OK, Regimond, I'll take the bait.
I finally had a chance to see the Microsoft hearing today on C-Span. The most impressive witness by far was Stewart Alsop, who said at one point that AT&T "volunteered" to become a regulated monopoly at the beginning of this century. He argued that Microsoft should do something similar, put the Windows source code into the public domain and reach an agreement with the government to become some species of regulated utility.
Is that what you want, Regimond, for Microsoft to volunteer for government regulation? Or maybe you want Microsoft to fight it and have the government intervene constantly in its buisness practices, ramming government regulations down its throat at every turn to teach Microsoft to, as Orrin Hatch put it, "learn to live according to the rules that apply to monopolists."
Right now, Microsoft is basically volunteering in slow-motion to become a regulated utility. Every time the government complains about some business practice or asks for some change, Microsoft puts up a little bit of a fight at first, but then relents. Chairman Bill and Chairman Hatch sit down together for a little talk in Chiarman Hatch's office, and they draft a letter together to send to Microsoft's business partners to say that Microsoft's license does not prohibit this or allow that. Then the government comes up with a new set of complaints or demands and the process starts all over again.
But that process will probably change once the government brings its broad-based anti-tying or monopoly leveraging case. Whether by trial or by settlement, out of that will come some new regulatory regime for Microsoft to have to live under. Maybe it will be a new, improved super-Consent Decree, or some new special master or committee to which Microosoft will report all its business decisions 90 days in advance for approval. (Interestingly when someone asked Barksdale what relief he thought DOJ should seek, he said he had not given it much thought. If true, that's an amazing statement.)
Maybe Bill Gates wants this. Maybe he thinks Microsoft should volunteer to become a regulated utility. Maybe he thinks that, if the government makes good on Chairman Hatch's threat to set up an Internet Commerce Commission, Microsoft can just capture it in a few years as so many other companies do with the government agencies that are supposed to regulate them. Or, more likely, maybe he thinks that, by giving in on the little things, he'll be able to hang on to Microsoft's core business competency of incorporating "features" into its operating system.
If that's his plan, success is not likely, in my view, although I have to admit, I am having a VERY hard time figuring out exactly what Chairman Bill's long term objectives and strategy are. Will someone please explain it to me? And, while you are at it, explain why he thinks it is going to work.
Now, Microsoft's lawyers are smart. They are going to be able to find ways around the regulations and consent decrees that Microsoft volunteers for and that the government imposes as a result of its new case. But the government lawyers are smart, too. They're going to realize this, and, when that happens, the game is going to be over. Microsoft is going to get its Internet Commerce Commission after all.
So, either way, it doesn't matter, because, whether government regulations are doled out in small doses by mutual agreement or in one big dose by a special master in the new antitrust case, the end result is the same. Regulation is regulation.
Personally, I do not have much confidence in government's ability to regulate industries on an ongoing basis, especially in an area like high-tech, where change is so fast that, by the time the government promulgates new regulations (or DOJ initiates a new lawsuit), the regulations or relief sought have already become obsolete. Even assuming the government regulations do not become obsolete, they are often a very ham-fisted way to manage a complex economy or industry. If Microsoft volunteers or is forced to become a regulated utility, that outcome will be less efficient, and therefore worse for consumers, than if it is broken up.
I think a single, simple, strategic strike to break up the company and then leave it alone would be better than an ongoing policy of government regulation by lawsuit and consent decree. It would restore the conditions of a competitve marketplace and remove the intellectual justification for more intrusive forms of regulation of the business practices of Microsoft and others.
Go in, break it up, then get out. That's what I think they should do with Microsoft. |
