In an open letter to Google, the Free Software Foundation suggested that the software giant freely release the VP8 HD video compression format after having acquired the On2 video technology firm.

Although Google's take-over of On2 Technologies has only just been completed, already the Free Software Foundation (FSF) is calling on the company to release On2's video codec technology as a patent free standard.

The announcement of Google's new WebM video format and release of the VP8 video codec as an open standard have been hailed by some as the move that will free the Web from the proprietary H.264 codec widely used for online video today and favored by Apple (AAPL) and Microsoft (MSFT).

Google has taken a swashbuckling step towards open and license-free web video by open sourcing the leading codec from On2 Technologies, the video-compression outfit it acquired earlier this year for $124.6 million.

One week after Google open sourced its $124.6m VP8 video codec, Mozilla and Opera have called for its inclusion in the still-gestating HTML5 specification. As it stands, the HTML5 spec does not specify a video codec. Browser makers are free to use any codec they like, and the big names are split between the patent-backed H.264 and the open source Ogg Theora.

Ever since Google announced its purchase of video codec company On2 in August 2009, there's been an expectation that On2's VP8 codec would someday be open-sourced and promoted as a new, open option for HTML5 video. An open VP8 would offer comparable quality to H.264, but without the patent and royalty encumbrances that codec suffers.

Last week, Google announced that it plans to remove support for the H.264 video codec from its browsers, in favor of the WebM codec that they recently made free. Since then, there's been a lot of discussion about how this change will affect the Web going forward, as HTML5 standards like the tag mature.

Google has added an experimental branch to the VP8 code tree, encouraging developers to begin work on the next incarnation of its newly open sourced video codec.

One month after releasing its open-source, royalty-free VP8 video compression technology, the company already is working on significant revisions to the technology.