MICROSOFT: SWIFT RESOLUTION, PLEASE
As a general rule, the best policy for a government in the face of a powerful new technology is to stay out of the way. Even in such momentous actions as breaking up the AT&T monopoly on phone service, for example, the government was merely ratifying the forces that MCI Communications Corp. and others had set in motion. So when the government does intervene, it should first be sure that the issue is worth fighting over. The attempt to rein in Microsoft Corp. in the browser wars seems just such a case (page 34). And, blessedly, the government should be able to get a quick resolution.
For years, Microsoft's market power has been the subject of considerable hand wringing. It's important to recognize that market power has its benefits, such as the rapid proliferation of what amounts to standard, basic software. But to the extent that market power squelches competition, the chilling effect on software developers may be more damaging than higher costs. The evolution of powerful browsers, the software popularized by Netscape Communications Corp. that lets us peruse the Internet, has progressed more swiftly in the hothouse of competition than has the Windows operating system, which has been virtually the exclusive province of Microsoft. And integrating browsers with the operating system to let us treat our computer, a company network, and the Internet as one vast file cabinet of information at our fingertips is likely to be a monumental enhancement of computing power.
History suggests the government can play a constructive role at this juncture. When the U.S. filed an antitrust suit against IBM in 1969, Big Blue moved on its own to unbundle its hardware and software businesses. With that opening, a slew of software companies sprang up, and many survive as part of Computer Associates International Inc., a major force in corporate computing. Nobody expects Microsoft to change its plans to tightly integrate its own browser with the Windows 98 operating system due out next year. The Justice challenge raises the larger issue of what constitutes a computer operating system. All we ask is that the government disclose its evidence soon and make its case swiftly. The next stage in the Information Age beckons.
Updated Oct. 23, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.