The Business of Standards November 2016 University of Colorado Boulder, CO Ken Krechmer I will take questions of clarification throughout. Comments may be raised at the end.

Classic Business Model Profitable Business Product Market Example John Deere plow

Communications Business Model Profitable Business Products Markets RJ jacks (interfaces) created large new markets: private telephones, dial-up modems, answering machines, PBX’s. Interfaces

Definitions Reference: Basis for comparison Standard: A codified and quantified reference imposed by an authority (government, committee or market). F.A. Hayek, Rules and Order, 1973 Standardization: Process of creating, implementing, or using a standard Defining an interface requires developing some definitions. Hayek used the term rule for the application of references. Describe creators, implementers and users.

Standardization idea Responsive e.g., ISO Anticipatory e.g., ITU product/ service Participatory e.g., IETF

Order and Rules Established by How order occurs Term for order Physical laws Inherent Nature Convention Without plan Reference Standardization Private entity Commercial Specification Government Required De jure Regulation Formal stds. body Consensus De jure standard Consortium Consensus? Standard Market De facto De facto standard De facto (market based) and de jure (committee based) are legal terms for standardization process that are difficult to apply in practice.

Similarity and Compatibility Plug 1 Socket 1 The interface is the outline of the plug and the inside of the socket. A software language or operating system environment is a similarity standard. The Application Programming Interface is a compatibility standard. Plug 2 Socket 2

Communications Compatibility Transmitter Receiver Receiver Transmitter Transceiver Transceiver Interface Protocol TCP or UDP or IP is a protocol

Successions of References Succession Examples Purpose Effect 1. Symbols Number systems Identify Barter 2. Measurement Units of measure, Quantify Trade currency 3. Similarity Venetian galleys, Replicate Increase ISO 9000, 14000, efficiency Manufacturing 4. Compatibility Railway gauge, Interworking Transfer G3 facsimile, Gillette razor and blade, air interfaces 5. Adaptability Etiquette, Negotiate Support Modem handshakes, variation change SIP, G3 fax T.30

History and Impact of Successions Age Hunter Gatherer Agrarian Industrial (before 3000BC) (3000 BC - 1750 AD (1750 - 1950) Succession of Symbols established references Economic self- Communications reinforcing mechanism Authorities’ involvement Dominate in establishing references New policy Trading

History and Impact of Successions Age Hunter Gatherer Agrarian Industrial (before 3000BC) (3000 BC - 1750 AD) (1750 - 1950) Succession of Symbols Measurement established references Economic self- Communications Coordination effects reinforcing mechanism Authorities’ involvement Dominate Authoritarian in establishing references New policy Trading Taxation

History and Impact of Successions Age Hunter Gatherer Agrarian Industrial (before 3000BC) (3000 BC - 1750 AD) (1750 - 1950) Succession of Symbols Measurement Similarity established references Economic self- Communications Coordination effects Scaling and learning reinforcing mechanism effects Authorities’ involvement Dominate Authoritarian Oversight in establishing references New policy Trading Taxation Patents

History and Impact of Successions Age Agrarian Industrial Information (3000 BC - 1750 AD) (1750 - 1950) (1950 - 2000) Succession of Measurement Similarity Compatibility established references Economic self- Coordination Scaling and learning Network reinforcing mechanism effects effects effects Authorities’ involvement Authoritarian Oversight Representative in establishing references New policy Taxation Patents Commercial systems

History and Impact of Successions Age Industrial Information Post-Information (1750 - 1950) (1950 - 2000) (2000 +) Succession of Similarity Compatibility Adaptability established references Economic self- Scaling and Network effects Gateway effects reinforcing mechanism learning effects Authorities’ involvement Oversight Representative Future: Guidelines? in establishing references New policy Patents and Commercial Trademark copyright systems

Insights Offered by the Succession of Standards • Adaptability standards support trademark value system • Adaptable standards allow open systems • Patents best applied to similarity • Need to limit patents that read on compatibility • Need to avoid patents that read on adaptability

Ken Krechmer e-mail: krechmer@csrstds.com http://www.isology.com Thank you Ken Krechmer e-mail: krechmer@csrstds.com http://www.isology.com

Part II Adaptable Standards support Open Systems

Once all stakeholders participated in standardization: Users/carriers Implementers Government Academia Railroad track and equipment are examples of early standards and standardization committees Now implementers dominate the standardization processes.

This creates the desire for “open standards.” When implementers do not address everyone’s needs, some are disenfranchised. This creates the desire for “open standards.” Note that open systems (changeable) are not the same as open standards (fixed for a period) although open systems should (IMHO) require open standards.

