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 DOJ Tilting at Windmills AGAIN!

An Opinion by Ralph F. Mariano. To begin, I respectfully submit

WASHINGTON (Reuters) - The Justice Department Monday accused Microsoft Corp. of using its Windows "monopoly" to force computer makers to include the Microsoft Internet browser in pre-loaded software, putting rivals such as Netscape at a competitive disadvantage.

The department charged that the software giant had violated its 1995 antitrust agreement with the government and asked a federal court here to slap a $1 million a day fine on Microsoft if the alleged violations continue.

The new legal assault represents a big boost for Netscape Communications Corp., a bitter rival in the "browser war" that had accused Microsoft of using "clandestine" tactics to persuade personal computer makers and others to offer its browser rather than Netscape's. Browsers are used to navigate the Internet's World Wide Web.

In its petition, the Justice Department asked the court to stop Microsoft, based in Redmond, Washington, from requiring PC manufacturers to accept Internet Explorer as a condition of receiving the company's widely used Windows 95 software.

It sought to force Microsoft to notify consumers who have Windows 95 that they do not have to use Internet Explorer and that they can use any compatible Internet browser.

Consumers also would receive simple instructions on how to remove the Internet Explorer browser icon from their PC. To get more companies to offer evidence against Microsoft, the department wants the court to nullify key portions of the secrecy pacts Microsoft requires manufacturers to sign.

Microsoft chairman and CEO Bill Gates defended the company's strategy.

"Today people want to use PCs to access the Internet. We are providing that functionality in Windows, and providing a platform for innovation by thousands of other software companies," Gates said in a statement.

The department, meanwhile, said a wide-ranging investigation of Microsoft's practices would continue.

"Forcing PC manufacturers to take one Microsoft product as a condition of buying a monopoly product like Windows 95 is not only a violation of the court order, but it's plain wrong," Attorney Janet Reno told a news conference.

Microsoft's stock skidded on the news to $131 before rebounding to end up 37.5 cents at $132.625, while Netscape's stock surged $4.3125 to end at $39.25, both on Nasdaq.

Separately, Microsoft said its first-quarter profit from operations jumped 53 percent, slightly better than Wall Street had expected, on strong sales of its PC software products.

Microsoft said it had net income of $663 million, or 50 cents a share, compared with $614 million, or 47 cents, in the same quarter a year ago. Revenue for the quarter ended Sept. 30 rose 36 percent to $3.13 billion from $2.295 billion.

The 1995 consent decree barred Microsoft from imposing anti-competitive licensing terms on personal computer makers. The company agreed to modify its licensing practices.

The department said it brought Monday's action to enforce that pact and prevent Microsoft from being able to expand its monopoly in the market for PC operating systems through anti-competitive practices. Microsoft will have 11 days to respond formally to the department's charges.

A spokesman said Microsoft is confident it is operating within limits set by the 1995 consent decree, which he said "specifically allows Microsoft to integrate new features into the operating system", such as its Internet Explorer browser.

"We have never tried to stop any computer manufacturer from shipping any other browser," said spokesman Mark Murray.

According to the department, much of Microsoft's market power today stems from the fact that most applications programs for PCs -- such as word processing, spread sheets and money managers -- are written to work with Microsoft's Windows 95 PC operating system.

Microsoft's operating system is installed on more than 80 percent of the nation's PCs. The department said many PC makers want to choose freely among competing software products when they decide what to package with their computers.

"Even as we go forward with this action, we also want to make clear that we have an ongoing and wide-ranging investigation to determine whether Microsoft's actions are stifling innovation and consumer choice," said assistant attorney general Joel Klein, who is in charge of the department's antitrust division.

The department charged that Microsoft had refused requests from at least three PC makers to remove the Internet Explorer program or the browser's icon from the Windows 95 package.

It cited a 1996 incident in which Microsoft issued a formal notice to one of the nation's largest computer makers that it intended to end its Windows 95 license agreement unless the manufacturer continued to preinstall the Internet Explorer icon and another Microsoft icon.

"Browsers are potentially the kind of product that could erode Microsoft's operating system monopoly," said Klein.

Department officials stressed that they were not taking sides in the battle between Microsoft and Netscape, or in any emerging competition between Windows and other products.

The Computer & Communications Industry Association applauded the move, saying Microsoft's practice seemed "designed to leverage the dominance of Microsoft's operating system ... and choke off competition in the browser market."

In Mountain View, Calif., Netscape Chief Counsel Roberta Katz said the company supports the department's action against Microsoft. But she said it was too early to judge the financial implications for Netscape's business.

