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Microsoft and the Justice Dept.: Reality intervenes, too
technofile  by al fasoldt
Columns and commentaries in a life-long dance with technology 
Simple gray rule


'Netsbrake' faces the realities of unstoppable progress 


Technofile for Oct. 26, 1997

By Al Fasoldt

Copyright © 1997, The Syracuse Newspapers

Once there was a company called Netsbrake. In the days before cars came with brakes, it made nearly all the brakes for automobiles.

You didn't have to buy what Netsbrake made, of course. You could look for a competitor's product—if you could find some other kind of brake. (That was real hard to do, so most drivers ended up in the Netsbrake camp no matter what.)

One day this balance of cars and brakes started to change. Ride-O-Soft, maker of most of the automobiles sold worldwide, suddenly woke up and discovered … you've got it … brakes. It was odd that Ride-O-Soft never thought of brakes as something worth making before—after all, brakes would seem to be essential parts of a car, right?—but this didn't faze the Ride-O-Soft company, which gleefully began shipping out its cars with brakes already installed.

This rattled the folks at Netsbrake. What was the world coming to? The market for brakes was suddenly threatened. Even though most of the world's automobiles still sported Netsbrake's line of brakes, Netsbrake asked the government to look into the unfair competition coming from Ride-O-Soft.

After all, the founders of Netsbrake said, if brakes were someday considered a legitimate feature of all automobiles, they would all come straight from the factory with brakes already installed, and new owners would never have a chance to choose which brakes they wanted to use. Worse yet, owners might not even realize they had a choice.

Before long, Ride-O-Soft had captured 37 percent of the brake business. No one complained that Ride-O-Soft's brakes weren't good enough—in fact, many drivers thought they were better than Netsbrake's version—but both the government and Netsbrake could see the trend.

And so, last week, the government threatened to fine Ride-O-Soft $1 million a day it if kept selling its cars with brakes already installed. Ride-O-Soft wondered what all the fuss was about, and Netsbrake was gleefully watching from the sidelines.

This is not a made-up story. I just changed the names and the subject matter.

You know what I'm talking about if you've watched the evening news in the past few days.

The Justice Department put Microsoft on notice that it could be fined $1 million a day if it continued to treat Internet Explorer, its World Wide Web browser, as an essential part of the computer's operating system. Netscape, the company that makes about 60 percent of all the browsers used worldwide, is afraid of losing its grip on the browser market if the browser becomes an essential part of Windows.

Guess what? The browser will become an essential part of Windows whether the government likes the idea or not. The browser will become THE essential part of Windows, in fact. You can see the way PCs are heading if you install Microsoft's latest browser, Internet Explorer 4.

In one way, Netscape comes across like a sore loser. Except for one thing: It's the company in the lead. It still has a huge share of the market, and it still makes the best overall Web browser. It might be the loser some day, of course. But I can't help but think of a race in which the runner who is out in front—‘way out in front—starts complaining because the guy who was a mile behind is now starting to catch up.

You may think I'm not being straight about this, because there is another side to the story. Microsoft has been accused of doing some unsportsmanlike things itself. The Justice Department says Microsoft has been making secret deals with PC manufacturers to get them to put Internet Explorer on the computers they sell. I'm not condoning that kind of behavior.

But you need to know something. A long time ago, before the first computer was invented, before the era of TV and even before sound came to the movies, the government spotted a bad trend in the automobile business. Some cars were being equipped with brakes on all four wheels. Shudder the thought! Imagine, a car that could stop when it had to!

No, I'm not making this up.

Most cars those days had brakes on the rear wheels only. They took a long time to come to a stop. Cars with brakes on all four wheels put all other drivers at a disadvantage, the government said. If you're driving a standard car and the bozo in front of you had the gall to own one of those fancy-schmancy four-wheel-brake cars, when he came to a sudden stop you'd be forced to smack right into him.

Serves him right. But, then, you might get hurt, too. And your car might get bent up in the process.

So the government did the wise thing. It banned cars with brakes on all four wheels.

It took a lot of arguing and a lot of finger pointing to get the government to change its mind. Cars these days are a lot safer. No one would dare argue that cars should have lousy brakes just because they might stop too quickly.

You still think I'm making this up? Ask me sometime to tell you about the laws that once banned cars from using real headlights. Government laws. Kerosene lamps were OK, as long as they weren't too bright. Mustn't scare the cows, you know.

Or the time the head of the Patent Office declared that everything worth inventing had already been invented, so the Patent Office should close down. That was 100 years ago.

He was wrong. Completely, irredeemably wrong. Too bad someone in Washington hasn't learned the same lesson.



After this article was published, I received many interesting letters giving contrasting views. Here are two of them.

Al,

I guess what bothers me most about the alleged business practice in this case is what seems to me, at least, to be the cut-throat tactics of Microsoft. Here I am assuming that IE 4.0 was not available in May 1996, so the browser in question really wasn't a part of the operating system. The message I got from last thursday's article was that Microsoft was threatening Compaq's ability to continue to produce and market an established product, if Compaq had the gall to promote a product not made by Microsoft (Navigator) in a different market sector (web browsers), that Microsoft wanted to enter (and dominate?). Obviously Compaq could have switched to Unix or some other operating system on the PC-type chips, with a vastly reduced set of available software, or bought a license from Apple, switched chips and started building Mac OS machines for a somewhat larger segment of the home and simple office computer market and continued on. But Unix boxes really aren't going very far in the home market, and Wintel is doing a fairly good job of wiping out Apple / Mac OS in the home market already.

