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12.01.07

Public Letters Protesting Against Department of Justice Decisions

Posted in America, Antitrust, Apple, Deception, Europe, GNU/Linux, Law, Mail, Microsoft, Novell at 10:00 pm by Dr. Roy Schestowitz

Thanks to a couple pointers and archived copies which were received by E-mail, we finally have some nice additions to the post that was published just hours ago. The following series of messages should hopefully illustrate the serious problems that the US Department of Justice is facing and particularly its poor handling of Microsoft’s abuses.

The following is a copy of a letter by Scott Fulton, written at the time of the DOJ case against Microsoft. Highlighted in red are bits that are related to Novell.


From: Scott M. Fulton, III
To: Microsoft ATR
Date: 12/18/01 4:30pm
Subject: Microsoft Settlement
BE ADVISED: Attachment to this message is in Adobe Acrobat (.PDF) format,
and has been cleared of viruses.

Gentlepersons:

Attached to this e-mail are my comments with regard to the Proposed
Final Judgment in the Microsoft antitrust matter. I am a published
author, editor, and developer of software, currently in partnership
with Ingenus. My credentials are explained in the attached comments. I
thank you for directing this document to the proper authority, and
wish you the best of holidays.

Yours sincerely,
Scott M. Fulton, III
Senior Partner, Ingenus
5664 Fen Court
Indianapolis, IN 46220 USA
voice: (317) 475-0212
Ingenus

5664 FEN COURT
INDIANAPOLIS, IN 46220 USA
(317) 475-0212
smfulton3 [AT] apexmail.com

Scott M. Fulton, III
Jennifer Fulton
PROFESSIONAL I.T. SERVICES
Editorial Consulting

Engineering Training

Research

18 December 2001
Renata B. Hesse
Antitrust Division
United States Dept. of Justice
601 D. Street NW
Suite 1200
Washington, DC 20530-0001
Ingenus

Dear Ms. Hesse:

I am submitting to you this document in accordance with the
U.S. District Court’s request for public commentary in the matter of
the proposed settlement in U.S. v. Microsoft, Civil Action
No. 98-1232, and New York v. Microsoft, Civil Action No. 98-1233.

I am currently a computer book author and private computing
consultant, and until very recently, was employed with CMP Media,
Inc. as a Senior Editor for the Planet IT Web site–one of the recent
victims of the “dot-com fallout.” I have been a published author,
editor, and correspondent in the field of computing for over 17 years,
several of those years having been spent as one of Computer Shopper
magazine’s original contributors. Under the pseudonym “D. F. Scott,” I
am the author of 13 books, nine of which are on the subject of
Microsoft Visual Basic, one of that company’s most prominent
programming languages. I am currently working on my fourteenth title,
on the subject of the Microsoft Access 2002 database. As an author,
programmer, and private consultant, I am intimately familiar with
Microsoft’s products, applications architecture, and corporate
history. I have developed software using Microsoft products for 23
years.

”Microsoft’s conduct as a corporation and a manufacturer of computing products, is predicated upon an internal policy of deception, which includes deceiving customers, deceiving competitors, deceiving partners, deceiving its own vendors, and at some level, deceiving its own staff.“I know Microsoft, and I know my industry. I thoroughly comprehend how Microsoft’s products, agendas, and conduct have shaped and defined computing as we know it today. I have friends and colleagues who work at Microsoft, and I have others who work with its current partners, its former partners, and its direct competitors. Having read Judge Thomas Penfield Jackson’s Findings of Fact in the civil matter as rendered 5 November 1999, and having shared my opinions at length with others directly affected by those Findings since that time, I can state without hesitation that there is nothing in those Findings to which I take exception, or about which I personally can find any reason to disagree. I call your attention to the fact that these Findings of Fact were given deference by the Court of Appeals, despite that certain elements were called into question, and despite the disqualification of the judge. The Appeals Court’s thorough study of the Findings of Fact, as well as the other evidence in the case before the District Court, uphold a quintessential truth whose importance transcends any scrutiny of judicial misconduct: Microsoft’s conduct as a corporation and a manufacturer of computing products, is predicated upon an internal policy of deception, which includes deceiving customers, deceiving competitors, deceiving partners, deceiving its own vendors, and at some level, deceiving its own staff.

Although the Appeals Court–with reluctance–deferred to Judge
Jackson’s Findings of Fact, it appears to me that the settlement
currently proposed by Microsoft and the Justice Dept. has ignored the
basic tenets of those Findings. This proposed settlement does not
specify the actions of a company that has violated the Sherman
Antitrust Act–a fact which has been upheld by the Appeals
Court. Instead, it is a document with ample evidence of being scripted
by a company entangled in its own self-importance and intoxicated by a
fundamental belief in its own immunity, and having been agreed to by a
plaintiff that no longer represents the cause of fairness in free
enterprise originally championed by Joel Klein and Janet Reno.

That Microsoft Corp. has monopoly power in key markets is not in
dispute. To hold monopoly power in this country is not illegal, and in
certain conceivable circumstances, it may even be justified. Microsoft
achieved its monopoly power through means which stand the test of
legitimacy under the closest scrutiny. Throughout its history, the
company has shrewdly and wisely taken advantage of imminent and
remarkable opportunities. Its initial agreement in 1981 with IBM,
allowing it to produce compatible operating systems for non-IBM
computers, actually created an industry where there had not been one
before, and which actually might never have been. That competitors,
including IBM, have been unable to produce viable alternatives to
MS-DOS or Microsoft Windows, can indeed be attributed to failures in
foresight, design, and marketing solely on the part of those
competitors. Generally, the prominence of Microsoft Corp. can be
credited to its own legitimate successes, and to its competitors’
legitimate shortcomings, wild notions, and simply wrong ideas.

But once Microsoft attained its lofty position, the measures it took
to fortify, protect, and defend that position were clearly immoral,
unethical, and as the Court of Appeals has upheld, illegal. The
antitrust case against Microsoft has been mainly about deception as a
means not of attaining prominence, but of ensuring it. Any remedy
imposed upon Microsoft, or settled upon by Microsoft and the Justice
Dept., must acknowledge this deception, must take steps to completely
disable and render defunct Microsoft’s means of deception in the
future, and must in some measure compensate those who were harmed–if
not monetarily, then through good faith measures that go beyond the
requirements of an ordinary company to do respectable and competitive
business in its chosen industry. As it stands now, the proposed
settlement may actually be used as a tool to extend and sustain the
sheath of deception Microsoft has sewn, to further its own interests,
and to continue the basic falsehood that the state of the computing
industry now is as it should be.

ENTER THE DUNGEON

”The company’s chief executives not only tolerated but helped foster this new approach, like “dungeon masters” in a role-playing game encouraging nastier self-characterizations by players who deemed themselves “evil.”“Once it became a monopoly as early as 1988, Microsoft’s executives almost immediately adopted a Watergate-style cloak-and-dagger approach to its internal corporate and even personal conduct, to the extent that some executives were privately relishing in the opportunity for them to emulate Nixon’s “plumbers,” or characters from “The Godfather,” or anti-heroes from comic books, or even leaders of the Third Reich. The company’s chief executives not only tolerated but helped foster this new approach, like “dungeon masters” in a role-playing game encouraging nastier self-characterizations by players who deemed themselves “evil.” Before the company had actually violated the law, Microsoft’s executives were adopting other-worldly roles, imagining themselves as saviors of the world but rebels against the establishment, immunized from the laws that apply to mere mortals. It was this immersion in this surrealistic fantasy vision that empowered Microsoft not only to commit its undisputed violations of antitrust law, but also to defend its conduct to this very day as somehow fair, honest, innovative, and pro-competitive.

In 1994, Newsweek correspondent Michael Meyer sat in on a meeting of
Microsoft’s key executives, including then-CEO Bill Gates, and product
managers who were discussing–while fully aware of Meyer’s
presence–the lackluster performance of their personal accounting
software, called Microsoft Money, against a competitor, Intuit’s
Quicken. (Later, Microsoft and Intuit announced a merger, which even
later fell apart.) In his 11 July 1994 article entitled, “Culture
Club,” Meyer recounted his experiences in the boardroom: Then comes a
strange moment, the sort of thing that happens often at Microsoft,
which seemingly within moments turns disaster into salvation. Talk has
turned to broader trends in banking. Where’s it going, what’s in it
for us. Banks are dinosaurs, says Gates. We can “bypass” them. [The
Money product manager] is unhappy with an alliance involving a big
bank-card company. “Too slow.” Instead he proposes a deal with a
small–and more easily controllable–check-clearing outfit. “Why don’t
we buy them?” Gates asks, thinking bigger. It occurs to him that
people banking from home will cut checks using Microsoft’s
software. Microsoft can then push all those transactions through its
new affiliate, taking a fee on every one. Abruptly, Gates sheds his
disappointment with Money. He’s caught up in a vision of “the
transformation of the world financial system.” It’s a “pot of gold,”
he declares, pounding the conference table with his fists, triumphant
and hungry and wired. “Get me into that and goddam, we’ll make so much
money!” Here is Microsoft in action. In just three hours, it laid
plans to buy at least two companies, ditched an alliance with a major
financial institution, opted for another and made major moves into
“two incredible new worlds,” as Gates put it–home banking and sports
entertainment. Another company might take months to accomplish as
much.

