Digital Enclosure: The Privatization of Standards and Standardization
Timothy Schoechle
International Center for Standards Research
University of Colorado, Boulder
SIIT2003
3 IEEE Conference on Standardization and Innovation in Information Technology
Technical University of Delft, The Netherlands, October 24, 2003
rd
Abstract
The concept of property rights and notions of public and private are social constructions with a
long history. In western society, the term “enclosure” dates from 16th century Britain, where the
Enclosure Movement was used to describe the political economic process of the privatization of
“pubic” or “common” land. This term has been recently appropriated in legal discourse as the
2nd Enclosure Movement to describe the increasing privatization of knowledge and information as
“intellectual” property in a new electronic information environment. This paper further applies
this notion of Digital Enclosure—enclosure in the digital age—to a particular form of knowledge
that has an inherently quasi-public nature, technical standards and the standardization process.
Standards and the practice of standardization are vital to an industrial and technological society.
Standardization practice has been institutionalized on a global basis over the past century and a
half, but is undergoing significant challenge and change. It exists in the political economic
environment of capitalism and market economics where there is a basic tension between
competition and cooperation, resulting in an interweaving of three elements: standardization,
intellectual property rights (IPR) and antitrust/competition policy. This paper explores current
trends in standardization from the perspective of Digital Enclosure, including the rise of the
consortia movement, IPR policy, business and commercial strategies, the open source movement,
and technical innovation.
1.
Introduction
This paper is about the process of standardization—the making of the technical standards
that define nearly every artifact of the modern world. In the field of ICT (Information
and Communication Technology)1 such standards specify everything from the prongs on
plugs and cables to the software protocols that make the Internet work. Historically,
these standards have been set largely by volunteer participants in committees that operate
within a wide range of environments, institutional rules and social practices; but in
general they have espoused a traditional commitment to general principles of democratic
deliberation, consensus, public accessibility and balanced stakeholder representation.
The historical practice is now being challenged by newer, more private organizations that
do not necessarily have a commitment to the same principles.
The purpose here is to establish an overall framework, that of Digital Enclosure, a
concept borrowed from legal, economic and public policy discourse, for understanding
important, contentious and interwoven current issues in the global standardization
system. These issues include the rise of the “consortia” movement and its relationship to
IPR, competition and anti-trust policy, business and commercial strategies, the Open
Source movement, geopolitics, and technical innovation. This paper will begin by
problematizing the enclosure of standards and its relationship to notions of intellectual
property and of public goods. It will then suggest some forms of enclosure and some of
the counter movements and institutional responses and adaptations to enclosure. Finally,
it will examine enclosure with respect to technical innovation and competition.
1.1
The problem
The central focus of this paper is on the practice of technical standardization as a form of
public discourse and idea production within a technical culture. In particular, it focuses
on the discourse around a recent general trend toward the increasing privatization or
“enclosure” of standardization activities under various corporations, trade associations
and consortia, and away from the more traditional, and possibly, as often claimed, more
“open,” and more “democratic” voluntary consensus committees.2 The distinction
between the traditional formal system3 and the newer consortia is one of legitimacy based
on accreditation, on adherence to certain principles and rules of process, and on custom.
The public or open nature of the traditional voluntary consensus bodies was already
perhaps somewhat problematic in various respects, and now the system is possibly being
further enclosed.
Standards play a powerful role in shaping technologies and how they are diffused into
society. Enclosure raises significant issues of public policy concern and questions about
how the public interest may be represented and served in a “digital” information age that
is increasingly dependent on technical standards and on the experts that create them. The
basic problem is, how can decisions made in private serve the public?
Standardization practice exists in the political economic environment of capitalism and
market economics where there is a basic tension between competition and cooperation,
resulting in an interweaving of three elements: standardization, intellectual property
rights (IPR) and antitrust/competition policy. These elements bear a triangular
overlapping relationship with each other that has important implications for public policy,
technical innovation and global trade and commerce.
Technical standards establish a vast array of processes, practices and procedures vital to
the functioning of modern society and the market economy. These standards address
such diverse needs as communication protocols and systems, languages and data
structures, accounting procedures and practices, manufacturing processes and quality,
product and process conformity assessment and certification. Many of these standards
cross over from the technical into the public policy arena. A sampling of such issues
includes privacy, security, access to networks and information, the “digital divide,” social
equity, societal cohesion, patents, trademarks, copyrights and fair use, freedom of speech,
technical innovation, regulation, industrial policy, monopoly and competitive markets, as
well as many others.
1.2
Digital Enclosure4
Originating within the field of law and public policy, an oppositional discourse has
recently emerged around the theme of the privatization or enclosure of ideas5—
analogous to the land enclosure movement in 16th century Britain—and addressing the
expansion of intellectual property rights and a resulting general “fencing off” of the
intellectual commons. Since open standards and standardization practices can be viewed
2
as a form of group collaborative idea generation—an intellectual commons—this study
begins by using the enclosure discourse as a framework within which to examine the
issues related to the privatization of standards. This enclosure discourse (including its
focus on intellectual property) is not only relevant but central to the study of standards
and standardization because the commons historically has been an essential concept of
standardization.
