WASHINGTON, MAY 27: The US government on Friday refiled its sweeping plan to break Microsoft into two, including technical suggestions from the presiding judge that set the stage for his final ruling in the landmark antitrust case as early as next week.The government proposal would split Microsoft into one company that manufactures operating systems and a second that makes everything else - notably the dominant Microsoft Web browser.A breakup of Microsoft would be the harshest antitrust penalty leveled against a US Corporation since AT&T agreed to spin off the regional "baby bells" in 1982. In the case of Microsoft, the judge would delay the breakup until the software giant finished appealing its case.In the meantime, the company would face restrictions on its conduct starting 90 days after the final judgment is filed - a change from the 30 days in the earlier draft. Microsoft is expected to ask an appeals court to suspend those provisions.Shortly after the government refiling was announced on Friday, Microsoft said it would delay by three weeks its strategy on the next generation Windows operating system. The company cited the expected court decree as its reason for the delay.Microsoft will file comments on the remedy Wednesday, and a spokesman said that it is clear the case is about to move to the appeals process. "We are confident the law and the facts are on our side," said Microsoft spokesman Mark Murray.Microsoft's share price closed at 61-7/16, off 1/16 on Nasdaq following news of the government filing and the Windows announcement delay. Jackson moved into high gear on the case at a hearing earlier this week, which Microsoft lawyers had expected to be the first of many routine hearings on a penalty.But Jackson surprised all sides by probing and exploring possible ways to break up the company - at one point considering a three-way breakup - before telling the government to get the final order ready for him quickly.During the hearing, Jackson spent time nit-picking the draft government proposal, at times sounding like an editor helping put a document into final form.In an introduction to its changes, the government also took the opportunity to blast Microsoft's approach to penalties as "a cynical ploy calculated to raise diversionary issues." The government said, "Microsoft was not forthright" even at as late a stage as this week's hearing.For example, the government said that although Microsoft wanted more hearings before the judge decided on a penalty, it did not get specific about witnesses until after the judge said there would be none.Once the judge ruled there would be no more hearings,Microsoft announced that it would have offered Chairman Bill Gates and President and Chief Executive Officer Steve Ballmer as witnesses. Had Gates and Ballmer actually appeared as witnesses, they would have been subject to cross examination and the government could have obtained more e-mails and other materials they had written.
