COMMENTARY--Just prior to launching my investigative report on whether Microsoft and IBM were plotting to take over the Internet, I received a phone call from my colleague and fellow columnist David Coursey asking me if I had forgotten to take my daily medication. He had good reason to wonder whether I had lost my mind. I'll be the first one to admit that the idea that two companies--even ones as big as Microsoft and IBM--could conspire take over the Internet on the basis of software patents and royalties is, well, "out there."
Casting further doubt upon my theory was Coursey's subsequent interview with Microsoft Platform Strategy Group General Manager Charles Fitzgerald, who said "While this may be disappointing to some conspiracy theorists, Microsoft has absolutely no ambition, plan, or desire to collect a royalty on Internet traffic." Fitzgerald went on to say, "Burdening the underlying standards with additional costs would both undermine this strategy and fly in the face of our business strategy of delivering high-volume, low-cost software."
We should thank Coursey for getting this official statement from Microsoft. When coupled and compared with the testimony of one of the same company's highest ranking officers, it is clear to me that one of two things happened. Either the company attempted to deceive Coursey, his readers, ZDNet, and the public; or Fitzgerald, a Microsoft general manager, didn't know what the company's official position was. You decide.
The conspiracy theorist to which Fitzgerald refers is me, and the rest of what Fitzgerald said lies in stark contrast to the testimony of Microsoft's Jim Allchin during the ongoing antitrust proceedings. Kevin Hodges, an attorney representing the litigating states, probed for the truth about Microsoft's intent with respect to its intellectual property rights over technologies that were submitted to the World Wide Web consortium (W3C) for consideration as standards. The line of questioning speaks for itself:
Hodges: And if you look at the bottom of the page, is it correct that once again Microsoft has reserved the right to charge a royalty for its technology used in this submission?
Allchin: Yes. If you have intellectual property and you follow the laws that the--the laws, the patent submission guidelines for W3C, if you have intellectual property, it's pretty reasonable that you get paid for it. We haven't decided that we're going to charge royalties.
Hodges: But you've reserved the right, correct?
Allchin: Yes.
Hodges: And I take it you haven't decided you're not going to charge royalties?
Allchin: Um, I'm not going to make that statement here today. We're thinking about it.
"We're thinking about it." That's a bit different from what Fitzgerald told Coursey, that "Microsoft has absolutely no ambition, plan, or desire to collect a royalty on Internet traffic."
So far, Fitzgerald has refused to comment on the issue. Over a period of one week, several attempts were made to schedule a telephone interview to give Fitzgerald an opportunity to explain the discrepancies between what he said to David Coursey and what Jim Allchin said to the court. Through Microsoft's public relations firm Waggener-Edstrom, Fitzgerald declined a telephone interview, offering only to answer my questions via e-mail by end-of-day May 20, 2002, which I reluctantly accepted. However, Fitzgerald and Waggener-Edstrom's self-imposed deadline have come and gone without any correspondence via telephone or e-mail from either.
Trust and antitrust
Just in case this debate degenerates into an argument over semantics, Microsoft may indeed have no ambition to charge royalty on Internet traffic itself. But any royalty charged to anyone (for example, another software vendor) for complying with an Internet standard ultimately shows up in the cost of creating traffic that's based on that standard. Either that, or the royalty is so expensive that no one pays it and the only way to comply with the standard is to buy the technology from Microsoft. Now you understand why the question is relevant to an antitrust hearing.
More importantly is the issue of trust. Microsoft apparently responds differently when it's under oath than when it's not. For example, when journalists have the same questions that lawyers do. If you're not convinced, the previous example isn't the only one. In a story that explored Microsoft's and IBM's motives for not inviting Sun Microsystems to be one of the founding members of the Web Service Interoperability Organization (WS-I), officials from both companies concocted logic for the decision that was almost too easy to debunk.
But just in case anybody thought I forgot to take my medications on that one as well, the very same court transcript revealed that the decision to exclude Sun from the WS-I came right from the very top. In responding to the idea of the WS-I, which was code-named "Foo" at the time, Microsoft CEO Bill Gates wrote in an e-mail, "I can live with this if we have the positioning clearly in our favor" and "in particular, Sun not being one of the movers/announcers/founding member." (See "Microsoft's plot to block Sun revealed.")
In an interesting bout of clairvoyance that took place the week before the revelation of Gates' email, IBM mysteriously backpedaled on its resistance to allowing Sun into the WS-I as a board member. Now that the truth is out of the bag, it's easy to understand IBM's interest in distancing itself from a situation that's not only embarrassing, but that could easily lead to an antitrust inquiry of its own. Formed by IBM and Microsoft, the WS-I is an organization that will produce Web specifications; these specifications, if left unchecked (and much to the chagrin of the W3C), stand a good chance of becoming the de facto standard protocols that will make up the next-generation infrastructure of the Internet. If IBM and Microsoft own the intellectual property to those specifications, they could end up with a duopoly over the Internet.
Why Microsoft continues to dig itself into a grave of mistrust is anyone's guess. Surely, the company must understand that no one is going to want to do business with a company that has one story when its under oath, and another when its not. Perhaps Gates should delete the word "computing" from his "trustworthy computing" initiative and just work on the first part for now.
What do you think is the issue here? Deception? Miscommunication? My medication? I'd like to hear your point of view. TalkBack below or e-mail me at david.berlind@cnet.com.
Stay focused: Sign up for Tech Update Today, the daily e-mail newsletter for those who need to know.