A body of discourse has emerged about the nature of technical innovation and markets,
and about the relationship between IPR and the intellectual “commons.” Lessig (1999)
maintains that network architectures and software “code” (which it is asserted here, are
largely defined by technical standards) represent de facto policy decisions about who is to
benefit from ICTs; and he stresses the derivative nature of intellectual creation, which he
calls ideas, and the importance of preserving a commons for innovation (Lessig, 2001).
Boyle (2001) likens the increasing emphasis on IPR and the privatization of ideas in the
present digital economy to the land enclosure movement of the 16th century. This
enclosure discourse is centered around a classic debate of market economics—whether
the generation of wealth in society is better served by holding property publicly (in the
commons) or in private hands (Boyle, 1996; Lessig, 1999). Benkler (2001, 2002)
describes alternative modes of production outside of the market model, including “peer”
production and collaborative authorship in the digital information economy, including the
open source movement. Litman (1990) describes the derivative nature of creation and the
process of authorship (standards committees are authors). Van Houweiling (2002)
describes forms of enclosure applied to standards and proposes extension of land
ownership models into the realm of IPR.
The terms of this discourse include such words as free, open, public and private—terms
that are deeply problematic and loaded with rhetorical and ideological significance. The
enclosure discourse focuses on how ideas and IPR are formed and dealt with in society in
general, but it does not (except in the case of Van Houuweiling) apply enclosure directly
to the problem and practice of standardization, except by implication. It is here proposed
that standardization is an important form of social idea generation, and perhaps a form of
IPR creation (although the term IPR is also itself somewhat problematic). The first step
here will be to relate the enclosure discourse to the discourse on standards—as IP.
1.3
Standards as property—as IP
Standards incorporating IPR, or as intellectual property per se, has become one of the
most significant issues in standardization over the past decade. In certain areas such as
wireless telephony, a sort of “feeding frenzy” has developed as the financial stakes rise
and participants in the standardization process seek to embed their own IPR in the
standards and to position themselves to collect royalties from users of the standard or to
fend off royalty payments by cross licensing strategies.6 Often, as a defensive strategy,
firms seek to develop patent portfolios that can be used in cross-license negotiations.
Standards bodies have traditionally relied on copyrights and their attendant publishing
revenues as a primary source of income for their host organizations or trade associations.
Such reliance has become a problem as demand for free or low-cost electronic
dissemination of standards increases. This reliance has also long posed a dilemma since
3
it conflicts with the basic purpose of their standards—their widest possible dissemination
and use. Some bodies, such as ETSI (European Telecommunications Standards
Institute), have found alternative financial means.
This reliance and property right also conflicts with the quasi-public goods nature of
standards, particularly in the case of standards that become mandated by law or are
incorporated into regulatory or administrative rules7. For instance, in the U.S., in the case
of Veeck v. SBCCI, a lower court upheld the copyright of a building code that had been
developed by a standards body, the Southern Building Code Congress, International, Inc.
(SBCCI), even though it had been adopted as law in the city of Dennison, Texas. The
decision was later overturned by the 5th Circuit Court of Appeals, (Veeck, 2002) to the
alarm of many standards bodies, and the case is now being appealed to the U.S. Supreme
Court. The dilemma has been described from the standards body perspective by Ruger of
IHS (Information Handling Services), perhaps the largest worldwide publisher of
standards related documents.
Developers of Codes such as various building, plumbing, electrical, fire and other such codes have
been dealing in governmental regulations for over 70 years. Starting in the late 1920s contractors
and other construction professionals worried that government was lax about updating building
codes. So they formed nonprofit organizations, such as SBCCI, BOCA, ICBO, etc., to draft the
kind of highly technical, up-to-date regulations they felt were needed to ensure public safety and
they encouraged state and local governments to adopt the regulations at no charge. BUT – they
retained copyright – and anybody who wanted to use the code had to buy a copy.
These codes are constantly revised, in the interests of public safety, and the organizations involved
need the revenue from publication sales to continue their work in keeping these codes current to
protect all of us, and to do public safety education. (Ruger, 2003)
Ruger further comments that it is through the voluntary consensus standards system,
based on broad participation from all interested parties, not dominated by any particular
group, that governments achieve legal and regulatory uniformity across jurisdictions and
yet do not need to fund its development. If the court rules that the copyright can not be
enforced, the financial basis of this entire system could be at risk. In recent years, the
U.S. Government, Office of Management and Budget (OMB) has directed that all federal
agencies incorporate privately developed regulations and standards “whenever
practicable and appropriate” to cut the government’s cost of developing its own
standards. (Ruger, 2003) Similar policies have been established in the E.U. If public and
regulatory and procurement standards—and even laws—can be privately owned, what
assurance is there that they will meet public needs or even be available? If not privately
owned, how will they be developed and maintained?
In contrast to traditional standards bodies, consortia, because they are often funded by
membership dues or licensing income, may enjoy a freedom from dependence on
publishing. Recently, partly as a result of this advantage, the ability to structure patent
license pools or royalty-free membership policies has become a driving force in the rise
of consortia.
1.3
Public goods
A central and problematic element in any discourse about enclosure and standards, as
well as about IPR, is the notion of the public and the private. Standards are often
4
regarded by economists as “public goods”—goods whose benefits are available to
everyone and from which no one can be excluded, and no one can fully appropriate the
benefits—and therefore are often under-produced by the market (Congress, 1992, p. 9).
