Attorneys General Call Microsoft Settlement Offer an Insult

REDMOND: After all this time, Bill Gates is still hoping for a slap on the wrist. Microsoft on Wednesday sent its opening settlement offer to the Justice Department. And as olive branches go, the four-page proposal was more like a squirting lapel flower. It suggests easing Microsoft contract restrictions on personal computer makers, Internet service providers and others in the computer industry, but of course makes no mention of the broader, harsher remedies the government is currently considering, such as distributing Windows code free to competing programmers or even breaking up the software behemoth.

The response, at least from the state attorneys general involved in the antitrust suit, sounded a lot like laughter. "It was a very small offer," said California AG Bill Lockyer, "a minimalist opening offer that is far from what anyone in our group would expect to be adequate." And Gates still doesn't seem ready to go much further. Speaking in New York on Wednesday, he reiterated his steadfast resistance to what he sees as the government's attempts to ruin Microsoft's ability to innovate -- although obviously, "we'd like nothing more than to have this behind us." But his apparent inability to take the suit seriously could insult not only his pursuers -- too late for that -- but also the judge in whose hands Microsoft's fate rests. When Judge Thomas Jackson recessed the case, he urged Gates and his pursuers to find some common ground. If Gates won't give an inch, Jackson will give it for him. Only it's more likely to be a mile.