No, it WASN'T a good day for MS

The hearing ended abruptly around 3 p.m. ET, with Judge Thomas Penfield Jackson telling Microsoft (msft) that there would be "no further process" -- meaning no more chance for additional depositions or hearings -- because he had given Microsoft enough time to make its case.

"This case has been pending for two years, Mr. Holley," Jackson retorted shortly in response to a last-ditch appeal by Microsoft's counsel for additional time and a chance to present its "offer of proof."

The judge asked the government to provide him with a "clean copy" of the plaintiffs' proposed final judgment, meaning one that the Department of Justice and 19 states suing Microsoft for antitrust violations could amend with some of the minor changes and clarifications made by the judge during Wednesday's day-long remedy hearing in U.S. District Court.

The judge allowed Microsoft its requested 48 hours to deliver a final response to the decree that the court will enter.

While some trial watchers are saying the judge is likely to rule any time in the next month or two, technically, Jackson will have everything he needs to enter his decree, complete with his proposed remedy, starting any time next week.

Because the judge spent much of his time on Wednesday asking for specifics regarding the government's and Microsoft's responses to the government's proposed breakup suggestion, many now are expecting the judge to suggest breaking up the company, in addition to various conduct remedies, when he issues his ruling.

It's not clear if the judge will back the government's proposed two-way split of Microsoft into a Windows and an applications company, or if he will favor the last-minute suggestion to cut Microsoft three ways -- operating systems, applications, and browser companies -- as suggested by a last-minute friend of the court brief by the Computer and Communications Industry Association (CCIA) and Software and Information Industry Association (SIIA).

Microsoft wasted no time in crying foul. Its attorneys, speaking on the steps outside the courthouse after the hearing was adjourned, said they expected to appeal Jackson's findings of fact and conclusions of law, his suggested remedies and procedure.

"We never reached a process," said Sullivan & Cromwell attorney John Warden. "Discovery was closed months ago and we outlined for the court's consideration three alternatives for the continuation of the trial -- but the court said no more process."

Bill Neukom, Microsoft senior vice president of law and corporate affairs, said Microsoft had asked for more time and evidentiary collection because the suggested remedy by the government went beyond the scope of the matter covered during the trial.

But during the course of the afternoon proceedings, government lead attorney David Boies suggested that Microsoft had forfeited on its opportunity to cross-examine the economists and investment bankers who provided supporting briefs to the government's proposed remedy, which it issued in April.

One trial watcher, University of Baltimore law professor Bob Lande, said he was convinced that Microsoft might have a strong case for an appeal based on process.

Microsoft (msft) "Microsoft has a serious due-process argument," Lande said. "They could have an issue on appeal," especially if Jackson calls for breakup, he said. "Microsoft could say they didn't have sufficient time to respond, as their grounds for appeal."

Lande said he expects Jackson to issue his ruling by July or August, based on the timetable outlined Wednesday. He said he believed it would take the judge that long to "write a carefully crafted decision."

"He won't take everything the government's going to file. It's still not even sure on the breakup issue," Lande said. "(But) he (Jackson) will seriously consider the government's proposal and the industry associations' proposal."

In the approximately hour-long afternoon remedy hearing proceedings, the judge began by asking both the government and Microsoft attorneys to elaborate on a few of the points raised in the CCIA/SIIA brief.

Specifically, he asked the two sides to respond to a quote attributed to Microsoft President Steve Ballmer, who claimed that 40 percent of the functionality of the Windows 2000 desktop is useless without the Windows 2000 server.

Jackson also asked for elaboration by the two sides on the CCIA/SIIA suggestion that Microsoft Office be subject to some of the same price-protection provisions as the government has suggested be applied to previous versions of Windows.

The judge also asked for reactions to the CCIA/SIIA suggestion that Microsoft be required to make Internet Explorer available as open source at "zero royalty" to Microsoft.

Sullivan & Cromwell attorney Steven Holley took on the Windows 2000 tying question by first attempting to discredit one of the authors of the friend of the court brief, the CCIA -- a tack that didn't sit well with the judge.

"CCIA is just a bunch of Unix companies who are running scared of Microsoft bringing the high-volume, low-pricing model to servers," Holley began.

He added that the trade association was trying to make a "classic monopoly leveraging claim," which Holley claimed Jackson has dismissed on summary judgment earlier in the trial.

Holley then noted that neither Windows 2000 nor its predecessor NT 4.0 were part of the case. And he spent time showing how "very, very complicated" the relationship between Windows 2000 clients and servers is.

In the end, he summarized by saying, "There is no reason why Microsoft can't make its client work well with its operating system. Companies have the right to develop their products so they work well together."

On the other friend-of-the-court points raised by Jackson, both Boies and Microsoft attorney Warden agreed that the trial record addressed Office sufficiently for it to be added to the remedies at this point. While Boies was in favor of the open-sourcing IE possibility, Warden, expectedly, was not.

Like Holley, Warden attempted to discredit the CCIA and SIIA as "Johnny-come-latelys to this matter." He added that their idea on open-sourcing IE "suffers from all the same destructive problems" as other government-suggested remedy proposals, but especially "lack of incentive (for Microsoft) to innovate."

Before the judge abruptly terminated the remedy hearing, Holley attempted to specify the types of information that Microsoft had hoped to seek via its offer of proof.

He began itemizing some of the witnesses that Microsoft had hoped to call, who would have addressed issues such as the severity of the adverse effects of a breakup on the company and consumers. But the judge cut him short, noting that the Microsoft document "would speak for itself."

On the steps in front of the courthouse, Neukom got the last word of the day, noting that "we are very near the appeal phase of this controversy -- we are still in the middle innings and are looking forward to appellate scrutiny."