A thorough discussion of the nature of the public is beyond the scope of this paper, but it
is important to examine it briefly.
Public is a word that is first usually defined as pertaining to the people as a whole on
some unspecified scale—i.e., community, city, state, nation, etc. (Random House, 1967,
p. 1162) But, in its successive definitions, it comes to refer to acting for the people, open
to the people, the affairs of the people, representative of the people and then to
government. Private begins from the opposite end; the individual person, then
progressing to a small group of persons, to limited groups or access, to not representative
or not public, and ultimately to not government. Thus, the meaning of these terms
becomes highly contextual and also may depend on from which direction one
approaches. In standards discourse, it is not uncommon to find these words, public
and/or private, used in different senses within the same document or even within the
same paragraph. For instance, when public is directly juxtaposed with private, or when
the word sector is used, it signifies government and non-government, as in the usage
public sector8—private sector. This usage is contrasted with such usage as, public
access, public availability, public forum, public opinion, or public exposure, which do
not signify government at all, but multiple private parties considered together as a public.
This latter case is more the sense of Habermas’ public sphere. 9
Habermas traces the evolution of the bourgeois public sphere, from the Enlightenment
period of the 17th and 18th centuries, as a space that was related to the notion of civil
society and distinct from government, “…within which private people assembled to
constitute a public and to regulate those aspects of their commerce with each other that
were of general concern.” (Habermas, 1962, p. 142). Such assembly often took place in
London coffee houses and Parisian salons of that period. Habermas’ primary concern is
the changing rationale for politics—that a structural transformation of this public sphere
in modern society was brought about by a mutual infiltration of public and private
spheres—a transfer of public function to private corporate bodies (i.e., privatization) and
the extension of public authority over sectors of private realm (refeudalization and/or
neomercantilism). He sees this transformation as having lead to a decline of public life
and a replacement of the discursive and interactive politics of the earlier public sphere by
technical, administrative and commercial discourse and politics devoid of genuine public
judgement. It is suggested here that the political life of the public sphere may in some
sense be in the process of being restored to some extent, in this highly specialized arena,
by the necessity of dealing with public policy issues in the private-yet-public realm of
standardization. Such policy discourse has found its way into standards discourse by the
interwoven nature of technical and policy issues, as claimed by Lessig (1999, 2001).
When Habermas recognized in 1962 the decline of a generalized concept of “the public,”
he also reflected on the possibility to realize some of the benefits of the principle of
publicness within more specialized forms of discourse that take place within complex
modern intra- and inter-organizational spheres (1962, p. 248). I wish to suggest here that
the process of standardization approximates this sort of discourse.
5
The consequence for standards discourse—struggling to deal with notions of what is or
ought to be public or private, and to what degree—is that the situation is ripe for
confusion and manipulation. Standardization practice, it is suggested, dwells somewhere
between the poles of public and private—in Habermas’ public sphere or Lessig’s
commons. Since there is no accepted term in the general discourse for such a place—
only an unspecified but nevertheless sharp public sector/private sector dichotomy—the
public sphere or commons is thus de-legitimized10 or rendered invisible and cannot be
considered. The end result is an inability to stabilize the concept of whether
standardization is a public or private function, or what the government’s or industry’s
role ought to be. Much of the standards discourse struggles with that question—
particularly the tension between the U.S. and European conceptions of standardization.
2.
Forms of Enclosure
The enclosure or privatization of standards and standardization can take many forms.
The quasi-public or the private-yet-public nature of some traditionally developed
standards, particularly when incorporated into public laws or into regulatory or
administrative practice, has already been noted. Other forms of enclosure may include:
1) the rise of the private consortia movement, 2) the increasing inclusion of IPR in
standards, 3) the adaptation of traditional institutions and practices to consortia, and 4)
the appropriation of standards or standards bodies by private firms. Before examining
these forms more closely, it is useful to examine the roots of traditional formal “public”
or “open” standards practice and the principles that they profess to represent.
2.1
Traditional Standards Institutions
The SDO (Standards Development Organization) is a term that represents the traditional
formal approach to standardization. This approach relies on underlying principles of
democratic process that include: openness, consensus, due process, transparency,
volunteerism and balanced representation of interests. SDOs take an approach that is
based on forming a consensus through a progression of phases. Each phase allows for
members to comment, revise, and approve or disapprove of the current proposed
standard, a process that dramatically slows down the speed to which the product gets to
market. Although slow to market, this process is often said to produce technically
superior standards to those developed by other standard setting processes, (Schoechle,
2002; Sherif, 2001) SDOs in the U.S. are legitimated or accredited by ANSI (American
National Standards Institute), a quasi-public non-profit membership organization, on the
basis of their commitment to the principles noted above.11 The ANSI principles of
process are generally typical of the formal system, are stated as follows
Open—any materially affected and interested party has the ability to participate
Balanced—The standards development process should have a balance of interests and participants
from diverse interest categories shall be sought
Due Process—All objections shall have an attempt made towards their resolution. Interests who
believe they have been treated unfairly shall have a right to appeal.
