Senate's slow go on MS

That's because the hearing made explicit what before was lurking beneath the surface: The idea that the nation's antitrust watchdogs could potentially force radical changes in the business models of industry behemoths such as Microsoft Corp. (MSFT)

Microsoft in Washington
	Nader says PC makers should forget Windows
	Microsoft pays to influence lawmakers

The committee, in existence since 1816, can derail the appointment of federal judges, and also oversees the operations of the Department of Justice. This means it will have a supporting role in the DOJ's continuing antitrust scrutiny of Microsoft, although it is barred from involvement in an ongoing court case such as Microsoft's battle with Sun Microsystems Inc. (SUNW), legal experts said.

What the committee can do is recommend the passage of new antitrust laws, or changes to the existing laws. But it's too late in the current legislative session for that to happen, so any action is likely to be put off until the release of Windows 98, observers said.

Some observers of Microsoft's antitrust saga, noting that the wheels of government bureaucracy move notoriously slowly, said the hearing -- in which Gates defended the company's business practices amid criticism from Barksdale, McNealy, and even some senators -- has resulted in more bluster than substance, at least so far.

No changes for a decade?
"There's nothing happening yet," said Rob Enderle, an analyst with Giga Information Group in Santa Clara, Calif., and a longtime Microsoft watcher. The most major impact on Microsoft's business would probably come from changes to the nation's antitrust laws, he said, and such a development could take years.

"It could be a decade before we see any meaningful outcome" to the hearing, Enderle said.

What's more, in the absence of solid evidence of illegal activity on Microsoft's part, the committee is likely to be swayed by the input of economists who might argue that establishing regulatory limits on the software industry will cause more harm than good, said Solveig Singleton, director of information policy at The Cato Institute, a Washington think tank.

And the companies crying foul about Microsoft's negotiating tactics with computer makers have quite a bit to lose if their own bargaining potential is limited by new laws, Singleton said. The line being walked by Microsoft's competitors is a fine one, she contended.

If it is proven that Microsoft threatened to effectively bury PC makers by withholding its Windows OS if those companies didn't include its Internet Explorer Web browser with their products -- at the same time as they excluded Netscape Communications Corp.'s Navigator browser -- then the DOJ, spurred by the committee, is likely to have grounds for legal action, according to legal experts.

Making a case for intervention
"I'd compare the committee to an excited back-seat driver," Singleton said. "But the DOJ is definitely in the driver's seat. If something illegal has occurred, it will be up to the DOJ to take punitive action."

Proving that this occurred is likely to be difficult. Yet just by raising the issue, competing companies risk bringing on legislation that could hinder their own deal-making efforts and, ironically, putting them in an even worse position in regard to Microsoft, Singleton said.

"The antitrust dog could end up turning around and biting the hand that feeds it," she said.

But, as reported earlier by ZDNN, Microsoft isn't taking any chances.

The company spent $1.2 million trying to influence Congress in the second half of 1997 alone -- nearly double the $660,000 the company spent during the first six months of the year. Microsoft's total spending on lobbying efforts in Washington last year was $1.9 million, up 67 percent from 1996.