States' witness defends open-source model

The Microsoft antitrust remedy phase entered its fifth week today, with the last witness for the nonsettling states defending a plan to make Internet Explorer open source, while also acknowledging that Netscape Communication's decision to open source Navigator didn't work out very well.

Carl Shapiro, a professor of business strategy at the University of California at Berkeley's Haas School of Business and the state's economic witness, was forced to defend his support for open sourcing against the troubled experience of Netscape's 1998 decision to open source its browser.

Returning to the witness stand this morning to face more cross-examination from Microsoft attorney Michael Lacovara, Shapiro had to square his support for the open-source remedy for Internet Explorer -- sought by the nine nonsettling states that have refused to sign the Bush administration-backed settlement -- against the record.

Shapiro, along with a co-author, praised Netscape's decision in a 1998 op-ed published in The Wall Street Journal entitled "A Judo Blow Against Microsoft," as a decision that would lead to more browser innovation. As an open-source product, developers had the ability to improve the browser's basic operation and functionality.

Lacovara used the experience of the Navigator open-source effort, called Mozilla, to underscore his point that by making IE open source there was a risk the browser could be fragmented, leading to incompatibilities with the Windows operating systems. Mozilla is expected to release Version 1.0 of its browser in the next few weeks.

Shapiro, however, insisted that Microsoft is in a better position to prevent that from happening, although he acknowledged that there is some risk for problems. He said the court could reduce that risk by requiring Microsoft to license the source code only for its current version of IE, and not future ones as required under the state remedy.

Shapiro, the last witness for the states, is outlining the economic case for several remedies, including making Office available for other operating systems such as Linux; requiring complete disclosure of Windows interfaces to third-party developers; and giving PC makers more leeway to configure desktops.

Under this proposal, Microsoft would be forced to auction Office licenses to vendors for the right to port the suite of applications to other operating systems. An official at Raliegh, N.C.-based Linux vendor Red Hat Inc. testified earlier in the hearing that that company would likely bid for an Office license.

Shapiro such remedies are needed to restore competition.

Microsoft is expected to call as its first witness W.J. Sanders, chairman and CEO of Sunnyvale, Calif-based microprocessor manufacturer Advanced Micro Devices Inc. Sanders is expected to testify about the benefits of Windows as a stable and consistent platform that has contributed to the industry's growth. He is also expected to warn that any "balkanization" of Windows would harm consumers and a variety of companies.

Other possible Microsoft witnesses this week include Kevin Murphy, an economics professor at the University of Chicago Graduate School of Business.

The company also plans to call a number of independent software vendors, including Chris Hofstader, vice president, software engineering at Freedom Scientific Inc. in St. Petersburg, Fla.; Heather Davisson, CEO of Opus-I Inc. in New York; Brent Frei, CEO of Onyx Software Corp. in Bellevue, Wash.; Scott Borduin, vice president and chief technology officer at Autodesk Inc. in San Rafael, Calif.

Microsoft also intends to call a string of company officials to testify in its defense, including its chairman, Bill Gates. The company hasn't said when Gates will testify.

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