Consensus—More than a majority, but not necessarily unanimity. (ANSI, 2000, p. 4):
6
In other nations and regions, SDOs are legitimated by other national bodies, by
governments or by tradition, usually on some basis of commitment to similar principles
of openness and process.12
In addition to an emphasis on technologically superior standards, SDOs offer the benefit
of having existing procedures and institutional structures in place specifically for the
development of standards. The SDO process is well defined and has proven itself over
time to effectively create standards.13 An additional advantage associated with SDOs is
the legitimacy of the organization itself as a standard development body, which is usually
rewarded with governmental support or recognition.
It must be noted that the “openness” of SDOs is not unproblematic, despite their claims.
What is open is multidimensional and every organization has its own unique profile.
Krechmer (1998) has proposed ten dimensions of openness in The Principles of Open
Standards, a paper14 that expands on the ANSI principles. They relate to such criteria as
stakeholder representation, access to working documents, to meetings, to the final
standards, to the governance of the committees and their sponsoring organizations, their
treatment of IPR, etc.:
1.
2.
3.
4.
Openness - all stakeholders may participate in the standards development process.
Consensus - all interests are discussed and agreement found, no domination.
Due Process - balloting and an appeals process may be used to find resolution.
Open IPR - holders of Intellectual Property Rights (IPR) must identify themselves during the
standards development process.
5. Open World - same standard for the same function, world-wide.
6. Open Access - all may access committee documents, drafts and completed standards.
7. Open Meeting - all may participate in standards development meetings
8. On-going Support - standards are supported until user interest ceases rather than when
provider interest declines.
9. Open Interfaces - interfaces allow additional functions, public or proprietary.
10. Open Use - low or no charge for IPR necessary to implement an accredited standard.
The first three principles are at the heart of the existing ANSI Open Standards concept. These are
required procedures of the American National Standards Institute for all accredited standards
organizations. The fourth principle (Open IPR) has been formally added to the standards
development process by ANSI, its SDOs and many international standard development
organizations. The fifth principle (Open World) is supported by ANSI but not required. The
additional five procedures represent Open Standards concepts which are emerging but which are
not yet supported by most accredited SDOs. To what extent should Open World and the additional
five procedures be considered principles of Open Standards? (Krechmer, 1998, p. 1)
The above criteria, although perhaps not exhaustive, may be useful in comparing various
organizations, including both SDOs and consortia, relative to enclosure.
2.2
Consortia Movement
An important trend in the structuring of standardization practice in the U.S., as well as
globally, was the emergence of a new institutional paradigm, the consortia, sometimes
referred to as MDCs (Market-Driven Consortia). To understand the cultural roots and
motivating forces of the consortia movement, it is useful to briefly examine the history of
the Telecom and IT industries.
7
Telecommunication standardization is one of the oldest institutionalized industrial
practices and it developed in a culture of (highly regulated) monopolies—a relatively
slow moving and non-competitive utility industry dedicated to the provision of reliable
voice service and primarily concerned with issues of network stability (including
negotiated pricing), quality of service and the interoperability of national networks. In
the U.S. until the early 1980s, technical standards were set internally by AT&T (e.g., Bell
Laboratories) and then negotiated internationally in the ITU. With the divestiture of
AT&T in 1984, Telecom standardization was opened to the voluntary consensus process
the Committee T1,15 was established for network standards and the TIA undertook
primary responsibility for setting CPE (Customer Premises Equipment) standards.
In contrast to Telecom, IT standardization grew up in the computer and semiconductor
industries—a fast moving and highly competitive (traditionally unregulated) industry
culture. Although the industry was dominated initially by IBM Corporation, and de facto
standardization prevailed, technological advances and entrepreneurs overtook IBM’s
dominance by the early 1970s, introducing the minicomputer and then the
microcomputer. One might contrast the cultural values of the Telecom and the IT
industries as that of: cooperation vs. competition, monopoly vs. market, stability vs.
change16, and interoperability vs. differentiation.
As this new culture sought to break away from IBM’s de facto standards and pursue its
own “open systems”17 standardization (Cargill, 1997), it was never very comfortable in
the bureaucratic, glacially slow, and politically defined Telecom standards régime—nor
was it very comfortable in the relaxed culture of other industry’s traditional
standardization practices where markets were stable and the pace of technological change
was relatively slow. As a result, new organizations began to form outside of, or on the
“doorstep” of, the formal structure; and these became known as “private forums or
consortia.”18 The cultural motivation for this change is colorfully portrayed by Cargill
(1997, p. 69-70) who was an active participant.
The current standardization model, especially that used by participants in the SDOs, is
fundamentally broken. The current model is based upon a myth; [like the one] which is part of
French national folklore, …captured in the Chanson de Roland, written in the eleventh
century…which became a powerful agent for coalescing [the] movement [that established] the
French King. …Roland served as an ideal for concepts of loyalty to a king, as well as the dues and
obligations of both warriors and the king.
In a similar manner, the concept of “Open Systems” has become a convenient icon to express all
that is good about computing and the promise that computing can hold. It, too, has undergone
significant shifts in its meaning,…[now, yet another] new iconic meaning is emerging.
