Consortia or Consensus? Current Issues in Industrial Standards Policy

George T. Willingmyre, P.E.

October, 1996

Executive Summary

International, regional and government standards policy makers are redefining the relationships between the historical "full consensus" standards process and the relatively newer standards process model used by industry consortia and fora. During this important transition period, stakeholders can help create policy that will have far reaching implications. Full consensus standards processes include elements of openness and public review, balanced participation among interested groups, and due process and appeals for aggrieved parties. Because of the short life cycles of Information Technology (IT) products and the urgent need for compatibility standards in this marketplace, companies in this sector found that the time necessary to establish consensus according to historical standards processes was too long. Taking advantage of the increased protection from antitrust action provided by the National Cooperative Research Act of 1984 and the National Cooperative Research and Production Act of 1993, like-minded companies organized themselves in consortia to produce "Publicly Available Specifications (PAS)" in the shorter time frames consistent with their product development needs. At the same time they achieved a relatively higher level of control of the resulting standard because of the fewer parties involved. At stake in the current public policy debate are the terms and conditions under which PAS could achieve the same status as standards from consensus processes either directly or through a process of "transposition" by a consensus standards body. Standards as a factor in international and regional trade and the implementation of standards legislation in the United States make this more than an academic exercise. The policies under consideration signal a fundamental change in the traditional consensus standards community.

Background
Standards produced through consensus processes enjoy a privileged position in many situations. The Agreement on Technical Barriers to Trade for example calls for governments to base their technical regulations on International standards (predominantly those of the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC) and the International Telecommunications Union (ITU)) and to notify and announce any national deviations from relevant international standards. Members of the World Trade Organization are obliged to encourage their private sector standards organizations to fulfill consensus and public notice requirements contained in a "Code of Good Practice." Industries around the world have a strong business motivation to participate in consensus standards activities that will lead to appropriate international standards for their products. The unification of the European marketplace rests in considerable part on the policy of relying on the European standards organizations (The European Committee for Standardization (CEN), the European Committee for Electrotechnical Harmonization (CENELEC) and the European Telecommunications Standards Institute (ETSI)) to elaborate the acceptable "standard" means of meeting the "essential requirements" in European Directives. Provisions of the National Technology Transfer and Advancement Act of 1995 call for US federal agencies to use technical standards "that are developed or adopted by voluntary consensus bodies…as a means to carry out policy objectives…"

Full consensus standards processes include elements of openness and public review, balanced participation among interest groups, and due process and appeals for aggrieved parties. Standards from consortia are not "consensus standards" but such standards are important in the Information Technology (IT) marketplace. Because of the short life cycles of IT products and the urgent need for compatibility standards in this marketplace, companies found that the time necessary to establish consensus according to historical standards processes was too long. Taking advantage of the increased protection from antitrust action provided by the National Cooperative Research Act of 1984 and the National Cooperative Research and Production Act of 1993, like-minded companies organized themselves in consortia to produce "Publicly Available Specifications (PAS)" in the shorter time frames consistent with their product development needs. At the same time they achieved a relatively higher level of influence on the resulting standard because of the fewer parties involved. In its 1996 Survey of Telecommunications - Related Forum's Activities, Japan's Telecommunication Technology Committee identified 63 such forums around the world. Attesting to the marketplace relevance that PAS have obtained, international, regional and national policy makers are exploring how standards from consortia might achieve the "privileged" position presently held only by consensus standards.

International Developments
One of the approaches under consideration in international standards policy circles is to distinguish "consensus" in the development process from "consensus" in the approval process. The ISO/IEC JTC 1 Committee on information Technology recognized the trend toward using consortia and fora and has established a process whereby these specifications can more simply and rapidly become ISO/IEC standards. The key to this process is the conceptual separation of standards development and standards approval. Under the Publicly Available Specification (PAS) process, JTC 1 can approve an organization as an 'approved submitter' of PASs. This approval, by National Body vote, is based on a review of the organization's processes. Using a management guide developed by JTC 1, each national body can evaluate the organization on the basis of due process, stability, maintenance capability, intellectual property policies, willingness to change, and other attributes. In order to keep the process as flexible as possible, there are no mandatory requirements. (As an example, the organization might state that its specifications cannot be changed by JTC 1 -- and National Bodies will vote based on whether they believe this is acceptable.) Once the organization is approved as a submitter, its documents may be submitted directly to JTC 1 for a "Draft International Standard (DIS)" ballot. As of the end of 1996 the program will have been in place for two years. To date there have been two organizations approved as PAS Submitters. Curiously, no documents have as yet been submitted for approval.

There is US domestic experience with the practice of distinguishing consensus in development from consensus in approval. The American National Standards Institute (ANSI) has long sanctioned alternative approaches for obtaining the status of an American National Standard. The "Canvas" method applies to organizations that have obtained a level of agreement among a drafting group and who seek a wider consensus though a "canvas" of identified interested parties and an ANSI public review. The ANSI canvas method however has not been popular with some "full consensus standards organizations." These organizations contend that ANSI approval of canvas method standards creates a false impression of process equivalence that is neither warranted nor deserved.

Responding to a proposal by the American National Standards Institute this September, the ISO Council established an ad hoc group to consider how ISO might adopt more flexible arrangements with outside organizations. Some of the controversies associated with the ANSI canvas method will surely arise in the international standards policy context of ISO exploring a similar process to transpose submissions from consortia and fora. Vested interests in maintaining the status quo may feel that a "PAS" process undercuts their traditional roles. The ISO ad hoc group will work with selected industry sector organizations (Information Technology & Telecommunications, Petroleum, Aerospace and Automotive sectors are proposed) to determine what processes are desired and how issues can best be resolved. This work may include a survey of consortia and fora to determine what they would want from a changed ISO process and how to demonstrate and enhance the value of the ISO logo. ANSI recommended that the project be coordinated with similar endeavors in IEC and ITU to ensure that the formal standards world has a harmonized approach.

