INTERNATIONAL STANDARDS: AT THE CROSSROADS

George T. Willingmyre, P.E.

December 1, 1997

Critical issues of retaining relevance in the rapidly changing global marketplace confront the formal International Standards system. George Allen, one of the most successful coaches for the Washington Redskins professional football team often responded, "The Future is Now," when queried about short and long term approaches to building a winning team. The International Standardization community must adopt this sense of urgency lest the current International system follow the fate of the Roman Empire and the dinosaurs. Architects of the international response to the current challenges must address weaknesses in the traditional system that lead to competitive threats. In so doing however, hallmark strengths of International Standards today must not be sacrificed. To compromise certain fundamentals would be to sell the soul, for the sake of expediency, of a system that has well served global trade and worldwide safety, health and the environment.

What is an International Standard?

The Agreement on Technical Barriers to Trade (TBT) defines Standard as "Document approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory." The TBT defines International Body or system as, "Body whose membership is open to the relevant bodies of at least all Members (of the World Trade Organization (WTO))." By construction, an International Standard is a Standard approved by an International Body. International Standards for purposes here, will therefore be those of the International Organization for Standardization (ISO), International Electrotechnical Commission (IEC), International Telecommunications Union (ITU), Codex Alimentarius (Codex) and a handful of other organizations. Such organizations share the common characteristic that their membership is open to "the relevant bodies" of WTO member countries. These bodies may be national standards organizations or central governments. The key is the concept of one member per country.

International Standards enjoy a favored status in the global marketplace. The TBT institutionalizes International Standards as effective tools in reducing non-Tariff barriers to trade. The TBT states, "Where technical regulations are required and relevant international standards exist or their completion is eminent, Members shall use them, or the relevant parts of them, as a basis for their technical regulations, except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfillment of the legitimate objectives pursued…" Similarly, the Agreement on Government Procurement states, "Technical specifications prescribed by procuring entities shall, where appropriate:… be based on international standards, where such exist…" These are not abstract, academic concepts. The United States government has registered and won a formal TBT dispute with the European Union (EU) on the grounds that the EU ban of imports of US beef departs from the applicable International Standards of the Codex.

But at the same time, important industrial segments around the world are increasingly frustrated with the international standards infrastructure. According to the Electrical, Electronic, Telecommunications, Information Technologies industrial Sector (EETIS) recommendations presented to US and European CEOs at the Rome Trans Atlantic Business Dialog Conference in Rome November 6-7, "…The International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), and the International Telecommunications Union (ITU) require fundamental operational reforms to strengthen their service to rapidly evolving high technology sectors such as electronics, telecommunications and information technology. The US and EU companies working through their national standards bodies should aggressively engage in work to accelerate within these organizations efforts to reform the process by which standards are developed, to re-engineer operations, to reduce excessive costs, and to increase efficiency. To date, in the eyes of industry there has not been enough progress in reengineering work to meet this broad goal. Nor is there evidence that ISO, IEC and ITU cooperate to implement each other's best developed practices."

What is the role and threat of international (lower case), global, consortia and proprietary standards?

Discussions this June during another meeting of European industry and US executives responsible for corporate global standards strategy confirmed the pressing need for agreement on common standards around the world. The Industry Committee on Standards and Conformity Assessment (ICSCA) resolution 10 states, "ICSCA II supports as a fundamental principle that global trade and commerce are best supported by harmonized global standards, and, further, embraces the principle of one standard-one test, supplier's declaration of conformity worldwide, and encourages the concept to be used by regulatory agencies." Many more standards than those presently defined as International Standards, however, can offer promise of meeting this industrial need. The world market often embraces good standards from organizations that do not meet the WTO criteria for International Body.

In some cases such standards arise from consensus standards developing organizations accepting direct participation, comments and votes from individual experts around the world. According to the October 1996 Report to Congress of the US Trade Promotion Coordinating Committee National Export Strategy, "In some sectors, US-developed standards are accepted virtually world wide. Examples include the American Society of Mechanical Engineers boiler and pressure vessel code, used in 54 countries, and American Petroleum Institute standards for petroleum products and pipelines." ASTM (formerly the American Society of Testing and Materials) and the Institute of Electrical and Electronic Engineers (IEEE) are also sources of world class standards based on such international participation.

