Understanding Microsoft

Part 51. Water Rights

The rich old man who lived in the Big House on the hill always had the edge. He would sell off a small piece of rich bottom land to a newcomer, a greenhorn from the East, or a struggling young farm family. The price seemed very reasonable, perhaps even generous. The sodbusters would start their farm, perhaps even buying a few head of cattle in hopes of becoming very successful and prosperous. The old man's ranch hands seemed ever so helpful and friendly. At least for the first two or three years.

Then suddenly the whole arrangement changed. Once the few head of cattle had become a small herd, the cropland had begun producing by the bushel, and the operation was about to turn a huge profit, the stream stopped flowing. The big rancher had ordered the water flow stopped on his side of the fence, and now there was no water for the cattle. In a few weeks they would all be dead, the young farmer would be ruined, and his family would have to move on to "greener pastures." The only option was to sell out to the man in the Big House for a few pennies on the dollar -- unless they were willing to go down fighting against a well-armed band of ranch hands. Where had things gone wrong?

This is a case of one big operation controlling the "essential facilities" -- to borrow a legal term -- needed for farming, namely water. If you have land, water, and labor, you just need to invest in some cattle and grain and you've got a farm operation. While the land, the cattle, and the grain are one-time investments, it is the water that is the key ingredient -- the most essential facility -- because it must be replenished constantly to keep the business growing. That makes the person who controls the flow of water a very, very powerful person. Some courts now say *too* powerful. And they have applied this same line of reasoning to the computer industry.

Of course, nobody has seriously made a court case making the "essential facilities" argument for putting Microsoft products in the public domain -- yet. But it is only a matter of time. The way Microsoft doles out favors to software startups, and then pulls the plug in an almost extortionary manner once the money begins to flow into the fledgling operation, is almost exactly like the rich old man on the hill with the helpful ranch hands. By changing the software APIs, pressuring partners to alter their software designs, or flooding the market with a cheap clone of the little company's product, Microsoft is able to cut off the vital flow of information to the small-timer. They can either sell out to Microsoft for a few pennies on the dollar, or fight a losing battle against a well-armed town full of assorted ruffians, cowards, and stooges who inhabit the software industry.

The Old West is alive and well in the software industry, as bullies in big houses feather their nests, enterprising newsmen get burned out of their shops (fired for speaking out against Microsoft), and the sheriff wonders just how far he can go in enforcing what little law there is. The owner of the water rights in this case even controls the drinking fountain at the local jail. Did you know that the U.S. Department of Justice is hiring Windows95 installers?

Most recent revision: April 22, 1998
Copyright © 1998, Tom Nadeau
All Rights Reserved.

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