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5
Competing Definitions of "Openness" on the GII
Jonathan Band1
Morrison and Foerster, Washington, D.C.
The dozens of private-sector and governmental position papers
concerning the emerging global information infrastructure (GII) all
agree that it must be an "open" system. As the Clinton
Administration recognized in its 1993 Agenda for Action, the
information infrastructure
will be of maximum value to users if it is
sufficiently "open" andinteractive so that users can developnew
services and applications or exchange information among
themselves,without waiting for servicesto be offered by the firms
that operate the NII [national information infrastructure].2
The position papers similarly agree that the desired openness
could be achieved only through standardized points of
interconnection (in technical parlance, interface specifications).
In the words of the Agenda for Action:
To assure interoperability and openness of the
many components of anefficient, high-capacity NII,standards for
voice, video, data, and multi-media services must be
developed.Those standards alsomust be compatible with the large
installed base of communicationstechnologies, and flexible
andadaptable enough to meet user needs at affordable costs.3
Further, the position papers all agree that governments should
not impose the standards; rather, the private sector should develop
them. All concur that standards organizations will have a primary
role in establishing the GII standards (de jure standards), but
some acknowledge that many of the standards inevitably will be set
by the market (de facto standards).
At this juncture, the position papers begin to diverge. The
divergence arises over the issue of proprietary control of the
standards: how much control, if any, should the inventor of the
standard be able to exercise over the practice of the standard by
others? The amount of control that can be exercised over a standard
is inversely related to how "open" that standard really is. During
the course of 1994, different firms and trade associations
articulated disparate views on the issue of proprietary control of
standards, reflecting their narrow commercial interests. During
1995, governments and international bodies began to assert
positions as well. Although all proclaim fealty to the goal of
openness, a given entity's definition of openness turns on the
extent of proprietary control it would allow over GII standards.
This paper examines the different definitions of openness that have
emerged over the past 2 years.
U.S. Private Sector Definitions of
Openness
During 1994, many U.S. companies and trade associations began to
express their opinions on "openness" on the information
infrastructure. These opinions can be classified into four
definitions ranging from the restrictive Microsoft definition to
the expansive Sun Microsystems definition.
Microsoft
The Microsoft position starts from the assumption that hardware
interfaces specifications are patentable and that software
interface specifications can receive both copyright and patent
protection. Microsoft further
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believes that there is no need to create special rules for the
GII; rather, the current laws applying to the software industry
(which have served Microsoft extremely well) are adequate for the
GII environment.
Microsoft will achieve "openness" by voluntarily licensing its
application program interface to all third party application
developers. Thus, anyone who wishes to develop a product that
attaches to a Microsoft operating system will be able to do so.
Microsoft, however, has not agree to license its interface
specifications to firms seeking to develop operating systems that
compete directly with Microsoft operating systems.4
Microsoft's narrow definition of openness—permitting
attachment—flows from its business plan. Microsoft hopes to
dominate the market for the operating system of the "set-top
box"—the entry point of the information infrastructure into
individual homes or businesses. By controlling the standard for the
set-top box operating system, Microsoft will be able to exercise
control over access to the entire infrastructure. Microsoft wants
to encourage third party vendors to develop applications that will
run on its operating system; the more applications, the more
desirable the operating system becomes and the more likely that the
market will adopt it as a de facto standard. At the same time,
Microsoft wants to prevent the development of a competing set-top
box operating system that is compatible with all the
Microsoft-compatible applications.
Computer Systems Policy Project
The Computer Systems Policy Project (CSPP), whose members
include computer systems vendors such as Apple and IBM, shares many
of the same intellectual property assumptions as Microsoft. Thus,
it believes that hardware interfaces specifications are patentable
and software interfaces specifications are both patentable and
copyrightable. The CSPP differs from Microsoft in that it believes
that special rules should apply in the information infrastructure
environment. Specifically, the CSPP believes that the owner of an
interface that is adopted as an infrastructure standard should be
required to license it on reasonable and nondiscriminatory terms,
not only to developers of attaching products but also to developers
of competing products. That is, the interface specifications should
be readily available to all vendors so that they could "build
products that are compatible with both sides of the interface."5 Further, the proprietor of an
interface standard should be able to revise it only with timely
notice or public process.
The CSPP position represents an underlying fear of Microsoft's
market power. By requiring the licensing of the interface standards
to the developers of competing as well as attaching products, CSPP
hopes to prevent a Microsoft set-top box operating system monopoly
even if the Microsoft interfaces emerge as the industry standard.
Moreover, by permitting revision of standard interfaces only with
timely notice, CSPP hopes to prevent the lead time advantages
Microsoft's applications developers would otherwise have over third
party developers. (These advantages are one of the subjects of the
ongoing litigation over the Microsoft consent decree.)
