Peter Sinclair: Passport 'toll' for XP rings antitrust bell

By PETER SINCLAIR

Back in the 1920s and 30s, idealists and iconoclasts - Shaw, Huxley, Chesterton, Wells - predicted a world without fences.

That very century, as they foresaw it, visas and passports would go the way of the carte blanche and a universal brotherhood would settle over all.

But with the arrival of Windows XP on the desktops of the world only a few months away, the bureaucratic mindset has never been stronger and the passport, in its latest guise, will assume a new and potentially more significant aspect in all our lives.

I've been running the latest XP beta for the last week or two.

And while I don't want to pre-empt my own preview in a few weeks (which can probably be summed up as "stunning"), the one feature on which I, and indeed the whole computing world, still have some reservations is its requirement that users register an account with Microsoft's Passport Authentification Service in order to be able to access its new instant messenger and telephony features.

Like many users, I am a conservative at the keyboard and can appreciate the force to Passport's critics' argument that by using Windows to more or less render Passport registration compulsory, Redmond is having another crack at using its desktop dominance to become a leading player in the new and growing market for online subscriptions and services.

And if there's a better way of bringing all the antitrust stuff back to the boil, I can't think of it.

Two other contiguous features in the new operating system are likely to have the same effect - HailStorm and the software-as-a-service . Net strategy.

No wonder that once again the mutter of drums can be heard from the campfires of Oracle, AOL and Sun Microsystems. But some legal analysts and experts see nothing inherently anticompetitive about Passport's inclusion in XP.

"Even a monopolist has a right to compete," Andrew Gavil, antitrust professor at Howard University School of Law in Washington DC, is quoted as saying.

"You've got to pay toll on some features, and Passport is the tollgate."

An analogy which probably sounds more compelling in the US than it does in NZ. "It's a great way to control their customer base. They own your identity, and therefore control you through that."

In other words, with Passport, Windows will come to control the cards of identity of millions of end-users; and with shrewd shuffling will have created an asset which could come to mean billions to the company.

For that's one of the keys to Passport's significance to Microsoft: it offers renewed revenue growth at a time when Redmond can no longer rely on its traditional software strategy to fuel its traditional profit increases.

When Windows and OfficeXP each command more than 90 per cent of their respective markets, it simply makes it that much harder to keep revenue flowing in proportion to sales.

Make no mistake about this, Passport and subscription-as-a-service is a strategy that has got to work.

There is nothing less at stake than the future of Microsoft itself.

* pete@ihug.co.nz

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