Industry estimates suggest that Netscape accounts for about 70 percent to 80 percent of the browser market and that Microsoft accounts for about 30 percent. The numbers can add up to more than 100 percent because computer users can use more than one browser.

 

What exactly is this country and its government coming to? Why are the Whigs on the Hill (Reno & Co.) trying so hard to divert attention away from the matters that will and do affect the nation’s citizens the most? What is Janet Reno’s point in trying to persecute (that’s right persecute instead of prosecute) Microsoft Corporation? I’ll try to answer these questions as I see it. In my best… "Telling It Like It Is" manner.

On the Hill, we have a both a lame duck Congress, both House and Senate divided Republican vs. Democrat. A "herd" of elected representatives so busy shooting at each other and trying to destroy the gains made by each party that the genuine issues that strongly concern and affect this Nation’s citizens and taxpayers are falling, left and right, by the wayside. That, my friends, is one of the real CRIMES the DOJ should be vigorously pursuing.

Madam Reno and the DOJ should be posting wonderful and highly reassuring headlines about the TRUE interdiction and curtailment, if not the total eradication, of DRUGS flowing freely into the USA. But no, they’re ever so busy pounding on Microsoft’s Door to seemingly make headlines for themselves. This couldn’t also be a diversion to take the heat off RENO about side stepping, backpedaling and coddling "Slick Willie" and or the Republican National Party over the Campaign Funds Issue now could it??

Obviously, Janet Reno hasn’t a clue about the huge amount of tax money Microsoft generates both directly and indirectly Federally and for each and every State in the Union (not to mention Worldwide) nor does she seem to care. Yet, on the real CRIME FRONT… One can only wonder why the Drug Lords are operating with impunity and why the Mafioso based in Las Vegas, Reno, Los Angeles, Miami, Philadelphia, Chicago, New Orleans, New York City, New Jersey and Boston still have an iron grip on commercial fishing, unions, concrete distribution, trucking, construction, garbage collection, medical coverage plans, fuel distribution terminals, transportation enterprises and entertainment centers… along with the "regular" underworld activities robustly flourishing without what appears to be the least bit of DOJ interception or mere interference.

 

Microsoft is unlawfully taking advantage of its Windows monopoly to protect and to extend that monopoly and undermine consumer choice."
:Attorney General Janet Reno

"We have never tried to stop any computer manufacturer from shipping any other browser."
:Microsoft spokesman Mark Murray

The government asked the federal court in Washington to hold Microsoft in contempt of a 1995 court order barring the Redmond, Wash.-based company from anti-competitive software licensing practices.

"This action is unfortunate and misguided," said Microsoft spokesman Mark Murray. "The facts will show that Microsoft is in full compliance with the consent decree."

William Neukom, senior vice president of law and corporate affairs at Microsoft, said the consent degree affirms Microsoft's right to enhance its operating system.

"This was carefully negotiated with the then-lawyers at the antitrust division of the Department of Justice," Neukom said.

Those negotiations support "that Microsoft was quite free to do precisely what we have done," and add new functions to the operating system. The agreement especially allows new functions that permit users of operating systems to locate and collect information from new sources_in this case, the Internet.

Internet is New Battle Ground

In many ways, the Internet is the biggest threat to Microsoft. The company makes the software that runs more than 80 percent of the personal computers in the United States. It also makes word processing programs, spreadsheets, databases and programming tools, all closely linked with the Windows 95 operating system. Microsoft's dominance of these markets allows it to collect huge licensing revenues. But the Internet is eroding the importance of operating systems. As use of the Internet grows, and the software for accessing it more sophisticated, it doesn't matter whether the computer being used runs Windows 95 or not.

"This is not about the Internet," said Netscape's general counsel, Roberta Katz. "It's about doing away with competition in the browser market because the browser threatens the operating system." The government told the court that "as Microsoft fears, Browsers have the potential to become both alternative "platforms" on which various software applications and programs can run and alternative `interfaces' that PC users can employ to obtain and work with such applications and programs."

 

Its fairly obvious Katz is sidestepping the real issue at hand. That is: Who is to be the "Big Dog" on the Internet and tries to make the rules? Netscape is already the predominate Browser in use. So, what’s HER (Reno's) Problem?? They (the criers) want their (Netscape, Oracle, Sun) version of Java to be the THE Java used by everyone. By MS using a variation, the user is indirectly protected from the monopolistic shot being taken by Oracle, Netscape and Sun at tying up the Net in THEIR snare. OOOOPs, all of a sudden the shoe is in the other foot. How about that? Web Trends produces pages all over the net that show true statistics prove this time and time again. Yet Katz is saying its not about the Net? Come now, are they now trying to sell bridges in Brooklyn? Of Course they are! Its ALL about the ‘Net. Netscape’s Communicator is the best Netscape can muster against Internet Explorer. So, in light of this fact, Netscape has every reason to be putting up all sorts of weird fronts. Has anybody asked about the Stringent, if not rediculous, requirements Netscape puts forth relative to PLUGINS and how they steadfastly refuse to accommodate the users in the midi and marquee areas? No, that’s ok for poor little old downtrodden Netscape to do these things while taking pot shots at MS and IE4. Sorry, but somebody at Justice had better take a deeper more informed look at this entire picture.