It is important to note here that, seven years later, none of this
“pot of gold” thinking actually led anywhere–not for Microsoft Money,
not for Microsoft Corp., and not for the world financial
system. Nothing took place that day, or any day since, on this
particular subject that offended anyone’s rights or broke any
laws. Nor was Microsoft Money as a software product the least bit
improved. Meyer was astonished by Microsoft’s “accomplishment,” but
today, little evidence of it remains outside of this article.

What did happen that day in 1994 is an example of how Microsoft
approaches its everyday business: not by applying itself to the truths
and principles and operating parameters of its chosen industry, and
not by solving the arguably solvable problems put before it, but
instead by concocting a fantasy world where Microsoft is the world’s
great benefactor, the great multitude is the recipient of its mercy
and grace, and all other entities in the computing industry are
either–to borrow a recently reborn phrase–”with us or against us.”
This is a world where media entities such as Newsweek, and
professional observers such as myself, should stand in awe of that
company’s “accomplishments,” as if its role-playing conquests held
tangible value in any currency in which common people trade.

How MICROSOFT LOST THE MORAL HIGH GROUND

In another civil matter separate from the suit brought forth by the
Justice Dept., the Canadian software producer Caldera took action
against Microsoft in U.S. District Court in Utah, on behalf of a
product it had acquired from Novell Corp.–a competitive operating
system called DR-DOS. (This civil action was later settled, and the
specific terms of that settlement were undisclosed.) As revealed by
evidence subpoenaed by Caldera and presented in its Consolidated
Statement of Facts, Microsoft’s executives openly conspired to develop
MS-DOS in such a way that compliance with its principles would mean,
by definition, incompatibility with DR-DOS. Later, these same
executives came up with the idea of tying MS-DOS together with
Windows–the first instance of “tying” in the company’s history–in
such a way that DR-DOS users would be artificially prohibited from
running Windows 3.1. In fact, as the evidence in Caldera v. Microsoft
indicates, Microsoft’s idea of tying MS-DOS to Windows derived from
its efforts to thwart the development of DR-DOS, and may have been
created for that specific purpose alone and no other.

The Consolidated Statement in the Caldera case uses subpoenaed
internal documents and e-mails from Microsoft executives to draw a
picture of a company whose central, overriding, and only interest from
1990 to 1995 was not to produce a viable operating system for
consumers, but to prevent Digital Research, and then Novell, and then
Caldera from doing so. (Granted, IBM’s OS/2 was also a Windows
competitor during this time, although the Caldera Statement makes
little mention of that system.) According to the Statement, in the
summer of 1990, Microsoft’s OEM sales force was directed to only use
per-processor terms in licensing agreements with both small and large
PC manufacturers, in order to prevent, as one account manager put it,
“losing them to DR.” Per-processor licensing practices was the subject
of one of the Justice Dept.’s first civil actions against Microsoft,
and was a matter of contention throughout the current civil case. Such
exclusionary licenses made it cost-prohibitive for manufacturers to
offer DR-DOS, or any other alternative operating system, to their
customers while at the same time maintaining their critical link to
Microsoft. As Microsoft’s company memoranda–excerpted in the Caldera
Statement–indicate, the company was fully aware of that fact. For
instance, there is this note of congratulations: Congratulations are
in order for John “DRI Killer” McLaughlan (No, he isn’t having another
baby) who signed a $2.5M agreement with Acbel (Sun Moon Star). The
agreement licenses DOS 5 per processor on a worldwide basis for 3
years (they will be replacing DRI DOS which they currently ship
outside the US).

In July 1991, Novell announced its merger with DR-DOS producer Digital
Research, in order to build a stronger, more complete operating system
product line that could compete on the same level as Microsoft, and
that could be licensed to IBM, which had already identified itself as
an interested party.

In a memorandum to fellow executives dated March 1992, Microsoft Vice
President (now Senior Vice President) Jim Allchin spelled out his
perception of the threat imposed by Novell: I still don’t think we
take them as serious as is required of us to win. This isn’t
IBM. These guys are really good; they have an installed base; they
have a channel; they have marketing power; they have good
products. AND they want our position. They want to control the APIs,
middleware, and as many desktops as they can in addition to the server
market they already own.

”We need to start thinking about Novell as THE competitor to fight against — not in one area of our business, but all of them.“We need to start thinking about Novell as THE competitor to fight against — not in one area of our business, but all of them.

If you want to get serious about stopping Novell, we need to start
understanding this is war — nothing less. That’s how Novell views
it. We better wake up and get serious about them or they will
eventually find a way to hurt us badly.

Allchin’s concept of “war” sparked then-Windows Product Manager Brad
Silverberg to advocate developing Windows 3.1 intentionally so that it
gave DR-DOS users the impression that it could not run on that
platform. The Caldera Statement provides this e-mail exchange between
Silverberg and his deputy (now Senior Vice President), David Cole:
Cole: A kind-gentle message in setup would probably not offend anyone
and probably won’t get the press up in arms, but I don’t think it
serves much of a warning [...] What is the guy supposed to do?

Silverberg: what the guy is supposed to do is feel uncomfortable, and
when he has bugs, suspect that the problem is dr-dos and then go out
to buy ms-dos, or decide to not take the risk for the other machines
he has to buy for in the office.

With company policy having been determined that the Windows user
should be made to feel uncomfortable with the notion of using a
non-Microsoft product, work began on how to intentionally develop the
beta code of Windows 3.1 so that parts of it fail to execute on a
DR-DOS platform. In an e-mail discussion excerpted in the Caldera
statement, a developer of Windows 3.1 told his development manager,
Phil Barrett, of an incompatibility he discovered between a disk cache
utility for 3.1, code-named “Bambi,” and DR-DOS. The developer reports
that he has created a build of the utility that solves this
problem. Nevertheless, Barrett suggests in his response that this fix
never see the light of day: heh, heh, heh …

my proposal is to have bambi refuse to run on this alien OS. comments?

The approach we will take is to detect dr 6 and refuse to load. The
error message should be something like `Invalid device driver
interface.’ The actual error message in Windows 3.1 Setup would read,
“The XMS driver you have installed is not compatible with Windows. You
must remove it before SETUP can successfully install Windows.”
Whether on direct instruction to do so or working on his own
initiative, a Microsoft programmer made contact with Andrew Dyson, a
technical support analyst at DRI, and in so doing identified himself
as “Roger Sour, Director of Windows Development, Microsoft.”
Explaining that he was trying to solve an incompatibility problem with
the “memory control blocks,” this Microsoft developer requested
information from Dyson on whether DRI has written Windows code to
detect whether a program is running under a DR-DOS or MS-DOS
platform. In the interest of fair play, Dyson submitted this
information; but later, a DRI official wrote “Roger Sour” (whether or
not he knew Sour existed is beside the point) to tell him that DRI was
aware of Microsoft’s plan to make Windows 3.1 fail on DR-DOS. The
letter stated, “Usually, when a software manufacturer feels that
something in our operating system is preventing their application from
running well, that company works with us to resolve the actual,
perceived, or potential conflicts.” In a letter dated 1 November
1991, Phil Barrett responded to the DRI official that there no “Roger
Sour” at Microsoft, and added, “Perhaps you may have been the victim
of a prank.” This “prank” was reported to the Federal Trade
Commission, which contacted Microsoft later that week. News of the FTC
contact prompted David Cole to write the following in an executive
memo: The bothersome part is where the hell is DRI getting their
information. Are they just speculating? Seems like a pretty risky
thing to do with the FTC? Did they interpret “Roger Sour” thing
broadly and conclude we are doing it for Windows?

What bothered Microsoft more than the possible appearance of
impropriety was the possibility of a mole within the company. For the
next year and a half, Microsoft would deal with DRI, Novell (which
acquired DRI), and the FTC as a single monkey on its back–the
collective entity preventing Microsoft from smoothly integrating
itself into the corporate computer network. Beginning in 1992,
Microsoft would develop the entire Windows platform into “Chicago”–a
confusing amalgamation of possible development scenarios which only
Microsoft would be able to decipher, leaving confused independent
developers and consumers to sort them out for themselves. In a 16 June
1992 strategy document circulated by Microsoft’s then-Vice President
Brad Silverberg, the company outlined its concept of Chicago as a
product that could be packaged three ways–as Windows for Workgroups,
as plain Windows, and as MS-DOS. Thus, the answer to the question,
“Are you merging MS-DOS with Windows?” could be “Yes,” and the answer
to the question, “Are you maintaining the two product lines
separately?” could also be “Yes.” This obfuscation, according to
documents, was crafted deliberately for the sole reason of throwing
off the competition and keeping consumers guessing, thus fulfilling
the following directive Brad Silverberg had made in late 1991: This is
a very important point. We need to create the reputation for problems
and incompatibilities to undermine confidence to drdos6; so people
will make judgments against it without knowing details or fats [sic].

In 1993, following its acquisition of DRI, Novell re-engineered DR-DOS
to become Novell DOS 7–a product which it promised would not only
serve as a cohesive network and desktop platform, but which would also
run Windows 3.1 without problems. At long last, the monkey on
Microsoft’s back became too much for Chairman Bill Gates, who on 21
July wrote the following memo to his subordinates: Who at Microsoft
gets up every morning thinking about how to compete with these guys in
the short term — specifically cut their revenue. Perhaps we need more
focus on this…After their behavior in this FTC investigation, I am
very keen on this.

