I doubt anyone suggests there has been a true market failure in setting smart grid standards. I would argue the pitfalls of mandates are numerous, particularly in new and dynamic technologies. Empowering a government organization, such as NIST in the US, to organize the effort, convene stakeholders, and set the agenda and deadlines to comport with statutory requirements is a better approach.
Read More…

PART 17: Concluding Thoughts

Over the past weeks, I have offered somewhat of a deep dive into my view that governments should be reticent to set IT standards (and particularly to mandate a standard that has not been developed and/or widely-adopted by the marketplace).

Read More…

PART 16: When Intervening in the IT Standards Market, the Government Must Mitigate the Risk of “Government Failure”

As I have described, the government should be reticent to intervene in standards settings, and should take an incremental approach where government intervention is warranted. Even taking an approach of incremental intervention, at each step, the government must consider the potential negative implications of government intervention – the risk of government failure.

Read More…

PART 15: Government Intervenes in a “Grey Area” Case, Government Intervention Must be Reasonably Tailored to Achieve the Public Interest Objective

Where the government concludes that intervention in the standards-setting process is warranted, it should reasonably tailor its intervention to rectify the identified market failure and to achieve the particular public interest objective. The government should limit the scope of intervention and define objectives in acting to address a critical or important public interest objective. In order to assure the most narrowly tailored government intervention, where government elects to intervene, policy makers should be able to clearly articulate:
(a) the specifics of the important public interest objective in the establishment of a particular I.T. standard;
(b) the purpose and scope of the government intervention; and
(c) identifiable objectives for government intervention to achieve.

Read More…

PART 14: 3 Types Of Cases for Analysis – “Grey Area” Cases and Significant, Substantial Market Failure

In the context of IT standards, and for the purposes of identifying the government’s role in regard to setting such a standard, I define market failure as being circumstances where an IT standard essential to meet a critical public interest objective, or relevant to an important public interest objective, has not developed in the market in a reasonable timeframe and thus, has proved a barrier to government action to address the identified pubic interest objective.

Read More…

PART 13: 3 Types Of Cases for Analysis – The “Grey Area” Cases, Where the Government Must Ask “Should we or Shouldn’t we?”

I have discussed those cases where there is a clear case for government intervention, and that for wich there is not; I now will turn to the most challenging – the “grey area.” These are cases where the IT standard is relevant to an important public interest objective. I define “relevant” to mean having an objectively reasonable connection to the important public interest objective. Although this is seemingly a broad category, this is only a threshold criterion that should trigger an analysis to determine whether government intervention of any nature is appropriate. Once this criterion is met, the analysis would guide a determination as to whether, given the legal, policy and practical constraints, intervention is appropriate, and, if so, how that intervention should proceed.

Read More…

PART 12: There are 3 Types Of Cases for Analysis – Cases that are clearly not circumstances for government intervention

With this entry, I will turn to the second category, those cases in which as a general matter government should not intervene in setting IT standards, where –

• The competitive market is vibrant (i.e., there is market competition and viable means to set the relevant IT standards) and

• (1) the market is not clearly failing to meet an important public interest objective, or (2) there is no important public interest objective or creating the standard is tangential to an important public interest objective (that is, creating the standard is not the only way to achieve the public interest objective, thus, even in a case of market failure, such would not be a barrier to the government in accomplishing the important public interest objective).

Read More…

PART 11: There are 3 Types Of Cases for Analysis – First, the Clear Cases for Government Intervention

In past entries I have sought to explain why governments should be reluctant to intervene in IT standards. In summary,

Read More…

In October, Talkstandards.com hosted an open forum focused towards issues related to interoperability within European standardization and framed against the backdrop of the current EU activities. In addition to a series of expert keynote contributions (summarized below – please follow the links to access the articles in full) two exclusive interviews were conducted. The event can be found her: www.talkstandards.com/reforming-eu-standardization.

Read More…

This month’s discussion asks whether the standards marketplace is delivering too little interoperability. Classical economic theory would say, with a nod to Leibniz, that the market is delivering exactly the amount of interoperability that its forces require at equilibrium. If users and stakeholders demand it, standards bodies will deliver and cooperate — probably exactly to that extent.

Read More…