 

Windows Dominance Threatened

Netscape's software, Communicator, acts as both platform and interface. It gives users an all-in-one program for e-mail, the World Wide Web and allows groups to collaborate over a network. And it runs on more than just Windows machines. And Java, a software language from Sun Microsystems, allows programs to be run straight off the Web, without worrying about the operating system. Already, crude word processors and spreadsheets are available, and they don't need Windows 95 to run. Oracle, Sun Microsystems, Netscape and other companies are working on low-cost personal computers that use Java rather than Windows programs stored on personal computers' hard drives.

 

Folks, there is no threat to Windows95 or any later version for that matter. The REAL underlying reason for Oracle, Sun, Netscape and Compaq prodding the DOJ to act is because THEY wish to take the ‘Net over with their Net TV garbage. People, the whole premise behind the Net TV thing is to ultimately bring the user into total dependence upon the service provider ie., Oracle.. you will RENT the use of programs. Once you log off you no longer have access to the program(s) until you rent the use of it again. Talk about a fleecing monopoly! Give these sharpies half a chance and you’ll PAY dearly for every split second you’re on the ‘Net. We might as well hook up intravenously and let ‘em have the pint of blood right off the bat!! After all that’s what they are really after.

 

And if Windows becomes irrelevant, Microsoft's dominance of these other software sectors could come crashing down. To avoid such a fate, Microsoft's strategy is to siphon away Netscape's customers and control the browser market, one that Netscape currently dominates with a 62 percent marketshare. And by tightly integrating its browser with the operating system, Microsoft can ensure that Windows 95 and its successor, Windows 98, which is due out by next summer, remain in a dominant position. Netscape would be pushed off the desktop.

Control of the operating system market allows Microsoft to set standards that software designers have to use, whether they want to or not, said Mike Morris, general counsel for Sun.

"When they control the standards it means they know first what's coming down the pipe," he said. "Their developers will get a leg up."

Legal Troubles for Microsoft

If U.S. District Judge Thomas Penfield Jackson agrees Microsoft violated the court order but Microsoft continues the questioned licensing, the government wants a record $1 million daily fine, well above the $10,000 a day it usually requests in antitrust contempt actions. Microsoft has 11 days to file a written response. A hearing is likely later.

"This is a very serious abuse," said Assistant Attorney General Joel I. Klein, head of the antitrust division. He argued that Windows and Internet Explorer "are two different products" and should be sold separately. "Each of Microsoft's products should compete on its own merits."

Justice's action comes on the heels of a lawsuit by Sun accusing Microsoft of improperly adapting Sun's Java language for Internet Explorer.

"This is just one more piece of bad news for Microsoft about their new browser, which has gotten very strong technical reviews but seems to be having some trouble on the legal front," said Dwight Davis of Windows Watcher newsletter in Redmond.

Microsoft Corporation is one of the world’s largest employers. Microsoft employs thousands of folks globally. But by far, not larger than say.. General Motors, or the HUGE Grain and FEED Conglomerates like General Mills, ConAgra etc.. Yet the Department of Justice, (Justice?) under the seemingly inept and woefully inadequate "Leadership and Guidance" of Janet Reno, sees fit to hack away at Microsoft, on an almost continual basis, for the last two and half to three years for one absurd reason or another. Why? Because Microsoft is in the forefront of tomorrow’s technology today? Because MS has produced the most powerful and reliable Operating System for the everyday computer user and the very best Web Browser??

No, its primarily because Microsoft’s competition (lame at best) has found Reno’s "magic GO button!" The competition, (if you wish to call them that, I call it sour grapes), has discovered which of the DOJ underlings are seemingly willing to institute most any action involving MS to gain notoriety for themselves. (the very same ones year in and year out, check who were the DOJ rep(s) in each and every instance of their constant hounding of MS) They seem to have forgotten they are public servants, each and every one of them, from Reno on down. Is what they are doing and the amount of taxpayer dollars they are consuming (read wasting) in the public’s best interest or, is it in the best interests of say, Netscape.. Sun or any other wild and opportunistic number of Microsoft wanna-be’s? Or, is it another "sacrificial ritual" of the "Control Freaks" in this Nation’s present Administration?

