13th > September > 1999 Archive

DoJ document details how MS harmed consumers

MS on TrialThe DoJ has, at last, produced a concise summary as to why and how consumers were harmed and will continue to be harmed by Microsoft's actions. It relies on the fact that antitrust laws are based on the principle that the wilful maintenance of a monopoly harms consumers, and that the Supreme Court has repeatedly held this. The heavy footprints of monopolisation inevitably lead to consumer harm, it seems. The DoJ deals with consumer harm caused when choice is restricted or removed, and more generally, how consumers suffer as a result of Microsoft's middleware threats. By restricting what OEMs may distribute - usually by offering financial inducements in the form of so-called "market development agreements" - Microsoft has made it more costly for alternative browsers to be promoted and distributed, thereby lessening the likely choice for consumers. Contractual restrictions imposed on ISPs and others by Microsoft also restricted user choice of browsers. In addition, welding the browser to the OS increased the cost of obtaining and using non-Microsoft browsers, and generally made it more difficult. Finally, users were denied the benefits of innovation unimpeded by Microsoft's abuse of its operating system monopoly. More generally, the DoJ suggests that Microsoft's control over standards helps to maintain its OS monopoly, so removing user choice; that Microsoft will be able to control the future directions for hardware and software; and that in effect Microsoft would be able to approve or disapprove innovations by competitors, and use predation against innovations that it regards as threatening. The DoJ could have done a better job of presenting its case for consumer harm, and perhaps it will do so in the hearing on 21 September. In some respects, the DoJ has been thwarted by only being allowed 12 witnesses, since it did not have a witness to flesh out the consumer harm aspect. It does appear that there is no legal need for the DoJ to prove harm to consumers (because proof of monopolisation is sufficient to show this), but by not doing so, it has allowed Microsoft to make the considerable propaganda point that the DoJ has not demonstrated consumer harm. ® Complete Register Trial coverage
Graham Lea, 13 Sep 1999

Gates' claimed ignorance of Netscape ‘bizarre’ – DoJ

MS on TrialBill Gates' video testimony comes under fire in the DoJ's final written contribution to the Microsoft trial. In a 21 page memorandum in response to Microsoft's proposed findings of fact, Gates is slammed for "bizarre assertions... that he was not aware of what Netscape was doing in mid-1995" and that his statements were "simply not credible." In a rare moment of bare-knuckle fighting, the DoJ asserts that Microsoft had attempted "to bribe and coerce Apple and Real Networks to stop offering multimedia support at platform level". The best joke is the DoJ's comment about Microsoft's conduct towards Netscape's browser. "Having first claimed that it did not shoot the victim, and then that everyone does it, and then that the victim would have died anyway, Microsoft now argues that the victim is unharmed". But largely the DoJ document sharpens up its case rather than directly refuting Microsoft's document. The main new DoJ section is about consumer harm. Much of the DoJ's argument so far has implicitly assumed that consumers were harmed, but detailing this has strengthened the DoJ's case. The other essential proofs of monopolisation - the restraint of trade and the prevention of competition on merits - are discussed, although the DoJ has not yet got round to putting on its web site the plaintiffs' revised proposed filings of fact. Microsoft's response Curiously, Microsoft did not produce a separate document attacking the DoJ's proposed findings, but added 38 attack-paragraphs to its previous version of its proposed findings of fact, and modified 184 additional paragraphs or sections. Microsoft's attack is essentially a sneer at the DoJ for using the same "snippets from the same stack of documents over and over again". Of course the problem for Microsoft with these snippets are that they disclose Microsoft's true intention, which seems to be at odds with the case its lawyers have been presenting. So far as the content of the DoJ's proposed findings is concerned, they have "internal inconsistencies and contain stunning concessions that undermine the claims alleged in the complaint", Microsoft says. Microsoft repeats previous claims that it does not have a Windows monopoly, and wants to include Java and browsers in a market definition, despite the fact that Microsoft's economist Schmalensee had claimed that a market definition was not relevant. It was tired old stuff, with Microsoft claiming "a complete failure of proof" of a "specific intent to monopolise the alleged market", which is controverted by dozens of Microsoft's contemporary documents. It also proved hard for Microsoft to defend Schmalensee's gaffes. At one point, Microsoft claims that Schmalensee was taken out of context in an article he had written. It appears that Schmalensee had the habit of writing papers in such a way that they could be used in more than one way, according to what his clients required. This is very useful for somebody whose principal source of income must be from acting as a paid witness. Microsoft's effort at dismissing the entry barrier issue is to cite the number of applications developed for Apple (12,000), OS/2 (2,500), Linux and Be (several hundred). "Some barrier," Microsoft quips, without any concession to the number of developers and their reasons for developing for Windows. When Microsoft discusses the price of Windows, it is to claim that the DoJ discussion is contradictory, not that Windows prices are increasing in real terms and as a percentage of systems cost. Microsoft is nearer the truth when it claims that it has never charged a short-term profit-maximising price for Windows, since as the DoJ points out, its price is long-term price maximising. Apart from claiming not to be a monopoly, Microsoft is also in denial over all the major claims made by the DoJ: "no foreclosure" (trying to ruin Netscape's browser market); "no tie-in" (forcing people to have IE if they want Windows); "no predatory pricing" (by giving away IE and forcing Netscape to stop charging for its bowser); "no exclusionary agreements with OEMs" (such as Compaq and IBM); "no exclusive-dealing agreements" (with ISPs, online service providers, and the like); "no pretextual justifications" (meaning inventing justifications after the event); and finally, "no consumer harm" (but so far as harm to competitors is concerned, and hence to users denied the benefit of competitive products, Microsoft remains silent). All in all, Microsoft would seem to be a model corporate citizen if its assertions were to be believed. Microsoft also assumes that any changes in circumstances since the original Complaint was issued in May 1998 (such as the release of Windows 98 in June 1998 and the tying claim between Windows 95 and IE) render the original Complaint moot. In fact, Microsoft remains liable for all its previous actions, if the court finds in the DoJ's favour. The Court of Appeals' earlier decisions (such as that on 23 June 1998, which arose from an earlier case - although Microsoft then claims that the DoJ cannot use evidence from the earlier case) are trotted out by Microsoft in an anticipatory way. It seems clear that Microsoft is already getting into gear for an appeal. Judge Jackson's statement that "foreclosure of more than 40 per cent" must be proved if the plaintiffs are to prevail is readily provable using Microsoft's own data, since it used more than one data set for IE market share in its evidence, as the DoJ points out. For Microsoft to seize on such inconsequential minutiae as Glenn Weadock's agreement that IE was more deeply integrated in Windows 98 than in Windows 95 at this stage of the trial is a sign of real desperation. Gates gets a small outing in Microsoft's evidence when he is quoted by Jim Clark of Netscape as saying that he hoped [sic] "no one plans to make money on browsers because they will get bundled in the operating system". Of course, that was a threat to Clark in the (pre-Navigator beta) days and was said to rough-up Clark - which it did, as we now know. Of course there's no mention of evidence that Microsoft did indeed consider charging for IE, quite apart from that pesky Windows Plus product that Microsoft sold rather unsuccessfully, which consisted of additions to the operating system. Microsoft's conclusion about the plaintiffs' actions is that they should have considered whether consumer harm could be proved. Of course, Microsoft was not to know that this has been spelt out more precisely in the new DoJ filing. The next step is scheduled for 21 September when both sides will have the opportunity to make oral arguments about the evidence. Whether the arguments will be allowed to take more than a day is not yet certain, but it will be a matter of months before Judge Jackson makes his findings. ® Complete Register Trial coverage
Graham Lea, 13 Sep 1999

