By DAVID BANK Staff Reporter of THE WALL STREET JOURNAL

Microsoft Corp. is taking steps to control what computer users see when they first turn on their machines, a move that has sparked renewed complaints from rivals about antitrust issues.

Microsoft has renegotiated licensing agreements with several major personal-computer makers, inserting language that blocks them from using Microsoft's dominant Windows operating system unless they ensure that Microsoft's screen comes on when users boot up.

That initial screen has traditionally been of secondary importance; in the past, some computer makers themselves have created their own introductory screens to walk first-time users through set-up procedures and simple tasks on their new computers. In the future, however, when more users will be on-line, the screen could become a valuable port of entry into cyberspace and be used to extract tolls or steer customers into particular areas.

With its hold on the computer desktop -- some 90% of the world's PCs run on Microsoft operating systems -- Microsoft, of Redmond, Wash., is in a position to shape the port of entry for millions of users into a world of customized sports highlights, streams of movie previews and click-to-buy merchandising sites across global networks. Competitors like Netscape Communications Corp. and America Online Inc. have also been angling to control the portal.

Microsoft's new terms were inserted into licensing agreements with International Business Machines Corp. and other PC makers as the contracts were renewed in the past several months. The new provision covers both the current Windows desktop and the Internet-enabled "active desktop" that Microsoft has said it will deliver next year.

The 'Windows' Experience

"We have taken measures to try to make sure customers get what we think of as the Windows experience," said Steve Ballmer, Microsoft's senior vice president of sales and marketing.

Mr. Ballmer said at least one computer maker had objected to the new clause.

Ozzie Osborne, vice president of systems strategy for IBM's PC division, said talks with Microsoft were continuing. "Do we have some issues that we have to get resolved? Yes," he said.

With Active Desktop, Microsoft is moving away from the familiar user-interface of icons and folders and toward a screen that will more resemble a television tuner. "Channels" will be used to receive news, sports, weather and entertainment programming, along with corporate information. Microsoft is in the unique position of providing both the desktop distribution platform and, through its MSNBC joint venture and its Microsoft Network, the programming to be delivered.

"I suspect the best channels will be reserved for Microsoft channels," said John Robb, senior analyst at Forrester Research Inc., in Cambridge Mass. "The premier positions, the pole positions, will be reserved for their own content."

Further raising the stakes for Microsoft is an antitrust investigation by the Justice Department into Microsoft's practices in marketing its World Wide Web browser, Internet Explorer. Gary Reback, a Palo Alto, Calif., attorney representing Netscape and other Microsoft rivals, said several computer makers have provided U.S. investigators with copies of the new licensing agreements for review.

The Justice Department declined to comment. Mr. Ballmer said Microsoft foresees no legal problems with the new contract language.

But Mr. Reback said, "Here's a situation where somebody could make something better that's highly useful, but Microsoft by dint of its monopoly in the operating system is able to retard it. If Microsoft is going to have a shell on top of Windows, then why can't others have a better shell on top?"

A Netscape Entry

Last month, Netscape demonstrated such a "shell," known as Constellation, that could compete with Active Desktop. Mr. Ballmer said that under the new licensing agreement, users will have to click on a Windows desktop icon to gain access to programs such as Constellation.

"It would be presumptuous for any operating system manufacturer to tell a computer manufacturer what environment to present to their users," said Rosanne Siino, Netscape's corporate spokeswoman.

Mr. Ballmer said that Microsoft wasn't seeking to control how computer users used their machines and said he hadn't been involved in any discussions about how Microsoft might leverage its dominant position on the desktop into an advantage for its content offerings.

Some content providers are worried, however. Kathy Daly, director of new business development for The Weather Channel, an Atlanta-based cable television and Web-site service owned by Landmark Communications Inc. of Norfolk, Va., said Microsoft's alliance with NBC could prevent it from getting a prime spot on Microsoft's desktop. NBC gets its weather information from a rival information provider.

"That becomes quite an obstacle and it's kind of hard to get over that challenge," Ms. Daly said.

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Join the Discussion: Share your opinions about Microsoft's requirement that PC makers must ensure that Microsoft's screen appears when users boot their computers.

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Write to the U.S. Dept. of Justice: Send your views directly to the people who can take steps to limit Microsoft's aggressive tactics.

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Become a Class Member: Fill out the form available from the "We the People" site to be considered as a Class Member in a forthcoming Class Action Suit against Microsoft.
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