Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, July 22, 1995                   TAG: 9507240040
SECTION: BUSINESS                    PAGE: A-4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

MICROSOFT: TO SELL OR NOT TO SELL?

The Justice Department unexpectedly withdrew a civil subpoena Friday involving Microsoft Corp.'s proposed online service, citing the company's delays in producing documents while speeding ahead with the launch of the Windows 95 software.

The government said it will draw on information it has already gathered in deciding whether to halt the sale of the product, scheduled to begin Aug. 24, based on concerns about antitrust.

At issue is whether the company's plan to include a program for accessing its new online service, the Microsoft Network, in Windows 95 would give it an unfair advantage over rivals.

Companies such as America Online, CompuServe and Prodigy must pay personal computer makers to install their software or distribute it in other ways, such as through magazines.

Microsoft Network is a computerized shopping and information service, featuring such companies as Home Shopping Network and NBC. The company plans to include it on every copy of Windows 95, an operating system that runs the basic functions of a personal computer. The service is optional, however.

The government's latest move provides no clear indication whether it will bring an antitrust case. But it removes a legal distraction, allowing more of the department's resources to focus on the main issue.

U.S. District Judge Robert J. Ward canceled a hearing scheduled for Monday on the disputed subpoena after the Justice Department withdrew it.

Microsoft filed a lawsuit June 23 to halt the Justice order, saying it was excessive and unreasonably broad. The disputed subpoena was the second that Justice issued to Microsoft.

Microsoft complied with a civil investigative demand issued June 5 but complained about the second, which was dated June 21, and gave the company a few days to reply.

Assistant Attorney General Anne K. Bingaman, in a letter to Ward, said the start of manufacturing of Windows 95 last week has made argument over the second civil subpoena useless.

``Given the delay by Microsoft in producing documents ... it is apparent that the government will have to make its decision as to whether to initiate an enforcement action prior to the launch date on the basis of evidence we have gathered to date,'' Bingaman said.