Schwartz was unhappy that California's webcams would not download their video to his Solaris laptop, hence the need for ODF. Matusow said competition between formats, even proprietary ones, is good for everyone.
The argument is valuable, but limited. For instance, the question in this case is not, should we have proprietary solutions, but whether government should mandate that commercial advantage.
And we should not limit the discussion to software either. Most webcams depend on standards like WiFi to send data. What if that spectrum is not available? The data then moved over the public Internet. Why should that be squeezed-out by proprietary services, like cable television, given that most consumers now have no choice on how they will access the Internet?
The phrase missing from all these discussions is The Public Interest. It is a phrase that sounds foreign to the interests of business, but in technology today it is not. Open standards offer opportunity to many businesses, while closed standards offer it to only a few. Open standards, openly arrived at, enable far more economic growth than closed standards ever will.
This is not just true in software, but in telecommunications as well. It is the central technology trend of our time. It is resisted by many, I think, because it feels politically uncomfortable.
Get over it.