FEATURES in upcoming Windows worry rivals, government

<br>WASHINGTON (AP) _ When computer users install the next generation of Microsoft's Windows operating system this fall, they will get an Internet chat program automatically. Plus a new security program,

Saturday, May 12th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ When computer users install the next generation of Microsoft's Windows operating system this fall, they will get an Internet chat program automatically. Plus a new security program, a DVD player and software to make personal CDs.

Rivals and some state attorneys general are complaining that with its Windows XP system, Microsoft is engaging in the same sort of product bundling that gave rise to the current federal antitrust case involving the company's Internet Explorer browser.

AOL Time Warner, the world's largest Internet provider and the maker of two competing Internet messaging programs, was so upset that it provided a private briefing in March to the attorneys general of the states that sued Microsoft in the case now before a federal appeals court. AOL officials outlined what they believe are new anticompetitive practices.

``This is a movie that many people have seen before. The direction Windows XP, .NET and Hailstorm all go in is to continue Microsoft's desktop monopoly and we think that's bad for consumers,'' said John Buckley, AOL vice president.

Microsoft .NET is the company's plan to develop Internet technology that works with most other computing devices, encouraging consumers to keep their data on Microsoft Internet servers. Hailstorm is Microsoft's code name for some of the services that will run on .NET.

Microsoft counters that it is simply trying to improve its product with new features that consumers demand, and that its rivals are trying to do the same thing: expand into new markets.

``We must continue to add new features and functionality, or else no one is going to want our product,'' Microsoft spokesman Jim Cullinan said. ``You have to remain nimble and remain focused on delivering value to your customers.''

The tensions between Microsoft and AOL come even as the two giants work together to resolve common issues, such as a single instant messaging standard.

Iowa Attorney General Tom Miller, who has coordinated the states' legal strategy in the antitrust case, said Microsoft's behavior amounted to ``history repeating itself.''

``There are certainly some concerns about them continuing dominance,'' Miller said.

The strategy to continue product bundling comes as an appeals court in Washington weighs a trial judge's order that Microsoft be split into two companies.

``Without any court restrictions, Microsoft has remained free to continue its previous course with respect to integrating the browser and anything else, and it has acted consistently with its previously expressed views,'' Howard University law professor Andy Gavil said. ``The snowballing of added features, however, surely will complicate any future remedy if a violation is upheld.''

Windows XP, which will be sold in stores in October, is the first Windows version designed for both home users and businesses. It promises to be far more stable for consumers, and includes more extras than ever.

Among them: MSN Messenger, an instant-messaging program; the new Internet Explorer 6 browser; a computer security program known as a firewall; a new media player only available with XP that will play DVDs as well as streaming Internet music and video; and a remote access program that will let a more savvy user troubleshoot someone else's computer across the Internet.

For the first time, MSN Messenger installs and loads automatically every time XP is run.

Several companies already sell security, multimedia and remote access programs. Once Microsoft has these features integrated with Windows, consumer advocates say, there is little reason to go elsewhere for them.

``At first blush it looks like ease and convenience and simplicity for the user, but in the long run it sets off alarm systems of stifling competition and higher prices,'' said Gene Kimmelman of the Consumers Union.

Competitors are hoping that consumers will see that their products are better than Microsoft's bundled ones.

``The firewall in (XP) is very rudimentary,'' said Sarah Hicks, a vice president of Symantec Corp., which makes a competing security program.

RealNetworks general manager Steve Banfield said that Windows Media Player was ``not the best product.''

Microsoft's Cullinan maintains that first, the company has to convince consumers to upgrade to XP.

``If people don't find those features compelling enough to upgrade,'' Cullinan said, ``they can keep whatever the heck they want. They're not forced to upgrade.''

David Farber, a former Federal Communications Commission technologist who testified against Microsoft in the antitrust trial, thinks consumers will resign themselves to using even more Microsoft products.

``It's the same game that they played with (Internet) Explorer,'' Farber said. ``If it's sitting there and it's built in and you have to put a lot of work in to use another product, you don't do it.''