Once again, Gates infuses his fellow executives and product managers
with a lofty vision of Microsoft as having carte blanche, on account
of its size, to set the rules for the industry, even if it means
teetering on the edge of implying that it’s above the law. With Gates,
there is never a smoking gun. The job of providing the smoke is left
to others, such as Jim Allchin who, in an 18 September 1993 memo,
advised the following: Sentiment is against us. We can and MUST turn
this around. As we become more aggressive against Novell product and
marketing-wise, we must get our mouth in order. The press, etc. is
very sketical of us so one slip up and we get set back quite a ways.

This really isn’t that hard. If you’re going to kill someone there
isn’t much reason to get all worked up about it and angry — you just
pull the trigger. Any discussions beforehand are a waste of time. We
need to smile at Novell while we pull the trigger.

The strategy that Microsoft concocted is for the company to represent
Chicago as the successor to MS-DOS 6.3, and as perhaps Windows bundled
with DOS and perhaps Windows merged with DOS. Consumers and businesses
considering their upgrade options would have to consider the extent to
which they considered Windows an asset. Not knowing whether the two
products would bundle or merge, consumers were forced to evaluate
MS-DOS as though it were Windows, and not for its own merits–which,
against Novell DOS, were admittedly lacking. As long as Windows
continued to support Novell NetWare–and it did, quite
completely–consumers would conclude they had nothing to lose from
their current NetWare investment, if they were to choose an
all-Microsoft upgrade path for the future, which included DOS as
well. The decision to actually merge DOS with Windows was withheld
until the last possible minute–in 1994, well after what was supposed
to have been Chicago’s initial release date. This decision was the
coup de grace to Novell DOS, indicating to buyers that there would be
no need for a DOS once Windows 95 was installed.

Consumer confusion about Microsoft’s course of action led to the
desired result: Buyers turned away from Novell, believing what
Microsoft itself calls its own “FUD messages” (fear, uncertainty, and
doubt) about the future reliability of Novell DOS in tandem with
Windows. The term “FUD” is said to derive from a similar term used by
Pres. Nixon’s famous “plumbers”–the people hired to spread rumors and
false information about possible presidential opponents. It is a term
which shows up in Microsoft internal memos and documents as though it
were its own brand name.

MIRACLE INGREDIENTS

The DR-DOS story is important because the behavior of Microsoft during
the early 1990s established a prototype for its behavior during the
“browser wars”–one of the current antitrust action’s two key periods
of interest.
It is in some ways humorous to note that Microsoft held
little or no regard for the Internet as a global information resource,
until such time as it perceived that resource as a threat to its
business. Bill Gates actually wrote an entire book, “The Road Ahead,”
that was a national bestseller, and that afterwards was amended as a
“Special Edition” after its author had received too many inquiries
about its omission of the Internet as a topic. Microsoft is not a
company that believes in creating opportunities, or even in finding
fair and open opportunities outside of its own corporate walls. This
is a company whose key success during the 1990s was stifling the
opportunities of others in order to protect its own products and
intellectual assets.

After Novell had been thoroughly decimated by Microsoft FUD, the
company turned its attention in late 1994 to Netscape, as the
threat-on-the-horizon it needed to continue to function the way it had
trained itself to do.
Microsoft, as we all know now, perceived
Netscape Navigator as a platform that could potentially be leveraged
to distribute a future form of Sun Microsystems’ Java as a substitute
operating system. The cross-platform capabilities of Java awakened
developers to the potential of crafting applications that did not need
to rely on the resources of any one operating system
exclusively–especially Windows.

As Judge Jackson’s Findings of Fact show, Microsoft’s internal policy
was to develop its own Java programming language and applications
resources–called J++–to appear to be compliant with Sun’s Java,
while actually presenting Java developers using Windows with
non-portable libraries. Jackson writes: In a further effort intended
to increase the incompatibility between Java applications written for
its Windows JVM and other Windows JVMs, and to increase the difficulty
of porting Java applications from the Windows environment to other
platforms, Microsoft designed its Java developer tools to encourage
developers to write their Java applications using certain “keywords”
and “compiler directives” that could only be executed properly by
Microsoft’s version of the Java runtime environment for
Windows. Microsoft encouraged developers to use these extensions by
shipping its developer tools with the extensions enabled by default
and by failing to warn developers that their use would result in
applications that might not run properly with any runtime environment
other than Microsoft’s and that would be difficult, and perhaps
impossible, to port to JVMs running on other platforms. This action
comported with the suggestion that Microsoft’s Thomas Reardon made to
his colleagues in November 1996: “[W]e should just quietly grow j++
[Microsoft's developer tools] share and assume that people will take
more advantage of our classes without ever realizing they are building
win32-only java apps.” Microsoft refused to alter its developer tools
until November 1998, when a court ordered it to disable its keywords
and compiler directives by default and to warn developers that using
Microsoft’s Java extensions would likely cause incompatibilities with
non-Microsoft runtime environments.

The part of this story that Judge Jackson didn’t touch on, and that
was not introduced as evidence, concerns Microsoft’s efforts during
1996-1999 to promote a cloudy but potentially promising future system
called ActiveX as an alternative to Java for developers, and an
alternative to Netscape for Windows users. Just exactly what ActiveX
was, is, or was supposed to be, isn’t entirely clear. I understand
this fact better than most people alive. In 1996 and `97, I wrote a
book on ActiveX technology for developers, with the full cooperation
of a major worldwide publisher. For the better part of two years, I
wrote seven complete drafts of this book, overhauling the content each
time in order to keep up with Microsoft’s mind-boggling changes in its
definition of the product/concept/marketing scheme.

In an early document for developers such as myself, dated 18 June
1996, Microsoft defined ActiveX in this way: ActiveX is a set of open
technologies that bring the power of the personal computer to the
ubiquitous connectivity of the Internet. ActiveX takes the Internet
beyond static text and picture documents to provide users with a new
generation of more active, exciting, and useful experiences. For
intranet developers (intranets are private Web sites published on
internal, corporate networks), ActiveX provides core functionality for
building robust enterprise-wide applications that offer enhanced
functionality and productivity beyond basic HTML document sharing.

So in June, at least, ActiveX was a multimedia standard for Web
sites. The very next month, Microsoft announced it was turning over
stewardship of ActiveX to an independent body. In its press release,
Microsoft quoted an independent industry analyst as stating the
following: COM and DCOM – the foundation for ActiveX – constitute the
most widely used object framework, but as technologies owned and
controlled exclusively by Microsoft, they were not vendor-independent
solutions. In the hands of a neutral standards body, ActiveX can
become a vendor-independent solution, enabling interoperability while
allowing both developers and customers to take full advantage of their
existing investments in OLE and DCOM technologies.

“COM and DCOM” are, respectively, the Component Object Model and the
Distributed Component Object Model. These are legitimate architectures
which, in my view, represent some of the best ideas Microsoft has ever
put forward. COM enabled source code from diverse and varied
applications and program components to address one another
dynamically, using a common framework and an amendable object
language. This way, old programs could conceivably determine the
capabilities of newer programs when they shared the same system, under
a multitasking framework such as Windows 95. DCOM extended these
principles to program components over a network, so server-based
components could communicate with client-based components and provide
them with requested resources. These were delicately intricate
systems, but they were constructed with the best of intentions, and
their creators deserve respect.

But it was apparently never the intention of Microsoft’s executives to
exploit the full potential of COM and DCOM. Instead, they deployed
ActiveX as a marketing tool to befuddle the market as to Microsoft’s
intentions, and to repeat the company’s successful strategy against
DRI and Novell, this time to kick Netscape and Sun Microsystems into
the death spiral.

Developers such as myself were given a myriad of mixed and often
self-contradictory messages. In the summer of 1996, we were told that
ActiveX was a system that would be deployed on Microsoft’s Internet
Explorer Web browser, to enable online applications from Windows
servers to utilize controls–buttons, menus, lists, and common “user
interface” elements–whose programs were deployed on the client side,
thus freeing bandwidth and relieving much of the burden on the
server. This was–and still is–a good idea. We were told that ActiveX
controls would make use of a Windows feature called Object Linking and
Embedding (OLE, pronounced “olay”) to enable their code to be called
up on the server side by container programs on the client side–again,
a good idea. This utilization of resources would free the controls
programs from the constraints of the client-side architecture called
Microsoft Foundation Classes (MFC)–the architecture upon which
Microsoft’s Office applications are based. (Microsoft’s developers are
indeed capable of creating good ideas, and executing good plans based
on them.) In the fall of 1996, the FUD began. Microsoft offered
developers a free, limited edition of its Visual Basic development
environment, geared exclusively toward the creation of ActiveX
controls. These controls, we were told, leveraged the power of MFC to
make them more fully integrated with Windows. This went against the
company’s original design strategy, for reasons we couldn’t yet
fathom.

While the newly-formed “ActiveX Working Group,” assigned stewardship
of the ActiveX standard, did establish a Web site for a brief period,
the group only held a few token meetings, and even then with a subset
of its membership. Many members listed on the Web site were surprised
to find they were members at all. As soon as January of 1997, the
Working Group had become a non-entity.

Later that same month, Microsoft announced its intention to deploy a
network communications system then called Microsoft Transaction Server
(MTS), and to market that system under the ActiveX collective
umbrella. MTS would be the hub of a system that processed DCOM
transactions over networks and over the Internet, between Microsoft
servers and client systems that were running ActiveX controls. What
confused us at first was the fact that DCOM was not OLE, so the
ActiveX controls we had now appeared not to be the ActiveX controls we
were supposed to build for later. Furthermore, the new controls–to be
created using that free edition of Visual Basic–could only operate
within the confines of a single, designated container program–which,
not coincidentally, was part of Internet Explorer 3.0. So it appeared
that the capability of Netscape Navigator to be adaptable, through a
third-party product, to display and use ActiveX controls, was due for
extinction.

