SONNY , FRANK --Good article on MSFT and politics ---So far Bush public speaking has been fair but the one thing that really impresses me is that he is NOT a lawyer . That is a big positive !
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Microsoft Case Viewed As Political Powder Keg
Parties split over plan to divide software titan
Carolyn Lochhead, Chronicle Washington Bureau Wednesday, May 3, 2000
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Washington -- Politicians may be clueless when it comes to the technical arcana of the Microsoft antitrust case, but they understand one number very well: the nearly 70 percent of Americans who oppose breaking up the software giant.
That level of public support for Bill Gates and company -- determined in a Gallup survey April 12 and consistent with earlier polls -- may fall short of popularity polls for apple pie and motherhood, but it's well within a range that gets political attention.
So far, that has not seemed to be of much help to Microsoft. Despite hiring legions of expensive lobbyists, lawyers and economists to make its case in the political arena, Microsoft faces a Justice Department proposal to break the company in half -- a remedy considered both radical and remote when the case began two years ago.
Yet now that the government is formally calling for a breakup, the political and economic stakes have escalated sharply.
Top White House economic aides, including Treasury Secretary Larry Summers, requested a briefing by Justice Department officials before the department issued its proposal to split up the company.
Republican Sen. Slade Gorton of Washington, Microsoft's most ardent ally on Capitol Hill, blasted the White House meeting and blamed the Justice Department's pursuit of the company for driving down its stock market.
``Clearly the White House is worried about the political consequences of their actions,'' Gorton said. ``They've woken up to the fact that their bid to destroy Microsoft will have a disastrous impact on the economy and severely undermine Al Gore's presidential bid.''
With several notable exceptions, the Microsoft case tends to break along party lines, offering obvious potential to become an issue in the presidential race.
Speaking to a hostile audience of Microsoft employees last fall, Vice President Al Gore, the presumptive Democratic nominee, defended the antitrust laws -- and by implication the case against Microsoft -- as ``embodying the values of our country.''
GORE GOES MUM
Since then, however, Gore has refused to discuss the case. President Clinton likewise has kept the trial at arms length.
By contrast, Texas Gov. George W. Bush, the presumptive Republican nominee, has grown increasingly vocal in criticizing the administration's action. Bush responded to the breakup proposal by saying he hoped the government ``does not ruin this company.''
``If George W. Bush chose to make Microsoft an issue, it would put Gore in another very awkward position vis-a-vis his own administration, otherwise called the Clinton- Hyphen-Gore administration, when he takes credit for peace and prosperity,'' said Stephen Hess, a political analyst at the Brookings Institution.
In February, Bush told a rally near Microsoft's Redmond, Wash., headquarters that he believed ``the question should be innovation, as opposed to litigation'' and that he is ``unsympathetic to lawsuits.''
Many interpret Bush's comments as meaning that his administration would consider dropping the case.
The lawsuit could drag into the next administration on appeal, even if Judge Thomas Penfield Jackson makes a final ruling on a remedy before the end of the year.
Both Microsoft and its competitors have been lobbying the two presidential candidates. Microsoft has already started a television and newspaper advertising campaign to court public opinion.
The television spot features Microsoft chief executive Steve Ballmer saying that innovation is ``creating new jobs, changing our lives, and helping children learn. . . . Technology is fueling America's economy; our next generation of software will do even more.''
In Washington, an array of conservative advocacy groups have been blasting away at the government's case.
`DESIGNED BY THE GOVERNMENT'
This week, Citizens Against Government Waste is sending oversized pencils to every member of Congress inscribed, ``Windows 2000, Designed by the U.S. Government.''
``We are trying to influence the thinking on Capitol Hill and also in the two presidential campaigns,'' said Tom Schatz, president of the watchdog group, ``so that whatever new administration comes in, they will understand that there's a lot of people around the country who aren't happy with the way this case has gone and don't want the government intervening in technology.''
House Majority Leader Dick Armey criticized the breakup proposal last week, saying, ``This government can't keep its own computers up to date. It's sheer arrogance to think it can possibly pick winners and losers in the high-tech industry.''
Many Democrats have urged caution or kept a lower profile.
California Sens. Barbara Boxer and Dianne Feinstein, both of whom are usually quick to announce their views on prominent issues, have made little public comment on the Microsoft case.
Boxer said yesterday that many of her constituents in Silicon Valley ``have been very upset about Microsoft's anticompetitive activities, but the details of the remedy should be left to the courts.''
Feinstein said the breakup plan ``by most accounts, provides more competition, leading to better prices and customer service and should be given careful consideration by the court.''
CONSERVATIVES BREAK RANK
But several conservative Democrats, especially those trying to reposition the party to be more pro-business and tech-friendly, openly oppose the administration action.
``I have a hard time believing it is in the consumer's interest to see Microsoft split up, especially with the speed of new product innovation in the technology sector,'' said Rep. Cal Dooley of Visalia, a leader of the New Democrat coalition.
Earlier this week, Microsoft lawyers said they intend to ask Judge Thomas Penfield Jackson to allow them to call witnesses and search government documents to prepare for hearings on the breakup remedy.
Microsoft general counsel William Neukom said such efforts could last ``well into the fall,'' possibly delaying a ruling on the breakup until after the November elections.
Government attorneys called the action a stalling tactic, a charge Microsoft denied.
A case as critical to the economy as Microsoft's ``is not simply going to be determined by the processes of government, but it is also going to be driven by the court of public opinion,'' said Robert Hahn, an economist consulting for Microsoft.
``More to the point, if Microsoft and other computing-firm stocks continue to tank when the Justice Department comes out with news that's not favorable to Microsoft, I would think that would give people reason for pause.''
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