Industry fora and consortia have increasing market impacts particularly in the information technology industrial sector. Companies are joining together in coalitions to develop standards in their common interest. Often registered under the anti- trust shelter provided by the National Cooperative Research and Production Act (NCRPA) of 1993 (which protects registered organizations from the risk of normal anti-trust treble damages and liability for a plaintiff's attorneys' fees), such groups usually adopt reasonable procedures to achieve consensus within their membership. Such NCRPA registration by the Open Software Foundation (OSF) did not, however, dissuade the Addamax Corporation from contending in a recent antitrust suite against the OSF and others, "Yet, Addamax was driven out of business, not because its product failed in the marketplace, but because the defendants and the coordinated exercise of their power prevented Addamax from competing for sales… For all this stipulated injury, Addamax asks this Court to award it damages in the amount of $51,175,000, plus treble damages and attorneys' fees." OSF and its member must have breathed a collective sigh of relief when Boston District Court Judge Trauro found >on May 21, 1997, "It is not enough for Addamax to allege that its injury was caused by defendant's antitrust violations. It must show that the violation was a "material cause" of its injury. As the court stated above, the computer industry is an inherently risky business. Technology advances quickly. Addamax started off too slowly, and when it finally caught up, it suffered from a malady faced by many companies in many fields. The customers did not want to buy its products. Beneath the layers of technical computer jargon is the undeniable fact that Addamax was an ineffective company >trying to sell security software's version of the ford Edsel. The fact that Addamax's woes coincided, in part, with the rise of OSF is mere coincidence and not the results of any alleged antitrust violations. The court, therefore, finds that defendant's conduct was not a material cause of any of Addamax's losses. For the reasons mentioned above, the court holds that Addamax is not entitled to any damages. An order will follow."

Consortia approaches to standards development generally do short cut the rigorous due process and openness elements characteristic of a full consensus type standards process, such as would be eligible for accreditation by the American National Standards Institute. Some proponents contend that the marketplace benefits of the rapid conclusion of a consortia process outweigh the potential anti trust risks and exposure to liability claims and suits as illustrated in the Addamax case above. The Telecommunication Technology Committee (TTC) of Japan summarized the standards activities of 63 such organizations in its June, 1996 Survey report on Telecommunication-related forum's activities. The TTC observed, "…the de-facto standard impact on company activities has increased. Thus, forum activities have proliferated, taking account of standardization at the specification design stage forming alliances in the market with the objective of establishing a position for defacto standards, and defusing and promoting de facto standards for rapid market activation. …How to cope with such forum activities will greatly influence standardization activities in the future."

Farthest in concept from the procedural trappings of an open consensus process, Proprietary standards can also become de facto worldwide market place standards. Good technology, good business strategy with respect to freely licensing required intellectual property, and the good luck of having the right product at the right time can combine to reward the business in the fortunate position with all of these. In such cases, a phenomena known as the network effect produces an increasing positive feed back. Every additional new user of the product or standard increases its value to the new and existing users. The market choice of VHS technology over BETA formats for video recordings illustrates this concept. The use of Microsoft Windows ™ operating systems on 80% of the worldwide personal computers is another.

Weaknesses in the process of developing International Standards lead to Competitive Threats

Competitive and political forces will define the future role and niche for International Standards in the global marketplace. International Standards risk losing their reserved spot in this future if steps are not soon taken to address five fundamental institutional shortcomings.

  1. The time to complete an International Standard is often out of sync with the marketplace needs and expectation. In the Information world of the future, "Web years" are measured in months. Development, publication, and adoption of International Standards must keep pace with these compressed product life cycles.

     

  2. The Byzantine institutional infrastructures of parallel often-competitive national organizations, and parallel clearly competitive international Central office overheads are no less than archaic. The system generates duplicative and parallel national needs for resource expenditures and generates costs that burden the system and places it at competitive disadvantage to standards processes based on direct international participation of materially and economically interested parties. Industry can ill afford and will not support these multiple investments of time and resources when there are more attractive alternatives.

     

  3. The system too frequently looses touch with real world practicalities and business exigencies. Resolution 11 from ICSCA this June, states, "ICSCA II observes that there are too many ISO standards that are out of date often rendering it technologically impossible for nations to adopt them, and that there is too much emphasis by ISO and IEC on the number of pages of standards produced. Almost never is mention made by the number of users of those standards, a situation diametrically opposed to the situation with consortia. Recently, industry resources around the world were devoted to preventing the initiation of new ISO work for Occupational Health and Safety Management System standards. Resources expended in keeping a standard from being written are resources not spent on developing standards that are needed.

     

  4. Such situations can be symptomatic of processes with inappropriate driving forces. The business of standards publication and sales too often can influence standards processes far out of proportion to the economic implications of the technology under standardization or the volunteer resources consumed in development.