By the spring of 1997, Microsoft had announced the replacement of its
core database transaction protocol with something called ActiveX Data
Objects (ADO). This protocol would be used by Microsoft Office
applications, and would be licensed for free to developers making
their own programs for data transactions. For ADO to be deployed in a
network environment, it appeared, the server would need to run MTS. So
if everyday applications wanted to take advantage of Web deployment
capabilities, Netscape was appearing to be less and less of an
option. ADO objects were not controls–what’s more, they weren’t COM
objects or DCOM objects either. So the umbrella seemed to be reaching
further. Almost every Windows protocol had something to do with
ActiveX–and thus, by association, something to do with future
deployment over the Internet.

In the summer of 1997, Microsoft sprung the trap. MTS as a product was
integrated with Internet Information Server, and very soon thereafter,
IIS was incorporated as a native part of Windows NT 4.0. If your
server had NT4, it had IIS, so it had MTS. On the client side,
Internet Explorer would be “sewn” onto the front end of Windows 98,
not as an integral part or even an inseparable one from Windows 98,
but a part which the common user could not easily detach from
it. Suddenly, the whole world of Windows closed in on itself,
excluding Netscape and Sun technologies and immediately rendering them
obsolete. Users abandoned Netscape in droves, and within only a matter
of months. Sun’s efforts to develop Java further, gradually slowed to
a trickle. The death spiral still worked.

The code of conduct which the Appeals Court upheld as illegal use of
Microsoft’s monopoly power, stems directly from the code of conduct
Microsoft taught itself in fending off the DR-DOS threat. It is not
the behavior of an established, experienced company whose leadership
position is bestowed upon it by its customers and partners. It is the
behavior of an adolescent, catapulted quickly to prominence in a young
industry, without ever having found the time or the inclination to
learn how success may be achieved fairly and with honor.
It is a
spoiled brat kid that never listened to its elders, and has never come
to appreciate the world outside of itself. It has erected its own
psychological “barrier to entry” that prohibits it from absorbing
anything of positive benefit–any new ideas, any good alliances, any
substantive partnerships–from the outside world, out there, where the
enemy lives. Paranoid, over-sensitive, and withdrawn, it hides out in
its room, nails a “Keep Out” sign to its door, locks the door shut,
loses itself in a video game, and drowns itself out with loud music
laced with messages of pessimism and disdain. It is the unloved
child. It is built in the image of its maker. It will not listen to
reason.

”Microsoft’s private fantasy world has evolved into a dangerous corporate subculture whose principles and motives threaten the very way business is done in America, in Canada, in Asia, in Europe, and anywhere there is a microprocessor.“Within the locked, sacrosanct confines of corporate headquarters or boardrooms, no fantasy world is illegal. Corporate fiefdom or chivalry may assume any degree of distortion, and black may very easily be declared white without objection. It is when these bizarre practices lead directly to tactics of deception, sabotage, and bad faith against not only a company’s competitors but also its purported partners, and to a calculated campaign of consumer choice control, that they impede upon the rights of individuals, of companies and corporations, and of an entire industry. Microsoft’s private fantasy world has evolved into a dangerous corporate subculture whose principles and motives threaten the very way business is done in America, in Canada, in Asia, in Europe, and anywhere there is a microprocessor.

”To this day, serious bugs and deficiencies in Microsoft’s operating systems and applications, discovered by myself and others and duly reported to Microsoft, remain uncorrected, quite possibly for fear of the political cost of exposing the problem by making the world aware of its solution.“When faced with a situation where the only rational option is for Microsoft to solve its own problems, Microsoft chooses instead to go on the attack against some outside enemy that could potentially expose or spotlight those problems. As a result, those problems may never be solved, but the enemy du jour becomes so damaged that the continued existence of those problems in the context of the industry as a whole, becomes inconsequential. To this day, serious bugs and deficiencies in Microsoft’s operating systems and applications, discovered by myself and others and duly reported to Microsoft, remain uncorrected, quite possibly for fear of the political cost of exposing the problem by making the world aware of its solution.

Microsoft’s distorted perception of the computing industry, and of the
world as a whole, is important because of a fact which Judge Jackson
came to realize but, all too soon, commented on: Any conduct remedy
which relies solely upon Microsoft’s own ability to scrutinize,
admonish, and improve itself through its own means, will be treated by
Microsoft’s executives with disrespect and contempt. It’s like a
parent ordering his wayward son to shape up. The executives of
Microsoft are as unwilling to consider such an order as an adolescent
boy, bottled up in his room, is willing to remove his headphones and
listen to his dad for five seconds. They are likely to ignore such an
order altogether. I say this with the utmost respect: They don’t give
a damn what you think.

FIRST NOVELL, THEN NETSCAPE, NOW THE JUSTICE SYSTEM

Microsoft is a company which views all events and actions relevant to
the computing industry, taken outside of its corporate headquarters,
as attacks against it. These include not only new product
announcements from Oracle or marketing agreements from Sony, but legal
maneuvers, motions, and actions from the Justice Dept., and judgments
and decisions from the courts. Microsoft’s executives are charged with
the mission to manipulate circumstances to its own advantage, so that
the enemy’s actions end up reinforcing the company’s prominence. Bill
Gates calls this mission “kicking them into the death spiral.”
Here’s
how the death spiral works, paraphrased from Microsoft’s own internal
documents: 1. Make agreements with the enemy that build an
interdependence between the enemy and us.

2. Generate uncertainty about our future course of action, to throw
the enemy off-track.

3. Propose a clear solution to the uncertainty that depends upon a
certain set of rules, and make it impossible for the enemy to turn you
down.

4. Change the rules so that the enemy is forced to live with its own
decisions, while we move to an entirely new world where the rules are
different and we own the territory.

The proposed final judgment before you now, presented by Microsoft and
the Justice Dept., is yet another clear example of the death spiral
methodology, this time applied to the American justice system. Just as
Novell was compelled to commit itself to a category of products that
appeared to have been rendered obsolete, and Netscape was compelled to
commit itself to offering for free a product that once generated
revenue and that had been rendered in most consumers’ minds
unnecessary, the Justice Dept. and the District Court are being
compelled to accept a vision of Microsoft’s conduct for the future
that is incompatible with Microsoft’s own vision of the
future. Microsoft plans to change the rules, to pull the rug out from
under you, and move on to a new territory where it gets to make new
rules.

Last 12 December, Microsoft counsel Charles F. Rule presented a
statement to the Senate Judiciary Committee, defending its Proposed
Final Judgment (PFJ) as taking corrective measures that are far
broader than may even be necessary, given that “four-fifths” of Judge
Jackson’s findings were invalidated, by his estimate, by the Appeals
Court. As with most prepared statements before a Senate committee, the
latter part that no one has time to read aloud, is “read into the
record” without objection. The body of this statement explains the
three-part provisions of the PFJ. The following excerpt explains the
Judgment’s provisions with regard to the category of software called
middleware: The case that the plaintiffs tried and the narrowed
liability that survived appellate review all hinged on claims that
Microsoft took certain actions to exclude Netscape’s Navigator browser
and Sun’s Java technology from the market in order to protect the
Windows operating system monopoly. The plaintiffs successfully argued
that Microsoft feared that Navigator and Java, either alone or
together, might eventually include and expose a broad set of general
purpose APIs to which software developers could write as an
alternative to the Windows APIs. Since Navigator and Java can run on
multiple operating systems, if they developed into general purpose
platforms, Navigator and Java would provide a means of overcoming the
“applications barrier” to entry and threaten the position of the
Windows operating system as platform software.

A person might expect that a decree designed to address such a
monopoly maintenance claim would provide relief with respect to
Web-browsing software and Java or, at most, to other general purpose
platform software that exposes a broad set of APIs and is ported to
run on multiple operating systems. The PFJ goes much further. The
Department insisted that obligations imposed on Microsoft by the
decree extend to a range of software that has little in common with
Navigator and Java. The decree applies to “middleware” broadly defined
to include, in addition to Web-browsing software and Java, instant
messaging software, media players, and even email clients — software
that, Microsoft believes, has virtually no chance of developing into
broad, general purpose platforms that might threaten to displace the
Windows platform. In addition, there is a broad catch-all definition
of middleware that in the future is likely to sweep other similar
software into the decree.

To summarize: It is conceded that Microsoft acted unlawfully to thwart
any action that Netscape and Sun may have taken to use Navigator and
Java as leverage for the distribution of an operating platform that
substitutes for Windows. Microsoft is to be praised, says Rule, for
its broad definition of middleware as more than just Web browsers, but
many categories of software with functionality that currently isn’t
part of an operating system–software that could not displace Windows
in and of itself, because it isn’t really an operating platform like
Java anyway. “A broad catch-all definition of middleware,” Rule calls
it–essentially, any software that isn’t Windows.

