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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 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% of the $8 trillion gross national product deals exclusively with information. 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 on antitrust grounds. It wants to do that despite the fact that it is absolutely uncertain what the effect will be on anything -- or on everything. Washington's remedy-theorists rely upon antitrust cases of a completely different era. The federal government successfully sued Standard Oil Company in 1911 and the Aluminum Company of America, Alcoa, in 1945. Alcoa possessed 80% of the aluminum market and Standard Oil 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. But unlike oil and aluminum, ideas and innovative technology can be controlled by no company. The government's contention that Microsoft has a stranglehold on innovation because of its dominance in operating systems is accurate only episodically 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 personal-computer manufacturers, including Compaq Computer Corp. and Dell Computer Corp., have started backing away from their singular devolution to Microsoft's Windows system. Not only have they begun selling machines outfitted with a rival operating system called Linux, but they're also 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 the radio 38 years before it had 50 million listeners, and the 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% of the telegraph traffic in the United States. However, by 1885 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, other industries have been replaced completely by new technologies. The icebox was replaced by the refrigerator, the gas lamp by the electric light, and the horse by the automobile. And it will continue to happen. Last October, the General Accounting Office predicted that the volume of first-class mail will begin to decline by about 2.5% per year beginning in 2002 because of e-mail usage. On Feb. 8, the U.S. Postal Service reported that its revenues were $306 million below plan, partly because of growth in Internet advertising and reported softness in all categories except Priority Mail. Consumers who are 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 huge 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 -- as they did to the telegraph, the icebox and the stamp -- new technology and consumer demand will quickly move old ideas into the history books. History has proven the decision for dominant technology should rest in the marketplace, not in the courtroom. |