The week's news: DSL coming of age

Separately, a federal judge granted Sun Microsystems an injunction against Microsoft's use of its license to Java. Microsoft has 90 days to stop selling software--including Windows 98 and Internet Explorer 4.0--that includes its version of the programming language.

Everyone's in on the act
Monday at the computer industry's biggest trade show, Compaq unveiled new consumer PCs with DSL modems while announcing a series of relationships with a who's who lineup of high-speed access providers: Road Runner/MediaOne Express, @Home Network, Ameritech, Bell Atlantic, BellSouth, Hughes Network Systems/DirecPC, GTE, SBC Communications, Sprint, and UUNET.

Despite some last-minute glitches, Dell followed suit, announcing a more limited package with USWest. Meanwhile, MCI Worldcom weighed in, announcing in a keynote that it will roll out nationwide DSL Net access by the end of 1998.

The upshot: Should the trend continue, Net connection speeds may begin to replace chip speeds as the yardstick by which PCs are measured. But DSL may also be just the trick for popularizing "voice over IP."

Sun wins round one
In a stern 31-page ruling issued Tuesday, Judge Ronald Whyte enjoined Microsoft from "advertising any product that contains, implements, or emulates the Java technology as the 'official' Java reference implementation."

Microsoft executives said they wouldn't have much trouble meeting the judge's order, but said they might appeal.

The ruling is "important development" in the ongoing antitrust case against the software giant, according to a DOJ prosecutor. Conversely, a Microsoft lawyer called it a "narrow ruling [that] will have very [few] implications."

Back in Washington, the judge said Microsoft chief executive Bill Gates has not been "particularly responsive" in videotaped testimony and has even drawn skepticism from the software giant's own legal team.

Also this week, an economist hired by the government testified that the software giant has hurt consumers by keeping prices for its operating systems above market levels, while Microsoft charged that IBM "colluded" with other industry leaders to attack the software giant's Internet strategy.

Back at Comdex
At Comdex, new LCD screens for desktops seemed to be everywhere, as Toshiba, Hitachi, Compaq, Mitsubishi, Fujitsu, and South Korea-based LG showed off "flat panels" offering improvements in clarity, size, and viewing angle. Significant obstacles to widespread acceptance remain, however.

Compaq demonstrated Windows 2000-ready PCs, the first sign that Microsoft's partners are readying for the launch of Redmond's next-generation operating system, while Packard Bell NEC and CompUSA readied new entrants into the notebook market.

Although Intel has criticized and avoided "integrated" processors--chips that incorporate more of the PC's functions onto the main piece of silicon--the company will introduce integrated chips in 2000, prodded by increasing competition in the low end of the market.

The need to bomb-proof networks against the Y2K bug could fuel an unusual first-half buying binge and then a second-half shutdown, producing 15 percent annual growth, PC executives said. The advent of Microsoft's newest operating system and the euro as well as continued Asian turmoil could also play significant roles.

Portals on the move
America Online and Netscape Communications are discussing a deal to embed Netscape's browser into the online giant's service, possibly eliminating the exclusive positioning of Microsoft's Internet Explorer.

Infoseek shareholders approved Walt Disney Company's equity investment, meaning Disney will acquire 43 percent of Infoseek for approximately $70 million. Disney will also apply $139 million toward the purchase of Infoseek warrants, while ownership of Disney's Starwave will be turned over to Infoseek. The two companies are jointly developing the upcoming Go Network portal.

Yahoo opened a huge online mall with offerings from more than 2,700 independent stores, while a market research study predicted that e-commerce will soon outstrip portal sites' advertising revenues.

Hewlett-Packard plans to integrate a set of its voice services software with Lucent's carrier tools. The agreement does not extend as far as HP's recent agreement with Cisco, but does echo previously announced alliances with other communications firms: Nortel Networks, Ericsson, and Nokia.

Pricing competition among long distance's big three--AT&T, MCI Worldcom, and Sprint--is being undermined by limbo-style pricing strategies from relative newcomers. Companies like Qwest Communications and Teligent are aggressively marketing new services and helping to drive a new round of price cuts.

A pair of decisions on opposite sides of the country evidenced states' continued skepticism toward the Bell telephone companies' simultaneous efforts to expand and protect their markets. Kansas regulators gave a thumbs down to Southwestern Bell's bid to move into the long distance market, saying the company has not opened its markets enough for competition. Meanwhile, Oregon regulators ruled that US West and GTE must open their local networks directly to competition.

COPA takes hit
In a major victory for civil libertarians, a federal judge issued a temporary restraining order barring the government from enforcing the Child Online Protection Act for ten days. The case is slated for another hearing in early December.

The Commerce Department appointed a new official to map out its Internet strategies, covers topics ranging from the digital economy to the Net's infrastructure. Succeeding Ira Magaziner, Elliot Maxwell will report Secretary of Commerce William Daley.

Also of note
Gabriel Battista resigned as CEO of the world's primary domain name registry, Network Solutions ? Microsoft is divesting its holdings in market-leading streaming media firm RealNetworks, a Microsoft competitor and critic ? Advanced Micro Devices released a trio of K6-2 chips, one reaching 400 MHz, and said its K6-3 notebook chip will come out in the first quarter of next year ? Open Market slashed the price of its Transact commerce system from $125,000 to $65,000, less than a month after a poor earnings report resulted in layoffs.