Nine states still solid against accepting Microsoft antitrust settlement

Tuesday, November 27th 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ The states still suing Microsoft for antitrust violations have become more entrenched despite heavy lobbying by Microsoft allies.

Lawyers following the case had expected at least some of the nine remaining state attorneys general to settle with the software giant after the federal government and other states did. Microsoft and its supporters have been sending letters and having influential friends call to try to persuade the holdouts to drop the suit.

But the effort appears to have failed. The states are scheduled to tell a federal judge next week how they think Microsoft should be punished for acting as an illegal monopoly.

Connecticut Attorney General Richard Blumenthal, a leader among the states, said Tuesday he has decided not to take Microsoft's deal. Several weeks ago he and a handful of other holdouts said they would continue to scrutinize details of the offer.

Citing its ``gaps and ambiguities,'' Blumenthal said, ``The settlement reflects good progress, but not good enough.''

Iowa Attorney General Tom Miller said two weeks ago that he had ``too many doubts as to the effectiveness of the agreement.''

State holdouts have received a flurry of calls from pro-Microsoft legislators, interest groups and others trying to persuade them to join the nine other states and the Justice Department.

``It was amazing. You can't imagine,'' said Utah Attorney General Mark Shurtleff. ``I haven't seen anything like it.''

Bill Lockyer, attorney general of California, said the lobbying effort was very intense and has included calls from state officials and a congressman. Lockyer hired Brendan Sullivan, a top trial attorney, to represent the states in future hearings.

The other states suing Microsoft are West Virginia, Massachusetts, Minnesota, Florida and Kansas.

A spokesman for the District of Columbia said it has not made a final decision but is leaning heavily toward continuing the suit. In a recent e-mail, Microsoft urged recipients to call Robert Rigsby, the District's top legal officer.

Groups friendly to Microsoft, such as the Association for Competitive Technology and the Citizens Against Government Waste, have made public calls to the remaining states to drop the suit. On the CAGW Web site, visitors can e-mail a prewritten message supporting the settlement to state governments.

ACT president Jonathan Zuck said he has held off on high-pressure tactics until the states reveal next week what they want from Microsoft.

``When they do, we'll take a hard look at it and share that with our members,'' Zuck said. ACT members include about 3,000 small businesses. Zuck heads another group, Americans for Technology Leadership, which sends newsletters and ``Action Alerts'' to several hundred thousand people.

Several organizations backed by Microsoft rivals AOL Time Warner, Sun Microsystems and Oracle have tried to convince the states not to take the settlement. Microsoft spokesman Jim Desler said the company is trying to counteract their efforts.

``We have reached out to interested audiences and parties to educate them on the merits of the settlement and to clarify any misconceptions from parties that are dead-set against any settlement, no matter how fair and reasonable it may be,'' Desler said.

Howard University law professor Andy Gavil said California, Massachusetts and Utah have a strong incentive to stay out of the settlement _ all three are homes to ailing competitors of Microsoft.

``It may well be that they view a weak remedy as damaging the chances of technology recovery in their own states,'' Gavil said.

Blumenthal indicated that he thought the settlement should have tougher enforcement, last longer than five years and require Microsoft to disclose more information to competitors.

The holdout states are scheduled to go to trial in March, when a federal judge will mete out a penalty. The same judge will decide early next year whether the settlement is fair.