Feds add two years to Microsoft antitrust deal

In a statement released Friday, the Justice Department said that it wants to extend certain parts of the final judgment in the case, set to expire in the fall of 2007, until 2009. It said that Microsoft has agreed to the two-year extension of the program, under which it licenses its Windows communications protocols.

The department made its request as part of its regular status report to U.S. District Court Judge Colleen Kollar-Kotelly, who is overseeing the case.

"The Department of Justice is committed to full and vigorous enforcement of the Microsoft final judgment," J. Bruce McDonald, Deputy Assistant Attorney General, said in the statement. "This extension will ensure that companies interested in licensing the communications protocols receive the benefit of complete and accurate documentation for the full period of time provided by the court's final judgment."

In the past, both the Justice Department and Kollar-Kotelly have expressed concerns over the documentation that Microsoft has provided in its licensing effort. The company has already made several changes to the program. However, the Justice Department said that Microsoft has "concluded that a broader 'reset' of its efforts to improve the technical documentation would be more effective and efficient than continuing with the current approach."

At one time, the Justice Department and several state attorneys general had sought a breakup of Microsoft in order to prevent it from abusing its Windows monopoly. Judge Thomas Penfield Jackson at one point ordered such a move, though his ruling was later reversed on appeal. Ultimately Microsoft settled with the Department of Justice, agreeing to far more modest restrictions, including the protocol licensing program.

More recently, the European Union has ruled against the software maker, also ordering it to share communications methods with rivals. The Department of Justice said its goal with the new effort is to make the two programs "as consistent as possible."

Slow progress
At a February hearing, Kollar-Kotelly criticized Microsoft for "foot-dragging" in the protocol licensing effort. In an interim report in April, the Justice Department said that of Microsoft's 58 proposed fixes to 71 short-term issues, only five completely resolved the issue in question. Microsoft said at the time that it had tapped additional engineers to try to respond better to the problems.

In the report filed Friday, the Justice Department said that of the most recent 37 responses from Microsoft, two-thirds appear to resolve the issue. "The trend is encouraging and confirms that Microsoft's recent process is significantly improving the quality of the responses," the department said in its section of the jointly filed report.

But the agency said that Microsoft's difficulty in improving the overall issues with its technical documentation "has led plaintiffs to conclude that a new approach is needed."

Microsoft said late Friday that it was agreeing voluntarily to "document and license the communications protocols in the Windows desktop operating system that are used to interoperate with Windows server OS products."

"The result of the agreement today, and Microsoft's additional announcements, is that the licensing of these protocols will effectively become an ongoing part of Microsoft's regular product development and business processes," the software maker said in a statement.

The department noted that Microsoft has assigned the head of its server and tools business, Bob Muglia, to analyze the open issues relating to the documentation. "Mr. Muglia and his team ultimately concluded that the current process of trying to fix issues...one at a time was unlikely, in the foreseeable future, to result in documentation that is satisfactory," it said.

Technical experts hired by state and federal regulators agreed, and the new plan is for Microsoft to rewrite "substantial portions of the documentation."

No 'violation'
As part of the revamped effort, Microsoft will also aim this year to create an interoperability lab in which licensees can test products and get on-site assistance from Microsoft in implementing the protocols.

"All of these steps should enhance the quality and comprehensiveness of existing and future documentation and will assist licensees, especially for companies that are less familiar with features in Windows," Microsoft said.

The government said that Microsoft's effort to rewrite significant portions of the documentation will take time, making it necessary to extend the term of the deal. The department said that extension request "is not a result of any belief that Microsoft has willfully violated the final judgment."

The software maker set up the Microsoft Communications Protocol Program to comply with the 2002 antitrust settlement. The program aims to give third-party developers a helping hand in creating software that works with Windows, thorough licensing access to protocols.

As part of the jointly submitted plan, Microsoft has also agreed that the department and state antitrust enforcement agencies may apply in the fall of 2009 to extend the provisions of the decree for up to three additional years, the Department of Justice said.

The software maker has also said that even if the court does not extend the final judgment, it will continue to license the technology that it currently is required to offer through Nov. 11, 2012. Companies would be able to license the technology for a minimum of five years.

Microsoft will be subject to other new requirements under the proposed extension plan. It will essentially give up any royaties due to it under the program from April 1 of this year until the quarter in which the new documentation is complete. During that period, licensees will be asked to give feedback and report on any problems they encounter.

Microsoft has also agreed that Muglia will directly oversee the documentation effort, and there are plans for a court order that would require the company to keep Muglia in that capacity either until the project is completed or until another court order relieves him. "Plaintiffs consider it very important that this project have the have the continuing attention of Mr. Muglia," the Department of Justice said.