     

  5. The one country one vote principle of most International Standards organizations sounds democratic and appealing but can also produce decisions not reflective of economic stakes. International standards are about politics and economics as much as about technology and procedures. When countries and regions use sheer numbers of block voting power to achieve a result out of sync with the real marketplace, the resulting standards will not be used and the process is ripe for political oversight and challenge.

Characteristic Strengths of International Standards and their Development Process distinguish them from other Standards

Intrinsic strengths in the current concept of International Standard and their process of generation sets them apart from international (lower case), global, consortia and proprietary standards. Any attempts to minimize or jettison these strengths would be to devalue and trivialize the meaning of International Standard.

  1. One reason International Standards enjoy their global acceptance is the presumption of worldwide agreement (consensus) on their content and acceptance. This presumption is based on confidence in the process of generating an international approval. As long as there will be mankind, there will be member states with national interests. The capital "I" in International standards symbolizes this agreement among diverse national interests. The International system must retain the concept of sovereign member states rights and responsibilities.

     

  2. The status of International Standard under the TBT as a means for governments to avoid erecting non-tariff barriers to trade distinguishes such standards from others. Future revisions of the TBT may redefine what constitutes an International Standard, or International Standard Organization, but for the time being such privilege does not apply to international (lowercase), consortia or proprietary standards. In addressing competitive threats and weaknesses, the worldwide caretakers of the International Standards system must not sacrifice the integrity and respect for the international process, which generates this special position.

     

  3. Access to, rights to use and implement, and claim conformity with International Standards must be without undue restriction. This concept applies to the purchase and publication of International Standards in that they should be publicly available anywhere for purchase at reasonable cost. A related concept is that copyrights should not be held in restrictive terms or hands. Anyone should be free to use and implement an International Standard. When intellectual property rights (IPR) are necessary to use or implement an International Standard, such IPR must be available from the patent holder on reasonable and non-discriminatory terms. While governments or purchasers may add their own requirements for demonstrating conformity with a standard, there is no limitation of the right for any one to claim conformity with an International Standard. Woe be to he or she who makes a false claim of conformity and is discovered by his/her competitor, the Federal Trade Commission or applicable regulatory agency. A closely related concept is that no single interest, third party or government should be anointed as the only means of attesting to conformity with an International Standard.

Proposed Solutions and on going Responses to the Dilemma Promise Hope yet raise Critical Concerns for the Future

Some conceptual aspects of the path to the future are clear and positive steps are underway. The great challenge is to bridge the gap between the historical International Standards processes and the alternative approaches, which have global marketplace and industrial support. Fortunately leaders within the International Standards community recognize the need to address the weaknesses and preserve the strengths of the International Standards system. Care and caution is necessary to reject proposals, however, which may be attractive as near term solutions but miss the mark when judged by long-term criteria. Some of current approaches, and their strengths and weaknesses are described below.

 

  1. The process of setting International Standards must employ the productivity and speed enhancing tools of today's information technology. The transition to electronic media of the work of the ISO/IEC JTC1 Committee on Information Technology (JTC1) is leading the way to this future. Currently over 90% of JTC1 documents are distributed electronically. The final stage of transition will involve notification of documents posted on file servers. Other International Standards committees should soon follow this lead. The National Standards System Network lead by the American National Standards Institute (ANSI) with support from the National Institute of Standards and Technology is another correct step to the future.

     

  2. The JTC1 experimental procedure to invite and accept contributions from outside of the traditional process is another positive step. The process known as the "Publicly Available Specification (PAS)" route provides for JTC1 to recognize an organization for the purposes of submitting a document for transposition as an ISO/IEC standard near the end of the normal JTC1 approval process. The PAS process is appealing in that it attempts to bridge the gap between the formal standards world and the world of international (lower case) global, consortia and fora standards. In two years' experience with the procedures, JTC1 has recognized four organizations as PAS submitters. Only recently has one of the JTC1- recognized PAS organizations first used the process to submit a document for transposition. So the process has yet to prove itself in practice. The JTC1 community is currently addressing a major controversy caused by the application of a single for Profit Company to be recognized under the PAS approach. Such approval would attempt to bridge the gap from International Standard all the way to the world of proprietary standards. Many fear that recognizing a single for-profit company as a PAS submitter goes too far in the interests of expediency at the expense and to the detriment of the long term intrinsic International Standard values of due process and protection of the various stakeholders' interests in Intellectual property. Negotiations are now occurring between the company and JTC1 to define the conditions under which the international standard might evolve. JTC1 national bodies around the world have stated categorically, that a single company can not, must not, will not control an international standard. Judging from public statements of senior executives at the firm, it is not at all evident that the company understands this. With the outcome of the negotiations between JTC1 and this company rests the future credibility of the international standards system, as we know it today.

