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To: odd lot who wrote (22453)	1/21/1999 9:31:00 PM
From: Harvey Allen	Read Replies (1) \| Respond to of 24154

Death by 1,000 cuts By Charles Cooper, ZDNN January 21, 1999 4:46 AM PT WASHINGTON -- Call it the death by a thousand cuts. When Richard Schmalensee first eased his frame into the witness chair last week, it figured to be a juicy confrontation. After all, the man had all the credentials you'd ever want to see in an expert witness for Microsoft, and he should have been able to hold his own against the DOJ's David Boies. It wasn't to be. After the government's chief trial lawyer finished his cross-examination of Schmalensee on Wednesday, the MIT dean was in dire need of first aid. zdnet.com

To: odd lot who wrote (22453)	1/21/1999 9:41:00 PM
From: GST	Respond to of 24154

odd lot -- thanks for the message on litigation -- I am not very good at handicapping these things. Sometimes it seems that courts are too slow to really have an impact on these fast moving situations -- but as you suggest, there is a lot at stake in terms of future growth, so it really does matter and needs to be understood if you want to assess future prospects and the value of the stock.

To: odd lot who wrote (22453)	1/22/1999 12:56:00 AM
From: Gerald R. Lampton	Read Replies (2) \| Respond to of 24154

I think you have defined the issues only partly. It's not just about Microsoft's control over the internet, but also about the government's control. Unlike Microsoft, which can only use economic coercion, the government can bring the full power of the state to bear to regulate conduct on the internet. We see part of the government's attempt to assert regulatory jurisdiction over the formerly wild and wooly internet, the attempt to regulate political conduct by limiting freedom of speech, in CDA I and II. We see in the DOJ's actions vis a' vis Microsoft an attempt by the government to assert regulatory jurisdiction over economic conduct on the internet. Depending on what remedies are adopted, this attempt may result in a substantial limitation on economic freedom. Political freedom and economic freedom cannot be separated; they are two sides of the same coin. As regulations beget more regulations, substantial restrictions on economic freedom will, eventually, result in a reduction in political freedom. Given that the court plainly will find that Microsoft has a monopoly and that it used predation to maintain that monopoly, we should be extremely concerned about what remedies the court should adopt. We should avoid remedies that involve governmental interference with the pricing mechanism or which require ongoing governmental supervision or intervention in the economy. Of the proposed remedies I have seen, only two meet this test: 1. Break up the company into undifferentiated parts, as McNealy, and now Bork, have proposed. This will have to be imposed, as it is plainly not something Microsoft wants to do. They want to maintain their precious corporate structure. 2. Turn Windows into an open source software product, thereby improving the quality of Microsoft's product while destroying the basis for its monopoly power in the process. It is not so clear that this would be rejected out of hand by Microsoft; all their internal memoranda on Linux and the OSS movement, so conveniently released to coincide with the advent of the antitrust trial, suggest that they are at least thinking about Open Source as a possible model for future software development. Obviously, Bork has given a lot of thought to the first alternative. I wonder if he has given any thought to the second, or even knows what open source software is.