Microsoft Chief Decries States’ Proposal

Microsoft Corp. Chief Executive Steve Ballmer testified that many of the remedies for the company’s conduct proposed by nine states would force it to take the ubiquitous Windows operating system off the market.

In a deposition released Monday, Ballmer said that some of the wording in the states’ proposals, such as one requiring documentation of interfaces between Windows and other programs, is so broad as to make it impossible for the company to comply.

“There’s simply no way to do that for the existing product set,” Ballmer said. “There will be no Windows PCs shipped.”

Ballmer, who hasn’t testified in court on Microsoft’s behalf before, is likely to be one of the software giant’s most important witnesses in hearings on the landmark antitrust case scheduled to begin next week.

At that trial, California, eight other states and the District of Columbia will try to show that a deal between Microsoft and the federal Justice Department doesn’t go far enough to rein in the company’s aggressive tactics.

Microsoft has responded by arguing that the states’ proposal would seriously damage the technology industry and the economy in general.

In the sworn interview conducted last month by lawyers for both sides, Ballmer went even further, saying the Redmond, Wash., software behemoth might have to shut its doors.

Among other things, he complained about the states’ plan to force Microsoft to auction off the right to make versions of the Office software suite that would work on Linux or other operating systems.

Assuming the new version sold to consumers for less, Microsoft might be forced to match the discounting, wiping out one of the company’s most valuable franchises, Ballmer said.

“If two people sell exactly the same thing, they sell them for zero price,” Ballmer said, citing what he called a tenet of the software industry.

Ballmer spent much of his time on definitions and other details in the states’ proposal, sometimes choosing the most draconian interpretation. But at least some of his argument was powerful enough to prompt changes Monday in the states’ proposal.

Ballmer maintained that the original proposal calling for the company to offer stripped-down versions of Windows without a Web browser, media player or other advanced functions would cripple the company, because it would have to offer millions of different versions.

The states then changed the wording in their plan to say that Microsoft had to make only one new version of its operating system--but one that was modular, so that computer companies could remove pieces without damaging the rest.

“Microsoft therefore would not be required to provide numerous versions of the operating system,” said Iowa Attorney General Tom Miller.

Connecticut Attorney General Richard Blumenthal said the modifications “clarify and sharpen our proposed remedies, without weakening them.”

“The modified measures should deflate Microsoft’s overblown rhetoric and apocalyptic predictions about the proposed remedies,” Blumenthal said.

In a separate deposition, Jim Allchin, one of the chief architects of the Windows operating system, described a proposal to strip out parts of Windows as “terrible” and “so mind-blowing to me I don’t even know what to say about them.” Allchin argued with two lawyers for the non-settling states that it would be impossible for Microsoft to accomplish what the states were proposing.

“I couldn’t do what you’ve got here,” said Allchin, who had a severe cold. “There’s no way. Forget about any business thing. Technically I just couldn’t do it.”

Under questioning, Allchin acknowledged that Microsoft has not conducted any formal technical reviews to determine whether the states’ plan was feasible. “It’s unimplementable,” Allchin said. “That’s my technical judgment. I haven’t done any studies on it.”

But Allchin also agreed that Windows XP, released last year, is modular and contains “chunks of functionality” that could be swapped out.

The depositions reflect many changes within Microsoft since the trial began.

After the government used Microsoft e-mails against the company, Allchin said he now tells employees to refrain from using obscenities and “full concepts” in e-mail messages.

“I probably matured quite a bit” in e-mail use, Allchin said.

Allchin also referred to an especially embarrassing part of Microsoft’s case, in which the company showed a videotape to make the argument that Windows would be damaged if a user attempted to remove the Internet Explorer Web browser. Microsoft later admitted that the demonstration computer was rigged.

“Do you have any expectation as to whether or not you will be putting together similar demonstration for this part of the case?” state lawyers asked.

“Not exactly like that one,” Allchin said.

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Associated Press was used in compiling this report.