"Microsoft Corp. has reached a settlement in dozens of
private antitrust suits, but the proposed deal's impact on the
company's bottom line remains to be seen.
Under the terms of the settlement, which Microsoft executives
and attorneys outlined Tuesday, the company during the next five
years would provide roughly $1.1 billion in cash, training, support
and software to some 12,500 schools in low-income U.S.
The settlement stems from numerous claims that Microsoft abused
its market position by charging too much for computers and
software. Those claims later were incorporated into a class action
StoryRESEARCH TRIANGLE PARK, N.C.--Nov. 20, 2001-- Open
Source leader proposes to provide software to every school district
in the United States if Microsoft provides computing hardware for
the 14,000 poorest school districts
Red Hat, Inc. today proposed an alternative to the settlement
announced today of the class-action lawsuit against Microsoft. Red
Hat offered to provide open-source software to every school
district in the United States free of charge, encouraging Microsoft
to redirect the money it would have spent on software into
purchasing more hardware for the 14,000 poorest school districts.
Under the Red Hat proposal, by removing Microsoft's higher-priced
software from the settlement equation, Microsoft could provide the
school districts with many more computers--greatly extending the
benefits Microsoft seeks to provide school districts with their
Microsoft had proposed that, in settlement of class-action
claims of price-gouging, the company donate computer hardware,
software and support to 14,000 poor school districts throughout the
United States. Under the proposed settlement, a substantial part of
the value provided to schools would be in the form of Microsoft
The Red Hat's alternative proposal includes the following:
Microsoft redirects the value of their proposed software
donation to the purchase of additional hardware for the school
districts. This would increase the number of computers available
under the original proposal from 200,000 to more than one million,
and would increase the number of systems per school from
approximately 14 to at least 70.
Red Hat, Inc. will provide free of charge the open-source Red
Hat Linux operating system, office applications and associated
capabilities to any school system in the United States.
Red Hat will provide online support for the software through
the Red Hat Network.
Unlike the Microsoft proposal, which has a five-year time limit
at which point schools would have to pay Microsoft to renew their
licenses and upgrade the software, the Red Hat proposal has no time
limit. Red Hat will provide software upgrades through the Red Hat
Network online distribution channel.
A Win-Win Approach
The Red Hat proposal achieves two important goals: improving the
quality and accessibility of computing education in the nation's
less-privileged schools, and preventing the extension of
Microsoft's monopoly to the most-vulnerable users.
"While we applaud Microsoft for raising the idea of helping
poorer schools as part of the penalty phase of their conviction for
monopolistic practices, we do not think that the remedy should be a
mechanism by which Microsoft can further extend its monopoly," said
Matthew Szulik, CEO of Red Hat. "Through this proposal all of the
states and all of the schools can win, and Microsoft will achieve
even greater success for its stated goal of helping schools. By
providing schools with a software choice, Red Hat will enable
Microsoft to provide many more computers to these schools. At the
same time, the schools can accept this offer secure in the
knowledge that they have not rewarded a monopolist by extending the
monopoly. It's now up to Microsoft to demonstrate that they are
truly serious about helping our schools."