Such new meaning ultimately took the form of a divergence into a broad array of groups
and institutional practices that are now variously referred to by such terms as SRO
(Standards Related Organization) including, forums, and/or consortia (or MDCs). The
term SRO (invented by the SDOs) is extremely broad because it signifies any body
outside of the traditional accreditation system. Some examples of such groups are the
IETF19 (Internet Engineering Task Force), W3C (World Wide Web Consortium), ATM
Forum (Asynchronous Transfer Mode), UPnP Forum (Universal Plug ‘n Play), and the
Open Group. The rules, procedures and practices under which these groups operate
(including their publicness or openness) vary widely. The only commonality they share
8
is that they lie outside the formalist domain described earlier, where they strive to claim
and perhaps enclose their own, more private, realms. They often purport to answer the
problems of obscurity, complexity, implementation difficulty, and above all, slowness, of
the traditional system.
MDCs are usually motivated by specific market opportunities. They tend to be targeted
at narrower goals than SDOs and, with their own sources of funding directly from
members, they can act more like trade associations and launch marketing and
promotional programs. They often also support testing and certification or conformity
assessment programs for products implementing their specifications. In addition, MDCs
are often better equipped to deal with the thorny problems of IPR. In some cases, they
actually establish patent pools that negotiate with patent holders and attempt to establish
reasonable royalty arrangements that benefit all their members. An example of such a
group is the DVB 6C License Agency (DVB6C, 2003).
In contrast, SDOs usually fill a strictly technical role and avoid any involvement in such
patent pooling or license negotiation activity. Such activity has been successful in a
number of cases, but must it be carried out carefully because it always runs the risk of
being seen as a cartel or of being otherwise anti-competitive and in violation of anti-trust
laws. Many consortia operate under some level of anti-trust protection provided by the
National Cooperative Research Act of 1984 (NCRA) and its successor, the National
Cooperative Research and Production Act of 1993. The original intention of these laws
was to facilitate cooperation on “pre-competitive” R&D activities to strengthen U.S.
industry in a global market environment. They were not intended to facilitate licensing,
promotion and other market-related activities, although such has been a result. (Oksala,
2000)
It is through adherence to principles and accreditation that the SDOs attain much of their
respect, authority and legitimacy within industry and society. Because of this legitimacy,
SDOs also enjoy a certain exemption from antitrust challenges and they offer a forum for
technical collaboration among competitors, as long as they refrain from certain anticompetitive practices (e.g., discussion of product pricing). This legitimacy also
privileges accredited standards in areas such as government procurement, regulatory
activity, and international trade (e.g., World Trade Organization (WTO) requirements).
In summary, SDOs tend to most highly value openness, balance, fairness and due
process. In contrast, MDCs tend place more emphasis on speed, efficency, branding and
promotion, and they often have the resources to provide follow through with testing and
marketing. Consortia, as a general category, is extremely diverse and there is an extreme
degree of variation between their structure, rules and procedures, financial basis, and
cultural practices. In contrast, SDOs tend to have more in common that they have apart.
Perhaps the greatest point of conflict between SDOs and consortia is the issue of balance.
As membership organizations, often funded by dues, MDCs recognize little or no
obligation to be inclusive in their membership, governance, or participation. This point
has become the focus of much discourse and debate, particularly in regard to the
legitimation of consortia for purposes of government procurement, regulatory recognition
or anti-trust protection. The recent proliferation of consortia, with their high member
costs, has absorbed large financial resources from the overall standardization system
9
because competitor firms cannot risk being left out. This drain may have significantly
reduced financial support for traditional SDOs and their hosts.
2.3
IPR in Standards Bodies
The embedding of IPR in standards has emerged as one of the most difficult issues in
standardization practice today. Patents and standards exist in a state of dynamic
tension—being inherently opposite forms of innovation and creation. Standards are a
form of group design or innovation. They provide public goods for the benefit of
everyone. Patents include claims to private invention. Patents provide private goods and
benefit the owner, and may benefit others for a reasonable royalty. In part, standards and
patents have opposite goals and this creates potential problems and conflicts, but they
both can benefit from each other.
All ideas and technologies are basically derivative in nature, relying on the work of
others. (Lessig, 1999, 2001) The primary benefit that flows from standardization is the
establishment of a common infrastructure or “platform” that facilitates interoperability
and provides a common basis upon which individual participants can build differentiation
and market value for their own products. Such platforms and interoperability also benefit
consumers and other users of technical products by improving economic efficiency (i.e.,
lower costs) and ease of use. The primary public benefit that flows from granting patent
rights is, in theory, an incentive to create new useful ideas and to bring them to the
public. When technically appropriate, and when available in a fair, reasonable, and not
unduly burdensome manner, patents can play a useful role in standards.
The differing goals and purposes of standards and patents create potential problem
situations. Such situations include 1) when material in older existing patents is
incorporated into newer standards, 2) when newer patents cover material already in older
standards. In the first case above, standards committees have a choice of avoiding
patented material entirely or gaining agreement from participants to license their patents
either freely or under “Reasonable And Non-Discriminatory” (RAND) terms.
Participants benefit from having available technical innovations included in standards and
from expanding the market for their products. In both cases above, the problem is made
worse when patent owners attempt to use patents strategically to block or impede use of
standards, either to extract higher royalties or to buy time for a competing standard or
proprietary technology.
Until the past decade, the RAND policy served SDOs adequately and disputes were rare.