MS makes last minute bid to suppress Compaq evidence

MS on TrialA curious sidelight in Microsoft's criticism of the DoJ's proposed findings of fact is that Microsoft is now trying to get documents detailing its earlier actions against Compaq to be ruled inadmissible, and to substitute a different story. In the contempt case, the DoJ produced a deposition from Steve Decker, Compaq's Director of Software Procurement that showed that Microsoft threatened to cut off Compaq's Windows 95 licence unless the IE icon was not restored: Q. Why did Compaq want to remove the Internet Explorer icon at that time? A. At the time, we had a relationship with Netscape and we had been shipping their product for a while. And therefore Netscape was actually the browser partner and we wanted to give that position on the Compaq Presario desktop. Q. How did Microsoft respond to Compaq removing the Internet Explorer icon from the desktop? A. Well, when they found out about it, they sent a letter to us telling us that, you know, they would terminate our agreement for doing so. Microsoft now says that Steve Decker's testimony should not be allowed on the record because it was ex parte (in other words, Microsoft had not cross-examined Decker). Microsoft now wants to substitute the story that the icon was removed because of an agreement with AOL, rather than with Netscape. This is nit-picking, because the AOL agreement at the time would have been for Compaq to use Navigator. This pleading does not ameliorate Microsoft's action. We have probably not heard the last of this story, and there could well be more to come about internal dissent at Compaq during this period. Microsoft evidently leaned hard on Compaq, since John Rose popped up in the present case in an attempt to counter previous evidence that could not be denied - like Microsoft's threat to cancel Compaq's Windows 95 licence if Compaq did not restore the IE icon. Microsoft must feel this is an important weakness in its case, since the facts do strongly suggest that Microsoft wielded monopoly power. It will be for Judge Jackson to decide the issue. ® Complete Register Trial coverage
Graham Lea, 13 Sep 1999

European Internet users to pass US by 2003 – IDC

European Internet use will overtake the US in 2003, IDC predicted at the IDC European IT Forum in Paris this morning. At present, half the Internet users are in the US, and a third in Europe, but the 44 million European users will grow to 170 million by 2003 and equal the number in the USA. Six of largest 10 countries in the Internet economy are in Europe (and this will soon become seven), but the revenue generated is still only 10 per cent of the total Internet revenue. At present, no country has 40 per cent of its citizens online, but 14 countries will reach this position by 2003, and they will account for 50 per cent of the world economy, IDC predicts. Pat McGovern, CEO of IDC, saw Internet companies getting access to low cost capital during IPOs, as their value was being based on their ability to generate revenue rather than profits. Frank Gens, IDC vp for Internet research, noted that the number of Internet users had gone from 19 million to 150 million over the past four years, and predicted 500 million users by 2003. At that time, 62 per cent of US users would be online, and the value of Internet commerce would reach 7 per cent of the US GDP. To get to version 2 of the Internet economy will require the creation of an organisation that works effectively; willingness to spend at a higher rate than previously (perhaps half the start-up cost each year); more consideration as to how the organisation's web presence looks to users; reaching for the global market (which was regarded as desirable but optional in version 1 of the Internet economy); and being prepared to work with others to achieve sales. It was interesting that new start-ups often spend more on their web site than large, established organisations. IDC's message for the conference seemed to be that US companies would need to globalise now if they were to carry on their domination of the Internet economy, but nothing was said about the cultural differences, and the reluctance of European users to use credit cards online. ® Tune into Cash Register and turn on to our daily Net Finance News
Graham Lea, 13 Sep 1999

