Antitrust Remedy Invites Opportunity

SAN FRANCISCO (04/28/2000) - It's a funny thing about monopolies: Many consumers get comfortable with them and don't want to try alternatives -- until they really get a whiff of what those alternatives could bring.

I doubt the courts will actually split Microsoft Corp. into two large chunks (Windows and applications) -- sometimes referred to as Baby Bills. If the breakup does happen, the process will be long, painful, and wrought with confusion and surprises.

But it also could be good for customers, particularly on the applications end.

The Baby Bill that owns the Windows operating system would remain the center of the computer industry. It would still be a near-monopoly, formidably funded and entrenched, able to yank the chains of almost every company in high tech. Would its fight against Linux, the Mac OS, Unix, and all the big back-end Web machines be changed much? Maybe not.

Does this part of a breakup matter much to me as a customer? Probably not.

Windows 2000 is a perfectly good operating system and Windows ME should be "good enough" for those of us on the consumer side whose expectations have been lowered by years of running Windows. Microsoft will get fierce competition from Linux and the Mac, and it has no lock at all on what runs all the new handhelds and Net appliances.

Wanted: Freedom of Choice

But the apps Baby Bill, which would own such programs as Office and Internet Explorer, is a different case. It can offer us a wider choice of applications -- starting with the basic desktop packages.

Now, if you buy a business PC you probably also buy Office 2000.

Office 2000 is a classic monopoly product. In some important ways, it improves on its predecessor, but in other important ways it does not.

As we rolled it out internally, I heard screams of protest about the new clumsiness of Word 2000 (which takes far longer to handle some basic tasks than Word 97) and the general level of bugs.

We're a computer publication, so many of us had discs around to quietly reinstall Office 97, Lotus SmartSuite, or WordPerfect Office applications.

Guess what, though? We can't buy any of that from our PC supplier.

Many consumers figure this war is over. They will buy whatever Microsoft is selling in desktop suites, and they're scared that an antitrust action might put that simple solution in jeopardy.

But I want real choice.

Despite all the hype about running applications off the Net, for years to come we'll be running word processors, spreadsheets, personal information managers, and other vanilla applications on PCs. And despite some of the blind alleys Office 2000 wandered into, those applications will evolve in interesting ways as speech recognition and other technologies get more useful.

I'd like to see Corel, Lotus, and a thousand other companies feel they have a shot at this again.

An apps Baby Bill would be another 800-pound gorilla, also with enormous financial, technical, and marketing muscle. But its products would not be bundled with Windows, it would not operate in Internet time, and it would leave a lot more oxygen in the PC marketplace.

Who Can You Antitrust?

It's true that the outcomes of major antitrust cases seem just about impossible to predict.

To take a little trip down memory lane, almost 20 years ago I interviewed dozens of folks about the breakup of AT&T. If any of them had a single clue about what the world would be like now, they didn't share it with me.

But that breakup paid off big-time for us. If it hadn't occurred, firms wouldn't let us call long distance at 5 cents a minute. And your local telco would still be flogging ISDN rather than DSL (okay, some of them still do).

Microsoft probably will dodge this bullet, and nobody really knows what the landscape will look like if it doesn't. But worse things could happen.

Competition is good. Even for Microsoft.

Eric Bender is executive editor of news for PCWorld.com

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