Re: Microsoft Remedies

["Lewis A. Mettler" <lmettler@lamlaw.com>]

I have seen a number of suggestions regarding the openness of technology
offered by Microsoft.

1) full disclosure of APIs
2) advance disclosure of all interfaces
3) advance publication of program specifications, etc.
4) and even opening the source for Windows itself.

The problem with all of these ideas is that they pale in comparison to
the raw economic power of bundling a lessor product with a dominant one.

It is a very simple concept, "product bundling".

1) it always increases the minimum cost for all consumers (price covers
both products)
2) it always reduces choice to the consumer by forcing all consumers to
buy one product and practically eliminating any demand for similar
products in the marketplace (short term and long term)

Consider the position Microsoft seems to take that IE is a free product.

But, what if IE is not free?  What if its part of the suggested retail
price for a new license of Windows 98 attributable to IE is really $140
or so?  (Microsoft did invest half a billion in R&D for IE and it is the
major improvement for the OS.)

What if it is not $140 per copy?  What if it is only $35 per copy?  My
calculator says that 100,000,000 customers times $35 costs consumers 3.5
billion.

Now, I do not know about the rest of you.  But, if I have to decide
whether to invest half a billion in R&D but can be assurred of a retail
gross revenue of 3.5 billion, that sounds like a pretty safe call.

The question this industry really needs to ask is "How much R&D money
can Microsoft invest in audio technology if it can force sell its audio
player?"  "How much R&D can Microsoft invest in video technology if it
can force sell its video player?".  "How much for advancing Network
technology?"

If I am Microsoft, I would be glad to publish the specs if I can
continue to force feed any and all products remotely related to the use
of the personal computer.

Microsoft left unfettered will continue to invest heavily in a whole
range of technologies and force the sale of those products regardless of
merit.  Requiring Microsoft to disclose technical details might permit
some technological competition, but does nothing to level the playing
field for the sale of products.

It is the sale of products that generates the revenue stream that offers
competition in the future.  Why do you think Microsoft focused so
heavily upon the sources of revenue that Netscape was able to put
together?


Rick Dahlgren wrote:
> 
> Is there a win/win possible in the remedies for Microsoft?
> 
> As many of you may know, we've been involved in litigation that largely
> encompasses access to technology that allows providers of content like us
> to be able to (in a common way with large providers) reach consumers with
> high value, multimedia content.
> 
> Is the argument that Microsoft has tied their OS to a set of tools
> (browser, servers, content creation, and financial transaction software) to
> a strategy that somehow hinders other network receivers (end user customers
> on the internet) and content providers from choices in what should be an
> open public platform for creation and delivery of content and transactions?
> 
> 
> If so, wouldn't language similar to Computer III, which the FCC recently
> abandoned, apply?
> 
> The declaratory ruling provides safeguards for interoperability, separate
> subsidiary structures, technical disclosures and pre-release safeguards (6
> months) prior to deployment of services that incorporate software and
> hardware solutions.
> 
> The ruling makes the telephone you use interoperate with other telephones
> for communications and enhanced services like telephone banking, voice
> messaging, etc. by mandating disclosures that allow competitors to
> manufacture equipment and software or create competing services with, in
> its earliest form, telephone companies.
> 
> The concept could provide Microsoft the ability to innovate, but would also
> mandate a set of rules and responsibilities that would prohibit Microsoft
> from exclusive deals when any application is designated as to be used by
> the public for communications that send or receive content or enable
> transactions from consumers and providers of products and services over
> public networks.
> 
> What do you all think?
> 
> Rick Dahlgren
> rd@cottonwood.com

-- 
Lewis A. Mettler, Esq.(Attorney and Software Developer)
lmettler@LAMLaw.com
http://www.lamlaw.com/ (web site reviews Microsoft antitrust transcripts
daily)