- The Washington Times - Thursday, June 15, 2000

Who is the real public servant: a company whose software innovation benefited "many if not most consumers," in the words of a federal judge? Or is it the government agency that is seeking to break the company up for supposedly trying to leverage its dominance of operating systems into a monopoly of Web browsers, thereby violating antitrust laws? According to that very same federal judge, Thomas Penfield Jackson, it's the government agency.
Defending his decision to side with the U.S. Justice Department's plan to break up Microsoft into two competing firms, Judge Jackson explained last week that the "plaintiffs' proposed final judgment is the collective work product of senior antitrust law-enforcement officials of the United States Department of Justice and the Attorneys General of 19 states, in conjunction with multiple consultants. These officials are by reason of office obliged and expected to consider and act in the public interest; Microsoft is not."
This is a breathtaking argument. Its premise is that the government's proposal must serve the public interest because, well, it's supposed to. But Microsoft, which must give the public what it wants on a daily basis or risk going out of business, does not.
Assume, for the sake of argument, that he is correct. Try to imagine how much "service" there would be in a world filled with nothing but "public servants," as Judge Jackson defines them. Forget about using computers and word processors or pens for that matter to write opinions since Justice Department officials might not get around to inventing them. Judge Jackson might be reduced to communicating his decisions through smoke signals, which he would have to distinguish somehow from the smoke signals sent by National Park Service officials burning down the forests around Los Alamos, N.M.
Perhaps Judge Jackson didn't really mean to say Microsoft was not obliged to serve the public interest. Perhaps he meant to say only that Justice Department officials were serving the public interest by trying to tame the company's wretched capitalistic excesses. It's a plausible argument. There just isn't any evidence to support it. Even the government's own witness in the case couldn't show that Microsoft had harmed consumers by integrating its browser into its Windows operating system and, in effect, giving the browser away for free. Judge Jackson himself acknowledged that integrating the two had increased general familiarity with the Internet and reduced the cost of gaining access to it. No, the danger to the public is prospective: Microsoft might some day exploit its "monopoly" to gouge consumers. Breaking up the company might increase competition, which might protect them from predatory practices.
But there are very definite winners in the case right now, aside from firms that have less to fear from a Microsoft hamstrung by the Justice Department and Judge Jackson. Consider a few:
Beltway lobbyists, PR firms and lawmakers. Whatever message Judge Jackson may have intended his ruling to send, the one high-tech firms heard was that they could not afford to ignore Washington politics. These days the news media are filled with stories about dot-com firms' pouring money into campaign coffers, ad campaigns and other lobbying efforts to protect themselves from public servants even if the firms themselves haven't made any money yet. "They're realizing that they can be hurt as well as helped by Washington," an industry analyst told the Wall Street Journal.
Journalists. In an effort to communicate directly with the public, Microsoft has embarked on a huge mass-media advertising campaign that helps pay journalists' salaries. Such controversy is good for the bottom line of publishing companies. Further, it can put reporters whose stories on antitrust matters once languished back by stock tables on the front page, television and so on.
Regulators. Companies now take care to genuflect to antitrust regulators who weren't always so vital to business success. Cisco Systems Inc., which makes Internet switching equipment, works hard at schmoozing government officials who oversee the company. To date, it has avoided Microsoft's fate. That case, a company official told the Journal, confirms the belief of higher-ups that "we were right to invest resources in Washington." Regulators' experience in such cases, it's worth noting, make them candidates for high-paying private-sector jobs to help firms stay out of trouble in the future.
The Washington metropolitan area: It's not a coincidence that Fairfax and Montgomery counties are among the wealthiest in the nation. The high-priced talent that protects companies from Beltway intrusion calls them home.
The question for Judge Jackson and his sympathizers is whether "investing in Washington" serves the public interest the way that, say, investing in new improved hardware and software does. Journalist Jonathan Rauch identified firms' focus on Washington as a symptom of the "parasite economy." Writing of a particular piece of legislation, he said, "Only one class of people will certainly come out ahead… [T]he lawyering, lobbying and politicking class is several million dollars richer. Another Washington lobby has been born, and another political action committee … Like all PACs, it will invest in friendly politicians rather than in new factories."
To describe the creation of a parasite class as a public service is exactly what one would expect from the Beltway. It's self-serving.
E-mail: smithk@twtmail.com.

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