Agreed technical standards, in many industries, benefit both producers and consumers by stimulating the uptake of a new technology, reducing costs, and increasing the overall market size for the technology. Coarse wavelength division multiplexing (CWDM) standards have allowed the manufacturers of CWDM lasers and optical filters to commit to mass production of a small range of standardized components that they know will be used by all of their customers, and thereby achieve economies of scale. Manufacturers of telecommunication systems equipment who incorporate standardized components into their designs can reduce their design effort and materials costs. Purchasers of systems that comply with the standards directly benefit from the flow-on of component and system cost reductions, but they also benefit from knowing that there is a reduced technical risk when adopting the new technology, and that there is a higher

likelihood of interoperability of equipment supplied by different vendors. Interoperability is important for network operators because they can avoid becoming locked in to buying from just one supplier. This freedom to purchase from any supplier stimulates price competition among the vendors and reduces long-term support risks as suppliers discontinue product lines or go out of business. Interoperability benefits the suppliers because they know that even if they do not win a contract to supply equipment for a new network, they can still offer their products for network expansion, upgrades, and ongoing maintenance.