.” ISO’s acceptance of OOXML as

alternative to ODF for documents sets a precedent for multiple standards

that may or may not be desirable. While multiple standards may compete

with each other in certain ways, they may also be positioned to serve

different interests. For example, one may be backward looking and

oriented to legacy systems, while another is forward-looking, offering a

target for migrating to a more elegant open standard. Similarly, a royaltyfree alternative to a more established royalty-bearing standard may be

more attractive for newcomers and developing economies. Standards do

not vitiate principles of competition. 

Standards Policy as Public Policy

These concerns go well beyond the professional and institutional

perspectives that inform traditional standards institutions and international

standards system. The U.S. government’s reliance on private-sector

initiatives and ANSI has, for the most part, worked well. However, there

are two major challenges:

First, the globally oriented consortia (including IETF) that drive innovation

in information technology, especially in software, do not fit within ANSI.

Since the consortia encourage participation from outside the U.S., they do

not want to appear tied to national standards organizations, including

ANSI. Most of these bodies originate from the U.S. because that is the

center for innovation within the sector. Ironically, they represent an

extreme form of the bottom-up approach characteristic standards

development in the U.S., yet they do not fit with ANSI national orientation

or ANSI as a route to international standards organizations.

Second, there is no locus for developing national public policy. NIST does

not have a legislative mandate to develop public policy. The State

Department must represent U.S. policy in international treaty

organizations such as the ITU but it has little expertise in standards and is

not engaged in policy development. In any case, ISO and IEC are not

treaty organizations, so the U.S. is represented there by ANSI. In short,

the bottoms-up approach has left a policy vacuum. 

6

 Utility model patents are available in many countries, although the Chinese enthusiasm for them

appears unique. Over 98% of the nearly 350,000 granted in 2010 were awarded to domestic

applicants. 

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ANSI is not constituted to develop or even debate public policy. It has a national

policy committee, but its documents are accessible only to members.7 Its

accredited committees and organizations represent the technical professionals

within member companies who engage as technical experts while keeping legal

and business issues at a distance. It focuses on policy as a matter of process

rather than substantive policy.

ANSI’s United States Standards Strategy is less a strategy than a set of

aspirational statements.8 It makes vigorous claims for the importance of

standards and the need to communicate their importance, yet it offers no policy

analysis. It simply defers to patents, as if there were no economic tension

between patents and standards or vulnerability of investments in standardsbased products. It does not address the policy considerations around RAND and

RF licensing, nor does it address royalty stacking and non-participant ambush.

Although ANSI calls for a sector-based approach, it fails to articulate any

differences between sectors or what such differences might imply, such as the

magnified strategic importance of standards in complex technologies and

ecosystems. 

The NTTAA and Circular A-119

The National Technology Transfer and Advancement Act of 1995 and OMB

Circular A-119 are focused on a problem of another era. Today, government

agencies rarely set standards on their own. Yet standards development is

important strategically in ways that were less apparent in the early 1990s, and in

retrospect, one of the less appreciated benefits of NTTAA was that it helped

integrate and expand the U.S. market.

Beyond eliminating barriers between government-specific and industry

consensus standards, Circular A-119 gives little guidance concerning the nature

of the government’s interest in standards and how this should be reflected in

agency practices. A sophisticated approach would take a nuanced look at the

factors favoring and disfavoring different forms and degrees of government

participation – at least providing a framework for agencies to consider in

spending scarce public resources. These factors might include: 

Need for cross-industry participation Government involvement may be

necessary for overcoming the coordination problems and costs in getting

industries to work together on common standards problems. This provides

justification for advancing standards for the electronic health records, the Smart

Grid, and cybersecurity. 

7 http://www.ansi.org/standards_activities/domestic_programs/governance_committees/about_nic

.aspx?menuid=3

8 http://www.ansi.org/standards_activities/nss/usss.aspx

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Potential economic and social impact A standard with vast potential may not

command a critical mass of interest from private participants. This may be

because the payoffs are too remote and contingent – or dependent on

further innovation. The remote but powerful payoffs from the early Internet

exemplify this problem.

Low barriers to innovation In areas such as software where the costs of entry

and innovation can be low, it may be desirable to have standards that do

not impose an entry fee. 

Proximity to scientific research As the major funder of scientific research, the

federal government has an interest in the efficiency of research infrastructure,

including the standards used to support collaborative activities.

Communications with citizens Where the government is engaged with the

public,9 a strong case can be made for the importance of royalty-free open

access. Conversely, where the government is seeking off-the-shelf equipment

for internal use, much as a private firm would do, the case for open access is

weak. 

Need for multiple sources The Department of Defense insists on multiple

sources for mission-critical applications. Even though the government can avoid

the severe risks associated with injunctions, agencies should consider the

dangers of lock-in to particular vendors.

Established government functions In many areas – national defense, emergency

preparedness, public health, veteran’s services – the dominant role of the

government is well established, and a leading role in standards development

necessarily follows, even though government-specific standards are probably not

desirable.

Different factors may call for different policy tools. Direct participation may

be practical in some contexts. In others, a redirection of existing funding

to university researchers may be more appropriate. In yet others, a

procurement preference may be effective. 

