Indeed — the rise of open-source software has been one of the most intriguing sidebars to the ongoing Microsoft antitrust trial. Back in 1995, when Microsoft and Netscape began practicing their body slam moves on each other, the coinage of the term “open source” was still three years away and Linus Torvalds was hardly a celebrity. Yet, earlier this year, Microsoft repeatedly cited the growth of Linux as proof that Microsoft did not enjoy monopoly control of the operating-system market.

Judge Jackson didn’t buy that argument. There are no current products that pose a threat to Microsoft Windows, decided Jackson. And why is that so? “Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft’s core products,” according to the finding.

Jackson’s findings, though not a final ruling, prompt a huge open-source question: What comes next? To some advocates of open-source software, the court’s next step should be to impose a “remedy” that punishes Microsoft and aids the cause of free software. One suggestion is to force Microsoft to release the source code to Windows; another is to use the proceeds of a huge fine against Microsoft to fund open-source software development. But there is no consensus among open-source programmers or other observers — even if a look back at history indicates that there is precedent for government action favoring open-source software style development methodologies.

Some hackers, most notably Raymond, believe that antitrust enforcement is fundamentally wrong-headed — that the government has no right to punish private corporations for monopoly “crimes.” That’s the job of the market. To open-source pragmatists like Raymond, the open-source software development process results in technically better products than the proprietary mode. Attempts to concoct a government remedy are “old paradigm” statist foolishness.

“The whole premise of antitrust law is wrong,” says Raymond. “Governments don’t break up monopolies, markets do. Governments create monopolies.”

And, as Raymond notes, even if Microsoft ultimately loses the trial, it will appeal, and if it keeps losing, the case will undoubtedly go to the Supreme Court. By that time, Raymond argues, perhaps just a tad optimistically, Microsoft will already have been killed off by a host of factors, not least of which will be the growth of Linux — with or without government help.

Other open-source luminaries strike a slightly less libertarian tone, but are still skeptical of government action. Tim O’Reilly, CEO of computer book publisher O’Reilly & Associates, says “the frontier of innovation has moved beyond the sphere that Microsoft controls … I think there is more competition for Microsoft now than there has ever been.”

Of course, that doesn’t mean Microsoft is bound to fail. “I don’t think that it is a foregone conclusion that without government intervention Microsoft would not manage to subvert some of the future standards in ways that would put them back in the driver’s seat,” says O’Reilly. “It wouldn’t be the first time that better software has been beaten by better marketing.”

So — should the government force Microsoft to release its source code? O’Reilly shrugs: “I think that’s a terrible remedy — no one would want it.”

Raymond also scorned the idea that Microsoft’s code would be desirable — although he did predict that open-source hackers “would descend on that source like a horde of locusts, find all the closed protocols that they are using to ensure ‘lock-in’ and we would then write that into Linux and never look back.”

But Raymond doesn’t want that advantage.

“I want to see them taken down but I want the market to do it, not the government,” says Raymond. “I have no argument with this finding of fact — Microsoft does have monopoly power, it does engage in sleazy business practices and there are many thing that people should loathe about it. But I fear a government with the power to punish these crimes more than I do the so-called crimes themselves.”

Raymond’s viewpoint is representative of that of a healthy proportion of open-source programmers. But does it take into account some of the factors that have nurtured the growth of open-source software? A case can be made that open-source software, monopoly power and the government have actually been interrelated for quite some time, in an intriguingly unexpected fashion.

In 1956, another federal judge, Thomas F. Meaney, enjoined AT&T under a consent decree that forbade the telephone monopoly “from commencing … manufacture for sale or lease any equipment [other than that used in providing telephone or telegraph services].” Judge Meaney also required AT&T to reveal what patents it held and to supply information about them to potential competitors. As a direct result, says Unix historian Peter Salus, years later, when enterprising Bell Labs researchers invented the Unix operating system, AT&T’s lawyers forbade the company from attempting to market the operating system commercially. Instead, AT&T licensed Unix to universities and research laboratories at a nominal cost.

(However, in what may end up as one of the great ironic moments in software history, Salus notes that the eventual use of Unix as the operating system most suitable for networking computers together over phone lines means that Unix actually could have been considered equipment that fell under the rubric of AT&T’s main telephony business.)

