The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHourtonight an interview about the new Iraq flare-up with the man in charge of the U.N. inspection teams; a four-way debate about the growing power of Microsoft; a foreign correspondence about Bosnia; and some Roger Rosenblatt thoughts about the 100th anniversary of the Dreyfus case. It all follows our summary of the news this Tuesday. NEWS SUMMARY

JIM LEHRER: Iraq blocked the work of a U.N. inspection team today. Iraqi officials claimed it was unbalanced because it was made up of too many Americans and Britons. They said it was being led by a U.S. spy. Team leader Scott Ritter called that charge ridiculous. He was a Marine captain during the Gulf War. At the United Nations in New York Chief Arms Inspector Richard Butler defended Ritter.

AMBASSADOR RICHARD BUTLER, Chief U.N. Weapons Inspector: Scott Ritter is a professional arms control inspector. He's a man of great ability and dedication. He is not a spy. He is a U.N. official. Iraq has always got wrong whether by intention or not what his past rank was, who he worked for, and so on. I don't want to go into this further. It's an unrespectable campaign against a perfectly competent, loyal, and truthful individual.

JIM LEHRER: We'll talk to Butler about all of this right after the News Summary. His inspectors are trying to verify that Iraq has destroyed weapons of mass destruction as required by the Gulf War cease-fire. In Washington Secretary of State Albright criticized Congress for not paying U.N. dues owed by the U.S.. She said it undermined efforts to build a U.N. consensus against Iraq. In a foreign policy speech she also spoke of the International Monetary Fund's and other efforts to resolve the Asian financial crisis.

MADELEINE ALBRIGHT, Secretary of State: Because the world economy is so interconnected, restoring confidence and financial stability in Asia is very much in our long-term economic and security interests. That is why the President has responded to the current financial crisis by strongly backing recent IMF initiatives in Asia and by underscoring this support by pledging to work with others in the international community to provide contingency funding should this prove necessary.

JIM LEHRER: In Asia today stock markets rebounded, led by Indonesia's main index, which climbed to 9.1 percent. Indonesian President Suharto gave U.S. officials new assurances that he would take strong steps to overhaul Indonesia's battered economy. Wall Street also had a good day today. The Dow Jones Industrial Average closed up nearly 85 points at 7732.13. In other economic news today retail level inflation last year was the lowest it's been in 11 years. The Labor Department reported it up 1.7 percent for all of '97. Last month, consumer prices rose .1 percent. Also in Washington today there was a federal court hearing in the Microsoft antitrust case. It was to determine if Microsoft was in contempt for violating a court order to separate its Internet browser from its Windows operating program. Microsoft said the two should not be considered separate products. Last month, a judge ruled differently. We'll have more on the Microsoft story later in the program. The Northern corners of the country were recovering from ice storms today. In the Northeastern U.S. and in Canada many residents left shelters for home. Four hundred and twenty thousand are still without power in the U.S., more than a million in Canada. Utility officials say downed transmission powers mean 400,000 Canadian households face one more week without electricity. In the Pacific Northwest, yesterday's coating of ice began to melt. The American Cancer Society announced today it would spend $10 million for research and prostate cancer. The society said they will focus on what causes the disease and why black men are twice as likely to die from it. Some 185,000 men will be--American men will be diagnosed with prostate cancer this year. And that's it for the News Summary tonight. Now it's on to the new flare-up over inspectors in Iraq, the fight about Microsoft, a foreign correspondence, and the 100th anniversary of the Dreyfus case. FOCUS - DEALING WITH IRAQ

JIM LEHRER: The new confrontation between Iraq and U.N. weapons inspectors. We get the latest from Amb. Richard Butler, head of the U.N. Special Commission in charge of inspections. I talked with him earlier this evening.

JIM LEHRER: Mr. Butler, welcome.

AMBASSADOR RICHARD BUTLER, Chief U.N. Weapons Inspector: Hi.

JIM LEHRER: First, tell us, please, exactly what happened there in Iraq today.

AMBASSADOR RICHARD BUTLER: Well, our team, which was to go out and look at a number of sites, a team made up of missile, biological, nuclear, chemical people, was not joined at the appointed hour by the Iraqi counterpart staff, who are supposed to go with them. And under those circumstances I had instructed the leader of the team, Mr. Ritter, to then abandon the inspection because there's no way that we should do that unless the Iraqis are with us. By this means Iraq gave effect to its decision last night that they would no longer cooperate with inspections led by Mr. Ritter. And that's what happened.

JIM LEHRER: Now, what did they say the reason was that they would no longer cooperate with inspectors led by Mr. Ritter?

AMBASSADOR RICHARD BUTLER: Well, they entered a fairly root and branch criticism not simply of him but of the composition of the team. They argued that it had too many Americans in it. In other words, it's a little bit like the movie we saw last November, slightly different in that they're not threatening at this stage to throw out American inspectors as they did in November. But they went on to say that the teams aren't adequately balanced in terms of their national composition. But much, much more importantly, they went on to accuse the organization itself as being dishonest and prejudiced against them and maybe run by some western intelligence agencies, all of which is simply untrue, but you asked the question. That's the answer, Jim. That's the reason they gave.

JIM LEHRER: All right. Well, let's go through these things one at a time. The complaint about the composition of the team, explain the size, the numbers, and the composition. Okay.

