o reach the broadest possible range of complementary services generally represents the best way to maximize the network's value (and thus the amount that the network owner can charge for service) (Besen and Farrell 1994; Yoo 2002; Farrell and Weiser 2003). At the same time, the standardization implicit in platform access imposes a number of costs. As discussed at greater length in Chapter 11, standardization decreases welfare by reducing product variety. Indeed, standardization on any Networks in Telecommunications protocol has the inevitable effect of favoring some applications and disfavoring others. Standardization also has the inevitable effect of commoditizing network services. By preventing service differentiation, platform access forces network own- ers to compete solely based on price and network size, which are considerations that reinforce the advantages enjoyed by the largest players. Conversely, incompatible networks may simply represent the natural outgrowth of heterogeneous consumer preferences (Katz and Shapiro 1994; Liebowitz and Margolis 1996). Differentiation can play a particularly important role in industries such as telecommunications, in which the presence of fixed costs that are large relative to marginal costs forces network providers to produce on the declining portion of the average cost curve. As noted in Chapter 4, product differentiation can create stable equilibria with multiple producers each producing on the declining portion of the average cost curve. Thus, smaller players can survive despite cost and size disadvantages by targeting subsegments of the market. Platform access also involves significant transaction costs, both in terms of establishing the governing standards and in terms of reconfiguring the network to open it to providers of complementary services. In addition, the governing standard must be updated to reflect changes in technology. In the meantime, standardization locks the location of the interface into place, an effect that is particularly problematic in industri