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Responses to NYTimes article on MS, Independent Institute

[The NYT ran a prominent article on Saturday raising questions about the
Independent Institute, an ad it placed, and funding from MS. Some of the
signers have told me they are very angry that they were not told that MS
was involved. Here is some fallout. --DBM]

>From: "Donald Boudreaux" <dboudreaux@fee.org>
>To: <declan@well.com>
>Subject: Times on Microsoft
>Date: Sat, 18 Sep 1999 16:07:54 -0400
>X-Mailer: Microsoft Outlook 8.5, Build 4.71.2173.0
>Importance: Normal
>18 September 1999
>Letters to the Editor
>The New York Times
>229 West 43rd Street
>New York, NY  10036-3959
>Dear Editor:
>I was one of the 240 signers of the newspaper ad, sponsored by The
>Independent Institute, defending Microsoft from antitrust attack.
>("Microsoft Covered Cost of Ads Backing It in Antitrust Suit," Sept. 18, p.
>A1.)  Like the other signers, I, too, was unaware that Microsoft footed the
>bill for the ad.  But why do you imply that the ad is tainted - its message
>unreliable - because Microsoft paid for the ad?  Doesn't the fact that we
>signers didn't know that Microsoft paid for the ad warrant, rather than call
>into question, the veracity of the letter?  I certainly wasn't paid to sign
>the ad, and as far as I know no other signer was paid to do so.  The fact
>that we signed it independent of any material interest on our part surely is
>sufficient evidence that our defense of Microsoft is sincere.
>Donald J. Boudreaux
>President, Foundation for Economic Education
>30 South Broadway
>Irvington-on-Hudson, NY 10533
>(914) 591-7230 (O)
>(914) 591-5322 (H)
>(914) 591-8910 (f)

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100 SWAN WAY OAKLAND, CA  9462101428
510/632-1366; 510/568-6040 (FAX)
September 19, 1999

Contact: Carl Close, 510-632-1366; Close@independent.org

Fair Evaluation of Winners, Losers & Microsoft Intentionally Clouded:
Independent Institute Remains I-N-D-E-P-E-N-D-E-N-T

Oakland, CA - The Independent Institute, a scholarly public-policy think tank 
in Oakland, California, has been accused in a New York Times article 
Saturday, September 18, of being secretly funded and its findings compromised 
by one of its approximately 2,000 members and subscribers, Microsoft.  The 
New York Times reporter Joel Brinkley based his national news story on 
erroneous Institute documents taken and provided to the paper by "a Microsoft 
adversary associated with the computer industry who refused to be further 

The facts remain:

* There has been no secret: the Institute has long acknowledged Microsoft as 
one of its supporters, including specifying its 7-8% level of support at the 
June 2 news conference for its Open Letter to President Clinton on Antitrust 
Protectionism - far less than the 20% Brinkley claimed in his article.  
Microsoft is not the largest contributor to the Institute, and the Institute, 
located just outside Silicon Valley, has a diverse range of members from 
businesses, foundations, civic organizations and individuals.

* It is indeed true that the Institute never reveals to its research fellows 
the sources of any funding, for otherwise this might compromise the scholarly 
process.  Furthermore, the results of all Institute research are derived 
solely from the standards of excellence found in its peer-reviewed science 
and scholarship.

* The Institute organized the Open Letter entirely at its own behest.  240 of 
the nation's leading economists signed the Letter, which was subsequently 
placed as ads in The New York Times and The Washington Post. The Open Letter 
was organized, written, and promoted solely by The Independent Institute, 
with no input whatsoever by Microsoft.  The ads were paid for out of the 
Institute's general funds.  In order to solicit continued annual funding in 
support of publicity for the Institute's
findings, Theroux provided Microsoft with a break-down of costs incurred by 
the Institute for the ads.  Rather than underwriting any such specific 
expenses, however, Microsoft subsequently renewed its annual general, 
unrestricted support for publicity for the results of the Institute's 
findings, including publicity for the Open Letter.

* The new Institute book, Winners, Losers & Microsoft, by economists Stan 
Liebowitz and Steve Margolis, assembles the authors' research findings over 
the past ten years, predating the Microsoft case, "browser wars," and even 
the Internet industry itself.

* In addition to many other areas, the book draws upon the authors' 
systematic research of independent software reviews from computer magazines 
over the past 15 years.

* The Wall Street Journal, in its recent review said, "[Liebowitz and 
Margolis] wrote this book not to serve a paymaster but instead to affect an 
important policy debate. . . . Henceforth, any judges, economists, pundits or 
journalists who discuss Microsoft or technology lock-in . . . without first 
dealing with the Liebowitz-Margolis critique should have their wrists soundly 
slapped . . ." In addition, The Economist has described the book as "The best 
single thing to read on this tangle of issues," and Wired has called it the 
"first systematic look . . . invaluable . . . and the best
compilation that anyone has offered so far . . ."

* Winners, Losers & Microsoft's analysis and findings are devastating to the 
government's case against Microsoft and the theories that underlie it. The 
real story here may be that the article was prompted by "a Microsoft 
adversary" seeking to kick up enough dust to obscure the issues raised in the 
Open Letter; to ensure that the book, Winners, Losers & Microsoft, will not 
receive a fair and visible hearing; and that public debate and the views of 
policy-makers are not affected by these findings.

"We believe that the issues pertaining to the disputes in the Microsoft case 
are fundamentally important and may well determine the well-being of billions 
of people as the high-tech industry's future is impacted.  Central to the 
matter is the issue of what is correct and what is fallacious in the dispute 
over competition, monopoly, antitrust, enterpreneurship, etc.," said David 
Theroux, Founder and President of the Independent Institute. "As a result, we 
stand firmly behind the Open Letter, and we welcome any careful analysis of 
the research, methodology, and findings in Winners,
Losers & Microsoft."
For further information, contact Carl Close at 510-632-1366, 


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