An Empirical Examination of Open Standards Development Rajiv Shah Department of Communication University of Illinois at Chicago rshah@a5.com Jay P. Kesan College of Law & Dept. of Electrical & Computer Engineering University of Illinois at Urbana-Champaign kesan@law.uiuc.edu ABSTRACT This project uses empirical data to provide insights into the impact of open standards. This work moves beyond the existing literature by considering a large number of open standards, instead of handpicked case studies. The results of this research will be timely, as governments are advocating and sometimes mandating the use of open standards. We found inequalities in the impact of open standards that suggest a power law relationship, found that the duration of the development process does not affect the impact of a standard, and found the length of a standard (number of words), which reflects the technical complexity of a standard, affects the impact of a standard. I. INTRODUCTION One of the most important issues for information infrastructures is standardization. Standards allow for interoperability and interconnection. They provide "the digital equivalent of a common gauge for railroad tracks" [13]. Much of the success of the information age can be attributed to the use of standards, whether it is for transporting information (TCP/IP, FTP) or representing information (HTML, XML, JPEG). When everyone uses the same standards, there are powerful network effects that increase the utility of a technology for everyone [5]. With the growth and power of standards, there has been a noticeable shift in how standards are produced and used. In the past, standards were created through two means. The first is de facto standards created by an industry. These proprietary standards are not publicly distributed and often require a licensing fee for others to use it. A simple example of a “de facto” standard is the Microsoft Word document format. The alternative method is known as “de jure” standards, which are developed by formal standard-setting organizations, such as the International Organization for Standardization (ISO). This simple dichotomy does not capture how standards are developed nowadays. Firms, individuals, and government have all recognized the value of standards and developed new organizational forms to collectively develop standards. These forms are often categorized as consortia. Within consortia, there are significant variations in the rules setup to produce standards [23]. However, the standards cannot be categorized simply as de facto or de jure. Instead, there are a variety of new approaches to creating and distributing standards. The most prominent is known as open standards. Although the definition of open standards is quite grey [10, 24], we define open standards based on three criteria [4]. First, the standard is publicly available to everyone at a minimal cost. Second, no entity controls the standard, or the standard is licensed on “reasonable and nondiscriminatory terms.” Third, the development process for creating the standard involves public participation. However, open standards should not be confused with "open source." Open source is a development model for software based on the public availability of the source code. Open source developers often work together and build upon each other’s work. While open source software typically relies upon and uses open standards, they are two different concepts. The advantage of open standards is they promote interoperability. Interoperability ensures that products from different vendors will work together. This occurs because open standards lower barriers to entry for developers. This prevents lock-in among users by allowing for competition among multiple venders with compatible technologies. Open standards are often considered a form of a quasi- public good, because of the benefits they confer not only on the immediate participants, but also for all of society [22]. Examples of open standards include the transmission protocols such as FTP, HTML, which serves as the language for Web pages, and the image format known as JPEG. Many observers feel that the strength and popularity of the Internet is partly the result of a reliance on open standards. Proceedings of the 41st Hawaii International Conference on System Sciences - 2008 1530-1605/08 $25.00 © 2008 IEEE 1