AMBASSADOR RICHARD BUTLER: Well, in their complaint they said that this team, led by Mr. Ritter, an American, numbered 16. It didn't. The team on Monday had 44 people in it, and drawn from 17 nationalities. They said the team of 16 had too many Americans in it. So it was not 16; it was 44 drawn from 17 nationalities.

JIM LEHRER: How many of the 44 were Americans?

AMBASSADOR RICHARD BUTLER: I think about 11.

JIM LEHRER: Eleven? And the rest were from what number of countries?

AMBASSADOR RICHARD BUTLER: Seventeen countries.

JIM LEHRER: Seventeen countries?

AMBASSADOR RICHARD BUTLER: Yes.

JIM LEHRER: Okay. So, now the team that Mr.--why is Mr. Ritter chosen to lead this particular team?

AMBASSADOR RICHARD BUTLER: Because of the expertise he has in the business of arms control verification before coming to us, he was involved in the verification of and the inspection of arrangements under the intermediate-range nuclear force treaty between the United Nations and the then Soviet Union. So he brings that expertise to this work. He had previously been an officer in the Marine Corps, and by that means too it's been some of his career around weapons as such. He brings technical expertise to this job. That's why he's in it, not because he's an American.

JIM LEHRER: Are you the one who chose him to head the team? Is that how that works?

AMBASSADOR RICHARD BUTLER: Yes, I did. I chose him to head this team. I approved of the tasks that would follow this week. I approved of the overall composition of the team. The responsibility is mine. I studied very carefully all of the information at our disposal to justify the wish to go to each of the places in Iraq that is on the team's program, and I was completely satisfied that we were in conformity with the decisions of the Security Council to go to those places where we had reasonable ground to go in and inspect because there may be weapons of mass destruction there or their related materials, or records of their production.

JIM LEHRER: Iraq claims that Scott Ritter is an American intelligence agent.

AMBASSADOR RICHARD BUTLER: That's not true. He is not.

JIM LEHRER: Do you know that for--I mean--

AMBASSADOR RICHARD BUTLER: I've just answered that, Jim. He is not an American intelligence agent. This is a false claim. He works for--well, I've made the point. He is not.

JIM LEHRER: And there's no question in your mind about that?

AMBASSADOR RICHARD BUTLER: There's no question in my mind. He works for the United Nations. He works through our rules, and those in the charter of the UN include that he must not be beholden to any individual government. He works for me, and I look very carefully at the proposals that he and other members of staff make to me for inspections. I need to be satisfied that we've got the information base we require, that we're acting in conformity with the decisions of the Security Council, and the principles of the charter. That's what needs to be satisfied, and in his personal case and with respect to these particular inspections, all of those criteria were met.

JIM LEHRER: Did you know about Iraq's objections to him when you appointed him the head of this team?

AMBASSADOR RICHARD BUTLER: Yes. I did. They have been voiced for some time, not to him alone, but to other members of the staff, as well, including, may I say, a member of the Russian- -a Russian member of my staff. And I have answered them directly with Mr. Tariq Aziz. I have said, look, stop personalizing this; what you're saying is not true, and it's not the main point. And this is what I say to you now, Jim, and to viewers. Look, this focus on individuals and their nationality is a diversion. It's simply a diversion from the task at hand. That task is called disarmament. And none of that is being addressed when we talk about whether they like the appearance of Mr. Ritter or not--or the country he comes from--or any other person--I mean, it's just not the real issue. By the way, we have another team in Iraq today looking at missile warhead remnants of warheads that Iraq claims it has destroyed. That team has four people in it, three of whom are Russians, one British. Where's the complaint about the lack of balance there? I mean, this isn't fair or right, and it's not based on fact.

JIM LEHRER: Does that team--did that team go about it's business regularly today?

AMBASSADOR RICHARD BUTLER: Yes, it did.

JIM LEHRER: No problems?

AMBASSADOR RICHARD BUTLER: No problems with any of the other teams. So, you know, remember what they did in November last was to seek to throw out all Americans. That didn't succeed. What they're doing now is targeting one individual and the team that he leads and saying that they're prejudiced against Iraq; they're not competent; they're dishonest--I mean, the note that they wrote actually speaks of our fabricating information. I'm sorry, Jim, but, you know, that's just unrespectable. We do not do that. We never would. And all of this, as far as I'm concerned, is a fairly transparent diversion from the real task at hand, which is disarmament, for which Mr. Ritter and his team are professionally qualified and with respect to which they're honest.

JIM LEHRER: There's been some suggestions today, Mr. Butler, that maybe the reason for this diversion, if that's, in fact, what it is, was caused by the fact that your teams were getting close to something that the Iraqis did not want you to find. Is there any evidence of that?

AMBASSADOR RICHARD BUTLER: Well, we had strong evidence that led me to designate the places for inspection that I have designated for this week. Now, with respect to what you just put to me, let me say that in the Security Council today I said I don't know why they have done this, but logic would suggest that one possible reason is that we are getting close, and they don't want us to get closer.

JIM LEHRER: Is there a particular--can you help us understand the kinds of things that you may be getting close to that has upset them?

AMBASSADOR RICHARD BUTLER: Well, I can't give away too much of that in public because that would simply give them-- give the Iraqis an opportunity to move or conceal things that we need to get to in the future. But let me say that the team that wasn't able to do its work today had within it experts from all of the weapons fields, nuclear, missile, chemical, and biological. So that's a hint for, you know, what we thought we may be looking for or may be able to turn up at the various sites.

