A court battle of Wagnerian proportions

It's been a while coming, but this week looks like the endgame in the long-running Microsoft trial. Or at least, the conclusion of phase one. Judge Thomas Penfield Jackson has given every indication that he intends to chop the giant software company in two, and Microsoft has given every indication that it will immediately appeal. With a slow meandering through the US appeals court system looming, this Wagnerian opera of a case is set to turn into a Ring cycle of trial and counter-trial.

Thus, we, the not-necessarily-willing audience, can look forward to more breast(plate)-beating, more strident arias, more frowning displeasure of the gods. It's up to you to decide on the hero: Viking-helmeted Mr Gates and Co, valiantly battling the forces of US Department of Justice darkness, or the sword-of-justice wielding, jowly Judge Jackson, striking the many-headed monopolist beast a mortal blow.

Either way, this week is crucial for a case that will reverberate through the technology industry, the markets and ultimately, could potentially alter the entire computing landscape. The possible ramifications of the case are so profound that every rumour of an outcome has jostled the markets. When negotiations to settle the case out of court failed in April, Judge Jackson's indication that the company would be broken up helped push the markets into a freefall.

A final opinion could come as early as Thursday, after the judge showed last week that he wants to "fast-track" the case to an early resolution. This shocked many observers, who had expected protracted hearings over the summer and autumn if the US government was considering as harsh an option as a company break-up. But in court last Wednesday, when Microsoft counsel Mr John Warden asked if a hearing schedule might be drawn up, the judge bluntly announced, "I'm not contemplating any further processes."

On Wednesday, the judge also rejected the initial proposal for dividing the company in two, seeming to show a preference for the alternative of seeing many Baby Bills - mini-Microsofts that would compete head-to-head - instead of a halved company. But the final submission from the Justice Department, handed in to the judge on Friday, proposes that Microsoft still be divided in two, although it incorporates other suggestions from the judge.

Microsoft will now have until this Wednesday to respond before Judge Jackson gives his final ruling, which could come as early as Thursday. The compressed timescale is a serious blow to Microsoft, which had clearly expected several months in which to challenge the break-up proposal, counter earlier evidence, and call fresh witnesses.

Microsoft is not without sympathy - many observers, even those who would like to see the company split up, feel it should have been given extra time to make its case given the gravity of the proposed resolution. But the judge obviously feels that Microsoft will have plenty of time - years, perhaps - in which to make those arguments as the case slowly wends its way towards the ultimate arbiter, the US Supreme Court.

Anyone who has followed the case over the past two-plus years, though, will find these closing stages rich in irony. First, the case was seen as an exemplar of the fact that the US legal system is too sluggish and ungainly to arbitrate for the fast-paced technology world. Microsoft supporters have argued that the long trial process is damaging to companies in this sector, and that many of the issues under consideration are now out of date. Yet, once the judge tries to force the system to move more quickly, the same camp argues that the case needs more time, that the issues are too serious for a quick decision.

Then, there's the sneaking suspicion that Judge Jackson was all along more interested in publicly slapping Microsoft's face and forcing it to find its own (albeit court-approved) method of contrition, than hacking the company up. Despite his pitiless Findings of Fact (the preliminary report he published on what he took to be the established facts of the case, which weren't remotely kind to Microsoft), he nonetheless appointed a conservative, pro-business negotiator to try and resolve the case out of court.

In other words, a negotiator acceptable to Microsoft and unlikely to pursue the company break-up option. When negotiations failed, the cause was purported to be the unwillingness of several of the state attorneys also involved to work towards a non-breakup compromise. After the stalemate, Judge Jackson praised the willingness of Microsoft, the Justice Department and the arbitrator to reach a resolution - and pointedly failed to mention the attorneys. He seemed to have created as pro-Microsoft an environment as possible for negotiation, and to have been hugely annoyed that a compromise wasn't reached.

Finally, the reality is that de facto standards imposed by a dominant player mean most people use the same Windows-based software, which means they have compatible software programs, making it easier to do things like share and exchange documents. Thus, the ultimate irony is that more competition in the software market may not necessarily be what consumers really, really want.