Steven Decker of Compaq Computer Corp. supplied government lawyers with documents and testimony that allegedly show Microsoft Corp. threatened to withhold its Windows 95 operating system from PC makers if they did not include a link to its Web software on their computer display. Documents and testimony from Compaq, a Microsoft ally and the world's biggest PC maker, other PC makers and Microsoft are the underpinnings bolstering the Justice Department's complaint Microsoft violated a 1995 antitrust agreement. The fact that the Justice Department revealed the documents showed its lawyers are confident they have a good case, an antitrust expert said.

Someone ought to ask Mr. Decker and the others at Compaq about the high priced proprietary hardware they use in their assembled computers they sell as the industry’s "best." About the close-outs and Job lots they buy to build these things, about the $25.00 chassis rails and custom connectors they use thus forcing the consumer to pay through the nose for simple upgrades and repairs.

Microsoft, on the other hand, has a positive and proven 15-year history of adding features and functionality to its operating systems products to provide more value for consumers and a rich platform for software development. Microsoft generally requires PC manufacturers to ship all of Windows, so that customers and software developers will have the full benefit of the platform and a consistent experience. From time to time Microsoft also issues updates to Windows to keep pace with consumer demand for new features and functionality, and PC manufacturers generally ship the latest updates to Windows as they become available.

Over the past two years Microsoft has been enhancing Windows with a broad range of Internet functionality, including Internet Explorer. PC manufacturers and customers have greeted these enhancements to Windows with enthusiasm. Today nearly all of the leading PC manufacturers are already shipping or plan soon to ship Internet Explorer 4.0, the latest update to Windows, though they are not contractually obligated to do so at this time. PC manufacturers are shipping Internet Explorer 4.0 because they want to provide their customers with the latest operating system technology. That will continue regardless of the outcome of the Justice Department’s proceeding against Microsoft.

It is important to note that all PC manufacturers are always free to ship any other software product from any other vendor. For example, consumers today can purchase PCs loaded with the Windows operating system and the Netscape Navigator browser from a variety of manufacturers, including IBM, Hewlett-Packard, Digital, Toshiba, Compaq and others.

 

Is the DOJ going to fine Microsoft $1 million a day for non-compliance with the consent decree?


No, the DOJ does not have the authority to impose any fines. The DOJ has asked the court to impose certain requirements on Microsoft, and to fine Microsoft if the company fails to comply with those new requirements in the future. The DOJ is not seeking any fine for things that happened in the past.

What are the next steps now that DOJ has filed suit?


Microsoft will have the opportunity to present its facts and arguments to the Hon. Thomas Penfield Jackson, the federal district judge who oversees the consent decree, within the next few weeks. Microsoft is confident that the Court will agree that Microsoft is complying with the consent decree, and is competing in a fair and appropriate manner.

Will this action delay the shipment or impact the shipment of Windows ’98?

No. The Justice Department’s action does not address Windows ’98.

The Justice Department expressed concern that the non-disclosure provisions in Microsoft’s license agreements might discourage computer manufacturers from providing information to the government’s investigation. Is there something unique about Microsoft’s non-disclosure provisions?


No. There is nothing unusual about the non-disclosure provisions in Microsoft’s licenses. Microsoft’s non-disclosure provisions are standard provisions, very similar or identical to provisions used by virtually every other software company.

 

In Summation.

If and when anyone can prove the actions of Reno and the DOJ are in the TAXPAYER’S and Citizens of this great Nation’s best interests We will all begin to listen very seriously. So far, all everyone has seen is another magnanimous grandstanding attempt by Reno and Co. to take the public eye away from;

  • its coddling "Slick Willie" and his antics with campaign dollars

  • the White Water Affair

  • the Paula Jones "thing"

  • its failure to eliminate the Mafia

  • a pending motion to impeach "Slick Willie"

  • its failure to eliminate the curse of illegal drugs which poison our entire society from the womb to the tomb.

One last point. when is Janet (Waco & Ruby Ridge) Reno going to face up to the fact the DOJ is a miserable failure under the inept guidance Reno offers or, FAILS to offer?

Have a differing viewpoint or opinion?? Let me hear from you and we’ll publish it right here in follow-ups to our ongoing series "The DOJ vs. Microsoft Right or Wrong?"

 


Is this emblem soon to be regarded as a Turkey rather than the proud Eagle it is?? Reno appears determined to make it either a Roasted Turkey or a miserably Lame Duck!

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