Defined so broadly, anything that isn’t on the Windows Setup CD-ROM
could potentially be defined as middleware. The settlement’s
provisions would, conceivably, apply to Microsoft’s treatment of the
producers and manufacturers of any non-Microsoft package on a store
shelf or Internet download site. Which sounds perfectly wonderful if
we allow ourselves to forget recent history: Microsoft has a
reputation for incorporating features from non-Microsoft software
packages–or features which at least appear to incorporate their
functionality–in new versions of Windows. The new digital photo
management features of Windows XP are a clear and present
example. What is to prevent Microsoft from adopting any new feature
into Windows, thus narrowing the feature set of “middleware” at will?
Certainly not the proposed judgment, which includes specific
provisions enabling Microsoft to share resources with a third party
for the development of products that compete with that party. From the
top of page 5: Nothing in this section shall prohibit Microsoft from
entering into (a) any bona fide joint venture or (b) any joint
development or joint services arrangement with any ISV, IHV, IAP, ICP,
or OEM for a new product, technology or service, or any material
value-add to an existing product, technology or service, in which both
Microsoft and the ISV, IHV, IAP, ICP, or OEM contribute significant
developer or other resources, that prohibits such entity from
competing with the object of the joint venture or other arrangement
for a reasonable period of time.

So conceivably, if we accept Mr. Rule’s explanation, a category of
software that was middleware in the past, could at Microsoft’s
discretion no longer be middleware today or tomorrow. But if you read
the Definitions section of the PFJ, you discover Mr. Rule’s
explanation isn’t entirely accurate. In this section, there are two
main categories: Microsoft Middleware, and non-Microsoft
middleware. The definition of middleware as “Internet browsers, email
client software, networked audio/video client software, instant
messaging software” applies only to the Microsoft category. In other
words, the broad definition applies only if Microsoft is the producer
of the broadly defined products. Non-Microsoft middleware is defined
later in the same section in this way: “Non-Microsoft Middleware”
means a non-Microsoft software product running on a Windows Operating
System Product that exposes a range of functionality to ISVs through
published APIs, and that could, if ported to or made interoperable
with, a non-Microsoft Operating System, thereby make it easier for
applications that rely in whole or in part on the functionality
supplied by that software product to be ported to or run on that
non-Microsoft Operating System.

In other words, any product that exposes its own functionality to
outside developers in the same way for Windows as for other operating
systems, enabling them to conceivably write code that supports that
functionality, for instance, for Macintosh, Linux, and Windows
simultaneously. This isn’t exactly Rule’s “broad catch-all definition”
that applies to instant messaging. Essentially, what this truly refers
to is any software that establishes dependencies with other software,
apart from the native dependence that all Windows software has with
the Windows operating system.

Speaking as a developer, I can speak with experience: This definition
may sound quite broad, but it isn’t. Excluded from this definition are
the drivers that software requires to be able to, for instance, print
an image on the printer or display something on-screen–drivers are
always considered part of Windows, even though Microsoft may not have
written them. Excluded from this definition are the kinds of products
whose mutual benefit, from the perspective of the user, is derived
from their being bundled together rather than from their communication
with one another–for example, Netscape Instant Messenger’s bundling
with Netscape Navigator. Excluded from this definition are programs
that establish dependencies on categories of data (as opposed to
programs or source code) that rely on the native operating system
independence of the system that uses them–as, for example, MP3 music
files are non-specific to Windows or Macintosh or Linux.

It is not broadness that distinguishes Microsoft’s legal definition of
middleware, but fuzziness. Depending on how you look at it, and where
you look for it, it can be anything at any time. The conduct
restrictions in the PFJ prohibit Microsoft from entering into
agreements with manufacturers that, in turn, would prohibit them from
choosing their own middleware for their own systems. Such restrictions
would be important if we could be certain what it is that Microsoft is
prohibited from prohibiting.

This fuzziness extends to the present moment. As I write, the entire
ActiveX marketing scenario is in the final stages of being disbanded,
in favor of a program architecture that replaces it entirely: the .NET
(pronounced “dot-net”) architecture. The basic principle of .NET is
that Windows may be enhanced to include a just-in-time compiler (JIT)
whose job is to execute programs in the Windows environment. The role
of the JIT is analogous to that of the Java Virtual Machine (JVM),
although Microsoft’s implementation will have no cross-platform
capabilities. Conceivably, as developers are compelled to switch their
program architectures from the now-obsolete COM to the new .NET, the
architectural model of the Windows application may be redrawn in such
a way that “apps” become satellites of a sort–small, shared
components designed to interoperate and, in so doing, produce a
collective, de facto application on behalf of the user. In such an
architectural model, middleware by one definition would not exist. The
reason is because the functionality of a collective .NET application
would not have to be “exposed” like the opening of a telephone
directory–and as the PFJ expects–but is instead derived as a result
of an independent assessment by Windows of the collective capabilities
of the .NET component programs. Imagine telephones that could
publicize their own phone numbers, and you get a glimpse of the idea.

”Microsoft is actively working to demonstrate this principle, and we must see .NET not only as a good idea, but a warning. As long as we consider Microsoft the de facto keeper of the computing dictionary, we will render that company of changing its terms–and to some extent, our lives as a result–on a whim.“The architectural concepts underlying Microsoft’s .NET architecture are among the best ideas the company’s developers have ever conceived. Nonetheless, the mechanism is being put in place today for Microsoft to change the rules yet again. Microsoft itself has stated in press conferences throughout the antitrust proceedings, that the rules of the computing industry change so fast that, by the time a judgment or settlement is finally reached, its terms will have been rendered obsolete by the very evolution of the industry. Microsoft is actively working to demonstrate this principle, and we must see .NET not only as a good idea, but a warning. As long as we consider Microsoft the de facto keeper of the computing dictionary, we will render that company of changing its terms–and to some extent, our lives as a result–on a whim.

Microsoft has a history of making its enemies follow a set of rules,
which it then changes. Provisions in the PFJ would prohibit Microsoft
from excluding from any party the right to include icons and menu
selections on its systems that point to any software it chooses. As
both a developer and an editor, I have heard news–whether it be
controlled leaks or the usual FUD–that Microsoft is considering
eliminating the “Desktop” as a feature of Windows, replacing it with a
more resplendent, multimedia-oriented, Web-based system that’s
possibly tied into its MSN network. The Windows Desktop is where all
the icons and menu selections are. If Microsoft changes the rules,
these provisions would immediately be rendered archaic.

The provisions of the Proposed Final Judgment as they stand today
would restrict Microsoft to behaving as we would expect any large,
successful company to behave with regard to its partners, competitors,
supporters, and customers, had that company attained its position of
prominence by legitimate means. What the PFJ would have us forget is
that Microsoft has a duty, at this point in its history, to make
reparations to those parties whom it knowingly and willfully
deceived. It must behave not as an ordinary large company, but as one
with unordinary obligations to the market in which it does business:
to provide its partners, competitors, supporters, and customers with
more than is expected of the company that has operated in good faith,
competed on the quality of its products and services, and has not
broken federal and state laws.

MICROSOFT’S WORLD, AND OTHERS

”This transfiguration of the concept of the operating system is referred to by Microsoft as “innovation.”“Unlike any single corporation in any other industry in the world,
Microsoft has attained the freedom to dictate not only the terms of the course of action for others in that industry, but also the very terminology, principles, and rules of existence by which that industry operates. In 1984, an operating system was a “bootstrap” program whose basic function was to engage the computer, take keyboard commands from the user, and give the user some rudimentary access to stored files. In 2001, the operating system has become something which removes red-eye from photographs, bounces instant messages to digital cell phones, and handles copyright infringement management on behalf of music publishers–and all of these things, not particularly very well. This transfiguration of the concept of the operating system is referred to by Microsoft as “innovation.” No similar concept of innovation can be applied to any other industry in the world. In our own fantasy world, we can imagine an automobile industry whose leader endows its products with microwave ovens, paper shredders, and Spanish teachers. We can imagine the manufacturer calling these developments “innovation.” And we can argue that such developments would not be illegal in and of themselves. But even in that fantasy world, we cannot concoct a situation where the inclusion of these features in automobiles would in any way impede, hinder, or prohibit a consumer’s means of nuking a hot dog, shredding a letter, or counting to diez by any other method.

Microsoft’s incorporation of often arbitrarily-chosen new features in
its operating system, by design, impedes the channel of delivery for
any company whose business is specifically to provide those
features. Knowing that, Microsoft has created its own little market
where partners and potential partners bargain for prominence. The
price of a partner striking this bargain is often the termination of
its own native distribution channel for its product–without
Microsoft’s backing, neither the product nor the company can
exist. And yet Microsoft itself has shown it had no intention for its
partnerships to continue for any longer than it could conjure its own,
self-branded alternative. Microsoft used its partnerships to develop
new markets in voice recognition, storage security, file backup and
restoration, messaging, imaging, multimedia, database organization and
translation–markets whose main channel of distribution were
controlled by Microsoft. Once that market exists, Microsoft rescinds
its partnership and offers its own “innovation” as a substitute.

The Definitions section of documents in the current antitrust case,
including the overturned District Court’s Final Judgment, paints an
outline for a newcomer to planet Earth of an industry constructed in
general accordance with Microsoft’s current vision. What an operating
system is, what a “browser” is, what an application is, what a
database is, are definitions that could have been supplied by a
Microsoft manual. That a company should have such a defining vision
should never be made illegal–any American company should be free to
dream of redefining its industry. But the very definitions of these
things as we have come to understand them, derive from Microsoft
actions taken to defend its own prominence and thwart enemy
attacks. Had these actions never been taken, our very understanding of
the parts of a personal computer may be almost unrecognizable to the
inhabitants of this world. Taking that into account, any remedial
measure which accepts the present state of computing at face value,
without taking into account not only what computing is becoming, but
also what it might have been today had Microsoft never acted with such
aggression and deception, is of no benefit to the companies outside of
Microsoft who each should have the right to challenge Microsoft’s
prominence in a fair and competitive manner.

