My colleague Adam Thierer has written extensively in this space about the danger of U.S. policymakers extending broadcast regulation to other visual media, such as cable, satellite and even the Internet. That could become a reality in Europe by the end of the year, as I pointed out this week in a Progress Snapshot titled "Regulation Without Frontiers: Europe Shows U.S. Policymakers How Not to Embrace Convergence."

Let's hear it for Robert Kahn and Vinton Cerf, co-developers of the TCP/IP protocol that directs traffic on the Internet. Ray Gifford has repeatedly cited the success of TCP/IP here at our standards events in Milan and Brussels; he notes the protocol, being open and non-proprietary, has allowed all sorts of innovators to build upon it without fear of someone seeking royalties. However, Ray also has noted that the protocol is decades old, and being non-proprietary, there is no incentive for any party to improve upon it (look at the struggles related to adoption of IPv6, for example). Lesson? There is no magic bullet on standards, either open or closed, proprietary or non-proprietary. Wherever you fall on the spectrum graph, there are positives and negatives.

I mention this because I just read here in the International Herald Tribune that Kahn and Cerf have been awarded the prestigious 2004 A.M. Turing Award for their TCP/IP protocol. They're the 39th recipient of the award, named for the famed British mathematician and cryptographer Alan Turing. Suprisingly, this award designed for computer science had never before gone to work in the area of computer networking. The market has gone in this direction for years now and isn't looking back; nice of the Association for Computing Machinery, the granters of the award, to catch up.

PFF was lucky enough to have Dr. Kahn give our first CEO luncheon of the year, a fascinating discussion on digital objects. A webcast of that event is free online at our site.

The best part of Digital Europe 2005 has been to meet fellow "classical liberals" here in Europe (in the U.S. we would call them conservatives or libertarians). Not only is the Centre for New Europe a welcome outpost in the bureaucratic environs of Brussels (Bruxelles, if you want to be continental), there is Istituto Bruno Leoni in Italy. I also met Pierre Bessard, who is working with the newly-formed Institut Constant to be a classical liberal voice in french speaking Switzerland. The Stockholm Network, meanwhile, links them all together in a (loose, to be sure) liberty-loving confederation. Through the Stockholm Network, I found the delightfully named Edmund Burke Foundation in the Netherlands, working no doubt to make sure that the glory of Europe is not extinguished forever.

The discussion today in Brussels with the Centre for New Europe centered again on standards in the digital age. They are important and hard, I think we can agree. My main point was simple, and hopefully not simplistic: there is no a priori basis on which one can prefer proprietary to non-proprietary standards, open standards to closed standards. Therefore, the role for public policy and regulators is modest and diffident. Define and incrementally improve the intellectual property laws -- both copyright and patent -- but do no radical surgery on these institutions. Likewise, there being no metaphysical certainty about the most beneficial type of standard, governments should be wary of preferring one model to another, absent manifest collective action problems or antitrust violations.

As I noted earlier, Milan is peculiar - to this Catholic at least - in that it begins Lent not on Ash Wednesday but on its own Ash Sunday. As a result, I got to see Milan's Carnival, its own version of Mardi Gras (and presumably a much older version).

It doesn't seem to involve the alcohol intake one finds in New Orleans - Italians love their wine, but they also understand moderation - but one nice feature was children dressing in costumes, from Hamtaro to Spiderman (I'm assuming in medieval times the costumes were slightly different). I've been missing my kids over here, but I smiled as I imagined how much fun they'd have running around Duomo Square, spraying silly string and taking balloons from smiling Italian women, all beautiful of course.

The square was directly outside our meeting room in the Hotel Grand Duomo, six flights down. For the most part this wasn't too much of a difficulty. However, late in the day MTV showed up, and exhorted the crowd in Italian to, well I don't know, but I gathered to get rowdy.

If so, the MTV folks succeeded. The Beatles apparently loved to stay at the Grand Duomo, and listening to the high-pitched screams of Italian teens in the square, I thought maybe the Fab Four had returne. I also learned that teenage girls, around the world, have a universal shriek.

Is competition in standards a good thing? Here at PFF, we're pretty much in favor of competition in any market, and our fellows made the same argument regarding standards.

Senior fellow Tom Lenard, addressing the EU debate regarding patents and open source, said it was important that Europe not preclude competition among standards. That's not a small point to make. As Wall Street Journal Europe editor Brian Carney noted, many in Europe are proud of the fact that the continent worked together to set one wireless standard - GSM - which many say was a major impetus in that industry growing more rapidly than that in the U.S. (To be fair, the EU's Simon Bensasson said another factor in that growth was Europe's adoption of caller-party-pays).

PFF's Digital Europe web page, describing the activities we will be undertaking in Europe next month, went up this week. The events we will be co-hosting in Milan and Brussels will focus on Interoperability in the Digital World - a subject that encompasses a lot of issues. One idea that will be examined during the course of these conferences is the notion that open source software (OSS) is more conducive to "openness" and interoperability than proprietary software.

In fact, there are very strong incentives for firms in network industries generally, including the proprietary software industry, to maintain interoperability, as the economics literature demonstrates quite clearly. The reason is simple. Maintaining interoperability with complementary systems increases the value of a firm's product to its customers. There are some exceptions to this rule, but even these exceptions do not necessarily violate economic efficiency.

Software developers can pursue interoperability in a variety of ways--on their own or through voluntary industry standard-setting groups that develop common technical standards that can be used across industries in different products. This type of activity has been around for a very long time and is now being adapted to the information technology world.

Ironically, open source runs into trouble in the standard-setting process, precisely because it requires companies to share their intellectual property. Proprietary software developers are willing to share because they can receive royalties, frequently under "reasonable and non discriminatory" (RAND) terms. However, the charging of royalties is inconsistent with most OSS licenses--e.g., the GPL. Therefore, it would be difficult, if not impossible, to incorporate OSS technology in a consensus standard that also utilized proprietary technology that was subject to a royalty. Similarly, propriety software would not be shared in a standard with GPL software, if that (which it would) precluded charging royalties.