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  U.S. Delays Its Decision on Filing Microsoft Suit

By Elizabeth Corcoran
Washington Post Staff Writer
Wednesday, August 9, 1995; Page F01

Some might be tempted to call it "vaporsuit."

Like "vaporware," or software that is talked about but never quite appears, the Justice Department's threatened antitrust suit against Microsoft Corp. moved further into the future yesterday. In a two-sentence press release, the Justice Department said it wouldn't reach a decision on filing a suit until after the much-publicized Aug. 24 launch of the product in question, Windows 95.

For the past few weeks, the high-technology industry and Wall Street analysts have been listening anxiously for any hints about whether the government might sue Microsoft over the company's plans to weave the software for reaching its new on-line service into its much-trumpeted operating system, Windows 95.

In a letter to a New York district judge dated July 21, antitrust head Anne K. Bingaman suggested that the Justice Department would try to decide before Aug. 24 whether to file a case.

But yesterday, like a software company behind schedule as it tries to work out the bugs in a new program, the government said that it would not be held to that date.

The lengthy investigation is wearing thin the nerves of both Microsoft's allies and partners as well as its competitors in the on-line world – not to mention executives at Microsoft's headquarters in Redmond, Wash.

Late last week, at least four industry executives wrote letters to the Justice Department predicting that a delay in the release of Windows 95 would derail the industry.

"Any interference in the shipment of Windows 95 will not only adversely impact business in the United States, but also will have a worldwide adverse impact," wrote Michael Cowpland, chief executive of Corel Corp., a graphics software company based in Ottawa, Ontario.

"We're entirely dependent on the financial commitment we've made to this release," said Fiona Rochester, a spokeswoman for Corel. The company has invested heavily in tailoring a new version of its leading product, Corel Draw, to work with Windows 95.

Rochester said that Corel also would suffer if a government suit later this year pulled Windows 95 off store shelves.

Microsoft, in a prepared statement, said that it was "pleased" that the government had removed the uncertainty about whether it would have to delay the launch of the new operating system.

The company reiterated that it "continues to move full speed ahead with preparation for the Aug. 24 launch and that Windows 95, with the Microsoft Network access feature, will be widely available as planned."

America Online Inc., the Vienna-based on-line services company that has been among those contending that Microsoft is using its dominance in operating system software to leapfrog into a new industry, also found some comfort in the Justice Department's statement.

"It's good news because the investigation is ongoing – they say they're looking at the Microsoft Network and other issues,' perhaps including the Internet-access feature," said Pam McGraw, a spokeswoman for America Online.

Separately, Microsoft also yesterday disclosed that it will have a tiered fee schedule for the Microsoft Network.

"If you're a heavy user, you pay a lot less" for the Microsoft Network than for other services, contended Bill Miller, Microsoft's marketing manager for the project. "If you use exactly five hours a month, we're about the same. If you use it lightly, we're less."

The first 500,000 people who subscribe will be offered an annual rate of $39.95, with three hours of usage per month, and each additional hour costing $2.50. The standard monthly plan would cost $4.95 per month, with three hours of use. A "frequent user" plan would cost $19.95 per month for 20 hours of usage.

© Copyright 1998 The Washington Post Company

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