Intel confirms PIII/Celeron price cuts

As revealed here earlier, Intel has cut prices on members of its Pentium III and Celeron processor family. (Story: Intel burns desktop prices again) The company confirmed the following adjustments, on OEM prices of 1000 processors. The PIII/600 drops to $615 and the 550MHz to $423. New Celeron prices are as follows: The 500MHz part drops to $153, the 466 to $99, the 433MHz to $79 snd the 400MHz part to $64. An Intel representative said the Pentium III cuts were in preparation for processors to be introduced in October, while the Celeron cuts were in time for the Christmas market. Intel today started offering its 600B and 533B Pentium IIIs to members of its channel programme. ®
Mike Magee, 13 Sep 1999

Trade body says no to ebiz legislation

An industry body is meeting in Paris today to stave off attempts by politicians to regulate ecommerce. The Global Business Dialogue on Electronic Commerce (GBDe) was set up earlier this year by a mix of IT companies, media companies an retailers, such as AOL, Disney and Time Warner. It plans to issue a set of guidelines for ecommerce, which will negate the need for national and regional governments to legislate in what is still a regulation-free zone. The move is being seen by some as an attempt to thwart the EU's plans to pass legislation concerning taxing online purchases and provide a general framework to promote the growth of ecommerce. Others see this as a bogus argument, pointing to the rapid growth of ecommerce to date, in spite of a lack of regulations. Speaking to Reuters, a number of analysts have doubted the need for such action. "I don't believe the absence of regulation has seriously impeded ecommerce," said IDC's Ken Fraser. Caroline Sceats, research analyst at Fletcher Research, was in agreement. "I don't think consumers are waiting for concrete legislation," she said. The EU has taken a more hands-on approach to all things ecommerce, thus far, and this is an attitude which is likely to continue. The GBDe warns that if the EU established a rigid framework of rules for trading over the Web, rather than promote the growth of ecommerce, it could nip it in the bud altogether. ®
Sean Fleming, 13 Sep 1999

Blair appoints e-envoy

Former civil servant Alex Allan has been appointed as the UK's first e-commerce envoy. His job will be "to champion e-commerce" in the UK and "spearhead a wake-up call to British business". He will be charged with encouraging business to embrace the Net "as a matter of urgency". Prime Minister Tony Blair made the announcement this lunchtime at a briefing in Cambridge. Allan was widely tipped as the man for the job and will take-up his role immediately. Before this appointment, Allan had been the High Commissioner to Australia since November 1997. Before that he was the personal private secretary (PPS) to former Prime Minister John Major. According to sources he has been interested in IT "for a long time" and worked as a computer consultant in Australia six years ago. He will work out of the Cabinet Office in Downing Street so that he is at the "heart of government". As well as promoting e-commerce, he will drive forward plans to develop electronic government in the UK although there is no news about how much cash he will have to turn Britain into a wired isle. The Register humbly suggests that one of Allan's first tasks should be to kick butt at the Central Office of Information (COI) and sack the Web monkeys who run their feeble excuse for a Web site. If the service runs at all it's a miracle. The rest of the time it is so slow it makes travelling around the M25 at rush hour seem like an F1 grand prix. ®
Tim Richardson, 13 Sep 1999

3Com set to IPO Palm

In the topsy-turvy world of Wall Street finance, Palm Computing could be worth more as a standalone company than with the rest of 3Com dragging along behind it. We'll soon find out. For 3Com is hiving off its Palm handheld operations into a separate, publicly-traded company which will IPO early next year. Palm is the unqualified hardware success story of the late 90s. Its challenge is to turn itself into an unqualified wireless success story for the early 21st Century. Early indications are promising -- the company is strong contender in hot market -- so what better time to IPO? 3Com shareholders should welcome the plans which represents an outstanding opportunity to unlock the value of Palm. 3Com says the Palm spin-out will enable it to build two distinct "leadership positions" in the handheld and networking markets. Of course, it will make it that much easier to hive off the networking equipment division, if any European telco with a few billion dollars to spare, comes along 3Com's way. 3Com is the world's biggest vendor of commodity networking products, but market share and margins are under eternal pressure from Intel and a clutch of no-name Taiwanese vendors. The company also has a useful portfolio of middling-to-high-end switches and routers. But, given the presence of Cisco, Lucent, Nortel and a raft of big-name European telecoms equipment players, it will be much harder for 3Com to establish a leadership position in this market, than with handhelds. ®
Drew Cullen, 13 Sep 1999