As standards became more strategic, however, abuses began to emerge. In 1996, Dell
Computer settled litigation by accepting a Federal Trade Commission (FTC) Consent
Decree. In that case, Dell participated in a standard-setting and failed to disclose that it
owned a patent that the standard would infringe. After adoption of the standard, Dell
then attempted to assert its IPR and asked for royalty payments. This practice is
sometimes referred to as a “submarine” patent. In 2001, Rambus Inc. was convicted of
fraud in a similar situation, and was sued in 2002 by the FTC for anti-competitive
practices. Subsequently, the original conviction was overturned by an appellate court
which was critical of the standards body for not being explicit enough in its IPR policy.
(Crawford, 2003)
10
As mentioned before, consortia may be in a better position to deal with or enforce more
elaborate IPR policies. SDOs, at least at the working group level, are largely composed
of engineers and not lawyers. Defensive cross license strategies may work for large
corporate participants, but smaller participants without patent portfolios are
disadvantaged, thus tilting the process and making it more exclusive. A patent régime
that allows claims on algorithms and business practices exacerbates this problem.,
Royalty-free policies, in response, may go even further toward solidifying the consortium
as a cartel.
3.
Systemic Adaptations and Responses
The traditional formal standardization system has responded and/or adapted to the
challenges posed by enclosure in a variety of ways. These ways are not neatly separated,
mutually exclusive or even complete, but a few are noted here as a guide to further
discussion and research on the general problem of enclosure. The ways highlighted here
include hybrid standardization, the introduction of the “workshop” process, ITU
institutional restructuring, the ascendancy of the Open Source movement, problems of
appropriation of standards or standards bodies, and innovation and patents. This list is
merely a survey and not intended to be thorough or complete.
3.1
Hybrid Standardization
A significant potential may rest in the hybrid process that is evolving today out of
necessity and expediency. For instance, it will be noted later that the workshop process
introduced in Europe is a hybrid response to consortia. If this trend progresses, it may
alleviate the need to legitimate consortia. The openness argument can not be easily
resolved, but may be avoided by accommodation and collaboration between consortia
and SDOs within a framework of anti-trust law application. From a public policy
standpoint, there is no advantage in conferring legitimacy on consortia, because one
consequence might be a further disadvantaging or even destruction of the formal system.
There exists at present a sort of balance of power and a creative tension. Persuasive
arguments have been made on both sides. Consortia are a response to some real needs,
but may not deserve special favor. Market-driven standards have limits; markets are not
typically good at picking long term needs or building basic infrastructure. For instance,
the Internet was built by a government initiative and it is hard to imagine it being
constructed by market forces. Standardization arenas are needed that can focus on longer
term tasks than those to which consortia are best suited. Consortia are diverse and are not
easily assessed and classified as to openness and other characteristics. Also, some
consortia are ephemeral in nature.
In any case, before any policies could be established in legislation or in governmental
administrative procurement or regulatory rules, some criteria and accreditation scheme
would need to be developed. To embark on such a project without taking into account
the existing criteria and accreditation system could be a big mistake. The inevitable
question that arises then is, can this need for some level of consortia legitimation or
inclusion be accommodated within the existing structure (i.e., ANSI in the U.S.)? Many
consortia are really marketing associations and the possibilities of collaboration with
SDOs seem to have obvious potential.
11
3.2
The Workshop
The SDO process has responded in a number of ways. One has been a hybrid approach
known as the “workshop,” a form of “SDO lite” with streamlined or abbreviated
procedures and incorporating consortia participants. The ISO has instituted the Publicly
Available Specification (PAS) procedure, a streamlined process for standardizing already
existing specifications in use in the marketplace.
3.3
ITU Institutional Restructuring
The ITU has had a different and more difficult problem with its legacy as a clearinghouse
for monopoly telecommunications carriers and with representation only by national
governments under treaty obligations.20 Its processes were convoluted, bureaucratic and
not at all public or open by most measures. In recent years, the ITU-T (ITU
Telecommunication Sector) has been striving under new leadership21 to somewhat reinvent itself and has been initiating processes for collaboration with SDOs and various
other standards organizations and private entities that it did not work with in the past.
Such has included granting membership status for such groups as the IETF, IEEE, ETSI,
ISO, IEC and even some corporations (known as SIOs—“Scientific and Industrial
Organizations”). As of 2003, the ITU lists 189 Member States as well as over 650 Sector
Members (SIOs and “other entities)”. Also they have adopted a fast-track approval
procedure, the “Alternative Approval Process (AAP).”
3.4
The Open Source Movement
Another extremely important response to the perception of enclosure of standards and to
the problem of IPR and proprietary systems has been the dramatic rise of the open source
movement, an outgrowth of the free software movement. The tradition of free software
and the sharing of source code has roots that trace from the very beginning of computing.