Open Standards mean different things to different people Implementers want: • A single process for worldwide standards • A fair process to negotiate intellectual property rights (IPR)

Users/carriers want: • Backward and forward compatibility • Maintained standards • Public technology (low IPR fees)

• A fair, fast and efficient standardization system. Government wants: • A means to address the standardization aspects of political problems. Everyone wants: • A fair, fast and efficient standardization system. Political issues include pornography, security and safety

Ten Parameters of Open Standards Requirements Stakeholders 1. Open meeting 2. Consensus 3. Due Process 4. Open World 5. Open IPR 6. Open Change 7. Open Documents 8. Open Interface 9. Open Use 10. On-going Support Creation Implementation Use

4. Open World – same standard for the same function, world-wide 4. Open World – same standard for the same function, world-wide. ANSI and WTO supported Discuss first three, then discuss value of 4 for creators, implementers and users

5. Open IPR – holders of Intellectual Property Rights (IPR) identify themselves during the standards development process. This does not work as well with compatibility standards as with similarity standards. How many think that IPR that reads on public standards should be free? Versions of IPR control that attempt to balance the desires of inventors and users include Reasonable And Non-Discriminatory (RAND) and Fair RAND that relate to Standards Essential Patents (SEP).

6. Open Change – all changes are presented and agreed in a forum supporting the previous five rights. Without this, interfaces are controlled by the supplier who maintains the ability to automatically update the system.

7. Open Documents – all may access committee documents, drafts and completed standards. Many SDOs still make some portion of their income selling standards documents. But this income is in decline.

8. Open Interface – Adaptability standards support migration and allow proprietary advantage. This is not understood.

9. Open Access – objective conformance mechanisms for implementation testing and user evaluation. Certification, plug fests, third party evaluation

10. On-going Support Phase Activity Description Major Interest Group Create Standard The initial task of SSOs Creators 1. Fixes (changes) Rectify problems Implementers 2. Maintenance (changes) Add new features and update Users 3. Availability (no changes) Continue to publish 4. Rescission Removal of the published standard

Broad View of Interfaces Legitimate Legitimate Public Private Good Gain Fair Interface

Part III Changes in Policy

Changes to Standardization Organizations Require adaptability standards Allow controlled IP only as an option in compatibility standards Publish how they address the 10 requirements of open standards User participation in the maintenance of standards

Changes to WTO Policies Define as barriers to trade the lack of open change procedures and lack of open interfaces of microprocessor-based compatibility standards

Changes to Competition and Antitrust Policy: When interfaces are required to support competition, empower a standardization organization to create and maintain them.

Changes to WIPO Policies: WIPO should evaluate the economic basis of IPR claims on international interface standards and make recommendations concerning when controlled technology should be optional in interface standards.

Changes to Individual Countries’ Patent Policies: Require greater demonstration of uniqueness for patent claims that control interfaces. Shorter term on patent claims that may control interfaces (e.g., algorithm implementations)

Part IV Adaptable Systems

Problems With Controlled Interfaces •The EU's concern that Google dominates the internet search market •The Chinese government's desire for their own com- munications technology in Chinese communications systems. • Earlier EU and US anti-trust actions over Microsoft's proprietary software interfaces.

Adaptability includes three processes: The means to create and maintain interoperation between autonomous heterogeneous systems at all OSI layers. Adaptability includes three processes: • Identification • Negotiation • Selection

Creating Adaptability OSI layers Negotiation means: 7 6 5 4 TCP/UDP 3 IP 2 1 Service discovery protocols Etiquettes (Network discovery protocols) Existing discovery protocols include Jini, Universal Plug and Play, Service Location Protocol (RFC 2608) and Bluetooth SDP. Session Initiation Protocol (SIP, RFC 3261) may also be seen as a discovery protocol.

The properties of an etiquette include Negotiation services without operational functions. Single tree, unambiguous, logical structure. Deletions are not allowed. An etiquette receiver ignores what it does not understand (new type of testing). Means to prioritize each branch. Supports proprietary functionality. Etiquette revision level. .

The Benefits of Adaptability - 1 Supports the rapid introduction of new technology. Supports proprietary, national and regional functions and features within public standards. Supports negotiation of modes, features and options. Selects compatible modes between different multi-mode systems while increasing system capacity.

The Benefits of Adaptability - 2 Maintains interoperation between multiple implementations or revisions of standards. Moves intellectual property issues to the market. Identifies the specific reason(s) when interoperation fails. Avoids interfering communications.

Ken Krechmer e-mail: krechmer@csrstds.com http://www.isology.com Thank you Ken Krechmer e-mail: krechmer@csrstds.com http://www.isology.com