---------- Forwarded message ---------- Date: Tue, 26 May 1998 08:02:50 -0400 From: Dave Farber <[EMAIL PROTECTED]> To: [EMAIL PROTECTED] Subject: IP: New York Times op-ed by Mitch Kapor DO READ!!!! Date: Tue, 26 May 1998 07:42:46 -0400 To: [EMAIL PROTECTED] From: Mitchell Kapor <[EMAIL PROTECTED]> High-Tech Hypocrisy About Government By MITCHELL KAPOR May 26, 1998 CAMBRIDGE, Mass. -- In the mid-1980's, during my tenure at Lotus, I was, I believe, the first person to publicly compare Microsoft to Standard Oil. Both companies sought and used monopoly control over a new industry critical to the nation's economy. And both were headed by men -- John D. Rockefeller Sr. and Bill Gates -- who would stop at virtually nothing to gain what they sought. Back then no one took the comparison seriously -- except Bill Gates himself, who made it clear to me how irate he was about it. Like Gates, I believe in and have profited from the free market. But I'm also a technorealist, which means that unlike many of my colleagues in the high-tech industry, I don't automatically see Government as the enemy of technological progress. Such views are all too fashionable in Silicon Valley, where the prospect of Government intervention causes a bad case of heartburn. What my colleagues need to see is that the market cannot work unless our society sets rules of play and enforces them. Microsoft has benefited from the stability and opportunities provided by those rules, but it has been flouting them as well. The antitrust suits filed last week against Microsoft are therefore regrettable but necessary. Despite all of Gates's talk about the right to innovate, his company uses its power to limit consumer choice and impede a free marketplace. Only the Government has the ability to take on Microsoft, and the Justice Department's antitrust chief, Joel Klein, has done his homework. He's a pragmatist, not a crusader. Klein understands that the real threat to entrepreneurial innovation is Microsoft's anticompetitive arrogance. Great discoveries in computing often come from small start-up companies. Yet with Microsoft's dominance, vast areas of the product market -- including but hardly limited to basic applications like word processors and spreadsheets -- are barren zones where venture capitalists and entrepreneurs fear to tread because Microsoft has staked a claim or is seen as likely to do so. It is a sad but telling fact that in the high-tech field, virtually no business plan will be financed today without a convincing answer to the question of what is to be done about competition from Microsoft. The Government also recognizes that Microsoft's dominance will only intensify as the Internet becomes an integral part of mainstream culture. The browser war is just the beginning. Microsoft claims droit du seigneur in any area of computing that becomes strategically important -- voice recognition, home appliances, auto navigation and so on. It's unfortunate that Microsoft is so aggressively self-interested that an external check is necessary. I would prefer to live in and help create a society in which self-regulation makes antitrust suits unnecessary. But until such a business ethos prevails, we must rely on other means. Ultimately, the extent of the Government-mandated reform may depend on Microsoft's willingness to begin acting like a more socially responsible industry leader. To the extent that the company remains recalcitrant, it's likely that radical solutions will gain favor. The most drastic action, of course, would be to break Microsoft up into a series of Baby Bills, separating operating systems from applications and from content and services. Today that seems like overkill, but in the coming years, short of a sincere change of heart by Gates, it may well become the preferred solution -- Mitchell Kapor, the founder of Lotus Development Corporation, is an investor in high-tech start-ups.