Citrix ports to Unix, Linux, aims at telecoms, devices

AnalysisDespite studied nonchalance on the part of company execs at its iForum event in Florida last week, it now seems inevitable that Citrix is poised on the brink of a major break from dependence on Microsoft. The execs still talk happily about the importance of "adding value to NT terminal server," but under the covers Citrix is working feverishly on Unix and Linux ports of MetaFrame server, and strengthening links with Redmond enemies such as Novell and Sun. It'll be a good trick if Citrix can pull it off, seeing its initial commercial USP was making NT applications available to thin clients, but all of the components for the Microsoft-free version of Citrix are starting to click into place, and some of them are going to cause its old 'ally' severe discomfort. Citrix's 'technology demonstrations' provided some useful signposts, as did the appearance of Novell CEO Eric Schmidt, and the unveiling of a new 'pay as you go' licensing strategy. The use of Solaris as the server software for some of the demos (related story) might have been talked down by Citrix VP Dave Weiss as something that would only go commercial if customer demand existed, but privately Citrix staff conceded that Unix and Linux ports were going ahead. Project Charlotte, due for formal announcement later in the year, provides one of the mechanisms for cutting the apron strings to Microsoft. It introduces the concept of a "Program Neighborhood" which allows a Citrix client to access application servers in a Citrix server farm. These could still be Win32 apps running on an NT server, but Citrix's choice of Notes running on Solaris made it clear that it wasn't going to be a case of just Win32 for much longer. The Palm demo used another forthcoming technology, Vertigo, again with a Solaris server. Vertigo aims at ultra-thin clients by keeping the UI objects at the server end, so it's particularly applicable to pocket computers and mobile phones. Again Citrix envisages these devices accessing server apps via a Program Neighborhood model, and although it claims to be agnostic about the OS on the application server, there's no obvious reason why the sort of custom apps that will be required in these situations have to be NT ones. Citrix founder and chairman Ed Iacobucci reckons we're heading for a world where it doesn't matter whether you're on Microsoft's DNA or Sun's Enterprise JavaBeans, but says Citrix is going where the developer expertise is. That means the company's Win32 commitments aren't going to go away (there are a lot of Windows developers), but also means increasing commitment to Java, and that Linux is something Citrix reckons it can't afford to ignore. The new licensing model meanwhile looks set to undermine Microsoft's NT Terminal Server licensing approach, and to improve Citrix's chances of striking deals with very large telecoms and wireless outfits. These fall into the Network Service Provider (NSP) category of Citrix's new iBusiness Application Service Provider programme. Citrix quotes typical licence fees of $15 a user, falling to $7.50 for more than 1,000 users, but NSPs who bite are clearly going to have a lot more users than that. Iacobucci failed to respond when The Register asked where the fees would go for, say, 100,000 or a million users (perfectly feasible considering the size of cellular companies' customer bases, but it's clearly going to be a great deal less. So Citrix seems headed into a world where the client devices aren't Windows (too cumbersome, licences too expensive), where the servers probably aren't Windows either (too expensive again, and BackOffice requirements for Communicators and Smartphones will be, if anything, niche), and where MetaFrame in available on multiple server operating systems. And what about Novell? Eric Schmidt's keynote was well received, but that's scarcely surprising as his blatant sales pitch for NDS was particularly appropriate for a Citrix audience. As Schmidt pointed out, if you use NDS you can set up new users on the network easily, you can log on from anywhere, using different devices, and still get the same desktop - basically, this is an extraordinarily good fit with the agnostic, 'anywhere to anywhere' computing model Citrix is currently pushing. So a forthcoming alliance? Iacobucci, as always, wasn't telling - but you read it here first. ®
John Lettice, 13 Sep 1999

Big Blue outlines copper, RS, Monterey futures

IBM rolled out its S/80 "Magic Box" today and at the same time gave sneak previews of its microprocessor PowerPC futures. At the same time, it released version 4.3.3 of Aix for its RS family and said that this is effectively Monterey for its Aix family. Senior IBM US executives also spent much time knocking Sun, and claiming that with the introduction of the S/80, and with future developments underway, its products will knock spots off the Sun platform. Doug Grose, VP of IBM's server group, said that IBM, using its copper interconnect technology, a specific pipeline interface for future members of the Power family which would deliver far faster throughput on future members of the family. IBM said that although it had not yet booted Monterey on silicon samples of Merced, it expected to do so in a matter of weeks, and has already received samples from Intel. The S/80 uses IBM's Pulsar chip, which includes 34 million transistors, runs at a clock speed of 450MHz and is a 24-way system. Groce said that i-Star technology, expected to appear towards the end of next year, will include SOI (silicon on insulator), also have 34 million transistors, but would run at over 500Mhz. However Power 4 was a different proposition, he said. It will make use of technology migrated down from IBM's mainframe family. Of this technology, he said: "It's a better way to get more bits on the pipeline," he said. "Normally, in the pipeline, bits need to be tracked until they get to their destination -- we don't need to do that with Power 4 -- it's designed as an SMP (symmetric multiprocessing) chip". The Power 4 will have over 170 million transistors, run in speeds excess of 1GHz and support 32-way SMP. IBM's processor roadmap for next year also includes the Winterhawk II running at over 350MHz and supporting two to four way systems,as well as the Nighthawk II/III, running up to 500MHz and supporting four to 16 way systems. The company claimed it would be the number one Unix in four to five year's time, and its range of microprocessors and the technology involved would be the backbone of the system, said Mike Borman, VP of RS sales. IBM will spend a whole heap of advertising and marketing money on its RS line, on the direct authorisation of Big Blue CEO Lou Gerstner, said Borman. "Unix is the largest OS system with 40 per cent of the market now and it will still be the largest in 2004," he said. "In five years from now, we've got to be number one in Unix. We plan to invest over $1 billion incrementally in our RS range." He said that while Aix-Monterey will be its main thrust, IBM will also support "innovative" Linux developments, and migrate customers needing higher performance transactions to Aix. Sun was not up to the job, he said. "Customers no longer need to rely on poor performance from Sun," he said. ®
Mike Magee, 13 Sep 1999

