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Sun, Netscape fire back at Gates

Netscape and Sun Microsystems hold a press briefing to counter one held by Microsoft across the Capitol Mall.

WASHINGTON--Netscape Communications (NSCP) and Sun Microsystems (SUNW) took aim at Microsoft (MSFT) today as the high-tech industry prepared for tomorrow's congressional hearing on competition in the computer industry.

The two companies held a press briefing that dueled with one held earlier by Microsoft across the Capitol Mall here. (See related story)

There was little if any new ground covered at either conference. Rather, each side repeated the same arguments they have been making for months now. At the Netscape-Sun gathering, Netscape chief executive Jim Barksdale disputed Microsoft CEO Bill Gates's assertion that the software giant does not hold a monopoly.

"They can say they're not a monopolist," Barksdale said, "but if you want to take it to a would be a slam dunk." Responding to Gates's contention that the Justice Department's pending enforcement action against Microsoft will stifle innovation, the Netscape chief said, in his characteristic drawl: "That's bologna."

Barksdale, joined by Sun CEO Scott McNealy, applauded the Justice Department for the enforcement action it already has taken against Microsoft, but they also called for a new lawsuit with broader charges. As reported earlier, the Justice Department has launched a more sweeping inquiry into Microsoft's business practices, but no charges have been filed against the Redmond, Washington, company. For its part, Microsoft denies any wrongdoing.

Barksdale said that, with the expansion of the Internet, there is new urgency to rein in Microsoft.

"This is a very pregnant moment," he said. "If the second generation of computing extends to the third generation, [the power that Microsoft potentially could wield] is almost unbelievable."

Barksdale and McNealy stressed that they do not want new laws or regulation of the computer industry, and said that enforcement of laws already on the books would stem off new oversight.

"We're worried that if you don't enforce [the current law], it will lead to regulation" of the computer industry, said McNealy. "That would be a disaster for everyone."

The Sun executive also pointed out that current antitrust law places a greater burden on Microsoft than on most of its competitors. "People don't understand that monopolists must operate under a different set of rules," he said.

Barksdale said he wasn't surprised by Microsoft's decision last week to drop certain requirements in its cross-promotional contracts with ISPs, and noted that he was skeptical that it was a routine business decision, as Microsoft has contended. (See related story) In any event, he said, the contracts were "certainly exclusionary for a company that is a monopolist."

The two executives' remarks came in anticipation of tomorrow's Senate Judiciary Committee hearing, dubbed "Market Power and Structural Change in the Software Industry." Barksdale, McNealy, and Gates, among others, will speak.

A second conference hosted by the two Microsoft foes also included comments from two of the most influential trade groups in the software industry. Both the Software Publishers Association and the Computer & Communications Industry of America came out against a number of Microsoft business practices.

One practice in particular concerns deals in which Microsoft persuades content providers to configure their Web sites so that they can be accessed only by Internet Explorer. "Ultimately, what [Microsoft] is doing to leading Web sites around the world is making them an offer they can't refuse," said Software Publishers Association president Ken Wasch.

Business editor Jeff Pelline contributed to this report from San Francisco.