The cyberwar rages on

The next wave of the digital revolution seems likely to be driven from the Seattle campus of Microsoft. An appeal court ruling against a break-up of the firm means Microsoft is free to dominate the market for Internet and network-based software as it did with the personal computer.

The result was not a surprise. Microsoft's share price has risen 68 percent this year as investors bet that the earlier judgment it unlawfully seized the Internet browser market would be rejected on appeal. While upholding the earlier ruling that Microsoft has a monopoly over PC operating systems the threat of a court-directed dismemberment looks to have passed.

Unresolved is whether U.S. competition authorities do a cease- fire deal with Microsoft that stops the firm exclusively bundling its own applications within a new range of on-line and PC operating platforms while guaranteeing access to third-party software providers.

The Bush administration is not hawkish on anti-trust matters and seems disinclined to pursue aggressive court actions. The wider debate about the costs and benefits of having a dominant software standard operator like Microsoft is unresolved. Yet despite predictions the Internet's open architecture would kill proprietary operating systems such as Windows, Microsoft continues to exert muscle and lock out rivals.

A potential AOL-Microsoft alliance recently crumbled over Microsoft's demand that the on-line venture exclude a rival's on- line video and audio-playing software in favor of Microsoft's less widely used standard.

Much remains undecided in the battle to control cyberspace's software. Microsoft seems to have put chips down on every possible outcome. In the autumn it will launch Windows XP, the next generation of PC-operating system. Its net initiative is aimed as a total solution for on-line users.

On the fringes, rebel programmers advocating open source code see a goliath that can still be felled. Mainstream rivals criticize its software even while calling for further anti-trust action.

The game is far from over.

-- The South China Morning Post, Hong Kong