"Microsoft R&D at best would go into a 10-year period of hibernation," if the non-settling states' remedy was approved, Gates told a District Court Judge Wednesday.
Wrapping up two and a half days of testimony defending his company against stiff remedies proposed by a group of nine non-settling states, Bill Gates painted a grim view of the future of software if the proposal is approved.
"Microsoft R&D at best would go into a 10-year period of hibernation," Microsoft Corp.s chairman and chief software architect told District Court Judge Colleen Kollar-Kotelly Wednesday. Taking issue with a provision that would require Microsoft to license Windows to OEMs on uniform terms, Gates said the end result would be a single operating system license for use by the whole world.
In a well-worn repartee with the states attorney, Steven Kuney, Gates described the worst-case scenarios that he believed would result from each of the proposals provisions. The main objection that ran through all of his complaints is that Microsoft would be unable to comply with the remedy because the provisions are either too vague to implement with any certainty or they would sap the Redmond, Wash., company of any incentive to innovate.
Charging that the terms "middleware product," "software platform," and "interoperate" are too ambiguous to guide implementation, Gates argued that the remedy proposal would force him to take Windows off the market. A provision requiring Microsoft to auction the source code for Office to three bidders would bring the value of the application to zero.
Showing some of the defiance that marked his posture in the liability phase of the landmark antitrust case, Gates did not answer "yes" when asked whether he recognized that the actions found by the Court of Appeals to be unlawful actions that sustained the operating system monopoly had contributed significantly to Internet Explorer gaining a dominant share of the browser market at the Expense of Netscape Navigator.
"I accept whatever the Court of Appeals found," Gates said. "Its my view that there were other key factors."
Kuney, maintaining an even tone, repeatedly asked, sometimes incredulously, whether Gates truly believed the dire predictions he floated in court would come to pass. He challenged Gates as to whether he anticipated anyone holding Microsoft in contempt for any of the doomsday situations described. He also quizzed Gates on provisions in the states proposal that note the possibility of altering the remedy if circumstances warranted.
Trying to demonstrate that Gates was describing problems that would not occur in actuality, Kuney asked him several times whether the definitions he was ascribing to the proposal differed from the definitions he uses in his work. "The problem you have is that you read the states definition of default as not matching [your] definition of default?" Kuney asked with regard to a provision broadening licensing options.
Challenging Gates on his contention that he would be unable to comply with a requirement to market an unbundled version of Windows with removable middleware, Kuney asked whether he could not use Windows XP Embedded tools to build an operating system for a PC that would support XP features. Gates responded that Windows XP Embedded is not used in general purpose PCs because it would cause harmful fragmentation and because the economics are suited for niche markets. Even if it could be used to create removable middleware, it would cause degradation, which would be in violation of the same remedy provision, he said.
Gates also took issue with a remedy provision that would require Microsoft to comply with a standard any time the company publicly claims it is in compliance with the standard. "The notion of complying with standards is very much a gray area," he said.
The hearing is expected to last at least two more weeks. Microsoft has the option of calling another 20 witnesses to the stand, but according to one company official, it is unlikely to do so.