JIM LEHRER: And that--just make sure I understand--that was the team of 44 people, led by Scott Ritter. Seventeen of those forty-four were Americans, right?

AMBASSADOR RICHARD BUTLER: Jim, sorry. Yesterday, they were able to conduct inspections, and that was 44 from 17 nationalities. The team that we put together for this morning's inspections was 31 persons from 12 nationalities, a slightly smaller pool of people drawn from the same overall pool because of the nature of the sites we were going to today. It was those 31 that contained those experts in nuclear, missile, biological, and chemical that were not permitted to do their job.

JIM LEHRER: How many of those 31 were Americans?

AMBASSADOR RICHARD BUTLER: Look, I think, again, about ten or eleven.

JIM LEHRER: About ten or eleven. Is that--do you consider that when you put these teams together? I mean, are you--are you trying to in some way accommodate the Iraqi objections to too many Americans in these teams? Are you doing anything about that at all when you put these things together?

AMBASSADOR RICHARD BUTLER: Not particularly, no. What we've got to do is find the people who are expert. We asked for them from the member states of the UN. At the beginning of our work we wrote to over a hundred member states asking for experts. That number over the years has gotten smaller and smaller because some of them simply can't provide them. But at the moment, looking at our overall staff, we have staff from 37 countries. We begin by asking for the expertise that we need. Now, if we are given an embarrassment of riches--let's say we ask for a missile expert-- and, you know, we get offers from a dozen countries, and they're all equally good, then we might enter into consideration of giving it a spread around those dozen countries but not at the expense of taking someone simply because of their nationality and when they may be less well qualified than the person that we need of top quality. We basically look for quality. We also look for dedication, for the willingness of people to do this very tough work in a very difficult environment. And only then thereafter do we think in terms, where we can, of giving, you know, many countries a share of the work.

JIM LEHRER: So you're not completely unconscious of that fact?

AMBASSADOR RICHARD BUTLER: No, I'm not unconscious of it. But were we to do what Iraq is now saying we must do, which is to choose people first and foremost because of their nationality, and, of course, it won't surprise you when I say that the nationalities that Iraq names as being desirable are countries that they think would be more favorable to their point of view--

JIM LEHRER: Sure.

AMBASSADOR RICHARD BUTLER: Were we to do that, we would be turning on our head--on its head the fundamental requirement we have to follow, which is for technical expertise.

JIM LEHRER: Okay. You are now planning to go to Iraq next week, is that right?

AMBASSADOR RICHARD BUTLER: That's right. I'll leave in a couple of days time.

JIM LEHRER: All right. What are you going to do there?

AMBASSADOR RICHARD BUTLER: Well, I was going back, in any case, to talk to them about this business of presidential and sovereign sites from which they are seeking to exclude us absolutely. But now, it seems, I'll have a second subject on the agenda, which is their insistence that they should be able to exclude from our teams people of a nationality or, indeed, an individual who they say they don't like. I don't believe the Security Council will allow them to do that, and so I should go back to Iraq armed with a strong decision by the Council and with this second subject on the agenda, that is, to get from Iraq an undertaking that they will desist from behaving in this way. They can't do it. It won't work.

JIM LEHRER: Based on your experience with a prior crisis, I guess you would say, in November, what do you smell about this one? Is this one going to escalate, or do you think you might be able to resolve it next week, or do you have any feeling at all at this point?

AMBASSADOR RICHARD BUTLER: It's a little bit early, Jim. I hope it doesn't escalate. I was a bit shocked when I saw the motive yesterday because it seemed to me like the rerun of a bad movie. I hope this doesn't go further. It could only come to a bad end if it does. So I'll certainly be doing my level best to try to find a way through this. But, no, it can't be at the compromise of the independence and integrity of my organization. Our value resides utterly upon our scientific expertise and then upon our integrity and our ability to go anywhere in Iraq where we have reason to think that there are prohibited weapons not by signaling to them in advance that we're doing so because that would make a mockery of independent verification. We need those things for us to be able to do our work properly, and I remind you that it's only when we can do our work properly that Iraq has a chance of getting out of its present situation, including getting out of sanctions.

JIM LEHRER: All right. Well, Mr. Butler, thank you very much.

AMBASSADOR RICHARD BUTLER: Thank you. FOCUS - MICROSOFT - PLAYING MONOPOLY?

JIM LEHRER: Still to come on the NewsHour tonight, the Microsoft fight; a foreign correspondence; and a 100th anniversary. Paul Solman has the Microsoft story.

PAUL SOLMAN: The issue of the day is the way software giant Microsoft gets people onto the Internet through a Microsoft computer program known as Explorer. Microsoft has been giving away its Explorer program with its Windows software, which runs most computers you buy these days. That lures consumers into using Explorer and shuts innovative competitors out of the market, according to the Justice Department. So, in October, Janet Reno formally charged Microsoft with violating a 1995 antitrust agreement between the government and the company.

JANET RENO, Attorney General: Microsoft is unlawfully taking advantage of its Windows monopoly to protect and extend that monopoly and to undermine consumer choice. The Department of Justice will not tolerate that kind of conduct.

