ICT standardization is based on voluntary participation and contribution of technology and innovations, on the one hand, and voluntary use and implementation, on the other. These simple facts have important implications. Standardization has to grant innovators sufficient monetary incentives to contribute technology, while licensing has to be based on a commitment to reasonable, not excessive, prices.

The separation of technology input production from technology implementation is the most obvious source of the tension between ICT standardization and IPR. IPR-based business models proliferate while the role of ICT standards expands to new areas. Amalgamation of different ICT sectors, e.g. hardware and software, content and technology, telecommunications and computers, contributes to this trend.

It is rather trivial that firm heterogeneity causes conflicts of interests, particularly between suppliers and users of technology. Simcoe (2006) notes that a decreasing number of firms can “co-operate on standards and compete in implementation” as more and more innovators choose IP-based business models.

The challenge is to find the right balance between innovators´ and users´ interests. One problem is how to best reduce, or ideally eliminate, hold-up problems for firms choosing to implement standards based on patented technology. Another is that the costs associated with controlled distribution can be tolerable for an IP holder lacking the necessary assets for competing in implementation (Gans and Stern, 2003).

It seems that voluntary standardization has to be based on reasonable but not excessive profitability, e.g. RAND or FRAND licensing.  Licensing on these terms give specialized technology firms incentives to participate in standardization, while users have an incentive to use and implement standards based on proprietary technology.