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Microsoft "re-enacting browser war with digital TV" - Court told

If, like every media company and most western governments, you believe digital TV is going to become vitally important in the future, you may want to watch the unfolding of Browser Wars II: Microsoft Strikes Again.

Yesterday, the CEO of Liberate Technologies, Mitchell Kertzman, told the US court investigating Microsoft that the Red(mond) Devil had been forcing suppliers of digital TV equipment to install Microsoft software rather than rival code.

The anti-trust sanctions that nine US states are attempting to impose on Microsoft need to be expanded to digital TV, Kertzman pleaded, or we will see history repeat itself and Microsoft steamroller competitors into insignificance by abusing its position, he suggested.

Of course, this is exactly what you would expect the CEO of a Microsoft competitor to say. But, sadly, he is completely right in his summary. The parallels with Internet browsers and Netscape are so crystal clear, it would take an IT journalist not to notice them.

Here are a few:

Netscape's Navigator software was far superior to Internet Explorer at the start. So, Microsoft leveraged the power it had thanks to Windows and forced companies to install Explorer. Explorer gradually improved in quality.

Liberate's digital TV software is far superior to Microsoft TV. It works, for a start. There are two companies currently using/testing Microsoft's software: TV Cabo, a Portugese firm, and Charter Communications.

TV Cabo - of which Microsoft owns a significant percentage - is still having "teething troubles" with the software, nine months after it launched its service. Charter Communications is still running a "field trial" with Microsoft software. It should have launched by now, but we have heard nothing. It also appears as though Charter is not paying for the MS software. Is this anything to do with the fact that the chairman of Charter is Paul Allen? You know Paul Allen, he helped set up this little software company called Microsoft.

Microsoft also owns a good chunk of UPC (*see below), Europe's largest cable company. UPC desperately tried to install Microsoft kit but eventually gave up last year and has gone with Liberate instead.

Microsoft forced some deals on suppliers in which they were compelled to do its bidding. This is the basic centrepiece of the whole four-year anti-trust trial against Microsoft.

Liberate's CEO claims that major British cable company Telewest has refused to deal with Liberate and has instead gone with Microsoft, despite the recognised flaws in its product.

This, he says, has got something to do with $3 billion Microsoft has invested in Telewest fairly recently. And at a time when the cable company business is on rocky ground. Microsoft had a significant number of Telewest shares before that. Microsoft also has a fair few shares in cable operator NTL. NTL is staring bankruptcy in the face. Will we see another generous donation from Microsoft in return for an exclusive contract?

Microsoft went out of its way to disrupt and confuse the bodies attempting to build Internet standards. Sun and its Java were a particular target. Exactly the same has happened in the digital TV market. Currently, because of the way TV has evolved over the years, only three per cent of TVs in the world are capable of sharing output data (different countries, different formats). But if, say, there was a standard that used other recognised standards to transmit information - well that would solve all the problems wouldn't it?

There are six such standards currently in the mixing pot but the clear leader at the moment is Multimedia Home Platform (MHP) - created by Sun and run on, you've guessed it, Java. Amazingly Microsoft doesn't much like this standard, calling it "large, monolithic and expensive".

Microsoft of course has its own version of MHP which is much better. This battle appears to have been lost though thanks to the European Parliament. TV is a different kettle of fish to the Internet and so the European Parliament was able to dictate what standard was to be used in European set-top boxes. It went with Sun's standard - despite much intensive lobbying by Microsoft. And, amazingly, the US seems to be following suit. This only leaves Microsoft with the software market to dominate.

Microsoft managed to tie companies, individuals and law courts up in so much red tape that by the time we have even got close to a finish, it has effectively sealed off a huge section of the market. Also, if you think back, it was cleared of abusing its position in the market long before the anti-trust trials kicked-off - mostly on the word of its executives promising to be good little boys.

Well, it's happening again. At the current trial, Microsoft is arguing strenuously that things like digital TV software can't be included because they came after the original fillings were put in place. It sounds like just another ludicrous MS legal delaying tactic and it is - but that doesn't mean it's not going to work. If we are still in the same position we are now in four years' time, it will no doubt have grappled control of a majority of the digital TV market. With inferior goods.

And, just a quick spot of history, it was a year and 20 days ago that the European Commission concluded that Microsoft would not have any negative effect on the digital TV market - despite owning large chunks of the main players in the market - because it had "agreed not to influence" the market or future technology. And the EC believed it.

So, if you want to relive a bit of history and see how government, institutions, companies, market and expert observers are seemingly incapable of learning from history, keep an eye on the digital TV software market. It'll be a real hoot.

* UPC's financial results came out yesterday:

"United Pan-Europe Communications N.V. announces its operating results for the fourth quarter and year ended December 31, 2001. Audited financial results are expected to be filed within the coming two weeks and after finalizing the appropriate accounting treatment of certain interest rate cross currency hedging agreements in the wake of UPC's default on its public debt on March 3 rd 2002. The impact will not affect the company's cash or net operating loss results, but will affect results below net operating loss."