PAUL SOLMAN: Windows is a program which controls a computer's basic functions. Since Microsoft CEO Bill Gates introduced Windows 95 two and a half years ago, it's become a necessity for the vast majority of computer users. But if you have to use Windows and Explorer is automatically bundled with it, does that give huge Microsoft, with 20,000 employees and a campus the size of a university, a monopoly advantage over much smaller rivals like Netscape, a 1994 start-up which employs about 2,000? Netscape's software, Navigator, had become the industry standard for navigating the Internet. But since Microsoft launched Explorer, it has converted a whopping 39 percent of those using the Internet to its program. Netscape's share has dropped from 73 percent to 58 percent in that time. David Yoffie has been studying high-tech and Microsoft for years. He explains the government's reason for going to court.

DAVID YOFFIE, Harvard Business School: The Justice Department is worried that Microsoft is exploiting its monopoly position and stifling innovation in the computer industry. The judge decided that Microsoft had to cease and desist from bundling Internet Explorer with Windows and ordered the two products de-coupled. In addition, the judge appointed a special master, a professor from Harvard University, to explore whether or not anti-trust law apply to these new technologies.

PAUL SOLMAN: Microsoft responded to the judge by claiming that Explorer is an integral feature of Windows 95, which supposedly won't work effectively without it. To comply with the court order Microsoft gave computer makers three choices: Install a two-year-old version of Windows without Explorer; remove Explorer from the current version of Windows, thus, supposedly crippling; leave things as is by installing Windows 95 with Explorer. The Justice Department thought these choices were insincere at best. Microsoft insisted it was preserving its right to innovate free of government intervention by offering the consumer more features without any increase in price. But when the judge's assistant was able to remove Explorer from his computer screen by putting it into the recycle bin about as quickly as we're doing it here, Microsoft seemed to be at odds with the court, as it's been at odds with a lot of people for quite a while.

PAUL SOLMAN: Today, Microsoft and the Justice Department appeared before the judge at a hearing to determine if Microsoft should be held in contempt of court in the Internet dispute. Is Microsoft using anti-competitive practices, or is it getting a bad rap? Let's start with two people who were at the hearing. Charles Rule is a lawyer who worked on antitrust for the Justice Department in the 80's and is now a Microsoft consultant. Edward Black is president of the Computer & Communications Industry Association, whose members include Sun Microsystems and AT&T. Gentlemen, welcome. Mr. Black, what happened at the hearing today? EDWARD BLACK, Computer & Communications Industry Association: Well, so far what we've seen is a demonstration of a lot of technical information, some legal maneuvering, that relate to a very narrow issue that's part of all this, which is whether or not the judge's order was violated and not complied with in good faith by Microsoft. And there's some key wording in that order that will kick in as the monopoly increases anaconda style, embrace and extend, embrace and extend, gluing their applications to their operating system. And third, we'll see an unhealthy concentration of power, regardless of antitrust laws, where this giant company is at the choke points in the toll gates into more and more sectors of our economy. History has never witnessed a more ambitious and ruthless and anti-competitive monopoly such as Microsoft. Standard Oil, at least in the old days, stuck to oil and gas.

PAUL SOLMAN: Okay. Mr. Beckles, you've got a lot to contend with there, and it is, after all, Ralph Nader we're talking to here. But let's take them one at a time. Innovation: You're a young company, right? DALE BECKLES, Software Executive: (Toronto) Yes.

PAUL SOLMAN: You're in Toronto. So aren't you worried about Microsoft steamrollering you?

DALE BECKLES: Well, first of all, I'd like to say that the computer industry for those who aren't in it, you have to understand that it's a highly competitive industry. It's probably the most competitive industry on earth, and because it's competitive and due to the fact that the barrier to entry is so low, I fear not only the Microsofts and the IBM's that are, quite frankly, ten times the size of a Microsoft, but I also fear the individuals sitting in their garage that's a recent college student that's trying to come up with the next great idea to unseat Microsoft. So innovation to me is not a valid argument at all.

PAUL SOLMAN: Is not a valid argument because--I don't think I follow it.

DALE BECKLES: It's not a valid argument because innovation is greater than ever in this industry, I would contend. One simply has to go to their local computer store and view the breadth and depth of products that are available. And I think you could see very quickly that it's a highly competitive and innovative market.

PAUL SOLMAN: Mr. Black, you're shaking your head here.

EDWARD BLACK: Got to get in on that. I think--

PAUL SOLMAN: There is too much innovation for most of us to handle. I mean, you do know that, right?

EDWARD BLACK: Too much complexity.

PAUL SOLMAN: All right. Fair enough.

EDWARD BLACK: And a lot of innovation is moving to make things simple. Now, I think we have the most tremendous dynamic industry in the history of the world in our current high-tech industry, and it's correct, it has come from competition and innovation. What we want to do and why we're concerned and why we're concerned about Microsoft is we see that climate changing because of Microsoft's presence in it. We have the goose that lays the golden egg. You don't change the diet. Microsoft's changing the climate for new entrants to enter the market, for new products and technology to have a chance to thrive, right now, a key to innovation has been venture capital. Right now, if you've got a new product and you go out there and to the venture capital community, which has been historically critical to the high-tech industry, you know, you get asked, is your product going to compete with Microsoft, how can you deal with the Microsoft phenomenon, are you planning to sell out to them, at what point in time? It's changed the climate tremendously, and you still have mixed innovation and a lot of it, but we're concerned it will erode.

PAUL SOLMAN: Mr. Beckles, that isn't true? I mean, you must have gotten venture capital or perhaps you got it, I guess I should say.

