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

To: Frederick Smart who wrote (45564)	5/28/2000 7:49:00 AM
From: John Carragher	Read Replies (1) \| Respond to of 74651

ECONOMIC PRINCIPALS On stealing the watchdog By David Warsh, Globe Columnist, 5/28/2000 o understand why the government's case against Microsoft came to its abrupt climax last week in the courtroom of US District Judge Thomas Penfield Jackson, it helps to know something about how the security technology from the computer network at the Massachusetts Institute of Technology ended up at the heart of the case. Kerberos is hardly a household word, even now. It surfaced repeatedly in the declarations of the experts the government intended to present as testimony in the remedy phase of the trial. It was among the centerpieces of the friend-of-the-court narrative submitted by an industry association that Jackson praised as ''an excellent brief, excellent brief.'' In Greek myth, Kerberos (often transliterated Cerberus) was the three-headed watchdog who guarded the gate to Hades. It is as good a symbol as any of the tactics that have brought Microsoft to the brink of breakup. The story starts in the 1980s, when personal computers first began to connect with older mainframes and mini-computers in extensive networks within universities. MIT is famous for hijinks - including the sort of computer break-ins that have subsequently come to be known as exercises in ''hacking.'' Yet to this day no MIT computer has ever been seriously hacked. Why? Because a venture led by network manager Jeffrey I. Schiller as part of Project Athena - an early partnership between MIT, Digital Equipment, and IBM to wire the university campus - developed an ingenious technique to prevent passwords from being stolen even by the most ingenious interceptor program. The details are not important here. What is important is that the system was virtually foolproof. By 1995, when Victoria Richardson described it in The Financial Times, she wrote that the ''impressive track record is attracting the attention of growing numbers of companies, whose executives trek through MIT's visitor center almost daily to see how the protocols work.'' In due course Kerberos was made an open, extensible standard of the Internet Engineering Task Force. Like the rest of the protocols and standards that made the Internet such a smash-hit technology, it was freely available to anyone who wanted to incorporate its techniques in a design, modifiable in any direction that a designer felt might make it better - a perfect example of collaboratively developed ''open source'' software. There was just one problem. In a particular field of the Kerberos program, which had been left open for some unforeseen future use, Microsoft inserted some clever and indecipherable code of its own, designed to affect its interface with other software. It then kept the code secret. Presto! Microsoft had transformed Kerberos from open-standard Internet computing into a proprietary domain. According to Rebecca M. Henderson, a professor at MIT's Sloan School of Management who is one of the government's prospective experts, Microsoft's choices ''do not admit of a potentially benign interpretation.'' No non-Microsoft server can use the security features of Microsoft's Windows operating system, she noted. Windows 2000 PCs cannot log into a Unix Kerberos server and expect them to file or print. That means that anyone with a Web site had better run Windows 2000 on his server if he wants to connect with the rest of the world, whose desktops are hugely dominated by Windows operating systems. Sun, Novell, Apache, and the rest of the Unix-based world, say goodbye to the market for servers. This is the ''applications barrier to entry,'' whose abuse is the chief complaint of the government suit. What is not widely appreciated is how vulnerable to capture is the whole great open system of the Internet if the abuse continues. The proprietary extensions of Kerberos are only one example. Ahead lie directory services and streaming video software - both already tied to Windows 2000. The evidence in the trial showed that Microsoft is working to co-opt many other standards, not the least HTML, the language that permitted the World Wide Web to unfold so quickly. The government charges that the PC operating system provides a chokehold that Microsoft has systematically exploited to convert open-standard computing - the Netscape browser is the chief example - to its own domain. ''The ocean of innovation on the Internet becomes a stagnant Microsoft-proprietary pond,'' as the joint remedy brief of the Computer and Communications Industry Association and the Software and Information Industry Association put it last week. Judge Jackson's swift decision to end the Microsoft trial last week effectively closed the case. Once he makes a decision on what remedy to order, his findings will probably go to the Supreme Court. It may come back down for further hearing. It may be carried over into an administration headed by George W. Bush. Chances are that a newly elected Bush wouldn't get involved in a case in which the evidence against Microsoft is simply overwhelming. But even if the Justice Department suddenly went limp, the states who are joint parties to the suit could switch roles and carry on. It now seems likely that the company will be broken up. This much is clear. In preferring the competition that would be engendered by the breakup over regulation, the judge is determined to avoid the protracted oversight of swiftly changing technology that was the bitter fate of Judge Harold Greene in the wake of divestiture of AT&T. The similarities to that case are growing stronger all the time. So remember that 100 shares of Ma Bell worth $6,150 at the time of the breakup were worth $56,144 in the middle of 1999. This story ran on page F01 of the Boston Globe on 5/28/2000. ¸ Copyright 2000 Globe Newspaper Company.