Standards-setting comes about through a wide range of processes, and creates a spectrum of options that vary from open to closed and proprietary to non-proprietary. "Public policy should not foreclose any of these options."

That's how PFF President Ray Gifford opened our conference titled "Interoperability in the Digital World: Open Standards, Open Source, Property Rights and Markets." Co-sponsored with Istituto Bruno Leoni, the conference at the Grand Hotel Duomo in the heart of Milan was full of excellent speakers and insightful audience interaction, even if we had to compete with a pre-Lent Carnival in the Duomo plaza outside (it was two days after Ash Wednesday, but our host, the Istituto's Alberto Mingardi, informed me that Milan marches to the beat of a different Catholic drummer, and doesn't start Lent on Ash Wednesday, but rather the following Sunday).

Ray outlined the axis of standards-setting approaches, with a single firm forming de facto standards on one end (Adobe's Acrobat) to government-mandated de jure standards on the other (many nations' DTV standards). In between there are joint ventures, patent pools, privatized standards bodies (the alphabet soup including the ITU, IEEE, EITF, W3C, ANSI and OASIS, to name a few) and government-blessed standards. These can result in a range of standards, including some that are open and proprietary (such as many offered on RAND (reasonable and non-discriminatory) terms, or open and non-proprietary standards such as royalty-free offerings. A closed, proprietary standard that is successful would be Apple's iPod, and a standard could also be closed but non-proprietary.

Public policy makers should be very cautious when looking to mandate any standard, Ray warned. The former Colorado Public Utilities Commission chairman said there is a "propensity for public policy to be diverted to private ends," and urged government officials to let the market sort out standards, insisting that a desire for interoperability will drive such processes to the benefit of consumers.

It was a simple message, one that might seem not even necessary to deliver. In fact, if one listened to the rhetoric of government officials attending the conference, one might think based on the words that they were in agreement with Ray. But closer examination of those words, as I'll note in later blogs, revealed a tendency to insist on government neutrality as a policy, while betraying favoritism for certain standards approaches in practice. Over the course of the day, it became clear to me that it was extremely necessary for Ray's message to be delivered, and that it will have to continue to be delivered by PFF and others on an ongoing basis.