Page 128 - Trends in Telecommunication Reform 2016

4.4.7 Threats to business models models are threatened may actively undermine
interoperability.
Higher levels of interop can have many benefits,
but those benefits may be distributed unequally Taken together, the risks and drawbacks of interop
across a market. Indeed, some businesses may can paint a challenging picture. But the potential
have a vested interest in maintaining lower levels negative aspects of a highly interoperable future
of interop, allowing them to benefit from locking- are not inevitable. The risks or benefits largely
in customers. For example, in 2012, Amazon sold stem from how interoperability is implemented
its Kindle e-reader devices at cost, profiting solely and regulated. As individuals, businesses, and
from the sale of content to customers who were regulators build an increasingly interconnected
locked in to the Amazon ecosystem. Amazon world at the technology and data layers, care must
38
achieved this customer lock-in by limiting both be taken to ensure that they avoid costs in areas
technological and other forms of interop. At the like privacy and security that society is unwilling to
technological layer, the company did not allow its pay. A theory of “interoperability by design” that
e-books to be read through non-Amazon software builds in privacy and security protections from the
or e-readers (although Amazon did enable the start can help enormously in this respect.
Kindle to interoperate in limited ways with the
services of other firms, such as a daily download
of the New York Times or reading e-books on a 4.5 Approaches
Kindle iPhone, iPad, or Android app). Similarly,
the Kindle did not support common open formats As shown by several examples in this chapter,
such as EPUB. This lack of technical interop helped there are varieties of approaches to interop. It
ensure that customers would rely on Amazon’s is useful to think about these approaches along
marketplace for content. a spectrum from unilateral to collaborative. In
other words, there are many ways to incorporate
Amazon has also tried to reduce interop at the varying levels of interop, ranging from providing
data and human layers, by limiting publishers’ an open API (a more unilateral approach) to
alternatives to Amazon. As part of its business working with competitors and other stakeholders
strategy, Amazon has priced e-books at prices to create open standards (a more collaborative
lower than competitors’ (sometimes at a loss) approach). Moreover, this same spectrum -- from
in order to encourage lock-in. Several book unilateral to collaborative -- is apparent across both
publishers began to fear that this customer lock- private-sector and government actors, including
in would kill competitors and enable Amazon to national and transnational regulatory bodies. This
demand monopoly pricing from publishers. Some spectrum of approaches is depicted in Figure 4.5
of these publishers challenged Amazon’s strategy, and described in the following sub-sections.
asserting that they wanted to set prices equally
across all e-book stores. In other words, the
publishers wanted to increase the interoperability 4.5.1 Non-regulatory approaches (private
of their content across platforms. This conflict actors)
between publishers and Amazon became a public
dispute when Amazon pulled most Hachette books Many interoperability strategies rest on access
from its store in retaliation. After a protracted to technology or technical specifications and
battle, the publishers won temporary control over involve licensing intellectual property (IP) rights
the prices for their books. 39 or other contractual agreements. However, the
degree of cooperation among different players
The fact that higher levels of interop may pose and the corresponding licensing terms may vary
a threat to certain business models is not a considerably from case to case. The following
downside of interop per se, nor is it a reason sections sketch three clusters of approaches to
to avoid policies and strategies that promise interoperability that range from unilateral to highly
higher levels of interop. In some circumstances, collaborative.
disrupting these kinds of business models may
be a real benefit. That said, it is important to
40
acknowledge that not everyone views higher levels
of interop with favour, and those whose business

110 Trends in Telecommunication Reform 2016