Jonathan Coopersmith, Texas A&M University

The importance of standards in shaping the trajectory of technologies has become increasingly recognized in recent years.  Making competing systems compatible increased network benefits while reducing risk for consumers and thus increasing the technology’s acceptance and diffusion.  Creating standards was a process occurring among competing interests, changing technologies, and great uncertainty.  The two basic approaches were to negotiate a common standard and for a firm to impose its standard through market supremacy.  As this paper demonstrates, neither was obviously superior.

Like many building blocks, standards are noticed most when they are lacking, in conflict, poorly designed, or poorly implemented.  The attempts to create four sets of fax standards in the 1970-2000 period demonstrated all those problems plus the success a well developed standard can bring.  A range of actors participated, including international and national standards bodies, telephone companies, manufacturers, software developers, and government agencies.

The first attempt, which resulted in the G1 and G2 standards, was by manufacturers to produce equipment incompatible with competitors and set standards by market superiority.  As no one firm dominated, this strategy of incompatibility hindered the overall growth of the fax market because users could not communicate among different types of equipment.

The second attempt was the G3 standard in 1980, following several years of arduous negotiations and trials.  Unlike previous standards, G3 preceded significant investment in equipment.  For the first time, every fax machine could communicate with any other machine, regardless of the manufacturer.  This compatibility was vital for the explosion of fax usage in the 1980s.  Equally important, this standard allowed firms to include specialized proprietary functions while still maintaining universality.  The creation of Group 3 standard was not preordained as  British, American, and Japanese interests promoted their own codes.

In the early 1990s, the rapidly growing computer fax market experienced several attempts by negotiation and market domination to set standards.   The rapid evolution of products, the appearance of new players from the computer industry, interfacing with computers, and an evolving process for setting standards meant a prolonged period of semi-compatible products.  Standards fractionated into separate protocols for different segments of the market.

The last attempt in the late 1990s was to create standards for the promising Fax Over Internet Protocol.  Despite unprecedented cooperation between the fax and internet communities to create seamless computer-network-machine integration, the result was, like the earlier computer-based faxing, more frustrating than freeing.