DOJ v MS: AOL, MCI called in

As the chess match between the U.S. Department of Justice and Microsoft enters its latest stage, some analysts say the federal government is taking a page out of the other Big Story du jour in Washington.

MCI Communications Corp. (MCIC), Sprint Corp. (FON), and America Online Inc. (AOL) all said Friday they had received civil subpoenas from the Justice Department in its probe of Microsoft Corp., although none is a target of investigation.

The Justice Department issued the civil investigative demands as it gathers information to determine whether to bring new antitrust charges against Microsoft (MSFT). In the past, the government has found documents from other companies to be a rich source of information about Microsoft.

"I can confirm we received one," said Tricia Primrose of AOL, the world's biggest online service. Officials at telecommunications companies MCI and Sprint gave confirmations in almost the same words.

An AT&T Corp. spokesman declined to confirm or deny that his company also got a subpoena but said AT&T co-operates when it is subpoenaed.

The Internet company CNet reported it received a subpoena at the end of last year.

Some analysts said the latest subpoenas suggest the government is looking for something -- anything -- to pin on Microsoft so it can save face during its widening antitrust investigation into the company's business practices.

"You could compare them to Kenneth Starr," said Zona Research Inc. analyst Jim Balderston, alluding to the special prosecutor who's been aggressively pursuing President Clinton for numerous alleged transgressions. "There are political brownie points to be gained here."

The Wall Street Journal first reported the subpoenas. The paper said the subpoenas appear to focus on whether the Internet providers agreed to favour Microsoft's Internet Explorer product over archrival Netscape Communications Corp's (NSCP) Netscape browser.

Analysts said the subpoenas indicate that the government is expanding its investigation beyond alleged violations of the 1995 consent decree. "They're going to widen their net," Rob Enderle, an analyst with Giga Information Group, said. Enderle also said the subpoenas indicate the DOJ is feeling pressure in light of a recent settlement with Microsoft and the company's recent win in Texas: "It looks like the DOJ is getting desperate."

The Justice Department is said to be interested in looking closely at any agreements and correspondence that might reveal Microsoft's operating tactics.

Reuters contributed to this report.

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