According to Salus, the terms of the consent decree “resulted in a much more rapid dissemination of technology than would otherwise have been possible.” Computer researchers, most prominently at the University of California at Berkeley, improved Unix constantly, adding features and fixing bugs — and putting in place the template for how all free software/open-source software projects have proceeded since.

Raymond disputes this view of computing history, arguing that AT&T had never intended to commercialize Unix in the first place, that it had always thought of Unix as something to be shared with other researchers. And O’Reilly notes that in 1982, the government-mandated breakup of AT&T — which permitted the phone company to compete in non-telephony markets — had another paradoxical effect on open-source development. Once AT&T was allowed to enter computing markets, it attempted to clamp down on the academics who were still busy working on descendants of Unix — most notably the various BSD variants. The adverse legal atmosphere drove developers away from BSD, suggests O’Reilly, and may be one of the main reasons why Linux achieved such sudden widespread developer support.

It would be incorrect to claim that government action gave birth to open-source software, or to Linux — certainly the concept of sharing source code was widely practiced even before Unix came along. But it can be argued that the 1956 consent decree gave Unix and open source-style development a huge boost, and that the 1982 AT&T breakup also had an impact on the software marketplace.

Should the government step in again? It now seems undeniable that it will attempt to do so. But Judge Jackson should step carefully. History indicates that there is precedent for taking action that will have clear impact on the world of open-source development — but usually in unintended and unpredictable forms. The war cry of trust-busters used to be “Break up the monopoly.” In today’s software marketplace, the new call to arms may be “Open up the code.”

Mayawati’s full majority victory in May 2007 UP State Assembly elections left her beholden to no one and has allowed her to act on her eccentricities, whims and insecurities. When she needed new sandals, her private jet flew empty to Mumbai to retrieve her preferred brand. According to Lucknow journalists, she employs nine cooks (two to cook, the others to watch over them) and two food tasters.

At a press conference today, Mayawati called the report “wrong, baseless, and disgusting.” She also asked that Julian Assange be put “into a mental asylum.”

Read the original cable here.

Jumping over to the Middle East and North Africa, two more revelations of interest: First, it appears that U.S. diplomats were skeptical of a deal between Microsoft and the now-deposed dictator of Tunisia, Zine al-Abidine Ben Ali.

In a September 2006 cable flagged by ZDNet, an official at the embassy in Tunis expressed reservations about a deal that provided “for Microsoft investment in training, research, and development, but also commits the GOT [Government of Tunisia] to using licensed Microsoft software.” The basic concern was that the software giant would be helping Ben Ali’s regime oppress Tunisians more effectively.

Wrote the author of the cable:

Microsoft’s reticence to fully disclose the details of the agreement further highlights the GOT emphasis on secrecy over transparency. In theory, increasing GOT law enforcement capability through IT training is positive, but given heavy-handed GOT interference in the internet, Post questions whether this will expand GOT capacity to monitor its own citizens. Ultimately, for Microsoft the benefits outweigh the costs.

The company did not comment to ZDNet. I’ve asked Microsoft for comment and will update this post if I hear back.

Finally, a cable from Iraq flagged by AFP provides a snapshot of the ever-increasing reliance on private military contractors by the United States. The basic concern was that Iraq, which had already banned Blackwater from the country after the notorious 2007 Nisour Square shooting, would also ban all former Blackwater employees. And the U.S. still relied on the same corps of former Blackwater employees who had joined other firms like Triple Canopy and DynCorps.

From a January 4, 2010 cable:

[A government spokesman] also indicated that the GOI [Government of Iraq] might expel former Blackwater employees out of Iraq, potentially complicating security services for the Embassy. …

[T]here are many former Blackwater employees at other private security companies in Iraq, most notably Triple Canopy and DynCorps providing security services to us.

Another cable written a week later reported that, “The Embassy understands that Triple Canopy currently employs several hundred former Blackwater employees.”

UPDATE: A Microsoft spokesperson sends along this statement:

Microsoft partners with countries around the world to help spur local IT innovation and job creation, help broaden access to IT, and to enable governments to adopt IT in the delivery of services to citizens. This has been the focus of our work in Tunisia.