The CSPP approach may work well enough for de jure standards set
by a standards body. The standards body may, through negotiations,
extract significant concessions from the proprietor. But what if
the market, as opposed to a standards body, adopts Microsoft's
set-top box operating system as a de facto standard? Pursuant to
what authority will Microsoft be forced to license its interface
specifications to competitors, or provide timely notice of upcoming
revisions? Moreover, who will determine the "reasonableness" of the
license fees demanded by Microsoft? Indeed, CSPP itself recognizes
the shortcomings of its approach. It has conceded that in GII
markets that are not competitive, the government may need to
intervene "to ensure that critical interfaces are open."6 Nonetheless, the CSPP continues to
insist that the government "refrain from implementing compulsory
licensing related to standards."7
The American Committee for
Interoperable Systems
The American Committee for Interoperable Systems (ACIS), whose
members include Storage Technology, AT&T Global Information
Solutions, Amdahl, and Broderbund Software, starts from a somewhat
different intellectual property assumption than Microsoft and CSPP.
While it agrees that hardware and software interface specifications
are patentable, it doubts that many such specifications will meet
the rigorous statutory
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requirements for patentability. Moreover, unlike Microsoft and
CSPP, ACIS believes that copyright cannot protect software
interface specifications. It reaches this conclusion in reliance on
the recent appellate court decisions in Computer Associates v.
Altai8 and Lotus v.
Borland.9 Further, ACIS believes
that any incidental copying that occurs during software reverse
engineering is lawful pursuant to Sega v. Accolade.10
ACIS, accordingly, believes that existing intellectual property
law, as understood by ACIS, permits sufficient openness in the GII.
Because few interface specifications would receive patent
protection, and no software interface specifications would receive
copyright protection, the firms that develop both de facto and de
jure GII standards would rarely be able to exercise proprietary
control over them. Additionally, the ability to reverse engineer
the interfaces reduces the necessity of mandatory disclosure.
Sun Microsystems
Sun, like ACIS, believes that copyright does not extend to
software interface specifications. Nonetheless, Sun does not
conclude that the current intellectual property laws provide
sufficient openness on the GII. It fears the ability of the de
facto standard inventor to obtain patents, to keep certain
interfaces hidden, and to change the specifications without notice.
Because of the importance of the information infrastructure to the
world economy, Sun believes that the government should overcome
these obstacles to openness by designating critical infrastructure
interface specifications as "barrier-free." Other developers would
have complete access to these specifications for nominal
consideration.
Incentives and Openness
Microsoft and CSPP argue that the ACIS and Sun
positions—which at a minimum deny copyright protection for
software interface specifications—would eliminate an important
incentive for innovation. According to Microsoft,
Without the incentive offered by the ability to
license intellectualproperty, the informationinfrastructure would
not get built. R&D of the type needed to develop
complexproducts like interactivetelevision requires the investment
of hundred of millions of dollars.Companies must be able to
recoupthose investments by licensing the rights to use the fruits
of thoseinvestments. In addition, publicdomain standards give
international competitors free ride on technology andintellectual
propertydeveloped here in the U.S.
Similarly, CSPP states that "[d]evelopers of specifications for
interfaces must be able to retain ownership of and benefit from the
intellectual property that goes into the specifications, in order
to maintain incentives to develop new technologies."12
Sun and ACIS reply to this criticism by drawing a distinction
between interface specifications and interface implementations:
"Interface specifications are pieces of paper; implementations are
actual products or services."13
Removing protection from an interface specification does not lead
to removal of protection from a particular implementation of that
specification. Indeed, proprietary implementations of
nonproprietary specifications provide the bases for rigorous
competition between providers: "This combination of nonproprietary
interface specifications and proprietary implementations meets the
imperative of balancing the requirement of providing incentives to
developers of new technology with the societal need for
interoperability along the information infrastructure."14
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Governmental and International
Definitions of Openness
Governments and international organizations began to adopt
positions on GII openness in the weeks leading up to the G-7
Ministerial Conference on the Information Society at the end of
February 1995. These positions are somewhat vaguer than those
articulated by the U.S. private sector.
Eurobit-itic-jeida
In January 1995, information technology trade associations from
Europe (EUROBIT), the United States (Information Technology
Industry Council; ITIC) and Japan (JEIDA) met to create a joint
position paper they hoped would influence the G-7 meeting the
following month. The first section of the joint paper dealt with
interoperability and openness:15
The key to interoperability is the development
and implementation of openinterfaces. An interface isopen if its
specifications are readily and non-discriminatorily available toall
vendors, service providers,and users, and if such specifications
are revised only with timely notice andpublic process.
