Setting Standards as a Global Business Strategy presented by Setsuo Harada Head of Technical Relations Office Corporate Technology Department Sony Corporation

Basic of Standards Setting Who/What is Necessary for International Standards Setting? "A double-headed person/Two minds in one human body" Keywords of standards setting: Laws and agreements - Intellectual Property Rights (+) - Copyrights and Encryption (+/-) - WTO/TBT Agreement (+/-) - Antitrust/Antimonopoly Act. (-) Every law or agreement is made by human beings and can be changed also by human beings. There is no law or agreement, which is considered to be applied “forever” or to remain unchanged “forever.”

A Face of International Standards Setting (1) Definition of standards A specification of a product is documented as a criterion, and that criterion when followed by some people is called a standard. Specification: A known state Criterion: An asked-to-follow state Standard: A used-widely state (2) Process from specification to criterion, and then to standard A standardized state does not mean a process but means an established state. Every standard has been made differently, not through the same process.

A Face of International Standards Setting, Continued (3) International Standards Organizations - International Telecommunication Union (ITU) Established as a UN organization. Responsible for telecommunications/broadcasting field. The MPHPT is the representative to the ITU. - International Electrotechnical Commission (IEC) Established under agreement of major developed countries. Responsible for electric/electronics field. It is an advisory organization to the UN. The JISC (METI) is the representative to the IEC. - International Standards Organization (ISO) Established under agreement of major developed countries. Responsible for materials/machinery field. It is an advisory organization for the UN. The JISC (METI) is the representative to the ISO. - ISO/IEC Joint Technical Committee 1 (JTC1) Established under agreement between the ISO and the IEC. Responsible for computers and information technologies. Standards Organization National Representative Standards Sellers ITU MPHPT ITU-J ISO/IEC METI JSA

Standards Setting Process in the USA

Standards Setting Process in Europe

Standards Setting Process in Japan Standardization Organization Dejure standards No Category Government Private Defacto standards National International Telecom. Telecommunications Council/ Technology Council P roposal 1 Governmental policy/strategy Information JISC Proposal Telecom./Broadcasting Telecommunications Technology Council Radio Regulatory Council Standards (Mandatory) Wired Telecom. TTC standards Wireless Telecom. AR IB ARIB Broadcasting 2 National standardization Information IPSJ/ITSCJ JEI T A, etc. JIS (Not mandatory) Telecom. MP HPT Companies* ITU Rec. Information JISC ISO/IEC standards 3 International standardization Telecom./ Compa nies Defacto Information, etc. standards Forums Forum standards *ITU sector members only

Essential Knowledge Regarding Government Every country starts its industrialization using national enterprises to protect its market. Therefore, standards setting is a job of the government in the beginning, but it will be privatized in time. Today, standards setting is fully privatized in the USA, semi-privatized in Europe, semi-governed in Japan, and fully governed in the other Asian countries. You need to know what the government is in detail. - It is unknown by those referred to as engineers. - It is unknown by those working in private companies. - It is unknown by those from country towns. It is highly dependent on.....

Essential Knowledge Regarding Industrial Bodies Standards setting is part of the job to be carried out by industrial bodies. It significantly relates to the work to be done by the divisions of the government. (1) General electric/electronics/computers/information processing equipment Japan Electronics and Information Technology Industries Association (JEITA), Japan Business Machine and Information System Industries 　　Association (JBMIA), Japan Electrical Manufacturers' Association (JEMA), and Information Technology Standards Commission of Japan (2) Broadcast/Telecommunications/Radio communications Association of Radio Industries and Businesses (ARIB), and the Telecommunication Technology Committee (TTC) Special Characteristics: - There are too many owners, and the workers tend to be irresponsible. - Standards development persons tend to become careless of money matters. - The work tends to become making other works; this opposes general business practices. TYPE A: To find a task -> To find talented persons -> To get a profit TYPE B: To obtain a budget -> To adjust a head count -> To find a job Standards are of quality, not of quantity. People who cannot measure "quality" tend to count it as “quantity.” Never count the number of standards, of committees, etc. because doing so is meaningless.

A Background of International Standards Setting (1) The word "Standards" Things which some people want to observe. Standards are criteria. A specification of a product can be a criterion but it has not yet been a standard until it is recognized and used widely. Specification: A known state Criterion: An asked-to-follow state Standard: A used-widely state If a patented technology is used in an international standard the patent owner can make money from the standard. When a technology or specification which people perceive as better is globally used they feel convenience when traveling overseas, but:

An example of an oligopoly or monopoly NOTE: This is a fiction, not a true story. “Brother, why are you named differently?” “Please be inferior for awhile for our profits.” 255 455 355

An example of a co-agreed or co-owned state NOTE: This is a fiction, not a true story. - You jump through a hoop. Respect the hoop, not the technology. NOT international standards International standards WTO TBT We have already sold it a lot in the market, but why ... We have not yet sold it in the market, but it is ... XX Government

A Background of International Standards Setting (Continued) (2) Bifocal view of standardization - A standardized state means an oligopoly or monopoly state, or a co-agreed or co-owned state. Never use the word "standards" in business. That word makes the entity vague. A person has to have a bifocal view on standardization. NOTE: The word "oligopoly or monopoly" used here does not mean it is against Antitrust/Antimonopoly Act. (3) Be gradual (slow) or be radical (quick) Move gradually (slowly) for standardization in an oligopoly or monopoly state, but move radically (quickly) for that in a co-agreed or co-owned state.

The Front and Back of International Standards Setting Production Development Research IPRs Legal Patent Inter- Company Committees Forum Domestic/ Overseas Government Anti Monopoly Act. Copyrights Encryption Domestic Official Stds Bodies Overseas Official Stds Bodies Stds bodies of other fields Government ISO/IEC/ITU (a grave or a cradle of standards)