Standardization vs innovation in tech: The curious case of USB-C

After a decade of consultation and debate, on June 7, the European Union approved a directive requiring virtually all electronic devices sold in the EU be equipped by 2024 with a USB-C charging port; thereby legally imposing a single electronics charging standard onto Europe’s vast market. This requirement will be on everything from laptops and speakers to smartphones. The move set off a global debate over whether the time had come for governments to set mandatory standards on electronics charging ports, ending over 30 years of innovation and proliferation in ports and devices.

In the U.S., three Senators wrote Commerce Secretary Gina Raimondo calling for the U.S. to begin the process of a mandatory standard for electronic charging. Not surprisingly, some commenters opposed government intervention on the grounds that governments should not stifle innovation by picking winners and losers — while others applauded it on the grounds that mandatory standards for electronics charging avoid the waste of consumers constantly throwing away their old charging cables/devices and buying new ones. Commenting on the issue, Apple said “We remain concerned that strict regulation mandating just one type of connector stifles innovation rather than encouraging it.”

USB-C, the latest version in the USB family of electronic ports, was approved in 2014 as a voluntary industry standard, and it has been gradually implemented by most laptop, smartphone and other manufacturers, sometimes with other ports alongside. More importantly, nothing — until now — has prevented any manufacturer from introducing a new charging port/device or dropping an old one. This historic flexibility in changing charging ports is arguably most relevant to Apple, which has periodically introduced new ports and currently relies on its “lightning” port for iPhones. Anyone who’s owned a cellphone/laptop over the past 30 years has gone through multiple generations of charging ports.

Full disclosure: Between the early 1990s and the 2010s, I kept all of my old charging devices on the absurd assumption that they might someday be re-usable. Eventually, I threw away shoeboxes full of outdated charging devices. My experience illustrates the enormous and perhaps unique role that environmental impact has played in this debate over power port/device standardization vs. innovation. Unlike most basically economic debates over mandatory standards vs. unrestricted innovation, the EU debate on USB-C turned very substantially on the environmental impact of consumers throwing away old charging devices and the impact of this electronic waste on the global climate. Waste-avoidance has never been a key aspect of the debates over standardization vs. innovation — but it is now.

Debates over standardization vs. innovation are as old as civilization: When we standardize things, economies of scale kick in, bringing costs down and increasing predictability; whereas, unfettered innovation opens the door to unrestrained new ideas and imaginative (frequently failing) innovations. The ultimate standardization, of course, is standardization by law. During the 1800s, for example, investors in certain types of railroad designs successfully argued for the importance of a single legal railroad standard track width (and thereby axle widths), suggesting that a hodgepodge of non-standard rail gauge widths would cripple growth/drive costs, as engines and cars on a line of one gauge could not operate on another. 

In contrast, since the 1950s, the computer industries have grown up in an entirely different environment. Through the 1990s, these industries were unregulated and substantially dominated by large-enterprise buyers (including governments in general and military organizations in particular.) This led to de-facto standardization by a small number of vendors and large private and government customers who could privately agree on non-binding standards without the burden (some would say benefit) of government regulators. While in such an unregulated industry, non-binding standards were often proprietary, as time went on, open standards that encouraged add-ons/applications have played an increasingly important role. 

For electronics charging and much more, this environment permitted both standardization and fundamental innovation to co-exist in the computer industries. Technical debates and market forces, not laws, tended to drive standards, while innovators willing to take a risk could still innovate and introduce new products/service/features outside of the agreed standards. Nonetheless, because large institutional customers/buyers formed a relatively small group that normally preferred the benefits of standards, this hybrid environment has been criticized for contributing to vendor oligopolies. Moreover, through a combination of proprietary features, customer loyalty, and distribution chains, large vendors could add non-standard, proprietary features at any time. These proprietary innovations could be controversial, described by some as ‘adding great value’ and others as ‘forcing existing customers to purchase useless features’ — which naturally leads us back to electronics charging mandates.

Perhaps the most recognizable example of the benefits/drawbacks of standardization vs. innovation for most Americans would be the lowly electric power plugs that we all see on our walls. Although electricity began to spread throughout the U.S. from the 1880s, and power plugs began to emerge by the 1890s, it was not until 1912 that Harvey Hubbell introduced the two-flat-parallel-pronged plug and socket that we all know today. By the 1920s, Hubbell’s design of plugs/sockets was adopted as a standard and was soon required by law. Once required by law, with some improvements, the basic design has remained for over a century. Some argue that this mandatory standardization of electric plugs stifled innovation, while others argue that it reduced costs, promoted safety and encouraged adoption. Importantly, mandatory standardization of the basic design of the electric plug seems to have channeled innovation into a wide range of innovations outside of the basic shape of the plug.   

And this lies at the heart of the emerging debate over whether the U.S. should follow the EU’s lead and mandate USB-C for electronic devices. Since the machinery of government moves slowly, once an electronic charging standard is locked in by law, and vendors and customers build expectations around it, it will take years or decades to change. This clearly does not mean the end of innovation in electronics charging, any more than it did for electric plugs. But it means that the precise definitions in any electronic charging law will define whatever innovation will be channeled outside of it.

Roger Cochetti provides consulting and advisory services in Washington, D.C.  He was a senior executive with Communications Satellite Corporation (COMSAT) from 1981 through 1994. He also directed internet public policy for IBM from 1994 through 2000 and later served as Senior Vice-President & Chief Policy Officer for VeriSign and Group Policy Director for CompTIA. He served on the State Department’s Advisory Committee on International Communications and Information Policy during the Bush and Obama administrations, has testified on internet policy issues numerous times and served on advisory committees to the FTC and various UN agencies. He is the author of the Mobile Satellite Communications Handbook.