     

  3. The International Electrotechnical Commission, IEC, will offer a new option to the traditional international consensus IEC standard to be initially called Industry Technical Agreements (ITAs). ITAs will be used by industry where business and trade in high-technology products and services may not need international consensus standards at market launch. The IEC has also revised its procedures to add a new category D liaison expressly to become more attractive for consortia/fora. While the new category will not include voting rights, the IEC foresees the possibility of publication of specifications from new non-traditional sources. The IEC anticipate the new category may be attractive to, "manufacturer associations, commercial associations, industrial consortia, user groups and professional societies." IEC requires such liaisons to, "be multinational with individual, company or country membership…" Thus IEC and JTC1 differ in their potential treatment of proprietary standards. This IEC process offers hope of bridging the gap with the non-traditional standards community but as in the case of the JTC1 PAS experiment, it is too soon for conclusions about its effectiveness.

     

  4. The ITU has reached an understanding with the Internet Engineering Task Force. The understanding provides for increased communication and liaison between the groups, which is a necessary first step in improving coordination and harmonization of activities.

     

  5. An ISO Council ad hoc study group on consortia has recommended that, "ISO continue its elaboration of new mechanisms to facilitate collaboration with consortia as well as procedures to introduce the results of the work of consortia into ISO." ANSI as the US member body to ISO has asked for input from its members on a position that any ISO Technical committee should be free to have separate "accreditation" processes with organizations that might submit their technical work directly for approval, rather than though the conventional working group or national body process. The chair of the ANSI effort to contrbute the US position, Steve Oksala of Unisys, recently concluded, "There was agreement (or at least no objection) by the contributors on some of the proposed principles -
    bulletThat industry should determine the suitability of any standard
    bulletThose ISO technical committees should be the ones that adopt the standards (rather than direct ISO adoption) and that no new organizational structures are needed.
    bulletThat any new mechanisms should apply to all types of organizations, not just so-called "consortia" (but see below).
    bulletThat the same Intellectual Property Rights rules should apply, no matter what the source of the document.
    bulletThat it would be acceptable for an ANSI-accredited standards developer to both submit standards to ANSI and submit (possibly other) standards directly to ISO under such a program.
    bulletIn contrast with the draft proposal, commenters did not support either the requirement for payment/membership by a submitting consortia in ISO or the national standards body of residence.

There was, however, disagreement on a number of significant points;
bulletWhether it was acceptable for a document to be submitted directly from a non-consensus process; more generally, whether as a matter of principle a document could be considered independent of its source.
bulletAs a special case, whether a single for-profit company could ever be acceptable as a submitter.
bulletWhether the JTC 1 PAS process was a good model.
bulletWhether documents of lesser consensus were a desirable outcome of the process."

Oksala's conclusion stated, "That no significant statement of principle could be reasonably endorsed by ANSI at this time. Further, it seems obvious that such a statement is not likely to be possible in the foreseeable future. The trend at the international level is toward more flexibility, concentrated at the Technical Committee level; the ISO ad hoc on consortia's primary recommendation was to grant all ISO TCs the same flexible mechanisms that are enjoyed by a few (such as JTC 1) today. It therefore seems sensible to let the industry sectors involved, through the U.S. TAG process, establish the principles and practices which they wish to support in their work."

The future of the international standards system to support the global marketplace is at a crossroads. Without question, industry demands fundamental reforms to the traditional infrastructure to respond to today's business needs. But there is a careful balance to be maintained between solutions taken to address essential weaknesses, and shortcuts that could be taken that could fatally weaken the system.

 

These are indeed interesting times for Standards policy and Global Trade. The challenges to the System have never been as great as now. But adapting and changing to new circumstances is both necessary and good. Look how far we have come.

One of the first attempts to set up a standard in the Western World took place in the year 1120 at the time of the first Crusades. The sponsor was King Henry I of England. Henry ordered that the ell, the ancient yard, should be the exact length of his arm, and commanded that distance henceforth to be the standard unit of comparison of lengths throughout his kingdom. The ell, 45 inches in length, was used until only very recently for measuring cloth. Henry's counterpart across the channel must have been of smaller stature. The Flemish ell was 27 inches or  3/4 of a yard.

 

 

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