Communication technology standards are technical specifications that enable technological components from different suppliers to work together within a given communication system. Some standards refer to the physical interfaces between network and terminal equipment. Others refer to logical elements expressed in algorithms and embodied in software. In digital systems, many standards involve both physical and logical elements: a standardized physical interface is supported by standardized software elements. Standards are essential to telecommunication, broadcasting, and computer networks. More recently they have become crucial elements in the integration of digital networking and services environments.
Much standardization is limited to physical and/or logical interfaces between components and functions. However, it is often the case that systems or networks that adhere to common standards also may incorporate specific implementations that are not fully compatible. Indeed, an essential institutional dynamic in the standardization process involves determining the limits to standardization. Such factors add strong socioeconomic and often political dimensions to the process of defining and adopting communication technology standards (Schmidt & Werle 1998).
Types Of Standards
Generally it is understood that standards have strong collective characteristics; that they are applied across entire product or service segments or otherwise on an industry-wide basis (Kindleberger 1983). Thus, standards are considered to reflect a consensus among stakeholders to adopt common solutions to shared problems. But consensus can be expressed in many forms, ranging from market preferences for proprietary solutions, to the outcomes of formal rule-based negotiations.
It has been common to make a distinction between de facto standards (often called “market” or sometimes “informal” standards) and de jure or “formal” standards as negotiated under the auspices of a standards development organization (SDO). It has been common also to refer to negotiated standards as “open,” reflecting the principle of admitting all stakeholders to the negotiation process. However, often the term “open” is confused with “open source,” which refers to software that is unencumbered by proprietary intellectual property. This is unfortunate, as an open source environment is not necessarily synonymous with a standardized environment.
These simple distinctions have given rise to an enormous array of specialized definitions and taxonomies. However, there is disagreement among scholars as to whether such demarcations reflect practice. Broadly speaking, opinion splits according to whether standards should be defined and classified in terms of form or of function. Formal designations focus largely upon the institutional settings in which standards are developed and adopted. Functional designations focus more upon the practical consequences and impacts of coordinating technology and markets through common technical specifications.
In principle, standards are distinguished from regulations (as, for example, concerning safety or electromagnetic interference) in that compliance with standards nominally is voluntary. Nevertheless, standards and regulations often are linked – a regulation may reference a technical standard or vice versa. In practice, however, standards and regulations can yield many of the same effects. Moreover, even where there is no regulatory compulsion to adopt a standard, there may be commercial pressures that favor adoption to the extent that it becomes virtually mandatory to adopt a nominally voluntary standard because the costs or risks of deviance are too high.
Theory Of Standards
Prior to the 1980s, most of the literature on standards was descriptive rather than analytical. Much of it focused either upon industrial efficiency from an applied production management point of view, or upon the regulatory role of standards, especially in the context of industrial procurement and trade. There was rather little explicit connection to the theoretical and empirical tools of the mainline social sciences, although some of the earliest analytical work on the role of standards in establishing modern forms of industrial organization remains conceptually relevant to many contemporary and emerging standardization issues (see Thompson 1954).
The variety and quantity of theoretical literature on standards has increased remarkably in recent years. Growing interest in the dynamics of communication networks has been a significant contributor to the diversification of scholarly interest in this subject. Significant new ideas have been forthcoming from economics, the management sciences, political and legal studies, organizational studies, and various branches of sociological studies concerned with the production and diffusion of technology.
Nevertheless, a common theoretical core runs through virtually all of the literature. The most basic concept is that standards reduce variety. Theory predicts that, by adopting a uniform solution to a problem that is common to many stakeholders, any loss in the value of discarded solutions will be regained and amplified for all stakeholders in the form of production efficiencies and overall reduction in the unit cost of standardized items. Even though the price may decline following standardization, theory predicts that producers of standardized items will benefit from access to a larger market overall. A closely related concept is that standards ensure compatibility rather than uniformity. This implies that conformance to a standard does not preclude variations in product qualities and features. To some extent, the compatibility concept reconciles the reduction of variety with the continuance of innovation and competition.
Reduction in variety is reckoned also to lead to information efficiencies between producers and users of technology. Thus, if we find a standardized connector on a computer keyboard or printer, we know that it will operate with any computer equipped with the appropriate standardized receptor. We do not require any additional information about either device. All of this information is transferred transparently by the standard.
