Standards Development, Disruptive Innovation and the Nature of Participation: Lock-In, Lock-Out, Holdup

Abstract

Standardization processes are quickly replacing regulation and competition as the primary method that technical specifications are deployed as rules, guidelines, or definitions of characteristics that ensure materials, products, processes and services are consistently fit for their purposes. Importantly, for Information and Communication Technologies (ICT), there is an evolution in the process used by standards-development organizations (SDOs) and this is changing the prevailing standards development activity (SDA) for ICT. The process is progressing away from traditional SDA modes: the legacy de jure standards promulgation by regulators that typically involve the selection from many candidates and existing alternative components. Increasingly, standards development is moving towards voluntary consensus consortia, venues in which there is a more design intensive crafting of standards that include a substantial design component, also known as “anticipatory” standards. Standards that include a substantial design component require increasingly important roles from organizational players as well as SDOs. These processes are increasingly characterized by the presence of intellectual property rights and collective behaviors alleged to trigger legal issues in antitrust, the First Amendment and tort law. An analysis of recent and likely influential series of holdup cases, such as the Rambus appeal, is also instructive.

Few theoretical frameworks exist to understand these emerging processes. This research is influenced by the design, sense-making and negotiation (DSN) theoretical framework. DSN suggests viewing the new standards-setting processes as a complex interplay among these three forces. The DSN model provides the framework for measuring SDO progress and therefore understanding future generations of standards development processes. This research conducted archival analysis of SDO documents for a selected subset of web-services (WS) standards taken from publicly available sources including minutes of meetings, proposals, drafts and recommendations. This work provides a deeper understanding of SDAs, the roles played by different organizational participants and the compliance with SDO due process requirements emerging from public policy constraints, recent legislation and standards accreditation requirements. This paper examines the public policy principles in use to evaluate the due process mechanisms and checks and balances in SDA. These must be better understood to inform a critique of proposed reforms so they might accommodate efficiency, expertise and participation incentives. The empirically grounded results of our studies are useful foundation for other SDO modeling efforts.