Bush isn't Microsoft's white knight

While speculation has run high that the president-elect and his nominee for attorney general, Republican Sen. John Ashcroft of Missouri, will swoop down and wipe away Microsoft's legal woes, antitrust experts say that is unlikely to happen.

The reasons are both political and practical. With a deeply divided Senate and weak initial political support after the struggle for Florida's 25 electoral votes, Bush will have to pick his initial policy battles carefully. Microsoft (msft) is not likely to be one of them, particularly considering that the appeals court is expected to overturn much of the government's victory.

"Given the political and practical realities, the new administration is not going to tamper with the case in the short term," said Bill Kovacic, a professor at the George Washington University Law School. "The administration is not likely to put its footprint on the litigation until after the Court of Appeals issues its decision in May or June."

The U.S. Court of Appeals for the District of Columbia Circuit is handling Microsoft's appeal of a devastating ruling and remedy.

In April, U.S. District Judge Thomas Penfield Jackson determined that Microsoft violated two sections of the 1890 Sherman Act. He later ordered that Microsoft be broken into separate operating system and software application companies but stayed the order pending appeal.

The appeals process is expected to pick up momentum Jan. 12, when the government files its principal legal brief in the case, followed by oral arguments Feb. 26 and 27.

While Bush has publicly indicated that he opposes a forced breakup of Microsoft, even if he wanted to intervene immediately there is no practical way this can happen, legal experts say. Bush has bigger problems than Microsoft to deal with. The legal battle over Florida's electoral votes delayed his putting together a cabinet and filling about 3,000 politically appointed positions--all requiring background checks and around 1,000 subject to Senate confirmation.

The delays also make it unlikely that Bush can get Ashcroft's nomination approved before oral arguments in the Microsoft case begin.

This alone, according to Kovacic, is reason enough to tell acting assistant attorney general A. Douglas Melamed, " 'Steady as she goes. Argue the case, pursue the case, and we'll see what the Court of Appeals does.' "

"You tell the professional staff you will reassess at the most natural point, which is the Court of Appeals decision," he added.

Bob Lande, a professor at the University of Baltimore School of Law, agreed, particularly considering the Court of Appeals is expected to overturn much of the government's victory.

"You let the appeals court do your dirty work so you don't get accused of playing politics," he said.

Bush's biggest problem in rallying behind Microsoft is simple: He has little or no political capital on Capitol Hill. After a close, bitterly contested election, the incoming president may face less good will from Congress than what normally might be given to a president during the first 100 days in office. Bush also must grapple with a deeply divided Senate and a slim Republican lead in the House of Representatives.

What good will he has will be needed to push through high-level political appointments, particularly the attorney general and assistant attorney general. Those two appointments are expected to affect several high-profile antitrust cases--among them Microsoft--and to face potential scrutiny in the Senate.

"One of the stopgaps on Microsoft is Orrin Hatch," Lande said.

Hatch, the Republican senator from Utah and head of the Senate Judiciary Committee, is one of the many conservative allies Bush will need in his camp. But Hatch also has been one of the most vocal supporters of the government's prosecution of Microsoft.

The cost of intervening quickly could create problems with Hatch that Bush cannot afford, Lande said.

"The Florida Supreme Court and U.S. Supreme Court rulings (on the election) show how critically important judges are," he said. "If you want to get your own judges through and Orrin Hatch controls the Judiciary Committee, you want to be nice to Orrin Hatch."

A wait-and-see approach makes the most sense given these circumstances, Kovacic said. "The cost of intervening would be a firestorm of criticism and fairly hard-edge political attacks at a time when you have no political capital at all."

With partisan lines sharply drawn coming out of the Florida electoral vote contest, Bush could only lose by lobbying hard for Microsoft.

"What benefits do you get if you intervene in the short term?" Kovacic asked. "I think they're close to zero, especially given the emphatic commitment by the state attorney general to proceed to the end."

The Justice Department filed the case in conjunction with 19 state attorneys general, whose cases could continue even if federal trustbusters withdraw.

Iowa Attorney General Tom Miller on Wednesday emphasized the importance of seeing the case through, regardless of political position.

"The Microsoft case already is far along, with strong findings of fact and a strong ruling by the District Court," he said. "There is a strong tradition, especially in antitrust cases, of pursuing matters professionally on the basis of the law and not on politics, so we are hopeful the incoming administration will continue to pursue this case."

Kovacic said the Bush administration has another good reason for not interfering: precedence and bad form. "I've gone back and looked at all the cases back to the passing of the Sherman Act in 1890, and I haven't found a single instance where the Department of Justice has won a decisive victory in the trial and then simply abandoned it on appeal," he said.

Long term, a Bush White House could play a pivotal role in the case's eventual outcome, but much hinges on the Court of Appeals.

Many legal experts predict the appeals court will throw out much of the government's victory, but not all of it. In that scenario, a forced breakup of Microsoft would be highly unlikely, said Lande and Kovacic.

Even before that point, Ashcroft's Justice Department could ask the Court of Appeals for the opportunity to withdraw the request for breakup.

"It's possible the court will invite supplemental briefs, recognizing the change in administration," said Andy Gavil, a professor at the Howard University School of Law. "It's also possible a new administration would ask leave to file a supplemental brief. If they did that, it would focus on the remedial side and say, 'We are no longer requesting a breakup.'"

The problem with that scenario--or with the Justice Department negotiating a weak settlement or withdrawing the case outright--is the other party pursuing the case. The 19 states would be free to fight the battle to the Supreme Court.

"The view of the states continues to be that Microsoft must fundamentally change how it uses its market power," Miller said. "If the U.S. government were to settle on terms that are weaker than we believe are necessary, we would not agree to the settlement and we would continue the case."

Gavil, Lande and Kovacic said the least likely scenario would be the Bush administration withdrawing the case outright. But settlement after a ruling by the appeals court makes more sense.

While few legal experts expect the appeals court to completely overturn the government's victory, that circumstance would have been handled differently by a Gore administration.

"If Microsoft were to win in the Court of Appeals, it could be a Justice Department under Bush would not seek to appeal that," whereas a Gore White House would have been likely to pursue it, Gavil said.

Either way, the states would have a tough time pursuing the case without the Justice Department, which could oppose such action before the Supreme Court.

"Even if the states were to continue to press for a breakup, if the federal government is not behind the breakup, I don't think a federal court would be comfortable granting it," Gavil said.