We use personal computers today whose processing power and data
address capability supersede that which the Dept. of Defense
categorized as “supercomputing” only eight years ago. Knowledge of
their technology falling into the hands of enemies of the U.S., was
considered a threat to national security. The processors on our
desktops are capable of calculations which, as late as 1989, were
deemed impossible given the laws of physics.

Yet what can we truly do with these computers? Can we calculate the
trajectories of celestial bodies? Can we give them voice commands and
ask them to perform sophisticated analyses of financial transactions,
bodily functions, or legal maneuvers? Can a computer tell me what I’m
eating that jeopardizes my cholesterol rate? Can we make heads or
tails of Enron’s bookkeeping strategy?

These are jobs, the basic functions of which supercomputers of the
1980s could perform with ease. Yet the modern, everyday personal
computer, whose processing ability supersedes that of those machines
by orders of magnitude, just barely delivers enough power for you to
type a letter, or keep a list of your colleagues’ phone numbers, or
even play a decent game of chess with you. Crashing has become one of
the fundamental functions of a computer. Entire careers are spent by
system administrators whose principal jobs are helping their users
recover from system crashes. We speak often of how the computers
on-board Apollo 11 had one-fourth the processing power of a
T.I. pocket calculator. Today, an everyday personal computer, capable
of literally millions of times the processing power of Apollo 11, has
difficulty running a real-time simulation of the Apollo 11 on-board
computer, without being bogged down by the colossal overhead incurred
by the operating system. Most of us computer users and developers are
just barely eking out our everyday jobs.

Had there been a true state of competition between Microsoft and other
producers of operating systems over the last 15 years, this pitiful
state of existence would never have come about. Microsoft yesterday
and today has employed brilliant programmers, with the capability to
endow computers with extraordinary functionality and richness of
experience. These programmers–not just those outside the
company–have been handicapped by the crippling weight of the
monstrosity that has become Microsoft Windows, a platform that
transforms the definition of “moving target” into an unfathomable,
four-dimensional puzzle from which rational minds can barely escape.

It is bewilderment in the apparently minuscule importance of the law
within Microsoft’s own little world, that Judge Jackson attempted to
express–and which, sadly, he did at the wrong time and with improper
motivation. Judge Jackson’s judgment was indeed clouded, as was Joel
Klein’s, and those of the other parties in this case who have
attempted to craft an appropriate remedy for Microsoft’s offenses. To
date, no solution on the table–including the breakup of the
company–has taken into account this obvious fact: Any remedy that
fails to render the future executive conduct of Microsoft or its
successor companies innocuous to those whom its prior conduct
knowingly deceived, is no remedy at all.

NEW CONSIDERATIONS FOR THE FINAL JUDGMENT

Tough love, for a misbehaving adolescent child, often mandates that
the parent be willing to cut that child off–not to kick him into the
death spiral, but to make him live with his own choices.

Microsoft would have itself continue to live in a world defined by the
agreements it makes with others–how free and open they are, how
restricted and narrow they may be, but in any event, how many
agreements there are! It is my suggestion to you that, in the interest
of tough love, Microsoft should be cut off. We must take steps to
force Microsoft to live with the decisions that it has already made
for itself. We must allow Microsoft to live in the world it has
constructed for itself. But we must not allow circumstances to
continue which force, or compel, or rely upon any other company doing
business in the computing industry–software, hardware, services,
networking, or elsewhere–to have to make any agreements with
Microsoft whatsoever just to stay alive.

What if we’re sick of Microsoft? Why must developers, manufacturers,
vendors, and retailers be forced to endure even the fairest and most
legally honorable of relationships with a corporation that has proven
its inherent incapability to see value in the ideas, works, and
products of others outside its own doors? Why must the rest of the
computing industry be bunched together under the category of “third
party” by legal definition?

In the early 1980s, the computing industry at large made a collective
decision to support a single, pre-eminent operating system, and to
trust Microsoft with the stewardship of that system. This decision was
not reached by having been kicked into the death spiral. This was a
rational decision made by honest, persevering corporations whose
mutual interest was to build an industry together so that each could
prosper.

Microsoft Windows did not, as Microsoft’s self-authored history
proclaims, compete head-to-head with other operating systems on equal
turf, and achieve a position of prominence through overwhelming
customer acclamation. MS-DOS–and by succession, Windows–were handed
this position of prominence on a silver plate, under the auspices of a
bond of trust between Microsoft and the rest of the computing
industry. This trust was the collective property of the computing
industry. Microsoft violated, ruined, and destroyed that trust. Entire
corporations were destroyed as a result, and others today struggle
simply to break even.

To presume that Microsoft can make reparations for this violation by
way of an agreement stating that it promises this will never, ever
happen again, is to ignore the extent of the damage that was done. For
Netscape, Sun, and Novell, the death spiral was indeed devastating,
but their survival is foreseeable. They may each yet rise from the
ashes, with or without Microsoft’s aid–and they may be better off
without it anyway. These are companies that may never benefit from any
settlement on the content of future agreements with Microsoft. These
companies don’t want future agreements with Microsoft.

The offended parties in the Microsoft antitrust matter are Microsoft’s
many software development partners, the computer manufacturers who
depend on Windows, the retailers who have the right to sell the
products they want to sell, and most importantly, the consumers and
businesses who rely on Windows every day. The state of Windows
today–and as a result, the state of the way their businesses work
every day–was designed, planned, built, and executed in bad faith.

In the interest of crafting a proper redress, I make the following
suggested replacements for the terms of the District Court’s Final
Judgment: 1. Microsoft should cede stewardship of all components of
its operating system directly related to the function of maintaining
the readiness and usability of the computer, to an independent
Licensing Bureau. This Bureau may be comprised of representatives of
software manufacturers (including Microsoft); hardware manufacturers;
leaders in services, support, and education. Any element of Windows
whose basic function does not directly relate to the operability of
the computer and its peripherals, may be retained exclusively by
Microsoft. This definition may include Media Player, Outlook Express,
and such elements that Microsoft has called “Microsoft Middleware.”
This central element of Windows is referred to here as the Windows
core.

2. Representatives of lawmaking entities worldwide will be appointed
as special liaison to the Licensing Bureau, for the purpose of
overseeing all development, licensing, and educational
operations. This includes representatives of the US Justice Dept., but
may also include representatives from the various plaintiff states,
from Canada, from the EU, and elsewhere.

3. The Licensing Bureau will make public all relevant information
required by any independent developer to be able to create an
application or program for any purpose that developer may conceive, in
a timely manner such that a program constructed using this information
may be guaranteed to run on the most premium version of Windows
commercially available for a period of time 24 months following the
developer’s receipt of the information. Costs incurred for this
publication will be assumed by the Bureau, and the Bureau will be free
to make certain premium versions of its publications–such as
“courseware”–commercially available.

4. The Licensing Bureau will serve as the central authority for
licensing of shared Windows components to independent developers, for
inclusion in independent programs. This way, developers who use a
compiler package will be able to incorporate elements of shared code
necessary for the software to perform common functions, such as
display buttons and present menus.

5. Members of the Bureau will grant themselves licenses to produce,
develop, distribute, and sell operating systems with any package,
design, or name they may choose, but which has guaranteed
compatibility with the Windows core, and whose principles comply
completely with the level of interoperability and communication
required by the Windows core. Costs incurred for licenses will be paid
to Microsoft Corp., and for the first two years, Microsoft will be
credited in any non-Microsoft version of Windows as the creator of
Windows. For example, “IBM Windows” may include this message: “Based
on Microsoft technology.” (Use the “Intel Inside” logo for a
prototype.)

6. Each member of the Bureau will retain the right to develop (or
“innovate”) its own exclusive packaging arrangement for its own
version of Windows. Hypothetically, “HP Windows” could include HP’s
own choice of media player, e-mail client, or instant messenger; and
HP may even choose to make a “plain” version of Windows available
without these items. Meanwhile, Microsoft may continue to offer
Windows Media Player, Outlook Express, and MSN Messenger. Fair market
competition will determine which package is superior.

7. It will be the sole and exclusive responsibility of the Bureau to
determine for the benefit of its own members, as well as the computing
industry at large, the developmental strategy for the Windows core, to
assign the tasks of development to Microsoft teams or to teams from
other companies, to manage the development process, and to ensure
compliance with the interoperability principles of the Windows
core. Microsoft has a seat at the table, but it’s a seat among
equals. It can elect to play along, or go home and sulk.

At this time in the history of the computing industry, and of the
country as a whole, it is incumbent upon us all to get smarter very
quickly. We now live and work in a society dependent upon the free and
expedient flow of information. The computing industry has helped the
concept of information to evolve to include not just news and mail,
but functionality–the type of work that can be performed by software
and yet represented digitally.

Microsoft’s most ardent supporters have argued that it should not be
the business of the federal government to interfere with, place
controls on, or make restrictions to the free flow of information, or
to any company that facilitates this flow of information. They are
right. Acceptance of the Proposed Final Judgment as it presently
stands, is a tacit surrender and assignment of all rights to restrict
the free flow of information, by the federal government, to a single
company. The Proposed Final Judgment defines the future as a
magnification of the present–in a state of existence that does not
appear to have evolved much from where we stand now. And yet we know
that the company to which the government would, in effect, render this
authority is capable of using its own monopoly power in deceptive ways
to manipulate the information industry in such a way that every single
transaction comes closer and closer to flowing, at some point, through
Microsoft.

