Date: October 24, 1998

From: "Bernard M. Palicki" <bpalick@traveller.com>

Subject: Justice Dept vs IBM - Now MS

My credentials to comment and voice opinion on this issue:

Thirty years with the IBM Corp., starting as a Customer Engineer in 1953 in the Toledo, OH branch office, maintaining IBM digital data calculating and processing equipment in commercial business offices - through evolution of the digital computer, from mechanical counters and storage units, through vacuum tubes, to solid state devices.

Brief background of Anti-Trust Action against IBM:

After two major judicial onslaughts by the Justice Dept, from the late 50's through the middle sixties, after spending $billions in its defense against charges of a monopoly and predatory marketing practices, IBM ended this pursuit by signing a Consent Decree to break off or divest itself of three major functions:

1. Service Bureaus (like Kinko copy services),

2. Card Manufacturing (the IBM card, the only means in existence at the time to put data into a machine, was made to very precise size and range of temperature and humidity requirements)

Last but not least,

3. IBM was forced to sell rather than lease IBM equipment. Most hurtful was termination of leasing arrangements. Portion of Lease fees was the primary engine of capital to fund research and development for design of new equipment and for improvement modifications to existing equipment - where the mods were installed at no additional cost to the IBM Customer. (All IBM machines in all customer offices were always at the latest engineering design level for function and performance without increase of Lease fees).

With $billions (yes, $billions) tied up in court litigation over years, IBM corporate attention, money and people were drawn from research and development efforts of the desk top computer, made possible by introduction of the solid state switching and integrated logic circuit devices that were emerging at the time.

End result was the first and puny IBM PC with the 8088 co-processor and the DOS (Disk Operating System). (The first IBM PC could conceivably have been bigger and better at the time of its intro, were it not for Justice Dept. anti-trust action against IBM).

No one has a monopoly on knowledge and technical innovation that derives from new devices. The Macs and PCs of today were being born in the garages and basements of brilliant young minds, and would have happened with or without a Justice Dept anti-monopoly attack against IBM at the time.

Enter Justice Department attack against Microsoft.

Predatory practices by MS to stifle competition will be proven, but the outcome in terms of judgements and decrees and appeals (ad nauseum) is most uncertain, because of ignorance on the part of Justice Dept lawyers and their prosecuting staff. This crap could go on for years.

The fundamental engineering and technical fact is: design and development of the desk top computer is still in its evolutionary phase - a phase that won't shake out for at least another ten years or so, because:

The engineering war (not the marketing war) is being fought on three fronts:

1. Development of the co-processor that ultimately drives development of software to use its data processing powers. (Architecture of the co-processor drives operating system development - never the other way around)

2. Development of the optimum Operating System that will always follow development of the co-processor architecture (never the other way around).

3. Development of the optimum Browser that provides for telecommunication of all digital, audio and video signals on the world wide web (using data bus line processing enabling functions built into the co-processor).

In fairness to all, wherein the engineering and marketing playing field may be leveled, and all players have the same opportunities to develop and market their products, the Justice Dept should force a Consent Decree that forces

Microsoft to break into just two Divisons:

1. An Operating System Division and

2. A Browser Division, because

- it is the integration of these two separate software functions by MS into its Internet Explorer that gives MS the power and the leverage to stifle free-market competition within these foundations for the total software industry.

If you want a real poll, ask all users of Internet Explorer if they ever had a user's choice to decide to have a different browser when their desk top computer was delivered to them. (Market share polls serve only to prove Microsoft monopoly.)

My advice to the DOJ: Offer Microsoft a 'Consent Decree' arrangement along the lines explained and described above, or suffer great monetary loss and jail time - an offer Microsoft would be hard pressed to refuse. All arguments in rebuttal or rejection of this solution will also serve to educate the layman and public-at-large.

Bernard Palicki,

Huntsville, AL

Retired IBM Computer Systems Field Engineer