Tech Industry

MS college deal protest escalates

San Francisco State University students join the protest against the proposed Microsoft deal with the California State University system.

A group of about 150 San Francisco State University students rallied yesterday in protest of a partnership that would make Microsoft and three other companies the exclusive providers of Internet and PC technology for the California State University system.

The SF State demonstration is the latest complaint from CSU community members across the state, which has now resulted in the California state legislature calling for January 6 hearings on the deal. As reported by CNET's NEWS.COM last month, Microsoft, GTE, Fujitsu, Hughes Electronics, and CSU are in the process of creating a for-profit "limited liability" company known as the California Education Technology Initiative (CETI).

The SF State rally was supposed to be followed by a march on university president Robert Corrigan's office, however, students interrupted a faculty meeting instead. The faculty members were discussing the details of CETI with the school's administration, and eventually asked students to join them. In addition, members of the California Faculty Association joined in the rally, as numerous CSU Academic Senates and teacher groups are against CETI in part because they feel the deal is being pushed through too fast.

Faculty members also were discussing a recent incident in which CSU backers offered to "ghost-write" pro-CETI letters to newspapers on behalf of teachers.

The first deal of its kind in the country, the private partners initially estimated they could generate $3 billion in revenue during the next decade, while giving the entire 23-campus system a much-needed high-tech face-lift and additional services. A CSU spokesman said the revenue estimates were overblown, and new estimates are expected to be released this week.

Many of the CSU's 350,000 faculty and students, along with consumer groups and Microsoft rivals, vehemently oppose the idea, charging that it would limit choice and academic freedom, as the companies' original business plan promised to create educational content. This week they are powering up forces to derail the plan, which is slated to be signed by January 30.

Consumer groups are leading campaigns against the effort as well. Yesterday, online advocacy group and Microsoft foe NetAction called on the CSU schools--which make up the largest university system in the country--to write, call, and email state Higher Education and Education Budget committee members protesting the deal.

"We want the state legislature to cancel this project. We're talking about training the future workforce of the state in a Microsoft-only environment, and GTE is also getting a monopoly across the state," said Nathan Newman, NetAction project director. "The state of California will be locking its students into this technology--in the midst of the Department of Justice investigation into Microsoft, this is unbelievable."

NetAction's complaint echoes the sentiment of the Justice Department's charge in October that the software giant violated a 1995 court order by requiring PC makers to distribute its Internet Explorer browser as a condition for obtaining licenses for its Windows 95 operating system. The group charges that the birth of CETI will give Windows a better stronghold on CSU, which already uses Windows more than Apple or Unix operating systems. When it comes to surfing the Net, Netscape--the now-favored browser in the CSU system--also might be replaced with copies of Explorer, critics charge.

Despite criticism, backers of CETI are convinced that the formation of the company will not be hindered by the state legislative hearings. "I don't have any concern about the state legislative hearings," Patricia Cuocco, CETI spokeswoman and senior director of information technology policy and analysis for the CSU system, said. "They are exercising their public responsibility to find out what we are doing."

CSU also contends that campuses will still be able to pay for any technology outside the "baseline" technology infrastructure, which the corporate partners have proposed to spend an initial $300 million during the next three years to upgrade and expand. In ten years, CETI estimates it will spend $610 million on the project, according to the latest business plan released Friday.

"This does not hamper academic freedom in any way. This is about putting wires in the ground, machines on desktops, and providing telephone service," Cuocco said. "This project is about finding $300 million that the state of California can't find for us."

To get the infrastructure money, CSU had to carve out something for its corporate partners. "The corporate partners have agreed to underwrite the debt of the [CETI] company. In order for them to do that, they have to make a return on their investment--and one of the ways for us to do this is to provide them with exclusivity for the baseline technology," Cuocco added.

However, critics argue that if CSU couldn't come up with the money in the first place, it is unlikely that individual campuses are going to be able to afford technology outside of the CETI consortium in the future. This will only be intensified by CETI marketing, they say.

Microsoft says its role in the project will be mostly on the Windows NT Server side, an operating system typically used by large businesses for networked PCs. Moreover, the software giant says it is not joining up with CSU to monopolize the university system's desktops.

"We think CSU will still allow a great freedom of choice on the desktop," Liz King, general manger for Microsoft's education customer unit, said. "There are lots of different choices; we make office products for the Macintosh and the Windows desktop."

But according to a CETI business plan drafted in August, "Microsoft wants its products to be the solution of choice for operating systems and application software. This is an opportunity to take our existing products and services and sell them to geographic areas and new customer segments. It is also a way to create and introduce new products to the market."

King contends that CSU will not be a "product-test bed for Microsoft." She added, "This actually is not top of mind for Microsoft. We just want them to succeed. The software piece of this equation is by far the smallest piece."

For students at the entirely Apple Macintosh-based Sonoma State University, Microsoft's motives will become clear soon enough.

"We're dealing with big business that is very experienced in making these deals," said Mette Adams, Associated Students vice president of university affairs. "Once they get their foot in the door, how far will these companies go?"