DALE BECKLES: Yes. That's a valid question. I mean, I spend my life day to day worried about competition from a number of sectors--Microsoft, as well as many others that are today unknown. We are competing directly against Microsoft in a specific area, the area of Internet publishing, where they have an established product that's the market leader known as Microsoft Front Page. And Mr. Black is correct in suggesting that when you try to raise capital, one of the first questions that an investor--a potential investor will ask is: How do you deal with Microsoft? They also ask: How do you deal with IBM--and Sun--and Netscape? From where I sit, all of those organizations are competitors. It doesn't stop me. I don't wake up in the morning and say, gee, I'll go back to sleep because there's someone who's dominant, or that's a competitor. That's what makes this industry so dynamic, I would argue, and I have not had--my organization has not had any real issue dealing with the competitive issue, other than saying here's how we differentiate ourselves; here's how we provide a better solution than our competitors, including Microsoft; here's the value we add to customers. And that, to me, is the beauty of a free market system.

PAUL SOLMAN: So, Mr. Nader, I mean, this guy is in the business; he's not worried about Microsoft; he's in Toronto; and he's got a thriving software company.

RALPH NADER: Talk to him three years from now as this monster increases and wipes out more and more competitors. We want an open architecture to the information highway, so competitors and innovators, entrepreneurs can come up with the most meritorious products. We don't want like a--if Microsoft was a railroad company and controlled the gauges and could change them any time and it wanted also to monopolize the freight train manufacturing, and it wanted to monopolize what's in the freight train in terms of produce, and you couldn't get on because they kept changing the incompatibilities, where would we be? When IBM was hit with antitrust laws and had to open up its system 370 to third party developers, it helped develop the entire software industry.

PAUL SOLMAN: All right. Mr. Rule has been trying to get in here for quite a while.

CHARLES RULE: I think, you know, one, it's important to put Microsoft in context. Microsoft represents--its revenue represents about 4 percent of all software revenue, 2 percent of all computer industry revenues, 1 percent of all information revenues. The fact is that they have never by any court been found to have monopoly power or market power.

PAUL SOLMAN: What about this issue that Mr. Nader raised about price? He talked about stifling innovation, then he said prices--they could, after all, raise prices if they controlled the market.

RALPH NADER: 90 percent of--

CHARLES RULE: There's an interesting statistic. The Windows 95 software, I think, has 8 million lines of code, which is four times greater than the total amount of code in the FAA's air traffic control system. They spend enormous amounts--

PAUL SOLMAN: This is computer--

CHARLES RULE: Right; the thing that controls the planes that you fly on. But it's an enormously complex product that is constantly being updated that Microsoft spends, you know, hundreds of millions of dollars in innovation, and it's the--I mean, it's amazing how low-priced that operating system is. It's extremely low, and Microsoft has been a key to getting PC's out there to everybody, to inundating the market with PC's, and making computing easier. And the issue here is: Are we going to make it tougher for Microsoft to make it easier for you and me to use our computer by bringing functionality together and making the computer easier to use? And that's what the Department of Justice, at bottom, is complaining about.

PAUL SOLMAN: And, Mr. Black, you're shaking your head yet again.

EDWARD BLACK: Well, because at the end there was a confusion here between what Microsoft will do for the consumer versus what the industry will do, and we tend to see kind of Microsoft thinking of itself as the industry. But at the earlier point I think the key here is nobody's done, I think, extensive analysis. You don't have cost figures of Microsoft, but whether it's main frames, chips, work stations, the high-tech industry in general has had a tremendous price performance increase. The consumer gets huge amounts of bang for the buck; it increases every year. Against that scale you put operating software, you do not see the same kind of increase in quality and decrease in price that you see everywhere else. We would suggest the reason is we do not now have competition. Right now the consumer is paying probably a lot more for his operating system software than he needs to.

PAUL SOLMAN: Well, Mr. Beckles--yes, you want to say something. I'm sorry.

DALE BECKLES: Yes. I just wanted to respond to Mr. Black. You know, one of the things that intrigues me about this whole debate, which I think has taken off-- taken on the connotation of religious war, more or less--is where is the consumer hurt in this? I respect Mr. Nader's perspective and have the greatest admiration for him, but where today is a consumer hurt by this? Microsoft gives away a piece of software that's as competitive as any other product on the marketplace, and it does it for free. When I speak to my friends outside of the industry, they wish that the automobile industry, the housing industry, and others would follow suit. We'd all love to have great products for free. So how does this harm the consumer?

PAUL SOLMAN: Well, quickly, how does it harm--

RALPH NADER: Predatory pricing has been defined as giving a product below cost, and when you give it away free, after Microsoft's put in hundreds of millions of dollars in it, that's an attempt to drive Netscape out of business! And--

PAUL SOLMAN: And then they'll hike up the price?

RALPH NADER: And then they'll hike up the price! It's like the chain stores coming in--the grocery--

DALE BECKLES: It's not really free anyway.

PAUL SOLMAN: Mr. Beckles.

DALE BECKLES: I was just going to respond. Sorry. Didn't Netscape do this to gain market share? I mean, Netscape, I recall, when they started, they gave away their browser for free--

RALPH NADER: But they don't have a 90 percent monopoly on the operating system.

DALE BECKLES: They had 100 percent.

