Microsoft, which has decided not to appeal the Court of First Instance's September 17 ruling in favor of the European Commission and its 2004 antitrust order against the company, has also agreed to bend its terms to the open source business model and slash the price of its server communication protocols - just like the Samba Project wanted.

If Samba, which has played a leading role in Microsoft's significant losses to the EC, had its druthers it wouldn't pay Microsoft a dime - it thinks that little of the software giant's IP claims - but it can live with the compromise that the EC Commissioner Neelie Kroes and Microsoft CEO Steve Ballmer struck early Monday morning.

Samba always said it could deal with a one-time payment. It just couldn't abide a royalty stream or a patent agreement. Kroes went to bat for the project and got Microsoft to agree to either a one-time payment of EUR 10,000, roughly $14,300, or a royalty structure, including a worldwide patent license, of 0.4%, down from 5.95% - less than 7% of its original price, the EC preened.

Since Samba doesn't accept Microsoft's patent claims, Samba Project leader Jeremy Allison says the open source effort will go with the flat payment, anticipating that the companies that use Samba will pay the freight. Two made pledges Monday morning, he said, declining to identify them.

(In the confusion of Monday morning the Samba Project thought that Microsoft wanted 10K per protocol and if so was contemplating running a "pledge-a-thon" to collect the amount needed. It has subsequently been determined that Microsoft is only asking a grand total of 10K.)

Microsoft reportedly won't assert its patents against non-commercial open source projects. That doesn't mean, Allison cautions, that it won't go after OEMs like Red Hat that use Samba and haven't signed one of Microsoft's now-famous patent agreements like Novell has.

Allison belongs to the school that reckons Microsoft is determined one way or another to collect a tax on Linux and that it's substituting one revenue stream for another.

Meanwhile, Red Hat, known to be in Microsoft's sights, has been telling the press that the arrangement the EC made with Microsoft may not be as good as it looks and may not be compatible with open source licensing. Like Samba it's studying the situation.

Samba's lawyers have been going over the proposed license connected with the deal, Allison said, and they believe it will be possible for the project to sign. "We've got a qualified thumbs-up," he said.

It could take as long as a month to vet everything and find "the devil in the details," he said. In other words, figure out exactly what Samba would be getting and how free it can make with the stuff.

The new so-called Workgroup Server Protocol Program (WSPP) license that Microsoft has posted on its web site shows signs of having been thrown together hastily and there are errors and contradictions in the thing that would have to be cleaned up before Samba could go forward, Allison said. For example, he said, the IDL files aren't supposed to be royalty-bearing.

See the link.

In the next few days Microsoft is supposed to put a list of the protocols on which it claims patents on its web site. According to Reuters, which got a summary, there are 31 existing US patents covering 21 protocols and four existing European patents covering an additional four protocols. There are also supposed to be 54 US patents pending covering 28 protocols and 10 European patents pending covering an additional 10 protocols.

When the EC ordered Microsoft to share the protocols with competitors in 2004, the order allowed Microsoft to charge for them - how much it was asking then became an issue along with the quality of the documentation Microsoft provided.

The documentation was found to be unusable and had to be rewritten, an exercise in non-compliance that cost Microsoft another $357 million in fines on top of the $613 million it was originally assessed.

It is anticipated that Microsoft may have to pay additional daily penalties related to the unreasonable pricing from 2006 through to October 22.

Under Monday's Kroes-Ballmer pact, Microsoft is supposed to guarantee the completeness and accuracy of the information it provides.

Kroes, who told a news conference the agreement would have "profound effects" on the software industry, said that the deal includes a provision that would allow those unhappy with Microsoft's performance under the new terms to take the company to High Court in London and demand damages.

In other words, it will be private enforcement of the warrantees over agency enforcement.

According to Kroes, "The measures that the Commission has insisted upon will benefit computer users by bringing competition and innovation back to the server market. I have always said that open source software developers must be able to take advantage of this remedy, now they can."

The EC reckons open source software is the "main surviving competitive constraint on Microsoft."

It figures these changes will mean that "Open source competitors to Microsoft will be able to provide businesses with competitive, innovative alternatives to Microsoft's work group server products, knowing that they are fully interoperable with Microsoft's Windows desktop operating system."