Commentary: You can still stop the next MS monopoly

Now that Microsoft isn't going to be completely broken up, someone should head off the next generation of monopoly problems before they can start, says AnchorDesk columnist David Coursey.

Now that the Microsoft case has found more reasonable footing in the appeal ruling, I'd like to suggest a remedy of my own. Since Microsoft isn't going to be completely broken up, here's a way to head off the next generation of monopoly problems before they can start.

My solution is reasonable, measured, and forward-looking. It addresses technologies that are just being rolled out that will allow Microsoft to push its juggernaut straight from the Windows applications business and into the Internet applications business of tomorrow.

Here's my plan: Require Microsoft to divest itself of MSN, the MSN Messenger instant messaging service, Hotmail, Passport, and the collection of .Net services known as Hailstorm. Also require Microsoft to stay away from providing the infrastructure services necessary for creation of Internet-based applications.

Further, require Microsoft to create open specs--subject to approval of a newly created standards body--that will define how Internet-based applications will interact and where personal user data will be stored. This is a 50,000-foot overview of a complex topic, and I am sure there are nuances I haven't considered. But remember what we are discussing:

  • Passport is Microsoft's method for defining how users access the online world and is increasingly being merged into Microsoft applications as a single login for multiple services. Microsoft should be denied this important gatekeeper role.

  • Hailstorm represents a giant database--access to which Microsoft will be selling for a fee--containing all of a user's personal information as well as lists of documents they own, Web favorites, contact lists--essentially all the items that today sit on your computer and define it as being yours. Internet-based applications will be constantly accessing this information. Besides questions about whether Microsoft (or anybody) should be entrusted with this information, giving it to Microsoft essentially gives Redmond an out-of-the-box monopoly on data that becomes only more important over time.

  • MSN, Messenger, and Hotmail are the communications networks and services that tie all this together. While these services face competition today, primarily from AOL, Microsoft is heavily leveraging them into its future plans. Passport is already closely coupled with these services, as are the messaging components of Windows XP.

In an earlier column, I suggested to Steve Case that AOL Time Warner's best hope of remaining competitive with Microsoft lies in offering its own competition to Passport and Hailstorm. The challenge to Case is that having essentially disassembled Netscape, the company may no longer have the brains and talent to pull this off.

So let's allow Microsoft to design these services--since it already has--but limit Microsoft's control over them in ways that maintain a competitive marketplace and give customers an option of where their personal information resides.

While requiring Microsoft to divest itself of these services might be a bit harsh, given the company's past business practices, the only way to ensure an open market is to keep Microsoft out of it. At the same time, however, Microsoft should continue to be encouraged to innovate. One compromise might be one used in the AT&T break-up: allow Microsoft to provide these services, but only in a completely open manner, and only after competitors were well enough established in the marketplace. Thinking this through as I write this column--just off the plane from PC Expo--this sounds like a fair and equitable solution for everyone.

I want to congratulate the federal courts for coming around: Yes, Microsoft is a monopoly and has committed some illegal acts. At the same time, not everything Microsoft has done is illegal, bundling isn't always a bad thing, and breaking up the company is too radical a solution to the problem, especially in such a fast-moving industry.

Reading between the lines, the court also seemed to agree that Judge Jackson managed to sink to the depths off, say, Simpson murder case Judge Lance Ito, in letting his personal issues get in the way of justice. Fortunately, Judge Jackson can easily find a job on one of those TV programs that make legal issues into game shows.