Such collaborative practice was established in such projects as ARPAnet (and later in the
IETF), and it later became formalized in the creation of the Free Software Foundation by
Richard Stallman and the GNU license22. An anthology covering the history of Open
Source by some of its key actors is provided by O’Reilly (1999). One of the seminal
works on the topic is The Cathedral and the Bazaar (Raymond, 1998), and the
phenomena has been examined in some detail in the enclosure discourse by Benkler
(2001). Basically, open source can be seen as a form of standardization entirely outside
of the traditional institutions, either SDO or consortia—in fact, outside the market
paradigm altogether—and more akin to the commons of the enclosure discourse. Yet,
like formal standards, it can create platforms upon which new markets can be built. It is
a form of distributed development process, but it is also a form of standardization
because it results in standards. It has learned to protect itself from enclosure or
appropriation using a novel mechanism of licensing that perpetuates itself known as GPL
(General Public License) and other related license strategies (e.g., the Mozilla license for
Netscape).
A thorough exploration of Open Source with respect to standardization is beyond the
scope of this paper. It may be useful, however, to note that the IETF provides an
example of a standards body that has relied on an open source and free software tradition,
12
albeit informally, for many years. In this case, the relationship between open source
creation and standardization can be clearer.
It may not be immediately apparent, but the availability of open standards processes and
documentation is vital to the Open Source movement. Without a clear agreement on what is being
worked on, normally articulated in standards documents, it is quite easy for distributed development
projects, such as the Open Sources movement, to become fragmented and to flounder. There is an
intrinsic partnership between open standards processes, open documentation, and open sources. This
partnership produced the Internet and will produce additional wonders in the future. (Anonymous
Reviewer, 2003)
The recent ascendancy of the Open Source movement is not a response or adaptation to
enclosure insofar as its roots go too far back—but its recent invigoration and
formalization is certainly such, at least in part. In the case of open source, the line
between innovation and standardization can become quite hazy.
3.5
The Appropriation Problem
Another form of enclosure is the transfer from public to proprietary ownership, or the
appropriation of established standards by specific firms. Van Howeiling (2002) has
described the standards “pollution problem,” where public domain standard protocols are
enclosed by a process she characterizes as EEE (Embrace, Extend, Extinguish)23.
Lemley (1998) has discussed the notion of standards “pollution” and Lemley and
McGowan (1998) have referred to “intellectual property ambush,” particularly, but not
solely, in regard to the practices of Microsoft Corporation.
3.6
Innovation and Patents
The fundamental rationale for the patent system is that patents play a role in technical
innovation for the benefit of the public. This notion is based on the presumption that
inventors need an incentive to invent and to offer their inventions to the public. Some
investigators challenge that basic premise. Benkler (2001), writing from a law
perspective, has studied alternative forms of production, both historical and recent, that
are highly successful and do not rely on such a presumption (e.g., open source). Boldrin
and Levine (2002), from an economic perspective, challenge the conventional wisdom,
asserting that, “there is nothing either natural or socially useful in the monopoly power
the state confers upon innovators…that, from a viewpoint of social welfare, current
legislation on copyrights, licensing, and patents plays a harmful role in the innovation
process.” (p. 1) These studies suggest that the patent system may be afflicting the
standards process for no good reason. In any case, it is suggested here that the IPR
system has diverged far from its original Jeffersonian mission.
4.
Conclusion
This paper has sought to establish the concept of Enclosure as a key framework for the
study of standards and standardization—and their relationship with the public good. It
began by situating the problem of openness in standards and standardization within the
current discourse about enclosure of ideas and about the problems posed by current
trends in IPR. It then examined the problematic notions of public and private, and how
they relate to standardization. It proceeded by examining the traditional standards
13
institutions and their relationship to the emerging consortia movement and other forms
of standardization. In particular, it focused on the problematic notion of what is meant by
open. Finally, it briefly visited some of the responses and adaptations to enclosure.
The most basic idea presented here has been the idea of open standards. All standards
bodies seem to fall short of the ideal of openness, at least is some respects. Consortia
advocates claim that openness of the result (i.e., the final standard) is good enough, and
that openness of the process is not as important.
Is it important for the process, rather than simply the result, to be open? If so, the reason
may lie in Lessig’s notion of “code” or “architecture.” Architectures are formed within
an inherent cultural context and they incorporate components that are contributed by the
individuals that participate in their design. If that participation is limited or enclosed, the
resulting design will still be shaped by the limits and the interests of the designers. Basic
infrastructures are particularly important in this respect. For example, one only has to
contrast the design of the conventional telephone network with that of the Internet to
understand the problem. (Isenberg, 1997). It may be that basic infrastructures ought not
be owned or enclosed by anyone if the interests of the public are best to be served. But,
if so, it is not clear what institutional structures can best maintain such a public commons.
Standards bodies are one approach. In any case, it is proposed here that Enclosure theory
can become a useful framework for further exploration of this problem—and can inform
policy initiatives that might flow from it.
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1
Although this discussion focuses mainly on standardization within the field of ICT, the principles and
issues explored here are applicable generally to all other fields. The ICT field, being fast moving and
contentious, is where some of the stresses on the standards system have been the greatest.
2
Voluntary consensus means 1) compliance with the standard is voluntary, and 2) a consensus process was
used to establish the standard.
3
“formal” institutions and practices here refers to established non-governmental national, regional and
international standards developing organizations (SDOs) and SDO accrediting bodies; these formal
institutions include such organizations as ANSI (American National Standards Institute), ISO (International
Standards Organization), ITU (International Telecommunications Union), IEC (International
Electrotechnical Commission), and many others.
