It is very exciting to see the “Open Video” movement taking off and finding voice with the upcoming Open Video Conference.

This well-earned “open breakthrough” has been a long time coming.  After all, open standards, and particularly royalty-free standards, are the very foundation of the Open Internet as we know it, and Internet leaders are vocal that open and royalty free standards are essential to its future.

But where are the open standards for open video?  Why don’t we already have them?

Hint:  business guru W. Edwards Deming once said: “If you control an industry’s standards, you control that industry lock, stock, and ledger”.

This bitter pill of insight points to the first thing you should know about open video and open standards:

1) Open Video is Collateral Damage
of the Digital TV Standards Wars

It’s not hard to figure out that if you could quietly bake your patents into a standard and then name your price after the standard becomes widely deployed, you could make a lot of money and wield a lot of control.

Great work if you can get it, and that’s pretty much the story of a set of international video and digital TV standards that got going in the 1990s, with MPEG the poster child of modern patent-pooled standards.

Of course this is a tale of big bucks.  Think $26 to $40 per TV, billions of dollars in royalties on billions of devices, vendor shoot-outs, litigation, dueling industry groups, back-room deals, claims of abuse, and consumer groups pushing for public disclosure of confidential patent licensing practices hidden behind claims they are “reasonable and nondiscriminatory”  — “RAND” in standards-speak.

So it is hardly surprising that RAND licensing practices and such developed through the DTV experience have done little to nothing to contribute royalty-free video technologies or standards now needed for broadband deployments, which today are essentially captured by proprietary solutions.

2) Standards Aren’t Just a “Techy Topic”
— They’re a Policy Problem

In fact, scratch almost any network policy issue and you’re likely to find a standards issue lurking inside.  Indeed, America’s broadband plan needs a standards policy.

Turns out country after country has a national “standards strategy”.

UK, France, Germany, Canada, and Korea to name a few.  Some closely tie international standards advantage to IPR & patents, as in Japan (“Intellectual Property Strategy Headquarters decided the International Standardization Comprehensive Strategy, with the aim of enhancing the international competitiveness of Japanese industries and contributing to setting global rules”) and China (“[the] Trade Barrier Treaty [TBT] can be used under the mask of standardization, patents and intellectual-property rights to obtain most world trade advantages.”).

And those that don’t, like Taiwan, have vendors crying foul.

Even in the U.S., a prescient 1992 Congressional report warned:

“The United States has been fortunate to have a pluralistic, industry-led standards setting process that has served us well in the past. Whether it will continue to do so in the future in the face of bruising international economic competition is uncertain.”

So if you think standards are for geeks and not wonks, think again.  As a Toyo University professor recently put the blunt zen to it:

“Standardization activities are political negotiations and not a forum for assessing which technologies excel over others.”

3) Open Source Doesn’t Solve
the Open Standards Problem

I don’t actually know anyone who is really confused or bent out shape about the difference between “open source” and “open standard” or believes that one is a good substitute for the other.  They are of course different things (one’s a license, one’s a specification, and so on).

But if you are inclined to dig in to this, check here or search the Web for “open source v. open standards’ and you’ll find numerous nice explanations.

4) Don’t Confuse Patent Reform with
Patent Licensing (They’re Different)

Another potential source of confusion is the distinction between patent reform — various proposals to make it more difficult to get a patent, to assure that patents are of appropriate quality, to tighten definitions of obviousness and so forth — and patent licensing — the rules and practices of patent pool licensing, disclosure, and IPR (Intellectual Property Rights) policies of standards groups.

Patents have been around for centuries, and so have patent pools, but the regulatory and policy linkages between the two are less than it might seem.  In fact, for a long time patent pools were rare and highly frowned upon by regulators (they weren’t even mentioned in the 1992 Congressional report on standards).  Then in the late 1990s many would trace the beginning of  the “modern” patent pool era to the U.S. Department of Justice’s authorization of the MPEG patent pool.

Pools and patents serve very different policy needs, raise different policy concerns, and by and large are even regulated by different entities.

So unless you are counting on a major scaling back of the patent system that somehow just makes patent issues go away (and few people are), it makes more sense to find a way, as many have, to achieve business model results.

5) “RAND” Isn’t

So what does the term “reasonable and nondiscriminatory” actually mean?

In theory it’s the commitment to fair licensing required of patent holders in standards groups that — unlike the W3C which defines HTML — are open to patents.

But in reality, since price isn’t set until after the standard comes out (sometimes years later), RAND ends up meaning whatever the patent holders want it to mean.

Studies of RAND licensing typically conclude:

“few SSOs [standard-setting organizations] define the term ‘reasonable and nondiscriminatory’ or have mechanisms to resolve disputes about its interpretation”

So Richard Stallman said it well:

“half of “RAND” is deceptive and the other half is prejudiced”

Still, sincere efforts have been made to give the term “reasonable and nondiscriminatory” a meaning  in standards IPR policies. For example the American Bar Association’s Standards Development Patent Policy Manual is a good source.  But good luck if you hope to wade through lawyerly weighing of “multiple factors” to get any particular practice declared unreasonable or discriminatory.

6) Don’t Fall For FUD — There Is a Solution

Finally, it seems there is a never-ending version of Fear, Uncertainty and Doubt that goes something like “you can never really be sure that someone might have a patent so there is no way to ever be sure a standard is truly royalty free”.

To be blunt — this is nonsense, and don’t believe it.  Not only are there thousands of royalty-free standards in the world, and although the number of patent disclosures started to accelerate in the 1990s, the vast majority of standards have no particular IPR or patent issues to speak of.

