Evolving the Role of Government in Private Industry Standard Setting: Lead? Follow? (Or Get Out of the Way)?

So many industry associations were formed in 1988 that a number of commentators dubbed it "The Year of the Consortium." Few of these organizations were intended to develop true de jure standards. Instead, they were most often formed as a species of marketing partnership in response to intense competition among the largest computer companies, each jockeying to dominate (or at least maintain their position) in volatile market segments such as Unix platform sales. Despite such overtly commercial purposes, these organizations frequently found that the development of de facto standards and specifications provided a crucial method for achieving their ends.

Less noticeably, a far greater number of consortia have been formed over the last ten years that have had a less public but more pervasive impact on the computer, information, and communications industries. These consortia have often been formed specifically to create a single standard of common need throughout the industry. Although proprietary interests may at times influence the operations of such consortia, these interests manifest themselves as often as not as skirmishes regarding small components of the central standard, rather than concerted efforts to drive the standard itself to overtly favor a single company or concentration of companies.

Remaining prominent on the standards landscape are the well-known de jure standard-setting bodies, such as the American National Standards Institute (ANSI) and the Institute of Electrical and Electronic Engineers (IEEE), whose mission it continues to be to set standards through well-evolved, representative processes relating to a larger standards set of goals.

The types of consortia and standard-setting bodies just described, and others discussed at length below, form a loosely coordinated, available, and existing "national standards infrastructure," which operates in an interlinked but independent fashion, and is both a product of and responsive to broad vendor and customer forces. Unlike the state- operated standards systems which exist in many other countries, the standard-setting process in the United States is both organic and dynamic, and is based on an evolutionary process that reaches back to pre-Civil War times.

Building the national information infrastructure (NII) will require the development of many new standards and interfaces, the adaptation of old standards and specifications, and the coordination of many standard-setting organizations. It is not feasible, and, this writer believes, not desirable, to seek to preempt or radically reform the existing method of standard setting in the course of facilitating the development of the NII. While such intervention in the past has quite appropriately led to the evolution of regulatory bodies and regulations in other areas, it is more preferable in the current context for government to seek to understand, support, and to use a computer industry term "optimize" the existing technology standard-setting infrastructure by judicious government participation and stimulation. This conclusion derives from several factors:

First, time is short, and cooperation is needed across a vast array of industries, interests and individuals. The existing standards infrastructure has grown up in response to these realities, and is responsive to the needs and demands of various commercial constituencies.

Second, aggressively redirecting the market forces which have created this infrastructure would not be likely to succeed, if the effort was not supported by the vendors affected (in this case, a daunting percentage of the commercial base of the entire country).

Third, the breadth of standards (new and existing) necessary to "stitch" the information superhighway together would be excessively difficult to bring under the developmental (as compared to the coordinating) control of a single standard-setting body.

Fourth, because the budgets of the vast majority of standard-setting consortia are small (typically $25,000 to $3,000,000), the existing process of standards development is highly cost-effective. Very small infusions of funding (by government standards) could have a profound impact in this area, and in most cases no government funding would be required at all.

Finally, standards have often evolved from the vision of a small group of companies, acting before large vendors have produced products which those vendors then seek to form standards around to their individual proprietary advantage. To overly institutionalize the standard-setting process in order to facilitate the formation of the NII might well stifle valuable standards initiatives and related technology development, and might permit the most powerful companies to exercise greater influence in the process.

For all of these reasons, it is the view of the author that the appropriate activities of government in the standard setting area over the coming years are:

Most importantly, assisting in coordinating the operations of standard-setting bodies to ensure that a cohesive, coordinated and timely set of standards are developed to accomplish the task at hand.

Participating directly in standard-setting consortia, as a member, through appropriate agencies.

Taking action to seek the direct or indirect participation of appropriate non-commercial interests (e.g., educational institutions) that may not otherwise be represented in the standard-setting activities of some consortia.

Where appropriate, commissioning (through the traditional Request for Technology and similar processes) the development of standards or components of standards, with the task being awarded to the most appropriate responding consortium.

Where necessary, supporting the establishment of new consortia to create component standards necessary to complete the NII.

In undertaking these activities, government can effectively further national goals such as internationally promoting the U.S. industrial and services base, representing the rights and interests of those elements of society that lack an effective voice in commercial decisions, and, not least, promoting the interests of government itself as the nation's largest single purchaser of technology and services.

The purpose of this paper is to assist in understanding the types, motives, efficacy, and methods of the various types of consortia that may become involved (either by invitation or market force) in the development of the NII, and, in so doing, to provide insight to government useful in choosing appropriate partners for the task ahead. Similarly, this paper will seek to identify the factors necessary to take into account in forming new consortia necessary to complete the task of creating the NII.

With a better understanding of the dynamics that influence how standards evolve within different types of consortia and the factors essential to forming effective consortia, government will be better able to decide when to lead (perhaps by commissioning development by a given consortia of a standard, or by providing seed funding for the formation of a new consortium), when to follow (perhaps by causing one or more agencies to become members and financial supporters of a given consortium), and when to get out of the way (by recognizing that an existing consortium is an appropriate vehicle for supplying a necessary technology, and refraining from sponsoring a competing standard).

Standards and "Standards": What's in a Name?

Although the word "standards" is much bandied about in a way that would seem to indicate common agreement on its meaning, in fact there is considerable divergence of opinion on what measure of respect is to be accorded to any given standard. Some would draw distinctions based on the source of the standard reserving the highest level of respect to "de jure" standards promulgated by organizations such as ANSI, and relegating standards maintained by industry associations to the lesser status of "de facto" standards. While some purists would not call consortia-developed specifications true "standards" at all, the impact of such de facto standards has often been as strong or stronger than de jure standards, and the role of market power-based de facto standards (such as DOS and Windows) can be most powerful of all.

Further complicating the issue is the fact that one kind of standard will often be dependent on, or incorporate, another. For example, de facto standards often incorporate de jure standards (e.g., the X Window System incorporates certain IEEE standards), and in some cases de jure standards bodies accept de facto standards or link to them, such as Object Management Group's widely recognized Common Object Request Broker (CORBA) specification. Finally, organizations like X/Open seek to develop environments that use a mix of de jure and widely supported de facto standards.

As a result, the role of de facto standard-setting consortia is relevant and important to true de jure standard- setting organizations such as ANSI and IEEE. On the one hand, as a practical matter, a de jure organization may opt not to develop a competing standard if it is satisfied that the de facto organization is providing a useful standard. As a result, a de facto standard-setting organization is effectively permitted to control an important area of technology. On the other hand, the endorsement or incorporation by de facto bodies of de jure standards augments the effectiveness of the latter standards.

For these reasons, a high level of sensitivity should accompany increased government involvement in what has become a complex and largely successful interlocking web of organizations, standards, and environments. At the same time, government needs to thoroughly understand the degree of proprietary influence that may exist within a given consortium and that may affect its standard-setting activities.

Developing a Taxonomy of Consortia

Consortia are to a degree merely new wine in old bottles. Trade...