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Compaq's Capellas offered as MS character witness

Will he take the field with Bill at the appeal?

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MS on Trial It's now all over bar the sentencing. Microsoft handed in its final arguments yesterday, and given that there's very little in the the judge is likely to agree with, he's quite capable of ruling on remedies today, or tomorrow. Effectively, Microsoft's latest filing is an investment for the appeal process, when the company will try once more to gather its friends - notably Mike Capellas of Compaq - around it.

The filing faces two ways. First of all, Microsoft continues to deny everything, to accuse the government's proposed remedies of being completely outrageous and inappropriate. But on the other hand, as Microsoft is the only party to the trial that doesn't think Microsoft is guilty, and Microsoft doesn't make the rules, it needs, somehow, to argue for the blunting of the remedies. So it wants longer to implement them, it wants them muted in nearly every single instance, and it wants any court-ordered restrictions on it to expire after four, not ten, years.

The government suggested giving Microsoft four months to come up with a breakup plan, while Microsoft wants a year. It describes the changes it wants made in the government's proposals as correcting "ambiguity and vagueness," but generally these corrections count as desperate clarifications on steroids in Microsoft's favour.

The company wants, for example, the restrictions on price discrimination to be thrown out, and to be able to carry on striking cosy marketing deals with PC manufacturers. These, the dreaded MDAs (Market Development Agreements) are of course the secret deals used in conjunction with confidential pricing schedules to control the OEMs via carrot and stick. This is some clarification.

In its last pitch it made a desperate bid to reopen the trial, calling new witnesses, and this was of course refused. It's tried this again in the form of an "additional offer of proof" intended to show that the government's proposals are defective. This is to a great extent a marker for appeal; Microsoft wants to be able to argue that the judge didn't give it the time and opportunity to refute the government properly.

But dare we hope that the witness list will play in a higher court? Bill Gates and Steve Ballmer were among the ones proposed last week, and Bill in the box would be a treat. Mike Capellas too may not entirely grasp what he's getting into. As Compaq CEO Capellas argues that it's just plain wrong that a company that ships as many PCs, and puts as much money into Windows R&D, as his does, can't get involved in close marketing deals with MS and can't get the pricing discounts it so richly deserves.

Of course the complicity of top executives of major PC companies in these arrangements, which effectively keep Microsoft's rivals and lower tier PC manufacturers in check, is a subject worth examining in itself. And Compaq's relationship did come under some scrutiny earlier in the trial. Perhaps Mike would be advised to check out some of the links below before stepping into the lion's den. ®

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