The sellers include eBay Inc. and private equity firms Silver Lake and Andreessen Horowitz.

About 170 million people log in to Skype’s services every month, though not all of them make calls. Skype users made 207 billion minutes of voice and video calls last year.

Most people use Skype’s free calling services, which has made it difficult for the service to make money since entrepreneurs Niklas Zennstrom and Janus Friis started the company in 2003. An average of about 8.8 million customers per month, or just over 1 percent of the user base, pay to use Skype services.

Skype lost $7 million on revenue of $860 million last year, according to papers that the company has filed since announcing its intentions last summer to launch an initial public offering of stock. The IPO was later put on hold. Skype’s long-term debt, net of cash, was $543,883 at the end of 2010.

The Skype takeover tops Microsoft’s biggest previous acquisition — a $6 billion purchase of the online ad service aQuantive in 2007.

Microsoft said Skype will become a new business division headed by Skype CEO Tony Bates, who will report directly to Ballmer.

Although it makes billions from its computer software, Microsoft has been accustomed to losing money on the Internet in a mostly futile attempt to catch up to Google Inc. in the lucrative online search market. Microsoft got so desperate that it made a $47.5 billion bid to buy Yahoo Inc. three years ago, but withdrew the offer after Yahoo balked. Yahoo is now worth about half of what Microsoft offered.

Microsoft would be Skype’s second large-company owner. EBay bought Skype for $2.6 billion in 2005, but its attempt to unite the phone service with its online shopping bazaar never worked out. It wound up selling a 70 percent stake in Skype to a group of investors led by private equity firms Silver Lake and Andreessen Horowitz for $2 billion 18 months ago.

Besides eBay, Silver Lake and Andreessen Horowitz, Skype’s other major shareholders are Joltid and Canada Pension Plan Investment Board.

When Steve Jobs debuted the iPad 15 months ago, critical appraisals were all over the map, from effusive to dismissive, but I don’t think even the most gaga fanboy predicted that in little more than year the tablet would have meaningfully reshaped the entire personal computing industry.

But the symbolism here is even more powerful. In 1991, Apple was still pumping out popular products — that year the company introduced its first serious laptop, the PowerBook 100, along with its high-end Quadra and the iconic-looking Mac Classic II.

Then, in April 1992, Microsoft released Windows 3.1 and brought the mouse and multitasking to the PC masses. And that was that. Apple’s attempt to sue Microsoft for coopting the “look and feel” of the Macintosh in earlier iterations of the Windows operating system failed miserably, and for most of the 1990s, the company was an also-ran. Die-hard Apple lovers still claimed aesthetic superiority over the commodified Windows-Intel nexus, but they were like yapping Chihuahuas — indefatigable and noisy but hardly dangerous. Microsoft proceeded to throw its weight across the entire industry, crushing its competitors and even shrugging off the best antitrust efforts of Bill Clinton’s Department of Justice.

And yet now the iPad and the iPhone rule supreme — where litigation failed, a superior design philosophy has triumphed, at least for now. It’s one of the most extraordinary stories in the history of personal computing.

The move marks a major strategy shift for Nokia, which has previously equipped devices with its own software. Analysts said the deal was a bigger win for Microsoft than Nokia, whose CEO Stephen Elop in a leaked memo this week compared his company to a burning oil platform with “more than one explosion … fueling a blazing fire around us.”

Nokia said the partnership would “deliver an ecosystem with unrivaled global reach and scale.” However, it warned that the new strategy would also bring “significant uncertainties,” and said it expects profit margins to be hit by strong competition from rivals.

Nokia’s share price plunged 9 percent to euro7.43 ($10.11) in afternoon trading in Helsinki.

Elop, a Canadian national, joined Nokia from a senior executive position at Microsoft last year. The first non-Finn to lead Nokia, he is under intense pressure to reverse the company’s market share losses to North American and Asian competitors.

“Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward,” Elop said. He added the company was aiming at “regaining our smart phone leadership, reinforcing our mobile device platform and realizing our investments in the future.”

Speaking later to analysts in London, he declined to say when Nokia would introduce a new device running on Windows Phone. But he said Nokia won’t bury its own Symbian operating system or the new Meego platform that it is currently developing.

The Symbian technology is being used in 200 million phones with 150 million more expected on the market, Elop said.

