interop can help develop innovative devices and software, it can also support innovative devices and software with negative social impacts. Worms, viruses, spam, and other unwanted activity are in many ways just as “innovative,” and just as dependent on interoperability, as positive developments. A recent example of this peril can be found in a vulnerability in the SSL protocol (which enables secure, encrypted communication across the Internet) that led to the so-called “Heartbleed” hacking episode.22 Because the SSL protocol is interoperable, anyone with enough technical knowledge can write a version of the protocol that can be used interchangeably. One version, called OpenSSL, became so popular that it was running on an estimated 66 per cent of the Internet. Unfortunately, OpenSSL had a critical flaw—the Heartbleed—that allowed attackers to see encrypted communications. Thus, interop enabled this vulnerability to become widespread. Additionally, high degrees of interop can sometimes threaten innovation. For instance, a successfully interoperable system’s network effects can lead consumers to stick with an existing service. This might diminish operators' incentives to invest in an entirely new technology, i.e., a radical innovation that would replace the older system. In such a scenario, operators might implement only incremental improvements to existing, interoperable systems. This would foreclose opportunities for radical innovations that would more vastly improve services. 4.3.2 Competition Standard economic analysis suggests that increased interoperability is likely to foster innovation by reducing lock-in effects and lowering barriers to entry. This pattern is observable in the subscription streaming video market. HBO, a movie network and content creator, recently began selling its HBO Now service directly to consumers over the Internet, breaking with its traditional business model of selling only through cable and satellite TV providers.23 Under its old model, HBO’s content distribution system needed to interoperate only with those cable and satellite systems. Under the new model, however, HBO needs interoperability with web browsers and devices such as Apple TV, Roku, Chromecast, and others. This change toward increased interoperability has increased competition in two ways. First, it has increased competition for subscription TV services. By decoupling its content from cable and satellite TV systems, HBO put those operators on notice that they no longer have content monopolies to ensure customer lock-in. In fact, several cable companies have begun offering “skinny” packages consisting of high-speed broadband, HBO, and just a few other channels, in order to compete with lower-priced, online-only services like HBO Now and Netflix.24 Second, by increasing its interoperability, HBO is competing in an entirely different market: online content streaming services. This shift has not gone unnoticed by Reed Hastings, CEO of Netflix, who recently remarked, “I predict HBO will do the best creative work of their lives in the next 10 years because they are on [a] war footing. They haven’t really had a challenge for a long time, and now they do. It’s going to spur us both on to incredible work.”25 This kind of competition benefits users by reducing prices and by providing incentives for product and service innovation. Although interop generally supports competition, in some circumstances it could, counter-intuitively, lead to anticompetitive results. Certain arrangements that lead to interoperability and to greater innovation may boost a single firm -- or a few firms -- in a manner that is, over time, anticompetitive. For example, standards consortiums may sometimes create closed standards that enable interoperability across only their stakeholders’ products.26 In this way, interoperability can be employed as a tool for building closed ecosystems. The value to the consumer of being in the ecosystem (and benefitting from the interoperability the ecosystem provides) can in turn raise costs for switching providers and thus reduce competition.27 Even when more interoperability does lead to more competition, the net result is not necessarily maximum innovation. According to one economic theory, firms may have the strongest incentive to be innovative in circumstances where low levels of interoperability would promise higher or even monopoly profits. This sort of (Schumpetrian) competition incentivizes developing entirely new generations of technologies or ways of doing business (so-called “leapfrog competition”) in order to replace incumbent players and achieve temporary dominance.106 Trends in Telecommunication Reform 2016