Sony puts PlayStation 2 at heart of Net strategy

Sony today took the wraps off the PlayStation 2 and immediately positioned the devices beyond its games console roots, promoting it as a home's gateway to digital content distributed via the Internet. It's a canny move, and while the PlayStation 2 isn't the first console to embrace the Net -- Sega's Dreamcast is already shipping with a built-in modem and a Web browser -- Sony is looking at the Internet as something more than a source of information. The machine will ship with a 4x speed DVD-ROM drive to support existing media, but it will also contain an Ethernet port to allow users to hook it up to broadband Internet access devices such as a ADSL and cable modems. The plan isn't simply to allow the PlayStation 2 users to view the Web more quickly, but to use the Internet as a storage medium in its own right. So, Sony will be posting PlayStation 1 and 2 software online for download backed up by an e-commerce. Built-in encryption and authentication technology -- possibly based on Sony's MagicGate -- will provide protection against piracy, even though downloaded material will be stored on removable memory card media or plug-in hard drive units. The machine's own memory bank consists of 32MB of Rambus Direct DRAM. Right now, the focus is on the delivery of games via the Net, but the plan clearly ties in neatly with Sony's other media endeavours, initially the delivery of music, and later, movies. The PlayStation 2 features FireWire/IEEE 1394 and digital optical hi-fi ports to allow it to be connected not only to devices like digital cameras, but to other consumer electronics kit. That will, in Sony's eyes, put the PlayStation 2 at the heart of the networked home. Download an album via your PlayStation 2 then immediately blast it out through your amplifier and speakers -- that kind of thing. The PlayStation 2 is set to ship in the US and Europe this time next year, but Sony's proposed online e-business infrastructure won't be in place until 2001. Clearly it has some way to go to convince music, movie and software companies that its approach is sufficiently secure, but there's also the issue of consumer acceptance of the new medium. Given the slow speed at which the public is taking to new consumer technologies, such as digital TV and DVD, it's likely to be some time before buyers are ready to embrace buying albums and movies in a non-physical format, and it makes sense for Sony to focus on selling the PlayStation 2 as a games console before pushing its wider usage. It also needs time to support home networking infrastructures in its other consumer electronics goods. ® Related Stories PlayStation 2 ship date slides three months
Tony Smith, 13 Sep 1999

Computer Resale builds nationwide second user PC chain

A new franchise business is attempting to build the UK's first national retail brand for secondhand computers. Called Computer Resale, the Hertfordshire-based firm has opened six outlets, and has signed up franchises for another 20 shops.It says it will have 100 stores opened by the end of next year. The company aims to keep prices to a minimum by placing franchised outlets outside expensive high street locations. Franchise packages start at £25K. If you want to know more, don't call us. Email Computer Resale instead.
Team Register, 13 Sep 1999

US army dumps NT for MacOS, us.gov going open source?

Grim news for Microsoft indeed - the US government seems to be tilting towards open source software, while the US Army's ArmyLink News claims the US Army Home Page has switched from NT to "a more secure platform" (MacOS and WebStar) following a nasty hacker invasion. ArmyLink quotes Christopher Unger, web site administrator for the US Army Home Page, as saying that the switch to MacOS had already happened. And what do you know - a quick Netcraft query reveals that www.army.mil is indeed running WebStar 4.0 on MacOS. This follows an intrusion to the site on June 28 where a Wisconsin man, who was arrested last month, broke into and modified the site. Says the ArmyLink story: "Unger says the reason for choosing this particular server and software is that according to the World Wide Web Consortium, it is more secure than its counterparts." For the record, we note that ArmyLink itself is running on Netscape and Solaris, which can't cheer Microsoft particularly either. But there's more. According to Federal Times, the US National Security Council is concerned about the security of Microsoft software, and is planning to diversify the types of operating systems the government buys. The NSC intends to create a new software assessment office "to assess the ways federal agencies could make greater use of open source, or non-proprietary, software that is freely available to anyone and has codes that are not secret." The Federal Times quotes an unnamed White House official as saying that the office will identify US government agencies and programmes for the initial trials of open source software. Humorously, the story also quotes Microsoft Federal Systems manager Quazi Zaman (clearly a man under some pressure) as saying that "Microsoft has been considering making some of its software products open source for two years." Oh really? More likely though is his claim that Microsoft would likely be willing to give the NSC access to its source. But will that be enough to stop a federal landslide? ®
John Lettice, 13 Sep 1999

PlayStation 2 ship date slides three months

Sony today confirmed that it has put back the release date for the upcoming PlayStation 2 by three months. The games console/information appliance was originally to have shipped in Japan at the end of the year -- at least that's what Sony said when it announced the machine back in April. However, in a release focusing on the upcoming console's support from the world's leading games developers, the company admitted that the Japanese release date is now 4 March 2000. The US and European launches have also been delayed, from Q2 2000 to the following Autumn. Such a delay was predicted last week by various Japanese analysts. However, since their statements were made in the immediate run up to Sony rival Sega's launch of the Dreamcast games console, the estimations of Sony's ability to ship the PlayStation 2 on time were treated with some scepticism -- even by The Register, ahem. The delays centred on Sony's capacity to produce the Emotion Engine processor at the heart of the PlayStation 2. We still feel the analysts' have underestimated the ability of Sony -- and especially that of its partner on the chip, Toshiba, which has plenty of semiconductor experience -- to develop the CPU. We suspect the delay centres on a rethink of the time it will take to ramp up volume production of the chip. Sega's Japanese Dreamcast roll-out was hit hard last year by problems chip supplier NEC had pumping out sufficient quantities of the console's PowerVR 2 graphics chip. NEC's problems didn't prevent the Dreamcast launch, but they did stop Sega shipping anywhere near as many units as it had boasted it would -- it originally hoped to shift one million consoles by December 1998, but in the end didn't make that figure until the second quarter of 1999. Sony clearly wants to avoid such embarrassing mistakes. That said, Sony bosses did predict sales of one million units in the machine's first week of release. The PlayStation 2 is expected to retail for Y39,800 ($334). ® Related Stories Sony puts PlayStation 2 at heart of Net strategy
Tony Smith, 13 Sep 1999

