It's true. The main reason the U.S. Justice department is going after Microsoft, maker of the Windows operating system that runs 90 per cent of the world's personal computers, is Microsoft's habit of periodically tacking on "enhancements" to the original software: little extras that allow computers to send faxes, or type a short note, or what have you.

It just so happens that other companies are in the business of making – and selling – these products that Microsoft throws in gratis. Until lately, no one made too much fuss over this – if its competitors were the losers, consumers were the clear winners. That was until Microsoft decided to equip Windows with a browser: the software that allows users to venture out onto the fabulous Internet.

Even before the fuss erupted over Windows 98, in which operating system and browser are integrated into a single program, Microsoft was stirring outrage by the price it was charging for its Internet Explorer browser: zero.

This time it had gone too far. With such tactics, it was reasoned, Microsoft might succeed in recreating its monopoly over the world's desktops on the Internet. It had to be stopped.

Or did it? No one prosecutes General Motors because it puts a radio in its cars, even if other companies make car radios. Nor is the practice of giving away software unique to Microsoft: in fact, its chief competitor in the browser market, Netscape, has lately adopted the same strategy.

What makes Microsoft's situation different, says the Justice department, is its monopoly. If computer makers want to equip their machines with Windows, they will be forced to carry the add-ons. And if software developers know that the minute they come up with a hot-selling product, Microsoft will start giving away its own version for free, they won't bother trying. That's the theory.

The theory, however, is based on an obsolete notion of monopoly.

Remember your economics textbooks? Monopolies are supposed to charge too much for their products, not too little. The reason Microsoft keeps adding things on to Windows is that it is deathly afraid of losing its grip on the market. And the reason it is so afraid is that Microsoft's monopoly is not like other monopolies.

The "natural monopolies" that were the object of government regulation in the past – the telephone networks, for instance – got that name because of the huge economies of scale involved in their production: it cost massive amounts to string up a network of telephone poles, but almost nothing to add another customer. The company with the larger market share could spread its fixed costs over more customers, allowing it to cut prices and add still more market share in a snowballing process that eventually drove out all other competitors.

Microsoft's monopoly is very different. It hardly cost Gates anything at all to develop Windows, or its predecessor, DOS, both of which were originally someone else's idea. People bought Windows not because it was cheaper, but because, well, other people had bought it: if you wanted the latest software applications in the broadest variety, you were better off running the most popular operating system, since that's the format the software developers were writing for.

But anything so easily won can as easily be lost. The dynamics of such "positive feedback" industries are inherently unstable. If suddenly something else were to come along that everyone had to have because everyone else had it, Microsoft's monopoly could disappear in a minute. That something was very nearly the Internet, and a browser known as Netscape Navigator.

As late as 1995 – as long ago as that – Gates was dismissing the Internet as a fad. Had he persisted in that belief, it would very likely be Netscape, and not Microsoft, that would today be the monopoly threat: as it is, Netscape continues to control over 60 per cent of the browser market. Since then, however, Gates has more than made up for his mistake. Indeed, Microsoft has gone further than most companies in seizing the Internet's potential.

This is the second way in which the Justice department suit is obsolete: it is based on a distinction between the desktop and the Internet that is about to become irrelevant. So long as most of us still have to dial into a network over the phone lines, wait to connect, and wait still longer to download information, the Internet will remain a discrete service, and a browser will make sense as a standalone product.

But as the bandwidth constraint disappears, so too will such distinctions. We will simply cease thinking of the files on our own computer and the files on the Internet as separate entities: each will be as easily available as the other.

The notion of maintaining separate operating systems for the desktop and the Internet – the whole foundation of the Justice department suit – will seem absurd.

More on the Microsoft monopoly, and what if anything to do about it, next time.