RALPH NADER: To tie in the operating system with the browser. You're comparing the little mouse with a giant.

PAUL SOLMAN: A monopolistic mouse but a small monopoly.

RALPH NADER: That knows how to retaliate, knows how to engagein brutal non-competitive practices.

PAUL SOLMAN: Let's get to the last question, which is the unhealthy concentration of power. That was your third point, Mr. Nader. Mr. Rule, no, do you think that such a thing is too big?

CHARLES RULE: If you look at the top 20, I think, companies in software, they represent something, I don't know, 20/25 percent of all the revenues in the business. This is an incredibly dynamic business, where there are a lot of players like Mr. Beckles and others who are constantly coming in here. And I agree with Ed, that this is--this is the industry, but it's important to recognize that Microsoft's role has been driving innovation and frankly, if Microsoft stopped and tried to act like the classic railroad monopoly, for example, they'd get squashed. You wouldn't hear of Microsoft in a year, which is exactly an example of what happened to IBM in the 1980's, and everybody first complained about IBM hitting the tank. You've got to keep moving forward.

PAUL SOLMAN: Do you really think that it's possible that Microsoft could get squashed? That's my last question.

CHARLES RULE: Absolutely. Absolutely. If they stop innovating, if they stop moving forward, making computing easier, there are plenty of competitors out there, including Netscape, who will eat their--

PAUL SOLMAN: Mr. Beckles, you think that's true too?

DALE BECKLES: Absolutely. I was with an organization 10 years ago by the name of Lotus Development, and at that point I was a general manager here in Canada. Lotus had approximately 10 percent of the spreadsheet market. I would suggest today that most people use Excel because Microsoft came out with a better product. And--

PAUL SOLMAN: I have to get to Mr. Nader for his last comments because we're running over.

RALPH NADER: If huge Microsoft changes conduct which is monopolistic and retaliatory, once it changes its conduct and allows other competitors to get in, then we'll see which product is the best; we'll see whether Microsoft can really innovate, instead of imitate.

PAUL SOLMAN: Okay. Great. Sorry. No time left. Thank you all very much. I appreciate it. SERIES - FOREIGN CORRESPONDENCE

JIM LEHRER: Now, another in our foreign correspondence series, conversations with reporters posted overseas with American news organizations. Phil Ponce has tonight's.

PHIL PONCE: : Joining us is Elizabeth Neuffer, the European bureau chief for the Boston Globe. She's been covering the Bosnia story since 1994. Welcome, Elizabeth. A few weeks ago we saw pictures of President Clinton walking through Sarajevo, and Sarajevo looked attractive. It looked normal. What is life like for the average person in Sarajevo? ELIZABETH NEUFFER, Boston Globe: Well, it's not what the President necessarily saw by strolling through the streets of Sarajevo. Certainly on the main street to Sarajevo we've seen a lot of reconstruction, a lot of new rebuilding. But it's a little bit like a Potemkin Village, in a sense. What you see is not necessarily what you get. Behind the reality of a lot of new buildings is a lot of deep ethnic hatred and a lot of deep bitterness. People are very frightened to return home. War criminals make it impossible for most people to return to their homes, and, you know, peace is still a long way away.

PHIL PONCE: : As far as life in the neighborhoods of Sarajevo, can you give us some insight into that?

ELIZABETH NEUFFER: Yes. There's actually one very interesting neighborhood in Sarajevo called Dobrinja, which is along the former confrontation line. And one half of the neighborhood is Muslim and Croat, as you know. Bosnia is divided into two kind of ethnic entities--Muslim Croat and also the Republic of Serbska, or the Serb-dominated half. The other side of the neighborhood is the Serb side. And it's basically as if you have an invisible line right down a boulevard. The two sides simply will not cross the street to talk to one another. And, in fact, people who do try to cross are heckled and thrown out. And one of the--the kind of sad realities is that we have yet to find a way to bring these two sides even of a neighborhood together to talk to one another.

PHIL PONCE: : And you say people are heckled and thrown out. How does one know if somebody is from a different street, I mean, are there physical differences, or differences in dress?

ELIZABETH NEUFFER: No, there isn't anything you could tell by seeing. You might happen at this point to know your neighbors like you would in any neighborhood. So, obviously, someone on the Serb side is going to recognize someone you know as not being from their immediate vicinity and guess that there might be a Muslim or a Croat. Most of them are just too scared to cross over. It's very interesting. The last time was in Dobrinja I stopped to talk to a shop owner who runs a little kiosk, and he had a huge picture of Radovan Karadzic, and I said, well, are you going to vote for Mr. Karadzic, do you support Mr. Karadzic? He goes, well, not really, but as long as that sign's up there, I know that I don't have to worry about any Muslim coming over here to talk to me. And I said, well, there's a really interesting question. What if a Muslim came over here and brought, you know, what you have to sell? And you made a profit, you know, out of it, wouldn't that be a good idea, and he sort of sat and thought about it--he said, you know, you're right, I never looked at it that way. And that's one of the opportunities that we have in a sense lost so far in implementing Dayton. We have not yet found a way to bring people together economically so that they're doing business, you know, making trade together. And that's a key opportunity so far that we have lost.

PHIL PONCE: : Have there been any opportunities like this where people are coming together because of trade or because of other self interests that might transcend their fear, or their hatred?