Ford Motor loses suit against Webmaster

Webmaster Robert Lane of Dearborn, Michigan is "elated" by a federal court decision restoring his right to operate BlueOvalNews.com, a Web site devoted to Ford automobiles and their various shortcomings. The company had sought a restraining order to shut down the site after accusing Lane of publishing its trade secrets, but US District Court Judge Nancy Edmunds found that the First Amendment trumps Ford's commercial concerns, and denied the request. Ford argued that Michigan's Uniform Trade Secrets Act would prohibit Lane from publishing its proprietary blueprints, market strategies and test data. The judge found, however, that in order to invoke the Act, Ford would have to prove that Lane "knows or has reason to know that the trade secret was acquired by improper means" or, alternatively, had himself "used improper means to acquire knowledge of the trade secret." The company clearly failed to meet its burden of proof under the Michigan Act, but the judge did require Lane to reveal his sources. This proviso is something of a consolation prize for Ford, which has got to be anxious to identify the mole who has been leaking the goods. Not that it will do the company much good: Lane "can testify truthfully that he doesn't know the source of the documents he posted," his lawyer, Mark Pickerell, told The Register. With the Michigan Act out of the way, Lane's next hurdle was the issue of copyright infringement. Here things were a bit stickier. The fair use exception to the Copyright Act does permit publication of copyrighted material for comparison or criticism; but normally, such material is quoted in part, not reproduced in whole as Lane had done. Here the First Amendment came into play. Edmunds ruled that constitutional prohibitions on prior restraint are enough to keep Lane out of the hot seat for his previous wholesale postings, which she admits were a bit over the top. In future he is not to publish entire documents which Ford has copyrighted, however. Lane will have to be satisfied with the normal liberties available to all American journalists: to quote passages from a copyrighted document and fill in the blanks with his own commentary. "To justify prior restraint on speech, 'publication must threaten an interest more fundamental than the First Amendment itself,'" Edmunds noted, referring to several earlier cases. "Although there are distinctions one can draw between the case brought by Ford and the existing precedent on prior restraint, those distinctions are defeated by the strength of the First Amendment," she concluded. Edmunds added that prior restraint is not justified according to legal precedent, even when documents are obtained illegally. A journalist may be prosecuted for obtaining information improperly if he breaks the law in doing so, but that would be a separate action; he is entitled to publish what he will regardless of how he comes by it. For all the attention this case has attracted, it boils down to a judge affirming a journalist's right to do what the First Amendment empowers journalists to do. It breaks no constitutional ground; it sets no precedents. Edmunds has defended the status quo, much to the relief of reporters and publishers throughout the USA. ®
Thomas C Greene, 13 Sep 1999

Cadence to appeal Avant court digest…

Design house Cadence said it is to appeal against a US district judge pre-trial ruling in its ongoing case of alleged trade secret theft against Avant. Meanwhile, an internal Cadence document has come to light which reveals what the company thinks, in private, about Avant and the case. An official statement by Cadence said that judge Ronald Whyte, in a California court, did not affect other aspects of the case following a waiver dated 6 June 6 1994. A Cadence lawyer said that this ruling "did not impact our ability to recover lost profits based on sales of Avant's ArcCell and Aquarius products". But the internal memo shows a far less polite view of the proceedings. Smith McKeithen, Cadence's lawyer, said: "Avant's own press release suggests that it is very likely we will win damages. The court's ruling has no effect on our claims for trade secrets stolen after June 6, 1994. The court's actions... have no bearing on the Santa Clara Country District Attorney's criminal case against Avant and its executives. That case is set to go to trial on November 15, 1999." The memo continued: "While Avant has employed virtually every legal stalling tactic in our civil case, we remain optimistic that Cadence will prevail when the case is put before a jury. Their theft of our code was brazen; its use was critical to their product development process; and the profits they derived from establishing their business on a foundation of Cadence intellectual property were substantial. That's the case, and we're ready to prove it." No one was available for comment from Avant at press time. ®
Mike Magee, 13 Sep 1999

Taiwan traders vote ALi IPO a winner

Chipmaker Acer Labs' over-the-counter listing today appeared to be a hit with investors in Taiwan, but a low initial price meant that almost no one was willing to sell. "Before we listed, the gray market price was around NT$100," said Acer Labs Inc. (ALi) Finance Director, Daniel Chien, "and our initial price is NT$68 (US$2.14), so many, many people wanted to buy, but nobody wanted to sell." As a result, the price hit its 7 per cent daily maximum almost immediately, jumping to NT$72.5 when a single block of 1,000 shares changed hands shortly after the market opened. "It's pretty typical in Taiwan that there are two or three days during which people want to hold on to the stock," commented Daniel Heyler of Merrill Lynch Taiwan, "because it's an IPO, there's this honeymoon period." As the price rises, holders will begin to sell. As a result, volume will begin to increase later in the week, Heyler believes. "Probably after four or five days we'll start to see more activity - and when there's more activity the price is more reflective of the value of the stock." ALi shareholders have allocated ten percent of the Acer Group member's 84 million fully paid shares for the IPO. In anticipation of high demand, around 2.2 million additional shares will be issued, probably at the end of this month, Mr. Chien said. ALi makes a variety of different chips, including chipsets, key components that are part of the main circuit board of all personal computers. "The semiconductor space worldwide is one of the hotter sectors," said Daniel Heyler of Merril Lynch, "It's being driven by a healthy PC sector - Merril Lynch is looking at over 100 percent unit growth this year." This growth in PC demand, coupled with a shortage of some popular chipsets made by market leader, Intel, is drawing attention to the chipset market, said Heyler. "People are in great need of a second source right now and Acer has been in this industry a very long time and has very strong design." "Now the chipset market is very hot," agreed ALi's Daniel Chien, "because of the shortage of the Intel BX chipset. I think the market is giving chipset makers a higher p/e ratio. So we want to issue some new shares to raise some money and improve our financial structure." ALi will buy a new office building he said, "and buy some testing machines and CAD [Computer Aided Design] devices." ALi will also use its new wealth to acquire know-how, commented Heyler. "The need to continue to acquire intellectual property... is a must at this stage of the game - integration is a must. Definitely there will more acquisitions as they move forward." However, Heyler does not expect ALi to join competitors like VIA Technologies in the CPU (Central Processing Unit) business. The smallest remaining independent CPU maker, Rise Technology, has been rumoured to be looking for a buyer. Instead, Heyler believes, ALi will look at ways to integrate more functions into its chipsets. The company last week announced the Aladdin TNT2, which integrates Nvidia's TNT2 3D graphics controller. ®
Simon Burns, 13 Sep 1999

