- The Washington Times - Wednesday, February 23, 2000

The United States was founded in part on the premise that an important role of the federal government was to promote science and innovation. Article I, Section 8 of the US Constitution specifically directs Congress to "promote the progress of science and useful arts by securing for a limited time to authors and inventors the exclusive right to their respective writings and discoveries."

The natural forces of consumer demand have allowed Microsoft's rivals and partners to thrive in a business environment unlike any seen in the history of U.S. commerce. Today, the information business is the largest single element of today's global economy. It is estimated that 60 percent of the United States' $8 trillion GNP deals exclusively with information. But yet in an economy that includes more jobs than workers, unprecedented gains for investors, and start-up fever across the country, the U.S. government would like to experiment with breaking up Microsoft, absolutely uncertain what effect it will have on anything or everything.

The government's theorists rely upon antitrust cases of a completely different era. In 1911, the federal government successfully sued Standard Oil Co. and in 1945 the Aluminum Company of America (ALCOA). ALCOA possessed 80 percent of the aluminum market and in the 1940s the Standard Oil companies still had a similar share of the known oil reserves under its control. Standard Oil's monopoly of oil reserves could allow it to control the market for decades. Once a company owned the rights to oil reserves, it could control the price of oil and the amount of oil available to consumers.

Unlike oil and aluminum, no company can control ideas and innovative technology. The government's contention that Microsoft has a stranglehold on innovation because of its dominance in operating systems, is episodic at best. Technology does not lend itself to comparison with oil and aluminum.

Outside the courtroom in the fast-moving technology marketplace, Microsoft faces equally daunting challenges as the Internet expands personal computing beyond the desktop. Several of the largest PC manufacturers, including Compaq Computer Corp. and Dell Computer Corp., have started backing away from their singular devolution to Windows. Not only have they begun selling machines outfitted with a rival operating system called Linux, but they're developing a new generation of slimmed-down computers that could include no Microsoft software at all.

Technology today reaches consumers at an unprecedented rate. The Internet is growing so fast that traffic is doubling every 100 days. It took radio 38 years before it had 50 million listeners and television 13 years to get 50 million viewers. The Web has reached 50 million users in only four years.

Just as market forces have made many technologies obsolete within just a few years, operating systems as we know them will inevitably be eliminated by innovation as well. In 1880, Western Union controlled 80 percent of the telegraph traffic in the United States. By 1885, however, telegraph traffic was shrinking. To an extent, Western Union controlled a monopoly over telegraph traffic, but by 1876 the invention of the telephone made it a monopoly of obsolete technology. By 1880, there were about 100,000 telephones in use; by 1915, there were 11 million.

Like the telegraph industry, other industries have been replaced completely by new technologies: the icebox was replaced by the refrigerator; the gas lamp by the electric light; the horse by the automobile. And it will continue to happen. In October 1999, the General Accounting Office predicted that the volume of first class mail will begin to decline by about 2.5 percent per year beginning in 2002 because of e-mail usage. On Feb. 8, 2000, Postal Service Chief Financial Officer Richard Porras reported revenues were $306 million below plan, partly because of growth in Internet advertising and reported softness in all categories except priority mail.

Consumers tired of the "World Wide Wait" are fueling the race for high-speed Internet access. Besides Microsoft, companies like IBM, AOL, AT&T;, Nextel, Intel, Sony, NBC, Bell Atlantic, Oracle, Hughes Electronics, National Semiconductor, Sun Microsystems and CBS are all investing in this future battle. And with the massive investment of these companies in telephone lines, cables and even satellite technology, it is unclear which will win out.

Consumers exercising their freedom of choice to buy the best product have made Microsoft what it is today. And like the telegraph, the icebox and the stamp, new technology and consumer demand will move old ideas into the history books. History has proven that the decision for dominant technology should rest in the marketplace, not in courtrooms.

Kenneth P. Brown is senior vice president of the Alexis de Tocqueville Institution.

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