Frank---Thought you would enjoy thus article ---a;pt of truth in it :
Low-Tech Spoilers
The state attorneys generals were always going to be the biggest obstacle to settling the Microsoft case. We were never fans of the lawsuit, preferring to let markets and technology chart their own course. But even Joel Klein has been careful to praise Bill Gates's contributions to the economy. And lead prosecutor David Boies has admitted to agnosticism on whether Microsoft broke the antitrust laws, saying we ought to find out how those laws apply in the software age.
What in the world do the attorneys general from 19 states have to contribute to these questions?
The answer, as Judge Richard Posner is finding, is not much except a penchant for pushing for extreme outcomes to keep themselves in the news. Mr. Posner, the Chicago appeals court jurist tapped to broker a settlement, has nearly conjured a rabbit into existence: Microsoft has reportedly offered a wide range of concessions, giving up much of its pricing freedom and intellectual property, and agreeing to sell a version of Windows without the browser.
Agita for AGs
Yet the state attorneys are said to be "surprised" and "concerned" by the pace of negotiations. What's the hurry? Obviously there is none if you're a statehouse hack trying to piggyback your political ambitions on the Microsoft suit.
For our taste, the lawsuit has too much resembled a piece of industrial policy from the beginning, with Justice trying to command the tides to validate Netscape's business plan. It's worth noting that two dozen-plus states with a stake in the high-tech future (including California, Virginia and Colorado) wanted no part in the lawsuit. Texas bailed after Michael Dell and Compaq signaled their disapproval. South Carolina dropped out after AOL's acquistion of Netscape, saying the case had been "made moot by the marketplace."
Unfortunately the incentive to entertain doubts is not present for the Iowas and Louisianas that remain, enjoying as they do the harlot's perogative of power without responsibility. The Justice Department carried the ball during the trial; the states only showed up for the occasional photo-op. Now that the endgame is breaking out, the states are pushing an implausibly harsh plan to dismember the company. Why not? The more extreme the penalty, the bigger the headlines back home.
Judge Posner has a reputation for getting things done (including writing umpteen interesting books), and presumably doesn't see his job as prolonging the opportunity for state pols to pad out the hours on CNN. Half the technology sector has been held in suspense waiting to learn the fate of its biggest customer/competitor/partner. Microsoft has thousands of employees and shareholders. And the concerns at the heart of the case have been overtaken by the lightning pace of technological change.
Microsoft still dominates PC operating systems, but PCs are being swamped by web phones and other "smart" devices running on a variety of operating systems. Even the trouncing of Netscape has been rendered moot by the proliferation of "microbrowsers" designed to run efficiently on these non-PC devices. Industry action has clearly moved from the desktop to the Internet, where Microsoft is just one player among many. So why is this case still going on?
But at this week's meeting of the National Associaton of Governors-in-Waiting -- er, Attorneys Generals -- the state pols were already looking for new industries to "fix."
Michigan's Jennifer Granholm noisily threatened a suit against Doubleclick, a Manhattan web advertising firm, unless it satisfies Michigan's whims on consumer privacy. States are talking about hiring contingency lawyers to go after the latex industry on behalf of doctors and nurses with allergies. Lead paint, HMOs, the gun industry and out-of-state pharmaceutical makers have all been targets or are likely to become targets.
The trend can be expected to accelerate: Trial lawyers have begun recycling their tobacco winnings to elect politicians willing to use their offices to promote more lawsuits against vulnerable industries. Somehow the incentive structure, working so marvelously now in our vibrant private sector, has gone over the cliff among the political class.
The answer here is tort reform. For now we're stuck with the Clinton Administration, Judge Posner and any of the states that can recognize a larger responsibility to the nation and the economy in the Microsoft suit. Having come this far, their clear duty is to bring the case to a conclusion that doesn't damage one of the crown jewels of American technology.
BEST WISHES
BILL |