ELIZABETH NEUFFER: There is one. There's a place that we sort of calmly call the Arizona market, which is a big field in Northern Bosnia that's operated and overseen by the U.S. military, and it's sort of a safe area for Muslims, Serbs, and Croats to go set up their stalls and trade goods. It's one of the few opportunities in Bosnia where you will see people of all ethnicities basically in the same space openly talking to one another. It's also become an informal forum for people to exchange information about missing people, loved ones. It acts like an informal post office. People change letters and notes, and it's one way of kind of getting back in touch with your neighbors, which may have been via the different ethnicity and may now be on the other side of the country, but whom you miss, nonetheless.

PHIL PONCE: : So if you're at the Arizona market, there's a distinct difference and the feel to it than say that neighborhood you were describing as Sarajevo.

ELIZABETH NEUFFER: Absolutely. And again part of the reason is, is we've created a place where people feel safe to come and do business. And they feel safe to come and talk and to exchange information and, more importantly, they have a reason to come. They're there to sell their goods.And in Dobrinja we have yet to sort of create a reason for people to cross that line to do business with one another. I often think, you know, why don't we have a McDonald's, in a sense, on the former confrontation line as a way of bringing people back together, or a gap, or whatever the--you know, the equivalent would be because, in a sense, it comes down to the economy. It does bring people together.

PHIL PONCE: : Have you seen any other examples where there might be pockets of people who are willing to--or are interested in some kind of reconciliation, in some kind of reunification?

ELIZABETH NEUFFER: Yes. I mean, the odd thing about Bosnia is that there are lots of bright spots of hope that you do see around the country. In Gornji Vakuf, which is an area that was hotly contested between the Muslims and the Croats, you will see women on either side of what used to be the confrontation line there now meet once or twice a week to talk about how to bring the community back together. They talk about how to support each other in times of grief. And I think, interestingly enough, you will see that happening in various neighborhoods, where women particularly, who in some ways had the most to lose--they've lost their sons; they've lost their husbands; they've lost their homes-- reach out to one another. But many people don't feel comfortable doing that as long as war criminals remain at large. They're scared to cross lines, to go visit old neighborhoods, or to see old friends.

PHIL PONCE: : How much of an impulse do you feel on the part of people to have those war criminals--alleged war criminals-- apprehended?

ELIZABETH NEUFFER: I think it's incredibly strong, and, interestingly enough, I think it was strong on all sides. Sometimes people say, well, the Bosnian Serbs don't want to see war criminal apprehended, or alleged war criminals apprehended. That's actually wrong. I mean, there are alleged war criminals on all sides of all ethnic make-ups. And I think it's incredibly important. It's important for a variety of reasons. One, people don't feel safe as long as these guys are still loose. They really are sort of like heady, you know, thieves that run town markets and, you know, oversee housing stock and basically run communities. So as long as they're in charge, people don't feel that they can sort of express themselves freely.

PHIL PONCE: : And your experience is they're not particularly hard to find.

ELIZABETH NEUFFER: No, they're not hard to find at all. I mean, I was on a number of occasions able to walk up to allege war criminals whose--you know--poster--whose picture is on the war crimes poster--and interview them openly. One, in fact, was still acting as mayor of a town. And, you know, when I said to him, gosh, why are you still in power, he said, gosh, I don't know, I'm not uncatchable.

PHIL PONCE: : What do people think would happen if the peacekeepers were to leave? Do they think that things would go badly again?

ELIZABETH NEUFFER: There's no doubt in anyone's mind that if the peacekeepers left, war would break out again. It has not been long enough for peace in a sense to be established. And, more importantly, you have to remember that Bosnia and the former Yugoslavia was the Communist Country. And one of the things we're doing by having peacekeepers there. It's worth helping bring democratic values into a place that had no democratic values. So we're beginning to establish, or, you know, a free press. We're beginning to try and teach people about democracy. And that's a really important part of the civilian side and to a certain degree the military side, and just by the sheer presence, they're in a sense a walking advertisement for a multi-ethnic side, you know, an American army, black and white.

PHIL PONCE: : Do you think people are internalizing those kinds of democratic examples?

ELIZABETH NEUFFER: Slowly. I mean, there's obviously a big effort on the civilian implementation side to make that happen. We've seen the appearance of the first independent media on the Bosnian-Serb side just in the last couple of months. And that's been very important. There are now parts of the Republic of Serbska where people can watch competing television depictions of the same event, as opposed to listening to the propaganda that had been fed them from Pale and by former, you know, Bosnian-Serb Leader Radovan Karadzic.

PHIL PONCE: : And speaking of media, how to people react to you as an American journalist?

ELIZABETH NEUFFER: I have always been pretty favorably received. I do feel that during the war the Bosnian Serbs did feel a certain degree of hostility towards the American press. Some of that, I think, was in a sense justified. We had--we did tend to tell one side of the story simply because we couldn't get to the Serb side of the story. We were often, you know, arrested once we set foot on Bosnian Serb territory, followed, and, you know, our freedom of movement was severely limited. So then when you did get a chance to speak to a Bosnian Serb, they said, well, you know, you American reporters didn't cover this and didn't cover that. And we have to say you're right. Unfortunately, your leadership made that impossible. Now, I find that you are very kindly accepted on all sides. People want to have you into your home; they want to make you a cup of coffee; they want to explain and talk about what they'd like to see happen in their country.

PHIL PONCE: : And very quickly, last question, what is it about Bosnia that causes so many journalists just have passionate reaction to it?