The joint paper stresses that those open interfaces should be
the product of "private-sector-led voluntary consensus standards
development processes."16 It also
draws a distinction between interface specifications and
implementations: "Interface specifications provide the information
and technical parameters for how systems, products and services
communicate with each other, but should be limited to that
information necessary to achieve interoperability, allowing
suppliers to develop different implementations with distinguishing
characteristics."17 Nonetheless, the
joint paper recognizes a role for proprietary technologies in GII
standards: "When a proprietary technology is incorporated into a
standard, the developer must voluntarily agree to license the
technology on reasonable terms and conditions, demonstratably free
of discrimination."18
The joint paper's views in general run parallel to those of
CSPP: Intellectual property rights can reside in technology
included in a GII standard, but the proprietor must license the
technology on reasonable and nondiscriminatory terms and revise the
specifications only with timely notice. The joint paper
unfortunately also shares the infirmity of the CSPP paper of not
explaining how the proprietor of a de facto standard will be
required to make its interface specifications available to
competitors. The joint paper, however, does not explicitly state
that copyright protects software interface specifications. Thus,
the references to proprietary technology could be interpreted as
referring to patented hardware and software interface
specifications. Indeed, the joint paper was probably intentionally
left ambiguous on this point. While many ITIC and CSPP members
historically have supported copyright protection for software
interface specifications, many JEIDA members have opposed it. By
discussing "proprietary technology" in the abstract, the joint
paper could satisfy both constituencies.
United States
In February 1995, the Clinton Administration's Information
Infrastructure Task Force issued its Agenda for Cooperation
amplifying on themes Vice President Gore had articulated in a
speech in March 1994, to the International Telecommunications Union
in Buenos Aires. One of the five core principles for the GII
recognized by Vice President Gore and the Agenda for
Cooperation is providing open access. The Agenda for
Cooperation further recognizes that open access can be achieved
only through interoperability and standardization:19
An essential technical element of the open
access concept isinteroperability, i.e., the ability to
connectapplications, services, and/or network components so that
they can be usedtogether to accomplish tasks.As the GII will be
based on many different existing and emerging components atlocal,
national, andglobal levels, it is imperative that these components
be interoperable. Thekey to interoperability isglobal
standards.
Page 35
In listing recommended government action to achieve the goal of
open access through global standards, the Agenda for
Cooperation states that the U.S. should join with other
countries to ''[e]ncourage an open, voluntary standards-setting
process that does not denigrate intellectual property
rights.…"20 Like the
EUROBIT-ITI-JEIDA formulation, the U.S. government appears to
recognize intellectual property rights in standards adopted by
standards bodies without taking a specific position on the
copyrightability of software interface specifications. The
discussion in the Agenda for Cooperation is so general,
however, that it does not contain the protections included in both
the joint paper and the CSPP paper: licensing on reasonable and
nondiscriminatory terms, and revision with timely notice and public
process.
Interestingly, a separate section of the Agenda for
Cooperation appears to address this issue, as well as the
problem of proprietary rights in de facto standards. When
describing the need to create a flexible regulatory framework that
fosters competition, the Agenda for Cooperation states that
such a regulatory framework should clearly indicate:21
•
The means by which new entrants can gain market
access, e.g., … licensing requirements …;
•
The nondiscriminatory terms and conditions of
interconnection to an incumbent operator's network and of supplying
information services over the network.…
Here, the U.S. government appears to go beyond the joint paper's
and CSPP's call for voluntary licensing; the quoted passage
reflects an intent to mandate licensing by law. In other words, the
Agenda for Cooperation takes the problem of proprietary
rights in de facto standards seriously.
European Union
The European Commission in September 1994, issued an "initial
theme paper" for the G-7 meeting. The theme paper recognizes the
importance of interoperability in permitting competition in the
development of the infrastructure, which in turn will ensure that
users receive the widest range of services at the lowest possible
cost. To this end, "G-7 governments are invited to express their
support for a consensual standardization process which is open,
voluntary, and private sector-led."22 The Commission notes that such a
process "would help avoid two pitfalls. On the one hand, the
unilateral imposition of mandatory standards by public authorities
and, on the other, the emergence of de facto standards from
monopolistic market positions."23
Although it is properly concerned about de facto standards and
resultant monopolization, the Commission is unrealistic in its
belief that standards bodies alone will solve the problem.
Standards bodies tend to work slowly, and thus probably will not
keep pace with the highly complex, rapidly evolving GII.
Accordingly, de facto standards will emerge notwithstanding the
best intentions of government and industry.
G-7 Nations
At the conclusion of the G-7 Ministerial Conference, the G-7
parties issued a statement strongly supporting openness. The
current regulatory framework must evolve to "put the user first."24 The framework "must be designed to
allow choice, high quality services and affordable prices."25 This consumer welfare will flow from
"dynamic competition,"26 which in
turn will result from "interconnectivity and interoperability."27
The G-7 parties specifically commit themselves to "[p]ursue the
interconnectivity of networks and interoperability of services."28 This goal will "be achieved through
the promotion of a consensual standardization process which is
market-led and which encourages open interfaces."29 The G-7 partners recognize the need
to accelerate the standardization process so that it can develop
"timely and market-responsive standards."30
The statement does not explicitly discuss de facto standards.
Nonetheless, it reflects a concern with the possible monopolization
of the GII. Accordingly, the statement indicates that competition
rules need to be interpreted and applied so as to encourage new
entrants and promote global competition. Further, competition
authorities must "shield[] against … risks of abuse of
market dominance."31