UK cash draining to US because of high Internet costs

The president of a major US Internet company claimed today Britain was losing huge amounts of money to the US because of poor bandwidth and infrastructure in the company. Jack Reynolds, president of Quik Internet, and a guest at IBM's S/80 launch near Heathrow, this morning, said that the large cost of connecting and the high charges associated with bandwidth were hurting UK industry, while all the money consumers would have spent was instead benefiting the United States. Reynolds said that government leaders were more interested in warning of the dangers of pornography than of taking immediate action to reverse the problem, he said. He said that IDC figures revealed that 60 per cent of products bought over the Internet were sourced from US Web sites. "People are buying books from Amazon.com over here," he said. "That's crazy". The poor infrastructure and the high cost of connecting were also linked to studies his group had done with small and medium sized businesses in the UK. He said that the lack of education and the level of understanding of the potential of the Internet was tiny compared to the US. These facts benefited his company however, said Reynold. The cost of Unix wizards to administer servers was on average 30 per cent higher in California than in the UK, he said. As a result, it had hired a group of UK programmers based in Liverpool to administer servers in the US. ® Tune into Cash Register and turn on to our daily Net Finance News
Mike Magee, 13 Sep 1999

No Pentium IV re-name on way – Intel

Intel has discounted rumours circulating on bulletin boards worldwide that it will name its .18 micron Coppermine processor the Pentium IV. An Intel representative said there were no plans to change the name when the chips debut next month -- as far as he was aware. Be that as it may, there is a marchitecture move afoot. Intel never silkscreened its new and shiny Pentium III logo onto Slot 1 packaging. The company wants to move Coppermine to Socket 370 and confine Slot 1 for desktops to its gulag. Postings on the bulletin boards suggest that Intel is attempting to put clear water between itself and its rival AMD. Intel has slashed its Pentium III prices many times since introduction earlier this year, while AMD is basking in the glow of the K7, launched accompanied to a series of positive reviews. (See earlier story: Intel confirms Pentium III/Celeron price cuts) ®
Mike Magee, 13 Sep 1999

Student sued for site's links to MP3 files

A 17-year-old Swedish student has been hit with a lawsuit by the International Federation of the Phonographic Industry (IFPI) for promoting piracy by linking his Web site to an archive of allegedly illegal MP3 digital music files. According to German newspaper Der Spiegel, student Tommy Olsson's site is the first Web site owner whose pages contain only links to music files to be targeted by the IFPI. Olsson's lawyer said the case against his client had no merit since Olsson was simply disseminating information -- the location of the files -- not the files themselves. However, the IFPI (or, rather, its Swedish wing) claims that Olsson's site does indirectly infringe the copyright held by the owners of the original music tracks. The case to some extent follows precedents set in the UK and New Zealand in 1997 when Web site operators were successfully sued for linking to copyright material. In those cases, however, the copyright material was pages of text from newspapers' Web sites which the defendants had displayed within frames on their own sites. Even though the text had not been copied onto the defendants' sites, it was still ruled that by displaying the text, they had violated the original sources' copyright. If the case goes against Olsson, he could face only a token fine of $150-200. However, said the IPFI's lawyer, it would set a precedent allowing the prosecution of other Web site owners for greater damages. A judgement on the case is due to be issued on Wednesday. ®
Tony Smith, 13 Sep 1999

NEC ramps up flat panel output

NEC is to open a new LCD production line in its Kagoshima plant in western Japan at a cost of 10 billion yen (around £58 million). The plant will churn out some 25,000 14in TFT colour LCD's per year. They will go to NEC and NEC Kagoshima - the local subsidiary. The 14in TFT colour panels are beginning to feature in thin monitors for standard desktop computers as well as traditional laptop machines. This plant is NEC's second in Kagoshima, and its fourth overall - joining another two lines at NEC Akita. The total production capacity of 220,000 screens per year. Full production is expected to begin in April 2000. ®
Lucy Sherriff, 13 Sep 1999

The Blair Net Project

Tony Blair flirted with technology today by ordering flowers online for his wife Cheri. One vulture-eyed Registerreader who attended the appointment of Britain's first E-envoy watched the PM in action as he visited the Interflora Web site. Although his technical ability was sound, by all accounts his typing was lousy. No matter, at least this little PR stunt will endear the PM as a romantic if nothing else. But what of his e-credentials -- how did they fare? Predictably, the PM was big on rhetoric and little else. "Britain has a proud history as a great trading nation," he puffed. "We were the first industrial power -- the workshop of the world. Great inventions have "made in Britain" stamped all over them. We are a creative, innovative adventurous people. "Today we need that spirit of adventure more than ever. We need to face up to a new challenge -- the challenge of new information technologies." The soundbite of the day -- which will be regurgitated ad nauseum -- was equally predictable and just as lame. "To British business: a blunt message: if you don't see the Internet as an opportunity, it will be a threat. In two or three years time the Internet could be as commonplace in the office as the telephone. If you're not exploiting the opportunities of ecommerce, you could risk going bankrupt." Don't say you haven't been warned. ®
Tim Richardson, 13 Sep 1999

08004u – where's it gone?

