I read Judge Thomas Penfield Jackson's finding of fact in the Microsoft antitrust case, all 207 pages of it. Several things amazed me about this document, not the least of which was the willingness of so many people — including me — to comment on it and interpret it without having ever read the thing. I was on CNN twice before reading a word of it. In retrospect, I wouldn't have said anything differently during my 120 seconds on TV, but it probably would have been better to at least have read the document. The next time one of your blowhard friends starts to pontificate on the subject, ask him (isn't it nearly always a "him?") for page references.

What amazed me about the report was how well it was written, how clear, and yet how obviously it was not at all a finding of fact in the sense I expected it. Judge Penfield Jackson lays out a very nice textbook on the inner workings of the PC software industry circa 1997. People could learn a lot from reading this thing. But where I expected a "finding of fact" to lay out his understanding of the facts of the case, this report is really more a "finding of fault." It is an essay that in nearly every word points to Microsoft's guilt and lays the foundation for its punishment. Even in cases where Microsoft is noted as having changed its nefarious behavior, the judge puts that in a context that is, in itself, damning. There is no doubt at all where this judge is headed.

Having said that, the judge makes a good case, and I think he is correct. Heck, I wrote that two years ago and the reasons I cited then are still the ones I would cite today. But that doesn't mean Judge Penfield Jackson got everything right. The major error I saw was his misunderstanding of Linux and the Open Source movement. He completely misses (or chooses to miss) the fact that there is a thriving commercial Linux business, assuming instead that all Linux distributions and applications are written by volunteers and given away for free. Here is a $3-4 billion business that is growing at more than 100 percent per year, and the judge doesn't see it. Linux and Open Source is a bigger headache for Microsoft than Netscape ever was. But since that would mute his argument that Microsoft must die, Judge Penfield Jackson ignores it.

Here are the other things I found of interest in the report, including page numbers in case you want to impress your friends.

On page six he says that there is no way another Intel-compatible operating system could be substituted for Microsoft's without cost. Where are FreeBSD, Linux and the other free OS's in that? The other Linux material mentioned above is on pages 25-26.

On pages 29-30 he makes the interesting argument that forcing hardware OEMs to pre-install Windows essentially kills the Windows piracy business. I never thought of that.

On page 33 he makes a good case for how Microsoft punishes companies that don't do exactly as they are told. In this case, Gateway and IBM pay substantially higher Windows license fees than do Compaq, Dell and HP.

Page 34 includes the interesting feature that Microsoft gives hardware OEMs a price break on systems that are powerful enough to run Windows NT even though Windows 95 or 98 is installed. This is apparently intended not only to help later NT installations, but also to nudge the general hardware standard higher and away from the thin client space.

One of the things that is especially interesting is how much Microsoft was willing to pay or how much revenue they were willing to forego in order to get Internet Explorer — a free application — installed on more systems than Netscape Navigator. On page 71 the judge tells how AOL received a cash bounty for every system it caused to be converted from Netscape to IE.

On page 85, the judge points out two things I hadn't known: 1) While Microsoft went to great pains to make sure that IE could not be uninstalled from Windows and claimed that this was necessary, there are other parts of Windows that Microsoft sees no problem with allowing the user to uninstall; and 2) Even if you choose to designate a browser other than IE4 as your default, IE will still be invoked automatically under many circumstances. This kind of depends on what the definition of "default" is.

On page 100, the judge details the first of many very dramatic threats by Microsoft to its OEMs. In this instance, Compaq is threatened with the loss of its Windows license if the MSN and IE icons aren't kept on the user desktop. This is, in effect, Microsoft threatening Compaq with death. At least in Bedouin culture, where the nomads can have no jails, there are ranges of punishment from cutting off a finger to a hand to two hands to the head. Microsoft seems to go straight to the head. About this, you may remember Microsoft argued in court that a threat isn't real unless it is actually applied and that Microsoft never had to apply any of these threats because the OEMs always gave in. This is not an argument that works for me, but it certainly fit with the "dog ate my homework" nature of the Microsoft defense.

