Microsoft Remedy Should Address .NET, AOL Says

AOL Vice President John Borthwick backed alternative remedies offered by nine states still pursuing the case that aim to level the playing field for non-Microsoft software.

+Without such remedies, Borthwick painted a bleak picture for Microsoft's competitors. He said the new Windows XP operating system, combined with Microsoft's .NET strategy, allows the company to dominate the emerging area of services that reside on a Web server rather than in software on a user's computer.

+'Microsoft's proposed remedy does nothing to ensure that Microsoft will not use its Windows operating system to thwart platform competition in the market for Web services,' he said in written testimony to U.S. District Judge Colleen Kollar-Kotelly.

+Borthwick, in charge of AOL's Advanced Services division, was the 11th witness called by the nine states that have rejected the settlement reached in November by Microsoft and the U.S. Justice Department.

+AOL, part of the giant media and entertainment empire of AOL Time Warner, is a fierce rival of Microsoft. The software giant charges that its competitors have been behind the four-year-old case from the start.

+Microsoft has said sanctions against it should not go beyond specific wrongdoings upheld by a federal appeals court last year, mainly that Microsoft tried to crush an Internet browser made by Netscape Communications in an effort to preserve the Windows monopoly. Netscape was later acquired by AOL.

+Kollar-Kotelly is still considering whether the proposed settlement meets a required public interest standard.

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+COMPETING WITH .NET

+Borthwick said Windows XP repeatedly prompts users to sign up for Passport, Microsoft's authorization software for .NET.

+AOL recently joined other large companies in the Liberty Alliance, that seeks to develop a competing authentication service, after failing to agree with Microsoft on making .NET compatible with an AOL suite of services dubbed Magic Carpet.

+Borthwick said the states' proposal for broader disclosure of the inner-workings of Windows and protections against retaliation by Microsoft would allow rivals to develop services to compete with .NET.

+The AOL executive also praised proposals by the states to allow third parties to license a stripped-down version of Windows that could be used to design customized computer desktops that feature non-Microsoft software.

+Borthwick provided the court with a prototype for a child's computer featuring the Lego building toy that uses non-Microsoft middleware applications like Yahoo Messenger and Kodak picture maker.

+He also saw possibilities for a sports PC or a music PC aimed at high-school and college students.

+The proposed settlement aims to give computer makers greater freedom to feature rival software, but Borthwick said Microsoft's middleware would only be hidden.

+Microsoft need only wait 14 days before prompting the consumer to reconfigure the desktop or sweep competing icons away into a folder off the opening screen, he said.

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+INTERACTIVE TV

+The states argue that remedies in the case should be broad enough to protect technologies that have arisen since the case began, handheld computing devices and interactive television.

+Earlier on Wednesday, Microsoft disputed the testimony of an interactive television executive who charged Microsoft had muscled in on his company's business.

+Microsoft attorney Dan Webb challenged Mitchell Kertzman, chief executive of Liberate Technologies, to cite any examples in which Microsoft had used illegal tactics to cut into Liberate's business. Webb also questioned Kertzman's claim that Liberate poses a competitive threat to Microsoft.

+Kertzman had said Microsoft was making inroads into interactive television by requiring the use of its software as a condition of major investments in cable television firms.

+Webb pointed out that most of those companies, including Telewest, AT&T Corp. and Comcast Corp., still useD Liberate software in their TV set-top boxes.

+'Apparently you've done well with AT&T in spite of Microsoft,' Webb said sarcastically.

+Kertzman said Microsoft had so far not taken away any of Liberate's business because it had failed to produce interactive TV software. 'We are doing well in this nascent stage of the market despite Microsoft's efforts to control the channels of distribution,' he said.

REUTERS

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