Enlightening Some of the Closed Thinking about Openness

When and how does ICT interoperability drive innovation? This is the subject of a new paper on interoperability by the Harvard Berkman Center for Internet & Society (the webcast of yesterday’s launch event at the Reagan Building is now available).

Co-authors Urs Gasser and John Palfrey have published a thoughtful and well-balanced study. There’s a lot to agree with, especially their essential conclusion: that interoperability is important for innovation in the IT sector and the market, not government, is the preferred mechanism for achieving interoperability.

But I also think this paper achieves something more, even if unintentionally. It helps debunk the rhetoric we’re hearing about "openness" (and there are many definitions) as the best and only way to achieve interoperability.

First of all, according to the paper, "interoperability is not an unqualified good and is not an end in itself." Furthermore, just because interoperability is not present doesn’t mean there’s a "market failure" — the authors cite DRM-protected music distribution and the growing shift toward unprotected music as a response to interoperability concerns voiced by consumers.

Importantly, the paper identifies that interoperability can be achieved by multiple means: IP licensing, APIs, standards (including "open" standards), and industry consortia.

As it affects innovation, interoperability can help some types of innovation, especially incremental innovations. But higher levels of interoperability may diminish incentives for radical innovations if the network effects of interoperable systems increase switching costs for consumers.

The paper also identifies the benefits and costs of interoperability. Potential benefits include autonomy, flexibility, diversity, access, and innovation. Potential drawbacks include security, privacy, reliability, accountability, and where a single platform dominates — homogeneity. These are big issue areas, so you’ll have to read the report for how it explains interop’s impact on each.

So why is this discussion important? Interoperability is the hot public policy buzzword in a number of contexts:

• Interoperability for computer networks—This is the subject of the Microsoft antitrust cases, and requires the disclosure of protocols that allow network work group servers talk to each other, and regulates the price Microsoft can charge when licensing its intellectual property.
• Interoperability for digital music formats—Apple has come under fire for restrictions it places on music downloaded from its iTunes website.
• Interoperability for spectrum use—Google successfully lobbied the FCC to force interoperability mandates onto licensees of the upcoming 700MHZ spectrum auction.
• Interoperability for Health Care IT systems.
• Interoperability of electronic document file formats (ODF, OOXML, etc.).

The public policy question is what government should do, if anything, to promote, regulate, or mandate interoperability? Notably, Gasser and Palfrey say that the government should intervene only as a back-stop through enforcing antitrust and consumer protection laws, and through procurement policies when needed.

I hope this paper helps shed light on some of the closed thinking about openness – that open is the only way to go. Open standards, open platforms, open whatever — it’s a means to promote interoperability. But too often openness is the rhetorical end-game of some very large companies (Google, IBM,..) wanting to use the power of government to skew the market in favor of their business model and against their competitors. Taken to the extreme, open will end up being the new closed.

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