In the mid-1980s, led by the seminal work of David (1985), Arthur (1989), and others, social scientists became interested in the role of standards in generating network effects – commonly expressed in terms of “increasing returns to adoption” or “positive externalities”. The public telecommunication network is often given as an example of this phenomenon because its value to all users increases with the number of users whereas the cost of connecting each new user is low. Standardized interfaces within and between telecommunication networks facilitate access, thus ensuring that the value of the network as a whole will increase for all users. Most communication networks, from radio broadcasting to the Internet, can be seen to display similar characteristics.
However, the phenomenon of increasing returns means also that the circumstances and timing of standards selection can be crucial. Standards can set up path dependencies, locking users into technological environments that may not always have optimal characteristics. Lock-in has economic implications in that the standardization of suboptimal technologies may impede technological progress. But it has political and managerial implications also in that dominant firms may use lock-in effects from standards to control markets and prejudice further technological development.
Understanding the relationship between standards and innovation is one of the most challenging theoretical and empirical issues (Blind 2004). On the one hand, because of lock-in effects and their role in establishing dominant designs, standards might appear to impede innovation. On the other hand, information efficiencies may lower the costs and risks of experimentation, thus encouraging innovation. It can also be observed that standardized infrastructures and platforms, such as we see with the Internet or mobile telecommunication systems, have facilitated significant innovation in business models and value-added services.
Institutional Dimensions Of Communication Technology Standards
Prior to the present era in which virtually all communication technologies and networks are digital and oriented in some respect to the Internet, the institutional landscape for communication technology standards was oriented to three, largely discrete, networking environments – telecommunication, broadcasting, and data processing. Although there were always overlapping standards requirements, each environment had its own standards regime centered in its own set of institutions.
The Internet has the potential to enable virtually complete convergence of these environments. Nevertheless, vestiges of the historical system persist. Many international standards for public switched telecommunication networks remain in the orbit of the International Telecommunication Union, either under the auspices of the Telecom-standardization agency (ITU-T) or the Radio-communication agency (ITU-R). As the authority responsible for the international management of radio spectrum, ITU-R also plays a significant role in the broadcast and satellite sectors. On the other hand, international standards for data-processing systems have been historically the responsibility of the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) through a Joint Technical Committee (JTC1) on data processing and computer communication standards.
Spurred to a large extent by the liberalization of telecommunication markets and convergence between voice and data networking, the institutional structure of standardization has evolved considerably. Many telecommunication standards now are developed in regionally based organizations, e.g., the European Telecommunication Standards Institute (ETSI). Likewise, standardization activities for data networking are now distributed among an increasingly diverse group of organizations. Some, like the Internet Engineering Task Force (IETF) employ nominally informal methods, soliciting inputs from the community of Internet users at large. Others, like many of the standards committees of the Institute of Electrical and Electronics Engineers (IEEE) work to formal procedures.
In practice, the lines between national, regional, and international standards bodies are becoming as blurred as the lines between network and services environments. During the past 10 years, the most significant development has been the proliferation of industry “consortia”: stakeholder-sponsored organizations that develop technical specifications mostly for specialized product and service niches. W3C (the group that oversees standards development for the world wide web) is probably the most widely known consortium, but these organizations have grown in number from perhaps 60 in the mid-1990s to at least 350 today. Although some consortia collaborate actively with formal SDOs, many do not.
The rise of the consortium phenomenon has often been attributed to failure of the formal SDO system to develop standards quickly enough to meet the needs of ever shorter product cycles for information and communication technology products. But it now appears more likely that the selection of consortium or SDO environments is made for commercially strategic reasons. Many of the key technologies that now function as global standards are either wholly proprietary (like Microsoft Windows or Vista). Others may incorporate proprietary and nonproprietary elements (West 2003). Accordingly, intellectual property has become one of the most contentious standardization debates.
To sum up, over a period of 20 to 25 years, the scope and function of communication technology standards has broadened considerably. In addition to their historical role in ensuring the compatibility of network components, they have become associated more directly with the coordination of specific service environments. Also, the key issues and debates have moved largely out of the hardware segments and into the software segments. As all of these changes have occurred, the social and economic implications of standardization have intensified for a much wider variety of stakeholders.
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