Markets Should Decide Winners and Losers
WASHINGTON D.C. - Policymakers should proceed with a great deal of caution when considering standards mandates, says Progress & Freedom Foundation President Ray Gifford. In a new paper, Gifford addresses procurement policies and other government actions where their actions may distort a marketplace filled with competing standards and levels of interoperability.
"Because there are undeniable trade-offs from any standard-setting decision," Gifford writes, "governments should: a) be wary of thinking they have sufficient foresight to make proper standard-setting decisions; and b) be deferential to private attempts at standard setting." Gifford says varying models of open and closed standards with differing levels of interoperability will emerge and compete, with the market determining winners.
This latest paper comes as various local and international governments are weighing the prospects of mandating certain standards in the procurement of software, such as purchasing only open-source software. This was one issue Gifford and several other PFF senior fellows addressed in Milan and Brussels during PFF's Digital Europe 2005 in February. Gifford's paper is based on a speech he gave on standards in Milan.
There are numerous standards, Gifford writes, from the open, non-proprietary TCP/IP standard that forms the basis for the entire packet structure of the Internet, to the relatively more closed and proprietary standards of Apple Computer and its companion the iPod. There are also numerous standards-setting bodies at work in the digital space. No one approach is the "right" choice, he argues, but instead each has strengths and weaknesses, and involves inevitable trade-offs.
Gifford also notes "a key taxonomic distinction" that lies between "open source" and "open standards." Open source, which he says should be considered open and proprietary, "is one way to achieve an openness of a sort. But open source should not obscure other attempts to achieve open standards through private ad hoc consortia or formal standard setting bodies." One cannot say "with any metaphysical certainty" that any one approach is superior. "And to be sure, we should leave other parties with the liberty and freedom to work within alternate models -- to achieve openness, interoperability and consumer benefits."
The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.