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The European Commission’s forthcoming White Paper on ICT standardization

posted by Mattias Ganslandt on Tuesday, May 5th, 2009 at 1:05 pm

Several interesting themes can be expected in the European Commission’s forthcoming White Paper on ICT standardisation. This was evident after a speech by Anne Lehouk, Principal Administrator at the European Commission, at the Talk Standards event in Brussels today.

Let me summarize some of the key messages that I picked up from Mme Lehouk’s presentation.

First, I noted that the Commission has identified a need to reform European standardization policy for several reasons, including the fact that the policy should be adjusted to accommodate to the particular characteristics of standardization in the ICT sector. It was also mentioned that European standardization has been taken over by international standardization. Presumably Europe therefore needs to take action to regain the initiative.

Second, a major policy objective of the European Commission is to facilitate coordination and engagement of all stakeholders in ICT standardization. Tentatively the Commission is proposing a platform with vendors, users, SSOs and other stakeholders where priorities and standardization work can be discussed (based on the experiences from a previous, less ambitious forum for discussion). In my opinion this sounds like a significant practical challenge and it remains to be seen how this forum will work in practice. It could also be added that coordination at the international level will still be an issue.

Third, a major theme of the Commission’s approach to ICT standardization has to do with the benefits of combining the advantages of formal European standardization and the technical competences of informal fora and consortia. According to the current thinking at the Commission, the tentative proposal is to keep three formally recognized European Standardization Organizations (ESOs) but in addition permit governments and public authorities to recognize specific standards from informal consortia and fora, when no European standard exist. More generally, the Commission is interested in extending the possibility to use global standards that are important but, nevertheless, not easily referenced within the current European standard policy. The Commission is also insisting that the cooperation between formal and informal standardization organizations must be improved.

Fourth, the Commission is committed to recognizing the principle that the policy governing licensing of IPR is an issue that is best dealt with by standard setting organizations and ultimately IPR holders. FRAND is the natural starting point. Maintaining some licensing flexibility for the holders of IPR is recommended. The Commission is not ruling the possibility that disclosure of IPR can be improved, e.g. through better cooperation with various patent offices.

Fifth, public procurement will be based on the principle that public agencies and government bodies should choose the best solution. The policy should be sufficiently flexible to allow procuring agencies to choose the alternative that has a perfect fit with their existing systems.

Finally, the Commission will not impose any restrictions on the use of innovations and know-how developed by private companies. Firms have to decide how to best use their technology and whether to bring innovations to standards or not.

My general assessment is that the Commission is taking a pragmatic and flexible view on ICT standardization. The value of the current system with multiple formal and informal standardization organizations is explicitly recognized. So are the benefits of a system of IPR licensing based on FRAND. I think we can look forward to an interesting discussion when the White Paper is eventually published and the period of public consultation begins.

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Policy Bloggers Network » Policy news May 18 says:

[...] Principal Administrator at the European Commission, at the Talk Standards event in Brussels. The European Commission’s forthcoming White Paper on ICT standardization Tags: ICT standardization policy, European Commission, White [...]
Christopher Stothers says:

Tim,

Interesting points. In terms of rationales for preferring FRAND over more specific ex ante terms, alongside flexibility as mentioned by Mattias there is also the issue of administrative cost. The burden of more detailed ex ante licence terms mainly falls on the innovators, while the benefit falls on the implementers. There is therefore likely to be a tension between innovators (who will dislike ex ante obligations) and implementers (who will like them).

This was looked at in a little more detail in the IPI’s submissions to the Commission in November last year, available at http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/contributions/20081118IPI_en.pdf.

Chris
Mattias Ganslandt says:

Good points, Tim. It is worth noting that, according to the Commission’s current thinking, licensing terms and negotiations must be compatible with European antitrust rules (i.e. Article 81 and Article 82). Hence, no exemptions for pre-standardization negotiations etc.

I think you touch upon a very important question, namely why stakeholders (SSOs and patentholders) deliberatly leave licensing terms vague. What is the rational for having an incomplete contract of this kind (in the presense of a potentially significant hold-up problems subsequently)? I can think of many reasons but perhaps the most important being that due to incomplete information and uncertainty there is a mutual motive for keeping some flexibility even beyond the point of no return… /Mattias
Timothy Simcoe says:

These seem like a reasonably sound set of principles for European standards policy — particularly the idea of enhanced “inter-operability” between formal standards developers and informal fora and consortia. However, I am not optimistic that an IPR regime built on FRAND will lead to minimal government involvement.

If ex ante licensing terms are only specified up to “fair and reasonable” (and not anything more specific) the meaning of FRAND will inevitably be decided in court. A “reasonable” outcome is not guaranteed.

And if SSO IPR policies do not become much more specific about disclosure and licensing obligations, I would predict continued involvement by antitrust authorities.

The European Commission’s forthcoming White Paper on ICT standardization

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Mattias Ganslandt

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