June 2002 – This month’s post includes two articles on the Microsoft case. One author is part of the ABM (anything but Microsoft) community, but yet he argues that the free market can do far more than the antitrust trial. The other author discusses how the proposed settlement from the nine hold-out states would affect disabled persons. I hope you find these commentaries interesting and informative.

Free Market Offers Best Challenge to Microsoft

by John Gable

As its recent beta test suggests, AOL may soon ship the Netscape browser in its flagship service, replacing Microsoft’s browser. This single act would do more to challenge Microsoft than all the anti-trust proceedings combined.

For years, some of the Internet’s elite have feared that Microsoft will leverage its operating system market power to gain greater market share of the Internet. If Microsoft controls the technological foundation of the Internet, the argument goes, it can keep out competitors.

That fear is what drives the ABM, or Anything But Microsoft, community. It has driven major Internet companies AOL Time Warner, Sun Microsystems, and Real Networks to look to the government and anti-trust laws in addition to regular market maneuvers, such as AOL’s merger with Time Warner.

Whether this environment is a picture of a healthy, competitive marketplace or an example of unfair competition dominated by a monopoly is the fundamental question of the anti-trust case. Whatever you believe, it has become clear that intelligent and bold moves in the marketplace have a much greater, more positive impact for Microsoft’s competitors than anything the government has done so far.

Government intervention frequently seems like a good idea, particularly to competitors battling a powerful foe. But not only is it too slow for the warp-speed high technology industry, it often does more harm than good. For example, one proposed agreement between Microsoft and the justice department essentially “punished” Microsoft by requiring them to donate hundreds of millions of dollars to the education market.

Apple Computer currently has the lead in the education market, so this agreement, which was fortunately later withdrawn, threatened Apple’s market leadership, giving Microsoft even more market power, not less. Instead of relying on the government to hinder competitors, companies can have more success with strong moves in the marketplace.

Today, AOL freely ships the Microsoft browser to all of its customers, a practice it started years ago in exchange for placement on the Windows desktop. With AOL and Microsoft shipping the same browser technology, around 80 percent of all Internet consumers use Microsoft’s browser. And many webmasters optimize for Microsoft browsers, sometimes ignoring competing technology like Netscape Navigator. But all of that might change.

AOL acquired Netscape in 1999, gaining a mainstream competitor to Microsoft for browser technology. Now it has started beta testing the Netscape browser within the AOL brand service, replacing the Microsoft browser that AOL customers currently use by default. Although this is just a test and AOL’s next release will still use Microsoft’s browser, it is a sign that AOL will eventually make this change.

If AOL replaces the Microsoft browser with a newly revamped Netscape browser, Netscape alone could potentially reach 35 to 40 percent market share (estimates by Giga Information). Web sites may then avoid solutions that only work on Microsoft technology. They may instead more readily support standards that are equally available to all vendors, and support competing standards like Real Audio and the Windows Media Player.

The result will be an even more competitive Internet. No matter which side of this debate you’re on, it’s clear that competition, innovation, and bold market moves are the best, most reliable ways to ensure a vibrant Internet that will continue to benefit all of us in more and more exciting ways.

John Gable, a former employee of such companies as AOL Time Warner, Netscape, and Microsoft, currently is co-founder of Kavi Corporation and an active investor in a number of start-ups.

What the Microsoft Case Could Mean to the Disability Community

by Pedro Babiak

In recent years, special computer technology has increasingly enabled Americans with disabilities to reap the same benefits of the information revolution as everyone else. So-called “assistive technologies” make it possible for people with motor, hearing and visual disabilities to operate computers. In turn, they are better able to lead independent lives, communicate, find jobs and succeed in their work.

Unfortunately, nine suing states, including California, are in court seeking to impose penalties on Microsoft that will undo the gains made through assistive technologies. California Attorney General Bill Lockyer should recognize how he will set back the disabled community if he secures court approval for his proposed penalties.

This issue became clear in the courtroom when Chris Hofstader, the vice president of software engineering for Freedom Scientific Inc., offered his testimony. Blind since birth, Hofstader not only designs products that assist those with visual impairments, but he also uses such products himself.

Freedom Scientific’s flagship product, JAWS® (for Job Access With Speech), is a screen reader that converts words on a computer screen into Braille or speech. It operates on computers running Microsoft Windows, and its functionality depends on various features built into Windows.

If the states force Microsoft to sell a stripped-down version of Windows, JAWS simply will not run. Further, according to Hofstader, if Freedom Scientific had to build multiple versions of its software to run on different types of Windows, the cost of development, testing and customer support would increase dramatically. Other makers of assistive technology products – as well as other software companies in general – would run into the same problem.

As Hofstader testified, Microsoft has been at the forefront of developing products that support assistive technologies. The company championed support for such technologies as far back as 1988, when it included the first accessibility features in Windows. By contrast, the National Federation for the Blind sued AOL in 2000 for violating the Americans with Disabilities Act (ADA) by not making its leading online service accessible to people who are visually impaired.

Microsoft’s efforts have not just been good for end-users – they have also spurred on an entire industry. According to Hofstader, Windows APIs (Application Programming Interfaces) lower the cost of overall product development for other software companies and therefore reduce the barrier to entry into the industry. Without the consistent inclusion of APIs in Windows – the very inconsistency that the suing states are seeking to create – these benefits will be lost to other software companies, and increased costs will be passed on to consumers.

At the most fundamental level, Freedom Scientific’s screen reader – as well as similar products from competitors – transforms the lives of its users by enabling full access to the benefits of computing. Assistive technologies also help companies comply with the Americans with Disabilities Act. The workplace can more easily accommodate employees with disabilities when computer work becomes feasible for everyone, disabled or not.

Hofstader’s own company is a case in point. More than 30 percent of the employees in his company’s Blind and Low Vision Product Group are themselves blind or vision-impaired. The next generation of assistive technologies will help still more of the 54 million Americans with disabilities, including some 8.5 million who want to work but are still unemployed. But not if the nine still-suing states have their way.

The states’ proposed penalties will not only make it impossible for many assistive technologies to work on future computers, they will also drive out of business many assistive technology companies, which are often small businesses with tight margins. These calamitous results follow from just a single provision of the proposed penalties.

Hofstader also points out that the states’ proposal to force the web browser Internet Explorer into the public domain would have drastic consequences for people with disabilities. Currently, IE is the only web browser with accessibility features for the visually impaired. In the public domain, the program could be modified and distributed without accessibility features. Further, because Microsoft will lose all financial incentive to improve the product further, development of web-browsing assistive technology will stall.

Hofstader’s testimony makes clear that Bill Lockyer and his fellow attorneys general either did not consider the implications of their proposed penalties or, worse, simply ignored the needs and rights of Americans with disabilities. They can all right this unconscionable oversight by joining the settlement already reached in this case. That settlement reasonably addresses Microsoft’s wrongdoings – without running roughshod over the entire disabled community.

Pedro Babiak is President of Lighthouse Computer Group, LLC.