And even in areas of particular patent thickets and patent controversies, standards organizations with a determined and specific royalty-free policy and process (Khronos and Web3D are a couple of examples) have successfully established their royalty-free credentials.  Sure it takes diligence, a “Freedom-to-Operate” analytical approach, proactive patent reading, time and determination.  Dirac is already making good progress down this path.

So get going Open Video-ers — let’s get some truly open, truly royalty-free standards initiatives going!


“The Internet is fundamentally based on the existence of open, non-proprietary standards” Vint Cerf, “the father of the Internet” cited in The Importance of Open Standards in Interoperability, OFE Onepage Brief No.1 (31.10.08.) Available at

“It was the standardisation around HTML that allowed the web to take off. It was not only the fact that it is standard but the fact that it is open and royalty-free. If HTML had not been free, if it had been proprietary technology, then there would have been the business of actually selling HTML and the competing JTML, LTML, MTML products.”

Tim Berners-Lee, quoted in Standards and the Future of the Internet, Declaration 25th February 2008, at

I have filed comments (available here) to the National Broadband Policy Notice of Information (09-51).  Excerpt from the executive summary:

Open standards, and particularly royalty-free standards, are the very foundation of the Open Internet as we know it, and Internet leaders are vocal that open and royalty free standards are essential to its future.

So broadband, and the Open Internet on which broadband is based, is not just about technical and business innovation, it is also about standards innovation.

But the term “royalty-free” is found nowhere in the 59-page Broadband Notice of Information, and “[e]quipment and protocol standards” merits only a single sentence buried in “Other Mechanisms” after “tower siting, pole attachments, backhaul costs, cable franchising and rights of way issues.”  Standards need a bigger voice in America’s broadband dialog.

Broadband means new services, not just faster speeds for existing services.  A prime example is video, a critical element of broadband deployments worldwide, be it in the form of IPTV, “over-the-top” video, online video, or video incorporated into new services like telemedicine and health care records.

It is both ironic and telling that “reasonable and necessary” (“RAND”) licensing practices that have developed through the US DTV experience have done little to nothing to contribute royalty-free video technologies or standards now needed for broadband deployments, which today are essentially captured by proprietary solutions. Convergence means worlds and business models collide, but is this really an acceptable, necessary, or desireable outcome, or foundation for future innovation?

Standards strategy has been integral to broadband policies around the world, and needs to be integral to America’s broadband policy. Standards can be America’s broadband advantage.


A.   “Royalty Free” is Not Mentioned Once in 59-Page Notice
B.   Royalty Free Standards Are a Defining Characteristic of the Open Internet
C.   New Video And Other Broadband Services Need Royalty Free Standards
A.   DTV Licensing Practices Exemplify Standards Issues in Broadband Policy
B.   Current “RAND” Practices Should Not Carry Forward as Broadband Policy
A.   Our Network Age Needs Greater Policy Engagement in Standards
B.   Royalty Free Standards Enable Open Industry Structure
C.   Broadband Policy Should Promote Transparency, A Level Global Playing Field,
Open Value Chains, Ex Ante Disclosure, Proactive IP Analysis and a
Preference for Royalty-Free

Filings last week in the CUT FATT proceeding at the US FCC on patent overcharging in the US digital TV transition claim that royalty demands for US ATSC-standard television receivers range from $24.10 to $40.10, depending on the size of the TV receiver.

dtv royalties The numbers in the table to the right appeared in the Reply Comments of the Coalition to Terminate Financial Abuses of the Television Transition dated May 27, 2009 in a declaration by Douglas Woo, president of Westinghouse Digital Electronics, one of the two members, along with Vizio, of the CUT FATT coalition.

Interestingly, Woo, a Harvard law graduate, was a partner at Pillsbury, Madison & Sutro focusing on intellectual property matters, before joining Westinghouse.

The table mentions a license fee to Thomson, it might be speculated though it is not directly indicated in the filings that this is Thomson’s “NAFTA Digital Television” patent license that Thomson mentioned in its own filings in the CUT FATT proceedings as containing essential ATSC patents.  Thomson is a member of the MPEG-2 patent pool required in the ATSC standard, but is not a member of the ATSC patent pool.

The filings have brought claims of on-the-edge patent licensing strategies like “multi-dipping” (participating in multiple methods to gain licensing revenue or advantage on the same standards group) and “accretive disaggregation” (increasing the cost of a patent portfolio by selling some patents to other entities).

Consumer groups and others have requested the FCC look further into US DTV licensing practices.  More background on the CUT FATT proceeding is available here.


“Thomson licenses its entire patent portfolio on a product-type basis, including its “NAFTA Digital Television” patent license for the sale of DTVs in North America. This license includes, among many others, patents that are essential to practice the ATSC terrestrial broadcast standards. Virtually all leading brand manufacturers, and the majority of the rest of the DTV industry (including VIZIO), are licensed under this program. By offering very reasonable royalty terms, Thomson has achieved this success in its DTV licensing program without filing a single enforcement action in the courts or the International Trade Commission (“ITC”).

Thomson Comments Petition for Rulemaking and Request for Declaratory Ruling Filed By the Coalition United To Terminate Financial Abuses of the Television Transition, LLC, MB Docket No. 09-23, dated April 27, 2009.

“[A]ccretive disaggregation”— increasing the cost of a patent portfolio by selling some patents to other entities — is plainly inconsistent with RAND pricing.”

CUT FATT Coalition filing at 12-13, May 27, 2009.