These examples are illustrative of the kind of useful but not binding

guidance that OMB could offer. It would also be helpful to develop an

analytic framework that explains the value of standards in economic terms

and in terms of the “market failure” and systems rationales for government

involvement. As an example of the analytic framework needed for

standards policy, the NSTC Subcommittee on Standards may wish to

consider the work commissioned by the U.K. government, at least as a

9

 See the Obama administration’s Open Government Initiative and its focus on transparency,

participation, and collaboration: http://www.whitehouse.gov/open

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starting point.10 There is a wealth of research on standards by U.S.

academics but the lack of analysis directed at policymakers should be

remedied under the auspices of NIST, the Department Commerce, and

the Subcommittee on Standards.

It is our hope that the examples submitted under the Subcommittee’s will

help illuminate the full range of options for government agencies to

contribute to standards development in a meaningful way. Suggested

guidelines can help define standards as an important element of a national

innovation strategy. In this regard, we note that the administration

recently revised its foundation document, A Strategy for American

Innovation, and Congress recently enacted the America COMPETES

Reauthorization Act, which calls for a study and strategy on “innovative

capacity and international competitiveness.” The Commerce Department

has asked for input.11

Patents and Standards

The USPTO has already identified standards as a major component of its

own economic research agenda, specifically, “examining the role of IP in

de facto standards, standard setting and standards policy.”12 This issue

has not been effectively addressed despite a dramatic and unbroken rise

in the number of patent disclosures in standards organizations during the

1990s and 2000s.13 The conflict plays out in debates over ex-ante

licensing, RAND vs. RF licensing, patent ambush, patent reform, and

public procurement.

For example, in the recent revision of the European Interoperability

Framework, debate centered on the definition of “open standard,” which

had been defined as meaning royalty-free under the first version of the EIF

in 2004. In December 2010, the second version of the EIF retreated into a

more nebulous definition that hinges on the effects on open source

software. Yet the PCAST report, Designing the Digital Future, also

10 G. M. Peter Swann, The Economics of Standardization: Final Report for Standards and

Technical Regulations Directorate, Department of Trade and Industry, December 2000, available

at http://www.berr.gov.uk/files/file11312.pdf. (References available as separate document at

http://www.berr.gov.uk/files/file11316.pdf.) See also Paul Temple, Robert Witt, Chris Spencer,

Knut Blind, Andre Junjmittag and G. M. Peter Swann, The Empirical Economics of Standards.

DTI Economics Paper No. 12, June 2005, available at http://www.bsiglobal.com/upload/Standards & Publications/Government/Empirical_Economics.pdf; G. M. Peter

Swann, The Economics of Standardization: An Update, at

http://www.bis.gov.uk/assets/biscore/innovation/docs/e/10-1135-economics-of-standardizationupdate.pdf

11 See Federal Register, Vol. 76, No. 24, February 4, 2011, p. 6395,

http://www.gpo.gov/fdsys/pkg/FR-2011-02-04/pdf/2011-2558.pdf

12 See http://www.uspto.gov/ip/officechiefecon/index.jsp

13 See Timothy S. Simcoe and Mark Rysman, International Standardization as a Strategic Tool,

IEC, 2006, p. 91, Figure 1, available at

http://www.iecchallenge.org/papers/pdf_iecchallenge/simcoe.pdf

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released in December affirms the broader understanding of “open” as

royalty-free,14 as does a U.K. policy released in January.15

Traditional standards organizations focus on openness in terms of the

process of developing standards. They often discount or avoid the

question of open access, whether in terms of either implementation of the

standard or access to documentation. Most standards organizations

depend on sales of documentation as a revenue source and most defer to

the patent interests of member companies. 

Yet the decision to make a standard royalty-free favors rapid and

widespread uptake of standard: There is no skewing of competition

among implementations in favor of dominant patent holders. The process

is less like to be slowed by participants jockeying for inclusion of patented

technology. A large survey undertaken for the European Commission’s

Directorate General for Enterprise and Industry16 suggests that royalty-free

policies are gaining in popularity and will be more common in the future. 

Whether that is the case or not remains to be seen. However, the significance of

open standards needs to be better understood, especially in terms of how two

superficially contradictory characteristics are reconciled: the encouragement of

international trade and the national advantage argued by PCAST. 

In information and communications technology, standards are the classic

embodiment of collaborative innovation and economic interdependency. They

deserve attention at the highest policy level because of the importance of

economic growth and leadership. 

Submitted March 7, 2011 

by

Brian Kahin

Senior Fellow

14 See Brian Kahin, Open Standards and the Royalty Problem, opensource.com, January 20,

2011, http://opensource.com/law/11/1/open-standards-and-royalty-problem

15 http://www.cabinetoffice.gov.uk/sites/default/files/resources/PPN%203_11%20Open

%20Standards.pdf

16 See DG Enterprise and Industry study on the interplay between standards and intellectual

property rights, http://ec.europa.eu/enterprise/policies/european-standards/standardisationpolicy/policy-activities/intellectual-property-rights/index_en.htm; preliminary results from the

commissioned survey by are available at http://ec.europa.eu/enterprise/policies/europeanstandards/files/standards_policy/ipr-workshop/ipr_presentation_interim_results_23-11-

2010_en.pdf

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Computer & Communications Industry Association

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bkahin@ccianet.org

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