[Congressional Record Volume 144, Number 16 (Thursday, February 26, 1998)]
[Senate]
[Pages S1065-S1066]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               MICROSOFT

  Mr. GORTON. Mr. President, the Senate Judiciary Committee has 
scheduled a hearing on Tuesday March 3 entitled ``Market Power and 
Structural Change in the Software Industry.'' As most of my colleagues 
know, I am deeply concerned that the true aim of this hearing is not to 
improve the software industry, but to attack Microsoft and to give the 
federal government more control over the future of this company. If my 
suspicions are correct, this attack is not, as some may argue, an 
attempt to protect the American consumer, but rather, a concerted 
effort to handcuff Microsoft and provide its competitors with an 
opportunity to play catch-up that their competitive merits have not 
provided them in a free market.
  In a recent interview with Salon, the Chairman of the Judiciary 
Committee, my friend and colleague Senator Hatch, announced that his 
committee will release a report the morning of the hearing detailing 
its findings from an in-depth investigation of Microsoft. That report, 
no doubt, will claim that Microsoft is engaging in anti-competitive 
business practices. Releasing such a report only minutes before Bill 
Gates is scheduled to testify before the committee, without giving him 
adequate time to read and respond to its allegations, would be grossly 
unfair.
  I raised these concerns with the committee and was assured that the 
report would not be released before Mr. Gates has an opportunity to 
testify. I trust that my friend Senator Hatch will stand by his word 
and do what is fair and right.
  Witnesses at the hearing include some of the biggest players in the 
high-tech industry: Bill Gates, Scott McNealy of Sun Microsystems, Jim 
Barksdale of Netscape, Michael Dell of Dell Computer, and Doug Burgum 
of Great Plains. These men and their colleagues in the high-tech 
industry are responsible for the technological revolution that has 
taken place in America. Twenty years ago, computers were hulking, 
outrageously expensive, inefficient machines accessible to only the 
wealthiest corporations. Today, personal computers are in virtually 
every business and in many homes and schools. This is the modern day 
version of the Industrial Revolution.
  Not only are the men and women of the hi-tech industry properly 
credited with allowing businesses to run more efficiently, making 
information on virtually any subject imaginable accessible to anyone 
with a PC and a modem, and providing our schools with increasingly 
effective learning tools, they are also responsible for the amazing 
pace of economic growth the United States has witnessed over the past 
20 years.
  The computer software industry has grown more than seven times faster 
than the U.S. economy as a whole, and today provides 600,000 good 
paying jobs to Americans across the nation. Indirectly, thousands more 
jobs are provided through subcontractors and small businesses serving 
these corporations and their employees. Industry revenues totaled $253 
billion last year.
  Clearly, Mr. President, the software industry is the quintessential 
American success story with Microsoft, Sun Microsystems, and Netscape 
at the helm. The women and men responsible for these amazing 
achievements should be congratulated and thanked for their contribution 
to a better, smarter, richer America.
  But, Mr. President, the high-technology industry achieved these 
successes in a free market environment from which government was 
virtually absent. Government, of course, always lags behind commerce. 
When Bill Gates first developed what has today become

[[Page S1066]]

the world's most popular personal computer operating system, the 
government didn't even know what an operating system was. When Jim 
Barksdale invented software enabling the average person to surf the 
web, the government was nowhere to be found. When Scott McNealy began 
marketing his Java system products government regulators did not place 
limits on his business opportunities.
  In fact, I would venture to say that the very corporations attacking 
Microsoft's successes are those that have gained the most from the 
absence of government interference in their businesses. But these 
companies, in their lust to gain a competitive advantage over 
Microsoft, are now advocating the unthinkable--big government 
intervention in the industry.
  According to an article in the Financial Times last week, Scott 
McNealy wants the big hand of government to step in and help his 
company compete with Microsoft. Mr. McNealy is quoted as announcing to 
a group of software industry executives in Silicon Valley that, ``only 
with government intervention will we be able to deal with this,'' this 
meaning competition from Microsoft.
  Many other unsuccessful corporate executives, Mr. President, have to 
come to Congress to petition for government interventions to save them 
from successful competitors. Only rarely, however, do members of my 
political party entertain those suggestions. But unfortunately, a 
member of this body from this side of the aisle, the party known for 
its embrace of free market principles and rejection of big-government 
solutions, has joined Mr. McNealy in his efforts not only in calling 
for a hearing on the matter, but in proposing an entirely new Federal 
regulatory agency, a ``network commerce commission'' to regulate online 
commerce.
  I am flabbergasted. It is truly a strange day when business speaks 
out against free enterprise and promotes big government. It goes 
against the grain.
  Sun Microsystems, Netscape and Novell, Microsoft's biggest 
detractors, are envious of Microsoft's success. Instead of doing 
business the old fashioned way and marshaling their forces for 
competition, they are going in a different, more dangerous direction. 
They are crying for help from big government in order to protect them 
from their more successful competitor.
  The anti-market forces led by Netscape, Sun Microsystems, and Novell 
are amassing in a dangerous attempt to pilfer the market share 
Microsoft has earned by being a leader in the industry, always out in 
front of the pack with new ideas and solutions. Adam Smith must be 
turning over in his grave, Mr. President.
  For it is precisely the absence of government intervention that has 
allowed all of these corporations to succeed. Competition has made this 
country great. America did not become the biggest economic power in the 
world through government regulation. And those nations that chose the 
path of government control of the economy are in a shambles today in 
almost direct proportion to the breadth of those controls.