On page 104, the judge explains for the first time how a hardware OEM can actually be harmed by doing what Microsoft demands, which is crucial to any antitrust claim. In this case, it is Hewlett Packard that found that making the boot sequence changes mandated by Microsoft 1) dramatically lowered its percentage of users who registered their products, 2) dramatically increased the number of support calls, and 3) led to an alarming decrease in the percentage of HP customers who said they were happy with their purchase. This was because Microsoft demanded HP remove a registration screen and a tutorial that automatically played when the system was booted for the first time.

On page 110, we see Microsoft tempering some of these boot sequence demands, but this time the judge sees Microsoft's acquiesence as yet another sign of bad faith. I'm not sure I get this argument on either side, though. For Microsoft's part, how can they suddenly claim that whatever threat they felt earlier had passed when nothing else is changed? And why can't the judge allow Microsoft to see that they blew it and be a bit nicer?

On page 117, Microsoft threatens Gateway, which kind of endears me to Ted Waitt. Still, the guy's a billionaire despite being leaned on by Bill Gates, but leaned on he was. I'd buy Amiga, too, just to drive Microsoft nuts.

Page 118 stunned me. It explained that Microsoft allowed certain hardware OEMs to self-certify that their products met specific technical requirements and could carry the Windows logo. Self-certification is at least 90 days quicker than running products through Microsoft's certification lab and is free to boot, so these OEMs have a real advantage over their competitors. But the stunning part is that the privilege to self-certify isn't based on technical merit, but on the OEM's willingness to do what Microsoft says in other areas of their business. Now here is something that hurts consumers, another requirement of a good antitrust claim.

On page 123, Judge Penfield Jackson claims that Microsoft gave away to ISPs its Internet Explorer Assistance Kit (IEAK), which allows ISPs to customize IE to their specific needs and look. In this case, the judge says Microsoft could have sold the IEAK, but gave it away to hurt Netscape.

Then follows lots of stuff about Microsoft's Internet Connection Wizard. I liked the part on page 138 where Microsoft people argued that the desktop ought to be more configurable by ISPs because some ISPs already have the right to remove the MSN and IE icons while others do not. Bill Gates' response to this was to demand a clampdown on everyone. Don't mess with Bill.

As a result of all this, AOL was allowed by Microsoft to bundle Netscape Navigator with its software, but was not allowed to tell users how to find the copy of Navigator on the CD. This was on page 144.

Around page 160, we see the rise and fall of push technology. In order to hurt Netscape, Microsoft was willing to put Intuit's icon on the Active Desktop channel bar for free when Intuit would have paid $10 million. Instead, Microsoft wanted specific anti-Netscape actions on the part of Intuit and other Internet Content Providers. Nobody was ever charged to put their icon on the Active Desktop channel bar, but that's okay because consumers never used Active Desktop anyway.

On page 171, Microsoft threatened to cancel Macintosh Office unless Apple gave up Navigator in favor of IE. Since Mac Office represented more than $200 million per year in profits to Microsoft, this is a heck of a threat to assist another product that is given away for free. Remember in those days, Microsoft made more profit from each Mac sold than did Apple. It was very much in Microsoft's interest to keep Mac Office going. Could this have been another of those empty threats?

At this point, I am reminded of a wonderful moment during an interview at Microsoft when the company was strongly arguing that IE was and had always been intended to be an integral part of Windows. So I asked Steve Ballmer what part of Windows was IE for the Macintosh? He didn't have an answer.

Now we are into the part of the case about Java and see how Microsoft fudged the requirements of its Java license, first by burying Sun's Remote Method Invocation (RMI) code on Microsoft's Java developer site (page 195) and then by threatening Intel over its support of Java (page 202).

Of course, there is a lot more to this report than the parts I have mentioned. These are just the sections that I found most interesting. I was amazed also to see no mention at all of Novell, the company that I think was hurt most over the years by Microsoft shenanigans. But since that is all in another antitrust case (Caldera v. Microsoft), maybe the judge didn't think it mattered.

Okay, so Microsoft is a mean-spirited and paranoid company. No news there. But what comes next? Well, nothing has to happen soon and Microsoft has lots of tricks it can still play, but then so does the Department of Justice, which may be able to leapfrog the more conservative appeals court and drive straight to the Supreme Court. This has everyone talking about remedies, and those remedies include breaking up Microsoft. I think this action would be a mistake.

Next week, I will not only explain why a breakup would be bad, but I will offer my own Solomon-like solution for what to do about Microsoft.