Over the past few months, I have been watching with interest as the U.S. Department of Justice and 19 state attorneys general sue Microsoft Corp. for anti-trust violations. The government has been relentless in pursuing the case, and Microsoft has been equally adamant that it is guilty of nothing more than aggressive competition in the software marketplace.
Recent news reports suggest that the government will seek the breakup of Microsoft into smaller companies similar to the Ma Bell breakup 20 years ago. And now that settlement negotiations have failed and the judge has issued his verdict, the case will go to lengthy appeals.Between 1990 and 1996, while I was governor of the state, Nevada had the fourth-highest high-tech job growth in the country. Many of these jobs came from California, where high taxes and costly government regulations made it hard for business to start up and thrive. As a result, Nevada today has more Web site addresses as a percentage of business addresses than any state in the union, just ahead of California and Massachusetts.
I'm not arguing for what some call a "business-friendly" set of policies. High-tech businesses don't need special tax incentives or targeted regulatory "carve outs."
Rather, I'm arguing for laissez-faire policies. Leave them alone. What we managed to avoid in Nevada is a kind of predatory state of mind: the idea that business is behind most of society's ills and the first source of funding for any good ideas that come along.
Pretty soon, this predatory predisposition creates the sort of regulatory environment that simply drives business away or discourages its formation and growth.
In that regard, the whole Microsoft litigation has a chilling effect on the New Economy. Microsoft does business in an unstable, rapidly shifting environment as it is. The high-tech world thrives on this, but when you add the unpredictability of government intervention, it creates too much instability to plan ahead.
This case has been going on more than two years. That's an eternity in Internet time.
When the government went after IBM for being a monopoly three decades ago, they litigated for 13 years, required IBM to produce 51 million pages of documents and cost the firm millions of dollars in legal costs. In the end, the government concluded it didn't have a very good case after all, so it dropped the suit. In the meantime, IBM lost complete control of the desktop market and was in a hole it took decades to get out of.
Some -- including their competitors who cheered the suit on -- would love to see Microsoft similarly hamstrung. They may get their wish now that settlement talks have failed.
Ultimately, it matters less what happens in the end than that an immense pall is put on our New Economy and one of its most successful drivers. I have seen a lot of lives put into a holding pattern while appeals go on and on, endlessly.
This certainly doesn't bode well for the spirit in entrepreneurship and innovation, and it simply can't be good for America.
Bob Miller was governor of Nevada from 1989 to 1999. He is currently in private practice in Nevada and serves on a number of boards, including the Advisory Committee for Americans for Technology Leadership.