A Scottish ISP claiming to offer round-the-clock 0800 access to the Net for £49.99 a month appears to have vanished. 08004u launched last Thursday at 9pm on the 9/9/99 as a deliberate ploy by MD David Banks to fly in the face of all those scaremongerers who thought something nasty would happen on that day. Well it didn't. But by Friday night, it appears something untoward had happened as the site disappeared from all radar screens. The Register has been flooded with emails from readers wanting to know what happened to 08004u. Unfortunately, the site is still down and attempts to reach David Banks have so far failed. Banks told The Register on Friday: "Because we'll be using multiple networks it means we shouldn't get any problems [with people trying to access the service]." Oh dear. It appears he may have been a little ahead of himself. ® Tune into Cash Register and turn on to our daily Net Finance News
Tim Richardson, 13 Sep 1999

Sub-$1 PCs? MIT chief speaks, but do we believe?

Speaking to the IDC Forum in Paris today Nicholas Negroponte, the founder of the MIT media labs, gave a refreshing and non-American view of the Internet, which he was able to do since he had been educated in Europe and spends nearly half his time there. He expressed a healthy cynicism towards the figure of 500 million Internet users in 2003, as forecast by IDC, but thought that the number could be higher by a factor of two or three.
Graham Lea, 13 Sep 1999

Dell chief lays down rules for ‘Internet revolutionaries’

Michael Dell, of Dell, has a modest view of what he terms "rules for Internet revolutionaries" (and the contradiction between "rules" and revolutionaries" has clearly not occurred to him - the titled sounds borrowed). Dell's success is based on not rocking the boat, and being a solid PC player that has shrugged off the Internet computer that "was reintroduced every two years". Speaking at the IDC European IT Forum in Paris today, he offered the view that what will happen with the Internet is something of a self-fulfilling prophecy. His "rules" were that what counts is the velocity of a business; its efficiency in execution; and his belief that the customer experience must be better than in the physical world. For Dell, the advantage of the Internet strategy is that it cuts its costs. He was well aware that his inventory declined in value at 1 per cent/week, so that having perfect knowledge of future user needs was important if inventory is to be kept at a minimal level. His reasoning was perhaps flawed by his narrow focus on US users, who apparently wanted a great deal of noise and flashing lights on websites that they visited. Maybe it's to do with the short attention span of Americans, conditioned as they are by frenetic snatches of TV and advertisements. To Dell, efficiency is as important as the quality of products and services, which may prove somewhat disconcerting to those who would rather have a reliable system than one delivered a day earlier. Dell has become very enthusiastic about dealing with "service issues" (which means faults, real and imagined) by hooking up to the user's PC, with their permission of course. The idea is far from new, since this was certainly being done in the early 1980s with minicomputers, and in the 1970s with mainframes. No innovation here. What may well be new is the scale on which Dell hopes to do this. It appears that some 60 per cent of telephone problem solving consists of finding out the details of a user's system, so that being able to get this online saves considerable time - always assuming that the PC was still able to communicate. Asked about Dell's plans for Linux, the eponymous founder gave the safe answer: "Let the market decide", but Dell has already decided, and says, that in his view Linux would never overtake NT in the server market. ®
Graham Lea, 13 Sep 1999

Diamond opens Vipers' nest of boards

Diamond Multimedia has launched its new Viper II graphics accelerator, one of the first graphics boards with the S3 Savage 2000+ chip. The board is due to ship at the end of October, and is expected to retail Stateside for under $200. Scott Vouri, VP of the multimedia division at Viper, said: "Viper II is the ultimate graphics solution, delivering intense 3D power for hardcore gamers, extensive functionality for home users and crisp high resolution 2D graphics for professionals." Not that he is biased, you understand. But if that isn't exciting enough, the company plans to unleash an even shinier, and slightly more expensive, version of the board sometime late in Q4. The Viper II LE will carry 64MB of onboard memory, and Viper promises that it will be packed with even more features. More info about Diamond products can be found here. ®
Lucy Sherriff, 13 Sep 1999

Nokia unveils Linux broadband wireless Web system

Nokia may be a fully paid-up member of Symbian, but the company's multimedia operation seems to be putting its eggs in the Linux basket instead. In the past few days Nokia Multimedia Terminals (set-top boxes et al has been talking about a Linux-based prototype mobile digital TV and cellular convergence product. On the one hand you could think of it as a crock, on the other as a plausible sounding compromise product that could fill the gap nicely until broadband multimedia is being fired at us from all directions via wireless. The MediaScreen uses digital TV broadcast to send out data, and wireless comms for the return signal. Its base OS is Linux, it uses Mozilla as its browser, and in current form it comes in a tablet-type format. It's a pretty obvious variant on the satellite broadcast/DSL approach, given that what's sent from the local machine to the server is usually a lot smaller than what comes in the other direction. That's previously led to systems where data is broadcast from server to client, and a land-line is used in the other direction, but GSM wireless is perfectly viable to perform the latter role, and Nokia's system could conceivably give us broadband wireless Internet well ahead of the deployment of 3G wireless services. And the absolute genius of this implementation is that Digital TV is coming with a momentum all of its own, and digital cellular is here already - all of the infrastructure will be there for whenever it goes live. Nokia Multimedia CTO Helmut Stein is apparently shooting for the big time with this combo. It'll work in the home in a combination GSM phone, set-top box and home control system (people don't want more wires in the home), but it'll work in the car as well. Obviously, it's going to have to be mains or auto powered (if you've seen reports of this as a Linux-based broadband mobile phone, discount them), but it sounds eminently do-able and compelling. Stein adds that the addition of Bluetooth local comms will make the 'look ma, no wires' picture complete. But why Linux? Nokia's cellular people, and Symbian's sales team, may have screwed-up more than a little here. There are however other developments in the pipeline that make Linux exceedingly plausible in this field - watch this space... ®
John Lettice, 13 Sep 1999