Heading MS Off at the Passport

ASPEN, Colorado — Sun Microsystems is quietly readying an alternative to Microsoft’s Passport, a linchpin of the Redmond company’s forthcoming Windows XP operating system.

During a dinner speech Tuesday, Sun CEO Scott McNealy lambasted Passport’s centralized structure as a security, privacy and competitive nightmare, saying Sun’s own technology would give Internet users more options.

“Stay tuned,” McNealy said. “We’re working on it. We know how to do it. We’re good at it.”

McNealy was closed-lipped about details, saying only that this standard would be developed by an open “alliance” of companies. A source close to Sun said the project has been in the planning stages for some time and McNealy had not been expected to announce it during his remarks to the Progress and Freedom Foundation’s Aspen summit.

He begged off answering more than a few questions, saying he had to return home to his family on his private jet before Aspen’s small airport closed for the evening.

From a user’s perspective, Microsoft’s Passport is a bundle of authentication services that lets users create one account that can be used at hundreds of websites to, for instance, buy products without having to type in a credit card number each time. It’s also one of Microsoft’s key dot-net services, a part of Windows XP, and used by Hotmail, MSN and Microsoft’s instant messaging service.

The mammoth database of millions of online shoppers will allow Microsoft to leverage its Windows monopoly by strong-arming firms to sign up, McNealy said. “It’s a brilliant strategy. If you’ve got a monopoly, leverage it.”

Microsoft says, “Passport is free to consumers” — although businesses that want to offer Passport services may have to pay.

But McNealy predicted Microsoft will levy annual fees. “Remember, the first hit of heroin is always free. I suggest they’ll charge $50 a year or something,” he said.

McNealy lauded the government’s antitrust suit against Microsoft, saying antitrust enforcement is “why we have a computer industry and Asia and Europe don’t” — but it seems increasingly unlikely that the Justice Department or state attorneys general will be able to obtain a court injunction to block the release of Windows XP.

Microsoft confirmed Tuesday that the final version of Windows XP would be in the hands of PC makers by the end of the week, giving government lawyers scant time to ask a judge to block shipments, a move that antitrust experts now say is not likely. PC makers will be able to sell new computers loaded with XP in September, with the consumer release date set for Oct. 25.

Sen. Chuck Schumer (D-New York) has called on state attorneys general to seek a court order unless the company made “significant changes” in response to requests from competitors AOL Time Warner and Kodak, both of whom have headquarters in Schumer’s state. New York is one of the states suing Microsoft.

Microsoft signed a deal with Kodak, and said in a statement at the time that it was open to a settlement deal: “We have repeatedly expressed our willingness to work with the government to resolve the remaining issues in this case.”

McNealy famously said in 1999, “You have zero privacy anyway — get over it.”

Sun’s chief executive didn’t go that far Tuesday evening, but he did say that no new federal laws were necessary to deal with privacy. He said “the market, the invisible hand, the common sense of the consumer,” coupled with the media’s willingness to out privacy wrongdoers are sufficient.

In July, Microsoft said it would not include Sun’s Java language in Windows by default: If users want it, they’ll have to download it or buy from a PC maker that includes it with the machines they sell.

A question from the audience on the topic visibly rankled McNealy. He said the move, which escalated the long-running rivalry between the pair of computing titans, was another example of Microsoft deciding what’s best for consumers: “They decided that as an XP user you don’t want (that) environment.”

Sun had sued Microsoft in 1997, saying that the operating system maker had polluted the Java language by adding Windows-only features. When the two firms settled the suit in January, Microsoft said it would phase out Java from Windows.

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