In this regard, the ITU is considering how to coordinate and cooperate with the standards work of the Internet Engineering Task Force and IEC intends to circulate a white paper on use of Publicly Available Specifications before the end of 1996.

Regional developments
The use of standards as a tool of economic policy is probably no where more refined than in the European Union. As a matter of European law, the European standards organizations CEN, CENELEC and ETSI develop standards that define acceptable means of complying with essential requirements in regulatory Directives of the European Union. The European Public Procurement Directive also calls on EU member governments to give priority consideration to the European standards in letting public contracts. In a July 1996 paper entitled Communication from the Commission to the Council and the parliament on "Standardization and the Global Information Society: The European Approach" the Commission concludes that formal standardization processes have not been able to deliver standards in due time for their wide acceptance in ICT markets and states that methods must be found to recognize the Publicly Available Specification (PAS) work of consortia and industry fora. Specifically the report states, "The European standards organizations are invited to promote the possibilities of the adoption of specifications that originate outside their formal structures. They should examine the possibility of adopting PAS." While this appears to be good news for consortia, there may be significant process conditions attached. If standards of consortia are to have an important role in the European marketplace, the Commission believes that mechanisms and safeguards to protect European interests may be necessary. Many consortia are based outside of Europe. It is implied that if the PAS from such consortia are to have significance in Europe, then specific European process criteria must apply to their development.

National developments
The relationship between consensus and consortia standards is surfacing as a public policy issue in the United States as the US Office of Management and Budget (OMB) revises its Administrative Circular A-119 to implement the standards provisions of The National Technology Transfer and Advancement Act of 1995. It has long been US Government policy codified in the OMB Administrative Circular A119 to use "voluntary" standards whenever possible. Congress elevated the policy to the status of US law in The National Technology Transfer and Advancement Act of 1995. Public Law 104-113, Section 12 encourages government agencies to use consensus standards rather than developing their own. Furthermore, agencies must report and defend any actions taken to develop new federal standards when voluntary consensus standards are available. According to Congresswoman Morella, the Chairwoman of the House Subcommittee on Technology and sponsor of the legislation, "The effect of this section… would be a reduction in Federal Procurement and operating costs. For example instead of mandating products built only to special government-created standards, the Federal Government can cut costs by purchasing off the shelf products meeting a voluntary consensus standard that, in the judgment of an agency, meets its procurement requirements." Section 12 (d) requires federal agencies and departments to use standards that are developed or adopted by voluntary consensus bodies except when that would be inconsistent with applicable law or otherwise impractical.

The law refers several times to the term, "voluntary consensus standard." Congresswoman Morella explains, "The private sector consensus standards bodies covered by the Act are engineering societies and trade associations as well as organizations whose primary purpose is development or promotion of standards…We meant to cover only those standards which are developed through an open process in which all parties and experts have ample opportunity to participate in develop (sic) the consensus embodied in that standard." While the intention may be clear here, Congresswoman Morella also alluded to the importance of flexibility when she said, "We would expect government procurement of off-the-shelf commercial products to be exempted by regulation from any review under the act. We also do not intend through this section to limit the right of the Government to write specifications for what the government needs to purchase."


The job of defining the rules by which government agencies will meet this new law rests with the OMB. One of OMB's principal roles is controlling government expenditures. When this responsibility is coupled with the understanding that a principal motivation of the standards legislation is to reduce costs of government by pushing standards work outside of government to the private sector, the stage is set for the implementing regulations to take a liberal view of the kind of standards that agencies should have to consider. A sentence in a recent DRAFT of the proposed new OMB A-119 establishes a new definition for the term "voluntary standard" to include, "what are commonly referred to as 'industry standards' (not always established through the full consensus process) as well as consensus standards…" Later the term, "voluntary standard" (not the term "voluntary consensus standard" as in the legislation) describes the kind of standards that Federal Agencies should rely upon, participate in and coordinate with. Whether this additional flexibility for agencies to rely upon consortia standards in the same manner that the legislation states that agencies must rely upon consensus standards will remain in the final policy is a matter for the OMB authors and Interagency Committee on Standards Policy to consider. A draft of the OMB Circular will be published for public comment in the Federal Register when this internal Government question has been settled. No doubt there will be additional debate during the public review.


Conclusion
International, regional and national policies on the relationship between standards produced through full consensus procedures and standards produced through consortia processes are being developed. These proposed new policies signal a fundamental change in the consensus standards development process. International organizations are studying how Publicly Available Specifications could obtain the same international status as traditional standards of ISO, IEC and ITU. In Europe, the European Commission recognizes the marketplace impact of PAS and is encouraging the European standards organizations to include the work of consortia. However, if such consortia standards are to achieve more formal status in Europe, the Commission has in mind procedural safeguards to protect European interests in what in many cases have been US-based activities. Domestically, administrative guidance is now in process to define the kind of voluntary standards (consensus or consortia) that government agencies would have to consider before proceeding to develop their own.

Businesses and organizations affected by international standards, regional standards in Europe, national consensus standards and publicly available specifications of consortia have important stakes in these policies. The policies will be shaped by those relatively few companies and organizations that track these matters and actively represent their interests in policy development. Now is the time to participate and contribute.

 

 

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