The more I think about it, the less I like the analogy with car manufacturers and brakes, since the marketing and technological aspects don't align very well with what seems to be going on here. I believe what fits better is the situation with AT&T before they were broken up. That company was willing to connect each of our houses to the outside world, provided we were willing to use only their equipment inside of our house. I will freely admit that I use AT&T for long-distance communications, primarily because they (through that magical place known as Bell Labs) have brought many marvelous inventions into the world. However, I also realize that I benefit from the government's having forced them to compete - I do not use their phones, or many other of their products and the competition probably helps keep all involved honest and pushing the technology.

What I fear is happening in the home computer market is that we are moving the wrong direction - Microsoft is establishing what is effectively a monopoly. And (to admit my own bias), I don't see them being as benevolent as AT&T - their technology tends to lag rather than lead the market. I had kind of scoffed at all of the noise made in the courts about graphical user interfaces until I started using a Mac four or five years ago (having used PC's from the early ‘80s onward). Using the Mac it became apparent how much Windows had been made to look and feel like the Apple. Having started using Windows 95 this summer at work and Mac OS 7.6 at home, my personal opinion is that in ease of use and ability to shape the machine to my needs and habits, the Apple still serves me better. Even now I am amazed to listen to the PC folks talking about how wonderful their machines are because they can hook them up to a VCR or camcorder and pull pictures in - my ‘94 Quadra 660AV came from the factory with all the jacks and software to accomplish that. Similarly with simple stuff like RAM (would've thought anyone would ever install more than 640K), file names (8 characters and a 3 digit extension is way too much), etc. The folks in Redmond are just catching up, but to listen to the noise, they've put a product on the market that is much, much better than sliced bread.

Microsoft is in a very unique position as a company, operating in a free market, having been able to obtain control of a huge segment of the market for operating systems. Obviously, this benefits the market in many ways. Hardware manufacturers have access to lots of software to make the box worthwhile, software developers have access to lots of consumers so they can sell a larger variety of products and consumers get to buy stuff from all over the place (hardware and software). But it all depends on having a very limited number of operating systems (optimally, one) so that whatever software you write, will work on whatever hardware you want to put it on. For a variety of reasons, Microsoft has produced that system.

What I see as the danger, is having achieved the distinction of having the vastly dominant operating system, it appears that Microsoft may be leveraging that position to dominate other related markets. By barring the ability of a company (Compaq) from effectively promoting a competing product (Netscape) by requiring simultaneous promotion of their own product (Internet Explorer), under threat of loss of license to the operating system (effectively the only game in town for Compaq), Microsoft has limited the ability of other software vendors to achieve and maintain market share. It is that diminuation of competition that will eventually lead to stagnation of the products available. My opinion is that Microsoft is an extremely competitive company and will work very hard to move into a market, but once they have dominance, I am not convinced that they will continue to aggressively develop the product. To go back to last evening, think about how long it took for Microsoft to release a mass market operating system that effectively recognized and efficiently utilized more than 640 kbytes of RAM.

And remember, we are living in a time when hardware is cheap and programmers expensive, so software tends to be bulky and inelegant. Imagine what it would be like if people wrote code like they had to when core memory was 16 kbytes and the only way to get anything in was paper tape (or before) and put it on a fast PowerPC or Pentium?

Again, thanks for the interest,

Dave Burch



Al,

I must say that I found it rather surprising to find you contributing to the propagation of one of those loony "urban myths," like Millard Fillmore's first bathtub in the White House or Kurt Vonnegut's "comencement speech" at MIT. No Commissioner of the U.S. Patent Office has ever suggested that the agency be shut down because there was nothing left to invent. In fact, as you can read at the web site listed below, the official who did opine that progress was moving so rapidly that it must be approaching the limits of human ingenuity, made the comment in the context of requesting more money for his office to deal with the ballooning workload. (See http://web.mit.edu/techreview/www/articles/july96/horgan.html).

Your defense of Microsoft in the face of government efforts to put an end to the kind of "tying" arrangement that has bveen illegal in this country for over 100 years, is equally surprising. When I first logged on to the Internet two years ago, I was given Mosaic, a very good browser. There were a half dozen others I could also get for free. I later picked Netscape because it was by far the best choice available. Netscape earned its dominant position by providing a product consumers wanted.

By stark contrast, I did not choose Windows 95 (or 3.1 before it) because it was a great program. I had no realistic choice unless I wanted to join the Apple minority. Microsoft has no competition in the operating system market, and the quality of its products reflects that sad fact. You may be right, although I disagree, that Internet Explorer is a better program overall than Netscape, but in head to head competition in the market it would be annihilated because few computer users want to use Microsoft if they can do at least nearly as well with someone else's product.

Your four-wheel brake analogy is particularly inapt. In this case, the government is trying to protect our right to choose four=wheel brakes. Microsoft is in the position of the sole manufacturer of master brake cylinders telling all the car manufacturers that it they want their products to have brakes, they have to take both Microsoft master cylinders and Microsoft two-wheel brake systems. Microsoft is telling manufacturers to force people to buy a product they do not want, or have nothing to sell at all.

Yes, the government can be very stupid as your brake story—a great one which I had never heard before—demonstrates. (Assuming, of course, that it is not another myth. I'll have to check on that.) In this case, however, the antitrust division is right on the mark, and I hope they sink their teeth into Bill Gates' ankle and don't let go.

David Prestemon


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