Bill Gates to do battle over Microsoft in Senate meeting

WASHINGTON -- In 1933, the depths of the Great Depression, the Senate Banking Committee summoned the nation's most powerful banker, J.P. Morgan, as a witness.

That hearing proved disastrous to Morgan, who not only was forced to reveal that he didn't pay income taxes in 1931 or 1932 but also was maneuvered into being photographed with a midget on his lap -- a publicity stunt by a visiting circus. The photo came to symbolize Morgan's eventual downfall.

On Tuesday, modern America's greatest corporate titan has his own date before a Senate panel. Bill Gates, chairman of Microsoft, will face questions from Judiciary Committee members who fear that he is out to take over the Internet, just as Morgan once controlled much of the nation's financial network. Gates' personal finances aren't likely to be an issue. He owes no taxes on the $591,000 in salary and bonuses he drew from Microsoft last year or the $46 billion block of Microsoft stock that makes him the world's richest person. But he will have to deal with the notion, pressed by Chairman Orrin Hatch, R-Utah, and others, that Congress may need to create an Internet Commerce Commission to bar Microsoft from shutting out competitors and framing its own, proprietary Internet structure. The hearing, where two of his fiercest corporate rivals will also testify, will test whether Gates can handle Congress as effectively as the personal computer software (PC) industry he has come to dominate. As a walking icon of the information age, Gates has not roamed the halls of Congress since serving as a 16-year-old House page. But he juggled his schedule to come and defend himself and his company before the lawmakers. "It's a wonderful chance to tell the story of the PC industry and the PC software industry," Gates said in an interview on NBC's Today Show last week. "This industry," he added, "has done more to create jobs and new companies and provide opportunities, including leadership for this country, than any industry I can think of. And so it's fantastic to have that chance to say how it all happened and make sure that regulation isn't imposed that would slow it down." Asked if Microsoft's problems with Congress and Justice Department trust-busters could drive a stake through his financial heart, Gates replied: "Well, there's no doubt in our minds that as this goes on, we will be able to explain very clearly what we have done and how we operate. And we're -- it's very clear that we've done nothing that needs to be changed -- nothing wrong at all. Providing great products is what our business is all about and we've done that very well, and that makes it great to compete." Such a sanguine response isn't likely to impress Hatch, who is deeply troubled by what he sees as anti-competitive dynamics in the software marketplace. Hatch cites a 1996 memo by a top Gates aide, unearthed in the broadening Microsoft antitrust probe, that says: "The best way to make people switch (Internet) browsers is to make sure they have to, to get the best content." Gates has taken personal command of Microsoft's battle with the Justice Department over the firm's bundling of its Internet Explorer browser with Windows 95, by far the world's most popular operating system. In private exchanges, his strong proprietary feeling for the firm he co-founded in 1975 are reflected in comments that recall the way Bourbon kings once referred to France. One longtime Gates observer, computer industry analyst Dan Lavin of Dataquest, said those sentiments can be dangerous in the setting of a congressional hearing. "Bill has the capacity to explain to senators on their own terms why his case makes sense," Lavin said. "Whether he'll choose to take that opportunity is up to him. He has to be really careful not let his ego get in the way in any sense during this hearing. When you're at... a hearing you have to be obsequious and you have to give the senators their due. And if you don't, you can be in for big trouble." However the legislators react to Gates, they are sure to hear plenty of gripes from Sun Microsystems Chief Executive Scott McNealy and Netscape Communications boss Jim Barksdale. Sun, a maker of computer workstations, is suing Microsoft over what it claims is its misuse of Sun's Java software technology. And Netscape has suffered financial reversals after its pioneering Internet efforts have come under sustained attack from Microsoft in their ongoing browser war. At least Gates can look forward to support from Michael Dell, another young, self-made billionaire entrepreneur. Dell's Austin- based hardware company ships much of its inventory loaded with Microsoft software. Nor is Gates remotely likely to face the embarrassment of having a midget seated on his lap. Security around Gates has grown notably tighter since he had a cream pie thrown his face while on a visit to Brussels, Belgium, last month. Says Dataquest's Lavin, "It wasn't that many years ago when you met Bill Gates he would have landed coach in an airplane by himself. And maybe he would've rented a car and shown up with nothing else other than himself. He'd love it to be that way today, I think. But just the realities of the world make that impossible."

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