  When you consider the impact that centralized control in Washington, 
D.C. has had on our nation's schools and the federal income tax code, I 
must admit that I'm amazed that anyone in the computer software 
industry would be calling out for more regulation, influence and 
decision-making from Washington, D.C.
  Let's consider how the Federal Government's gradual taking of 
authority from parents, teachers and school boards for education 
decisions has impacted children in our local schools. Test scores are 
falling, embittered educators are spending more time filling out forms 
than teaching our children, and schools are more dangerous than ever in 
the past.
  Instead of new ideas and new solutions to these problems, Washington, 
D.C. bureaucrats are capable of only one answer to these challenges--
more power for Washington, D.C. to decide how our local schools should 
be run. I ask my colleagues--based on the current state of public 
education in America, do you really think that Washington, D.C. 
bureaucrats know better than parents, teachers and locally-elected 
school boards what's best for the schools in your state?
  I believe that people in local communities know what's best for their 
children and their schools, not Washington, D.C. bureaucrats.
  I believe the same for the computer software industry. Knowing how 
the burdensome hand of the federal government has impacted our local 
schools, why would anyone in the software industry ask to have 
Washington, D.C. play a more burdensome role in the future of their 
industry?
  Another example of how centralized decision-making has hurt American 
life is the Federal income tax code.
  Instead of a simple, fair tax code in place to fund necessary 
Government programs, the tax code has become a social-engineering 
mechanism empowering Washington, D.C. to decide which activities in 
society should be rewarded, and which activities should be punished. 
More importantly, our complicated, messy tax code simply gives more 
control over our daily lives to Washington, D.C. bureaucrats in 
virtually every Federal Government agency. I ask my friends in the 
computer software industry--based on how warmly the American people 
have embraced the current tax code and the Internal Revenue Service, 
how could you possibly want the same federal government that created 
the tax monster to take a more powerful role in your business?
  Further, I find it troubling that the request for government 
intervention has come not from the American consumer, whom our 
antitrust laws were designed to protect, but from Microsoft's 
competitors. The consumer has benefited greatly from Microsoft's 
innovations and the innovations of its competitors.
  Bill Gates, summed it up best in a recent editorial in the Wall 
Street Journal:

       If you asked customers whom they would rather have deciding 
     what innovations go into their computer--the government or 
     software companies--the answer would be clear. They'd want 
     the decision left to the marketplace, with competition 
     driving improvements.

  I vow today to do my best to ensure that consumers get exactly that.
  Microsoft is the American dream, arrived at through hard work and 
innovation. I want to assure my colleagues that I will not stand by and 
allow Bill Gates' adversaries to destroy the principles upon which this 
nation's success is based. I urge those of you who value the free 
market to join me in my fight against those who want the Federal 
Government to gain further control over the computer software industry.
  Big government is not now, has never been, and will never be the 
answer.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. ALLARD. Mr. President, are we in morning business?
  The PRESIDING OFFICER. The Presiding Officer advises the Senator that 
the pending business is S. 1173, the highway authorization bill.
  Mr. ALLARD. Since we have a break in the pending business, I would 
like to ask unanimous consent that we go into morning business for 10 
minutes.
  The PRESIDING OFFICER. The Senator may ask unanimous consent to 
proceed as in morning business.
  Mr. ALLARD. I ask unanimous consent we proceed as in morning 
business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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