ELIZABETH NEUFFER: That's a good question. I think it's because it's very much like home. It's not an alien place. For all that you see pictures sometimes on television of, you know, women wearing head scarves and men with their goats, it's actually a very sophisticated European-style country, where the victims are lawyers and doctors and journalists and people very much like you. And it's really easy to see how this could happen in a sense in a troubled multi-ethnic neighborhood of the United States.

PHIL PONCE: : Elizabeth Neuffer, thank you very much.

ELIZABETH NEUFFER: Thank you. FINALLY - J'ACCUSE...!

JIM LEHRER: Finally tonight, a 100th anniversary observance and to Elizabeth Farnsworth in San Francisco.

ELIZABETH FARNSWORTH: On January 13, 1898, a French newspaper published a letter from the French writer Emile Zola under the headline "J'Accuse"--I accuse. He was writing the president of France about a man convicted of treason, a man named Alfred Dreyfus. NewsHour regular Roger Rosenblatt is here to tell us more about that letter. Why did Emile Zola write that letter, Roger?

ROGER ROSENBLATT: He wrote it to cure an injustice, to scold a nation, and to try to shame it into doing the right thing. There was no question that Dreyfus was always innocent. It went back to the whole history of the case. But Zola, who was not a political man, rose to the occasion, and a hundred years ago today that letter was published in the papers, and it brought down a government, it eventually freed Dreyfus, and it did honor for France. It took a while.

ELIZABETH FARNSWORTH: Tell us about the case.

ROGER ROSENBLATT: It starts--and I'll stumble my way through the history--long before the case, itself, came to the fore in 1870 at the Treaty of Frankfurt, which ended the Franco-Prussian War in which war the German military humiliated the French military and German annexed Alsace. For the next 20 years, France was seeing spies in the trees. Everywhere there was somebody capable of treason. In 1894, it was discovered that a bordeleau, a schedule, a memorandum, had been given over to the German high command by some French traitor, giving French positions, defense positions. Who could have done it? They landed on this captain, a 35-year-old captain, who had two disabilities. One, he was Jewish, and, therefore, made himself available to the anti-Semitism, which was rife in France, particularly in the military at the time. The other, he was Alsatian. The combination was perfect to make him a scapegoat. So in September 1894, Alfred Dreyfus was arrested. A couple of months later there was a secret court martial led by a chief investigator named Du Pati Du Plame. The head of the war office was named Mercier at the time. And with witnesses lying and with so-called handwriting experts saying he wrote this bordeleau, this memorandum, on January 5th in 1895, there was a ceremony of degradation for those who remember the movie, Emile Zola, with Paul Muny, Dreyfus standing in the courtyard, the epaulets stripped from his shoulders, medals taken away, and he was made to stand in shame before the whole country. The press then joined in, said that, of course, a Jew would turn on the country and so forth, so the press has an interesting sideline history in this, which then became central. All the way along Zola's interest had been increasing in this, and I should say that Dreyfus was sentenced to a life term in Devil's Island--no fun. Then in 1898, the real culprit, a guy named Major Esterhazy, was discovered. He was court-martialed, but the military because they would stonewall, they would cover up, found him innocent. And at that point that was on January 11, 1898, two days later, Zola came out with "J'Accuse," this letter to Felix Fore, the president of France and to all of France to call it to shame. Afterwards, he was--he, Zola, was convicted of libel, and he--rather than serve time in jail, he went over to England. Eventually, he came back--he died in 1902, but in time both to see the government fall and to see Dreyfus exonerated. And in 1906, Dreyfus was entirely exonerated by the Supreme Court. But it took all that time. He died--he, Dreyfus, died in 1935.

ELIZABETH FARNSWORTH: Why is this so important, Roger, not only in France, where there are huge celebrations today about this letter, but for many other people and many other countries too?

ROGER ROSENBLATT: Well, Elizabeth, it's just a great document. It's a class document. It may be the best piece of journalism ever written, certainly, and one of the most powerful. First of all, it says a lot about the press. The press was as anti-Semitic and as inflaming of anti-Semitism as any other institution in France, including the military. Yet, it was the press too that allowed Zola to publish this letter, and the press, which then turned in favor of Dreyfus after the letter made its case. Second, it's just a wonderful statement of honor and justice on the face of it. It is also a statement of the power of the individual or the potential power of the individual who can go up against the state, as Zola did. And, finally--and this pleases you and me and all of us in this odd trade--it shows that the power of the word can do everything. When all this case is over, when people forget, Dreyfus, certainly nobody would remember that the president of France was Fore, or all the names of all the corrupt generals, when all of that is gone. What they will remember and do remember is this letter. They remember the words, so it is a powerful, wonderful document in behalf of civil liberties and freedom.

ELIZABETH FARNSWORTH: Thank you very much, Roger. RECAP

JIM LEHRER: Again, the major stories of this Tuesday, Iraq defied the United Nations again by blocking a weapons inspection team. On the NewsHour tonight, chief U.N. Arms Inspector Richard Butler said logic suggests Iraq is diverting inspectors to keep them from finding something it wants to conceal. And stock markets in Southeast Asia rebounded, led by a 9.1 percent gain in Indonesia. An editor's note before we go tonight: A segment on icy weather last night included a map that transposed the states of New Hampshire and Vermont. We're sorry about that. And we'll see you on-line and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.