”“Get me into that,” Bill Gates is quoted as saying, “and goddam, we’ll make so much money!”““Get me into that,” Bill Gates is quoted as saying, “and goddam, we’ll make so much money!” The free flow of transportation was engineered by geniuses–Henry Ford, John A. Roebling, Norman Bel Geddes–and championed by presidents–Abraham Lincoln, Theodore Roosevelt, Dwight Eisenhower. The free flow of ideas is one of the basic principles upheld by the United States Constitution. Up to now, all successful freedom has been constructed and established on solid principles. Are we truly prepared to draw up a statement that speaks for all of us as a people and a nation, that serves as a catalyst for the surrender of the free flow of information not to an institution defined by principles, but a corporation defined by deception?

We are a smarter people than that. We know, for a fact, that all
information, all knowledge, all wisdom is truly free, and that all
people are entitled to fair and equal access. This principle will be
demonstrated, clearly and unequivocally, either in the relative peace
of today or in the turmoil of the future. You may spare the people a
great ordeal now, against a powerful yet unprincipled force, by
putting a stop to the death spiral. The way you do this is the way you
deal with a wayward adolescent: Stop making deals. Take away its
power. Spell out the law. And don’t get kicked in yourself.

Yours sincerely,
Scott M. Fulton, III
Senior Partner, Ingenus


Here is another letter. This one comes from Ralph Nader and it’s available for public viewing here


Ralph Nader
P.O. Box 19312
Washington, DC 20036

James Love
Consumer Project on Technology
P.O. Box 19367
Washington, DC 20036

January 28, 2002

Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Email: microsoft.atr@usdoj.gov
Note: In the Subject line of the e-mail,
type Microsoft Settlement.)
Fax 1-202-307-1454 or 1-202-616-9937

Introduction

Having examined the proposed consent final judgment for USA
versus Microsoft, we offer the following comments. We note
at the outset that the decision to push for a rapid
negotiation appears to have placed the Department of Justice
at a disadvantage, given Microsoft’s apparently willingness
to let this matter drag on for years, through different
USDOJ antitrust chiefs, Presidents and judges. The proposal
is obviously limited in terms of effectiveness by the desire
to obtain a final order that is agreeable to Microsoft.

We are disappointed of course to see a move away from a
structural remedy, which we believe would require less
dependence upon future enforcement efforts and good faith by
Microsoft, and which would jump start a more competitive
market for applications. Within the limits of a conduct-
only remedy, we make the following observations.

On the positive side, we find the proposed final order
addresses important areas where Microsoft has abused its
monopoly power, particularly in terms of its OEM licensing
practices and on the issue of using interoperability as a
weapon against consumers of non-Microsoft products. There
are, however, important areas where the interoperability
remedies should be stronger. For example, there is a need
to have broader disclosure of file formats for popular
office productivity and multimedia applications. Moreover,
where Microsoft appears be given broad discretion to deploy
intellectual property claims to avoid opening up its
monopoly operating system where it will be needed the most,
in terms of new interfaces and technologies. Moreover, the
agreement appears to give Microsoft too many opportunities
to undermine the free software movement.

We also find the agreement wanting in several other areas.
It is astonishing that the agreement fails to provide any
penalty for Microsoft’s past misdeeds, creating both the
sense that Microsoft is escaping punishment because of its
extraordinary political and economic power, and undermining
the value of antitrust penalties as a deterrent. Second,
the agreement does not adequately address the concerns about
Microsoft’s failure to abide by the spirit or the letter of
previous agreements, offering a weak oversight regime that
suffers in several specific areas. Indeed, the proposed
alternative dispute resolution for compliance with the
agreement embraces many of the worst features of such
systems, operating in secrecy, lacking independence, and
open to undue influence from Microsoft.

OEM Licensing Remedies

We were pleased that the proposed final order provides for
non-discriminatory licensing of Windows to OEMs, and that
these remedies include multiple boot PCs, substitution of
non-Microsoft middleware, changes in the management of
visible icons and other issues. These remedies would have
been more effective if they would have been extended to
Microsoft Office, the other key component of Microsoft’s
monopoly power in the PC client software market, and if they
permitted the removal of Microsoft products. But
nonetheless, they are pro-competitive, and do represent real
benefits to consumers.

Interoperability Remedies

Microsoft regularly punishes consumers who buy non-Microsoft
products, or who fail to upgrade and repurchase newer
versions of Microsoft products, by designing Microsoft
Windows or Office products to be incompatible or non-
interoperable with competitor software, or even older
versions of its own software. It is therefore good that
the proposed final order would require Microsoft to address
a wide range of interoperability remedies, including for
example the disclosures of APIs for Windows and Microsoft
middleware products, non-discriminatory access to
communications protocols used for services, and non-
discriminatory licensing of certain intellectual property
rights for Microsoft middleware products.
There are,
however, many areas where these remedies may be limited by
Microsoft, and as is indicated by the record in this case,
Microsoft can and does take advantage of any loopholes in
contracts to create barriers to competition and enhance and
extend its monopoly power.

Special Concerns for Free Software Movement

The provisions in J.1 and J.2. appear to give Microsoft too
much flexibility in withholding information on security
grounds, and to provide Microsoft with the power to set
unrealistic burdens on a rival’s legitimate rights to obtain
interoperability data. More generally, the provisions in
D. regarding the sharing of technical information permit
Microsoft to choose secrecy and limited disclosures over
more openness.
In particular, these clauses and others in
the agreement do not reflect an appreciation for the
importance of new software development models, including
those “open source” or “free” software development models
which are now widely recognized as providing an important
safeguard against Microsoft monopoly power, and upon which
the Internet depends.

The overall acceptance of Microsoft’s limits on the sharing
of technical information to the broader public is an
important and in our view core flaw in the proposed
agreement. The agreement should require that this
information be as freely available as possible, with a high
burden on Microsoft to justify secrecy. Indeed, there is
ample evidence that Microsoft is focused on strategies to
cripple the free software movement, which it publicly
considers an important competitive threat. This is
particularly true for software developed under the GNU
Public License (GPL), which is used in GNU/Linux, the most
important rival to Microsoft in the server market.

Consider, for example, comments earlier this year by
Microsoft executive Jim Allchin:

http://news.cnet.com/news/0-1003-200-4833927.html

“Microsoft exec calls open source a threat to
innovation,” Bloomberg News, February 15, 2001,
11:00 a.m. PT

One of Microsoft’s high-level executives says that
freely distributed software code such as Linux
could stifle innovation and that legislators need
to understand the threat.

The result will be the demise of both intellectual
property rights and the incentive to spend on
research and development, Microsoft Windows
operating-system chief Jim Allchin said this week.

Microsoft has told U.S. lawmakers of its concern
while discussing protection of intellectual
property rights . . .

”Open source is an intellectual-property
destroyer,” Allchin said. ”I can’t imagine
something that could be worse than this for the
software business and the intellectual-property
business.” . . .

In a June 1, 2001 interview with the Chicago Sun Times,
Microsoft CEO Steve Ballmer: again complained about the
GNU/Linux business model, saying “Linux is a cancer that
attaches itself in an intellectual property sense to
everything it touches. That’s the way that the license
works,”1 leading to a round of new stories, including for
example this account in CNET.Com:

http://news.cnet.com/news/0-1003-200-6291224.html

“Why Microsoft is wary of open source: Joe Wilcox
and Stephen Shankland in CNET.com, June 18, 2001.

There’s more to Microsoft’s recent attacks on the
open-source movement than mere rhetoric: Linux’s
popularity could hinder the software giant in its
quest to gain control of a server market that’s
crucial to its long-term goals

Recent public statements by Microsoft executives
have cast Linux and the open-source philosophy
that underlies it as, at the minimum, bad for
competition, and, at worst, a “cancer” to
everything it touches.
Behind the war of words, analysts say, is evidence
that Microsoft is increasingly concerned about
Linux and its growing popularity. The Unix-like
operating system “has clearly emerged as the
spoiler that will prevent Microsoft from achieving
a dominant position” in the worldwide server
operating-system market, IDC analyst Al Gillen
concludes in a forthcoming report.

. . . While Linux hasn’t displaced Windows, it has
made serious inroads. . . ]. . In attacking Linux
and open source, Microsoft finds itself competing
“not against another company, but against a
grassroots movement,” said Paul Dain, director of
application development at Emeryville, Calif.-
based Wirestone, a technology services company.

. . . Microsoft has also criticized the General
Public License (GPL) that governs the heart of
Linux. Under this license, changes to the Linux
core, or kernel, must also be governed by the GPL.
The license means that if a company changes the
kernel, it must publish the changes and can’t keep
them proprietary if it plans to distribute the
code externally. . .

Microsoft’s open-source attacks come at a time
when the company has been putting the pricing
squeeze on customers. In early May, Microsoft
revamped software licensing, raising upgrades
between 33 percent and 107 percent, according to
Gartner. A large percentage of Microsoft business
customers could in fact be compelled to upgrade to
Office XP before Oct. 1 or pay a heftier purchase
price later on.

The action “will encourage–’force’ may be a more
accurate term–customers to upgrade much sooner
than they had otherwise planned,” Gillen noted in
the IDC report. “Once the honeymoon period runs
out in October 2001, the only way to ‘upgrade’
from a product that is not considered to be
current technology is to buy a brand-new full
license.’”

This could make open-source Linux’s GPL more
attractive to some customers feeling trapped by
the price hike, Gillen said. “Offering this form
of ‘upgrade protection’ may motivate some users to
seriously consider alternatives to Microsoft
technology.” . . .