Android surpassed Symbian to become the world’s No. 1 smart phone software in the fourth quarter of last year, according to the Canalys research firm.

Microsoft CEO Steven Ballmer said the partnership would give the team “more innovation, greater global reach and scale.”

“We need to, and we will, collaborate closely on development … so we can really align and drive the future revolution of the mobile phone,” he said.

The key challenge will be to come up with devices of a quality level and hip factor that helps position Windows Phone as an attractive alternative to iPhone or Android.

Windows Phone 7, which was launched last year, still has a lot of catching up to do in terms of both the number of users and the number of “apps” available for the phones.

Nokia said its expertise in developing new software with Microsoft will be “on top of the platform in areas such as imaging, where Nokia is a market leader.” Its map services will be a core part of the new device as will Microsoft’s Bing search engine, Nokia said.

Neil Mawston of London-based Strategy Analytics said Microsoft was the big winner in the partnership, by teaming up with the biggest mobile hardware vendor in the world.

“In terms of expanding their distribution reach, this is a huge win for Microsoft,” he said.

For Nokia the deal leaves uncertainty about what will happen to its current Symbian operating platform. Mawston said he expects it to be phased out within two years and “completely, or at least mostly, replaced by Windows Phone.”

Although Nokia still is the mobile industry’s biggest handset maker, its market share has plummeted from a high of 41 percent in 2008 to 31 percent in the last quarter of 2010.

It has also lost its innovative edge in the fiercely competitive top-end sector and is virtually invisible — with a 3 percent share — in the world’s largest smart phone market, North America.

Apples’ iPhone has set the standard for today’s smart phones and Research In Motion Ltd.’s BlackBerrys have become the favorite of the corporate set. More recently, Google Inc.’s Android software has emerged as the choice for phone makers that want to challenge the iPhone.

“Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience,” Elop said.

He warned of further layoffs and restructuring, saying Nokia must “improve the speed and nimbleness and agility of the organization … by taking significant steps in how we operate.” He gave no details.

The company said it will announce a new leadership team and organizational structure “with a clear focus on speed, results and accountability.”

Nokia, which claims 1.3 billion daily users of its devices, said it hopes the “broad, strategic partnership” with Microsoft will lead to capturing the next billion users to join the Internet in developing growth markets.

Jyrki Ali-Yrkko, from the Research Institute of the Finnish Economy, described Nokia’s cooperation with Microsoft as “surprising.”

“The strengths will be in Microsoft’s strong position in various corporate solutions and server solutions, but its weakness is that Microsoft perhaps doesn’t have a broad, user-oriented group of developers like those around Android or Apple,” Ali-Yrkko said.

——

Online:

Nokia: http://www.nokia.com

Ozzie was the company’s Chief Software Architect, a position held previously by Bill Gates after he stepped down as CEO. It was an ideal fit: Ozzie’s technical talent and vision for what we could do with technology were extraordinary. At Microsoft he headed up an effort to move the company toward the era when software was more online than not, a sea change for a company that had for its entire existence been all about what amounted to packaged goods.

I’ve been an Ozzie fan for years. To journalists who covered his doings, he was patient in helping us understand what he was doing. Just what that was could be hard to grasp, given how far ahead of his time he proved to be on project after project at several companies including Groove and, before that, Lotus Notes.

For all his qualities, Ozzie didn’t push Microsoft fast enough toward the future, or else his pushing was resisted. Microsoft dallied way too long to get into the “cloud” where software becomes as much as service as a product you buy. The competition — Google, Amazon and others — is more entrenched now, and for all the formidable technical talent at Microsoft, the company hasn’t caught up in key areas. Keep in mind, however, that Microsoft’s bread and butter (and gold and diamonds) remains in the licensed-software market, where it’s still an absolutely huge and immensely profitable enterprise.

It’ll be fascinating to see what Ozzie does next. I find myself hoping he’ll try something in the social-entrepreneurship arena. Certainly he can live with a lower paycheck than most of us.

As for Microsoft, which keeps losing (or expelling) top executives, the questions grow more urgent. Ballmer has been a better CEO than his critics say, but if the board isn’t pushing him to line up a solid successor, and soon, the directors are falling down on the job.