SBC Exec Sees Threat to Web Communications

An executive of SBC Communications Inc. testified Monday that antitrust penalties sought by nine states against Microsoft Corp. would prevent the software giant from controlling an emerging market of Internet communications products.

But Microsoft lawyers fired back by painting SBC as a powerful phone monopoly that wants to dominate a service to provide consumers access to voicemail, e-mail and faxes from any telephone.

Larry Pearson, a product design executive helping SBC develop the Unified Messaging System, said UMS threatens Microsoft’s PC operating system monopoly. It would be managed by big server computers on the Internet rather than by consumers using a Windows-powered desktop PC and a phone line.

Pearson said he feared Microsoft would try to crush UMS, which SBC plans to introduce in January.

Taking the stand in the fourth week of the landmark antitrust trial, Pearson testified that a proposed settlement reached between Microsoft and the Justice Department last November is so loosely written that the software giant could withhold technical information or thwart rivals from effectively deploying UMS and other non-Microsoft products.

Pearson said Microsoft does not have to release enough details about the inner workings of Windows software to allow UMS servers to work effectively with Windows PCs.

But Microsoft’s lead trial attorney Dan Webb introduced an e-mail from SBC executive Michael Hawkins that claimed the company had a three-year lead over Microsoft in UMS.

Later, Webb tried to get Pearson to acknowledge that the nation’s No. 2 regional telephone company, which dominates local phone service in 13 states, hardly feared Microsoft.

“SBC believes today it will have a significant competitive advantage for UMS products, correct?” Webb asked.

“We have some advantage,” Pearson responded. “I don’t see them as huge.”

Pearson was the 12th witness called by the District of Columbia and nine holdout states seeking tougher penalties against Microsoft.

The holdouts argue that a proposed antitrust settlement between Microsoft, the Justice Department and nine other states is too weak and does not cover important computer technologies that have emerged since the government first sued Microsoft on antitrust charges in May 1998. Microsoft contends the settlement is enough to restore competition in the PC operating system market.