What is surprising is that the US Department of Justice
allowed Microsoft to place so many provisions in the
agreement that can be used to undermine the free software
movement. Note for example that under J.1 and J.2 of the
proposed final order, Microsoft can withhold technical
information from third parties on the grounds that Microsoft
does not certify the “authenticity and viability of its
business,” while at the same time it is describing the
licensing system for Linux as a “cancer” that threatens the
demise of both the intellectual property rights system and
the future of research and development.

The agreement provides Microsoft with a rich set of
strategies to undermine the development of free software,
which depends upon the free sharing of technical information
with the general public, taking advantage of the collective
intelligence of users of software, who share ideas on
improvements in the code. If Microsoft can tightly control
access to technical information under a court approved plan,
or charge fees, and use its monopoly power over the client
space to migrate users to proprietary interfaces, it will
harm the development of key alternatives, and lead to a less
contestable and less competitive platform, with more
consumer lock-in, and more consumer harm, as Microsoft
continues to hike up its prices for its monopoly products.

Problems with the term and the enforcement mechanism

Another core concern with the proposed final order concerns
the term of the agreement and the enforcement mechanisms.
We believe a five-to-seven year term is artificially brief,
considering that this case has already been litigated in one
form or another since 1994, and the fact that Microsoft’s
dominance in the client OS market is stronger today than it
has ever been, and it has yet to face a significant
competitive threat in the client OS market. An artificial
end will give Microsoft yet another incentive to delay,
meeting each new problem with an endless round of evasions
and creative methods of circumventing the pro-competitive
aspects of the agreement. Only if Microsoft believes it
will have to come to terms with its obligations will it
modify its strategy of anticompetitive abuses.

Even within the brief period of the term of the agreement,
Microsoft has too much room to co-opt the enforcement
effort. Microsoft, despite having been found to be a law
breaker by the courts, is given the right to select one
member of the three members of the Technical Committee, who
in turn gets a voice in selecting the third member. The
committee is gagged, and sworn to secrecy, denying the
public any information on Microsoft’s compliance with the
agreement, and will be paid by Microsoft, working inside
Microsoft’s headquarters. The public won’t know if this
committee spends its time playing golf with Microsoft
executives, or investigating Microsoft’s anticompetitive
activities. Its ability to interview Microsoft employees
will be extremely limited by the provisions that give
Microsoft the opportunity to insist on having its lawyers
present. One would be hard pressed to imagine an
enforcement mechanism that would do less to make Microsoft
accountable, which is probably why Microsoft has accepted
its terms of reference.

In its 1984 agreement with the European Commission, IBM was
required to affirmatively resolve compatibility issues
raised by its competitors, and the EC staff had annual
meetings with IBM to review its progress in resolve
disputes. The EC reserved the right to revisit its
enforcement action on IBM if it was not satisfied with IBM’s
conduct.

The court could require that the Department of Justice
itself or some truly independent parties appoint the members
of the TC, and give the TC real investigative powers, take
them off Microsoft’s payroll, and give them staff and the
authority to inform the public of progress in resolving
compliance problems, including for example an annual report
that could include information on past complaints, as well
as suggestions for modifications of the order that may be
warranted by Microsoft’s conduct. The TC could be given
real enforcement powers, such as the power to levy fines on
Microsoft. The level of fines that would serve as a
deterrent for cash rich Microsoft would be difficult to
fathom, but one might make these fines deter more by
directing the money to be paid into trust funds that would
fund the development of free software, an endeavor that
Microsoft has indicated it strongly opposes as a threat to
its own monopoly. This would give Microsoft a much greater
incentive to abide by the agreement.

Failure to address Ill Gotten Gains

Completely missing from the proposed final order is anything
that would make Microsoft pay for its past misdeeds, and
this is an omission that must be remedied. Microsoft is
hardly a first time offender, and has never shown remorse
for its conduct, choosing instead to repeatedly attack the
motives and character of officers of the government and
members of the judiciary.

Microsoft has profited richly from the maintenance of its
monopoly. On September 30, 2001, Microsoft reported cash
and short-term investments of $36.2 billion, up from $31.6
billion the previous quarter — an accumulation of more than
$1.5 billion per month.

It is astounding that Microsoft would face only a “sin no
more” edict from a court, after its long and tortured
history of evasion of antitrust enforcement and its
extraordinary embrace of anticompetitive practices –
practices recognized as illegal by all members of the DC
Circuit court. The court has a wide range of options that
would address the most egregious of Microsoft’s past
misdeeds. For example, even if the court decided to forgo
the break-up of the Windows and Office parts of the company,
it could require more targeted divestitures, such as
divestitures of its browser technology and media player
technologies, denying Microsoft the fruits of its illegal
conduct, and it could require affirmative support for rival
middleware products that it illegally acted to sabotage.
Instead the proposed order permits Microsoft to consolidate
the benefits from past misdeeds, while preparing for a weak
oversight body tasked with monitoring future misdeeds only.
What kind of a signal does this send to the public and to
other large corporate law breakers? That economic crimes
pay!

Please consider these and other criticisms of the settlement
proposal, and avoid if possible yet another weak ending to a
Microsoft antitrust case. Better to send this unchastened
monopoly juggernaut a sterner message.

______________FOOTNOTE________________________

1 http://www.suntimes.com/output/tech/cst-fin-micro01.html
“Microsoft CEO takes launch break with the Sun-Times,”
Chicago Sun Times, June 1, 2001.


The following is an expired page which comes as a public message from Nader.


Error message

Microsoft has performed an illegal function and should be shut down.

By Ralph Nader

AS THE TITANIC antitrust case against Microsoft moves into its endgame, the question of the hour is what remedies will be effective in taming this wealthy and ruthless monopoly.

The goal of any set of remedies should be to ensure that there will, in fact, be innovation, competition, and reasonable prices in some of the most important sectors of our economy: software, computers, and telecommunications.

Here are some suggestions:

- Free PC manufacturers from Microsoft’s grip. Microsoft has used its monopoly power to bully original equipment manufacturers into installing only Windows on computers. A court-ordered remedy of nondiscriminatory OEM licensing of Windows would go a long way toward solving this problem. Pricing and licensing should be “transparent,” openly published, and evenhandedly applied.

- Don’t let Microsoft use its other software monopolies to limit competition. Just as Microsoft used its Windows monopoly to threaten the competition, so it is using its Office franchise to scare off competitors and dominate new Internet markets. Its preferred strategy is the notorious “embrace, extend, and extinguish” gambit: embrace the new Internet authoring tools as part of the dominant Office software suite; extend control of the new market by introducing proprietary standards that are incompatible with competitors’; extinguish competing software through manipulative licensing and bundling deals with OEMs. The court should require Microsoft to separate Microsoft Office from Windows, and the new owner of Office should be required to port the entire platform to multiple non-Windows operating systems.

- Ensure that “Internet navigation” options remain open. Microsoft has insisted to OEMs that it retain control of the “first screen,” or default choices for Internet navigation menus. It has done so to retain control over the time and attention of computer users, whose reliance on the default “first screen” can be used to channel them to certain e-commerce sites. Here’s the danger: if any single firm exercises too much control over Internet navigation, competition in e-commerce markets will suffer. Microsoft should be prohibited from imposing such terms.

- Protect interoperability of hardware, software, and network protocols. The usefulness of software programs depends on their ability to work (and coexist) with other software programs, with hardware systems, and with the protocols of telecommunications networks. It should come as no surprise that Microsoft frequently and deliberately introduces barriers to compatibility and interoperability, preventing competitors from working with Microsoft’s monopolizing Windows or Office products. One remedy is to force Microsoft to support open standards for software and to provide extensive technical information in a timely manner and in usable formats and protocols to any company that requests it.

- Adopt structural remedies, because the past six years of antitrust problems with Microsoft have demonstrated that the company cannot be trusted. Its conduct during the trial itself offers the best evidence of this point. The company subverted the intent if not the language of a 1995 consent order, by integrating its browser into the Windows operating system. Effective remedies should, as much as possible, avoid “conduct remedies” that require continuing court oversight.

Ideally, a breakup of the company would go further than the Justice Department proposal to divide the operating system line of business from the application and other lines of business. The court could insist that Microsoft separate the Internet Explorer browser from Microsoft Office. That way, the browser market could become competitive again and the owner of Microsoft Office would find a way to function with more than one browser. This would be an important result in a world where the browser is key in setting Web publishing standards and links to e-commerce sites and where Microsoft is driving for dominance in Internet authoring tools.

The court should also consider forcing Microsoft to spin off, as a separate company, all of its online services and minority interests in networking companies. There is no legitimate tie between the software businesses and online/network services – only anticompetitive mischief.

The antitrust remedies that ultimately bring the marauding Microsoft to heel will have far-reaching consequences – on future software design and choices, on consumer prices, on the competitiveness of e-commerce, on the very structure of the Internet and hence our culture.

The factual case against Microsoft has been made devastatingly clear. If Microsoft’s long record of deception and untrustworthiness is to be ended, the public remedies must be as bold, sweeping, and effective as the company’s private power.


So here we have 2 letters and a speech which highlight:

  1. Microsoft’s past abuses of Novell
  2. Failure by the Department of Justice to restrain Microsoft
  3. Clear pattern of unethical strategies which are used to battle GNU/Linux and Free software in general

The quote shown below is real.

Jim Allchin on Novell

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