Confident Microsoft Cuts Witness List

Microsoft originally said it would call 28 witnesses to defend itself from antitrust penalties sought by nine states but removed eight witnesses Monday. The states, who continued the case rather than accept a settlement agreed last year by the federal government and nine other states, called 16.

The company acted "after reviewing the progress we made so far in our case as well as assessing the states' witnesses and what we believe are shortcomings in the states' case," Microsoft spokesman Jim Desler said.

After the cutback, the company has only eight witnesses left, including Microsoft chief executive Steve Ballmer. Desler said Microsoft may reduce the number further as the case continues but plans to show video of California's assistant attorney general, Tom Greene, summarizing the states' proposals.

Four of the eight witnesses Microsoft decided to eliminate are company employees, including a vice president, Richard Fade, who handles the company's relations with computer makers. During his interview with lawyers for the states, Fade admitted that computer makers felt contracts drawn up after the federal settlement were unfair.

Executives from retailer Best Buy and cable firm Charter Communications were also dropped from Microsoft's witness list.

Much of the testimony from future Microsoft witnesses, especially that of Microsoft executives, repeated the testimony of company Chairman Bill Gates, who testified last week.

Several small software developers have testified as well, but their credibility was put into question when they admitted they had little knowledge of the case and learned about proposed penalties only from Microsoft officials.

Qwest Senior Vice President Gregg Sutherland testified Monday that it is not in Microsoft's interest to use its market power to shut out non-Microsoft devices in the emerging voice and data messaging market.

Microsoft used Sutherland's testimony to rebut earlier allegations by an SBC engineer that tough antitrust penalties are needed to restrain Microsoft from taking over so-called unified messaging services.

Qwest, SBC and other telecommunications firms are researching so-called unified messaging services, a way to meld landline and cellular calls, e-mail, faxes and instant messages into a universal inbox.

The nine states still pursuing antitrust penalties want the penalties to apply to those systems as well, so that Microsoft won't be able to degrade communications between non-Microsoft systems or favor its own products. The states also fear that Microsoft would co-opt the market with its own products, as it has done with its desktop operating systems.

John Schmidtlein, a lawyer for the states, said Qwest itself has been involved in Microsoft's efforts to shut out other companies. Qwest signed a 2001 deal with Microsoft to move Qwest's Internet customers to the Microsoft Network.

Microsoft Network, or MSN, forces its users to run Microsoft's own e-mail program and strongly encourages the use of Microsoft's Web browser. Most other Internet providers allow customers to use any e-mail or Web product.

Other proposed penalties would let computer manufacturers remove Internet Explorer and other features of Windows and substitute competing software.

The original judge in the case, Thomas Penfield Jackson, ordered Microsoft broken into two companies after concluding that it illegally stifled competitors. An appeals court upheld many of the violations, but reversed the breakup order and appointed U.S. District Judge Colleen Kollar-Kotelly to determine new punishment.

States that rejected the government's settlement with Microsoft last fall were Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, along with the District of Columbia.

Shares of Microsoft were up 74 cents to close at $52.24 in trading Monday on the Nasdaq Stock Market, and gained another 25 cents in extended trading.

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