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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: adamnelson who wrote (43611)	4/27/2000 1:37:00 AM
From: Thunder	Respond to of 74651

To All: FWIW from the N.Y.T. (emphasis mine) April 27, 2000 State and Federal Lawyers Unite on Microsoft By JOEL BRINKLEY WASHINGTON, April 26 -- The federal government and the states that are partners in the antitrust suit against Microsoft agreed today to file a joint proposal on remedies in the case and back a plan to break Microsoft into two companies, officials said. MICROSOFT ON TRIAL Index of Articles Forum Should Microsoft Be Broken Up? The joint proposal had been in doubt earlier in the day but this evening it included elements that state officials had proposed to strengthen interim restrictions on Microsoft's conduct. A federal official said the states had made useful suggestions "that have been incorporated in the draft." Some details were still being negotiated. A state official said that a majority of the 19 state attorneys general involved had signed onto the plan, but that a few holdouts remained. Some were saying they may file minority opinions -- something the trial judge, Thomas Penfield Jackson, has said he does not want. But with a Friday deadline for the proposal to be filed with Judge Jackson, some of them may still be convinced to join the majority. Among those holding out, one official said, is Betty Montgomery, the attorney general of Ohio, who has said publicly that she opposes breaking up the company. "There may well be a minority opinion offered," one senior official said. "But what it will be and how it will be expressed, we don't know yet." Once again, a state official said, remarks by the leaders of Microsoft helped harden opinions among some attorneys general and rally support around the plan for a breakup. On Tuesday, William H. Gates, the chairman of Microsoft, went even further than other company executives have in defending Microsoft's conduct, which Judge Jackson called "predatory" and illegal in the ruling that he issued early this month. In an interview on the public television program "Nightly Business Report," on Tuesday, Mr. Gates said: "It's important to understand that Microsoft is very clear that it has done absolutely nothing wrong." The state official said "the text of Bill Gates' remarks has been carefully read today, and he makes it hard for people to be trusting." But Microsoft asserts that it will win the case on appeal and has every right to state its convictions in public. Last week, Steven A. Ballmer, Microsoft's chief executive, said in an interview with The Washington Post that the company had done nothing wrong and saw no reason to alter its business practices. Some attorneys general, working that day on enforcement mechanisms, "saw this as a real slap in the face," one official said. The joint state-federal plan calls for breaking Microsoft roughly in half. One-half would be the operating-system company, the other would hold everything else, including Microsoft's applications software, such as the word processor Word and the spreadsheet program Excel, and the Internet properties. -------------------------------------------------------------------------------- Restrictions on the software maker's conduct are sought. -------------------------------------------------------------------------------- But since it is likely that a breakup plan, if approved by the judge, would be stayed during legal appeals, the proposal includes a range of interim restrictions on Microsoft's conduct. Among them are a plan to publish a uniform price list for Windows and to give other companies free access to the software interface codes for Windows. The plan calls for these so-called conduct remedies to remain in place for three years if the breakup is implemented or 10 years if it is not. The states want to modify that element by extending the duration in either case, but no decision had been made this evening. Many of those conduct remedies were debated during the court-mediated settlement talks that broke apart early this month. Then, one clear concern of the states was that a strong enforcement mechanism must be put in place, to be overseen perhaps by a court-appointed special master. The states say they are trying to strengthen the enforcement provisions of the conduct remedies, noting that if a breakup plan is overturned on appeal, the conduct remedies will be the only remaining restraints on Microsoft's behavior. The exact mechanisms of the enforcement proposal are still being discussed. Microsoft calls all of these remedy proposals extreme and unwarranted. If they are in fact offered, the company will ask the judge to hold lengthy and detailed hearings, with witnesses and the opportunity to obtain government documents on the issue, before he makes his decision. Gary