4
Enclosure is a reference to the oppositional discourse about a commons or public domain that is at risk of
being enclosed. Digital is a reference to the digital age—the age of ICT—where the term digital economy
refers to an economy based more on knowledge and information than on physical assets. Schiller uses the
term in this meaning in Digital Capitalism (Schiller, 2000). And, for different ends, a similar usage is made
by Negroponte in Being Digital (Negroponte, 1995). Digital is also a reference to the 2nd Enclosure
Movement as a metaphor of enclosure, to contrast the present digital (knowledge or idea) enclosure with
the 1st spatial (land) enclosure. In other words, the 2nd Enclosure is the Digital Enclosure—enclosure in the
16
digital age—a reconfiguration of the spatial logic of the 1 st enclosure movement into the digital age where
ideas and knowledge become privatized, compelling entry into a particular social relation, preempting
alternative spaces (i.e., the commons); and where capitalism establishes proprietary access to information
which can be accumulated.
5
The term ideas is borrowed from Lessig (2001) and is used in a broad sense. It encompasses any product
or manifestation of human intellect including texts, writings, musical compositions, art, artifacts,
inventions, and technical standards and specifications.
6
Such participant firm’s strategies with regard to GSM (Global System Mobile) patents are described by
Bekkers, Verspagen and Smits (2002).
7
Regulatory standards might include pharmaceuticals, auto safety regulations, food classification
standards, and agricultural inspection standards, electromagnetic emission limits, building codes, fire
protecton standards, and spectrum allocations. The term regulatory actually refers a distinction between
voluntary and involuntary compliance requirements. Administrative rules might include purchasing or
procurement requirements.
8
The use of sector implies a sharp distinction that is left undefined—a slice of the pie but of unknown
dimension—and fails to recognize or acknowledge the ambiguity or overlap between sectors.
9
Part of the problem is the way that contemporary discourse confuses the terms private and public. We
speak of public schools, meaning government funded and operated, but we also speak of public
broadcasting, meaning privately operated but funded by public contributions (with or without government
help) or public houses (“pubs”) which are privately owned and operated but open for patronage to the
general public (in contrast to private clubs).
10
This term was suggested by van Wegberg (2002).
11
Some such SDOs in the U.S. are the EIA (Electronic Industries Alliance), TIA (Telecommunications
Industry Association), ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning
Engineers), ITI Council (Information Technology Industries), ATIS (Alliance for Telecommunications
Industry Solutions), SCTE (Society of Cable Telecommunications Engineers), ASTM (American Society
for Testing and Materials), ASME (American Society of Mechanical Engineers), IEEE (Institute of
Electrical and Electronics Engineers), and NFPA (National Fire Protection Association).
12
Some examples of SDOs are international institutions such as the ITU (International
Telecommunications Union), the IEC (International Electrotechnical Commission), the ISO (International
Organization for Standardization). Some regional SDOs include CEN (Comité Européen de
Normalisation) and CENELEC (Comité Européen de Normalisation Electrotéchnique), ETSI (European
Telecommunications Standards Institute), and ECMA (European Computer Manufacturers Association).
13
There are notable exceptions such as OSI (Open Systems Interconnect) or ISDN (Integrated Services
Digital Network) where the SDO process largely failed. The ICT standardization domain is fundamentally
different from other more traditional domains.
14
This paper was awarded 2nd place in the annual World Standards Day paper competition for 1998,
sponsored by ANSI and NIST.
15
Committee T1 is now administered by ATIS (Alliance for Telecommunications Industry Solutions), an
ANSI accredited SDO.
16
Standards may be regarded historically as either agents of stability or as agents of change (Cargill, 1997).
17
Thus the term open became prominent in standards discourse, establishing a meaning that could be
paraphrased as, “liberated from IBM’s proprietary de facto standards practice,” but still vague in other
respects. Farance (2002) disagrees, commenting, “…open (even in the days of 1970's IBM mainframes and
non-IBM disk drive vendors) means well-documented, i.e., a normative document (a standard or
specification) that describes interfaces, interoperability, behavior, compatibility, etc.”
18
It is interesting to note that in ancient Rome, a forum was the marketplace or public square of a city, the
center of judicial and business affairs and a place of assembly for the people; or it was a public court or
tribunal or other assembly for the discussion matters of public interest. (Random House, 1967, p. 559)
19
The IETF is included in this list because it lies outside of the traditional formal accreditation system, yet
many would claim that it is more open and inclusive in certain respects than most SDOs. This example
illustrates the difficulty in classifying organizations outside of the formal system.
20
The ITU is an international treaty organization and has traditionally been organized on a national body
basis. Submissions come through national committees. In the case of the U.S., the State Department
officially coordinates and represents the U.S. position. The part of the ITU concerned with
17
telecommunications standardization is called the ITU-T (formerly called the CCITT). The various ITU-T
committees are called “Study Groups” and attendance is authorized through the national bodies. Working
documents, contributions, etc., including meeting minutes, are not generally publicly available (they are on
the website but are password protected).
21
Houlin Zhao, Director, Telecommuncation Standardization Bureau. (Zhao, 2001).
22
GNU is a recursive acronym meaning “GNU is Not Unix.”
23
This author would suggest that in the acronym, EEE, Extinguish ought to become Enclose.
18