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Microsoft foes lukewarm on Windows licensing

EU orders Microsoft to license Windows Server communications protocols. Most competitors just shrug.

The European Union ruled on Wednesday that Microsoft must make Windows Server protocols available for license, but competitors showed little initial interest in the program.

The European Court of First Instance said Microsoft must comply with penalties imposed in March by the European Commission, which determined that Microsoft used its monopoly in operating systems to manipulate the markets for media players and work group server operating systems. Microsoft is still appealing the case and will pursue a possible settlement.

Microsoft will have to release a version of Windows without the Windows media software and to make certain protocols of its Windows Server operating system available to competitors. The intent is to level the playing field for competitors in both markets.

The EU ruling will force Microsoft to disclose more technical information than it has in the past, specifically dealing with Windows Server, said Brad Smith, a senior vice president and general counsel at Microsoft. The company intends to create a Web site with the technical details, fees and terms for the new server protocols, Smith said.

"The Commission's decision also covers a new category of communications protocols," Smith told reporters Wednesday. "Under the Commission's decision, we are obligated to make those protocols available for license so that they can be implemented in competing server software."

In the U.S. Department of Justice's antitrust case against Microsoft, the software giant was compelled to publish some Windows client protocols that allow desktop PCs to communicate with servers. About 20 companies, including Sun Microsystems and AOL, already participate in the existing licensing program, which is called Microsoft Communications Protocol Program.

The European Commission had ordered Microsoft to license protocols that deal with, among other tasks, sharing files stored on servers, sharing printers and authenticating a user's access to a network.

Some Microsoft competitors said they will investigate the new set of protocols, but any decision regarding licensing would require more time.

Novell, which owns its distribution of Linux and the NetWare operating systems, lauded the decision to enforce the ruling.

"Novell has been clear that we were very interested in seeing the remedy implemented, and we believe that it could be beneficial to players in the work group server market, including Novell," a company spokesman said.

Novell, however, did not choose to participate in Microsoft's current protocol-licensing program, which has been in effect since the U.S. antitrust agreement in 2002.

"The protocols disclosed in the U.S. case are not sufficiently helpful to Novell to justify the overrestrictive license terms of the programs or the unreasonable cost of the license," Novell said in a statement.

Similarly, Computer Associates International, which acquired network security company Netegrity earlier this year, said it will look into the new licensing program but had not yet determined whether it was worth it.

IBM declined to comment on the EU ruling because an appeal in the case is still pending.

Jeremy Allison, the co-creator of open-source product Samba, said he is interested in the new licensing scheme because it could greatly benefit the Samba software, which lets Unix and Linux servers share files the same way Windows servers do.

But he warned that it has to be substantially different from Microsoft's current program in order to be useful.

In the United States, Microsoft charges protocol licensees for each copy of software shipped with the technology, Allison said. This per-unit royalty is incompatible with the General Public License (GPL) that governs Samba. Instead, Allison would like to see Microsoft share its protocol documentation with a select group for a lump sum.

A spokeswoman for Linux software maker Red Hat said the company was in favor of the EU ruling because it is designed to curtail monopolistic practices. But Red Hat has no plans to license Microsoft's server protocols.

However, another Linux provider, Paris-based Mandrakesoft, made clear that it would not license any Microsoft protocols.

Mandrakesoft CEO Francois Bancilhon said he would rather "die than purchase a Microsoft license." Instead, the company will work on interoperability with Microsoft software through existing standards efforts.

CNET's Stephen Shankland contributed to this report.