Associated Press

WASHINGTON — The new judge in the Microsoft antitrust case ordered both sides to work around the clock to settle the dispute, citing economic fallout from the terror attacks as one reason for haste.

"There’s no reason this case can’t be settled," U.S. District Judge Colleen Kollar-Kotelly said Friday. She said she would appoint a mediator in two weeks if sufficient progress isn’t made toward settlement.

Kollar-Kotelly said the issues have been argued in and out of court for more than six years, and both the government and the software maker could spend their money better elsewhere.

"In light of the recent tragic events affecting our nation, this court regards the benefit which will be derived from a quick resolution of these cases as increasingly significant," the judge wrote in an order after a morning hearing.

She told both sides to start negotiating "24 hours a day, seven days a week." She encouraged settlement at every opening during the hour-long hearing.

Besides the case, Microsoft also is dealing with a shaky economy and the coming release of two key products: the Windows XP operating system upgrade and its first major foray into the video game business, X-Box. Even though a quick settlement would end the proceedings, business restrictions sought by the government would affect the company for years.

"One of the reasons they’ve been trying to delay this is that it’s much easier to just go to court all the time," Giga Information Group analyst Rob Enderle said. "A conduct remedy would mean a cross-section of the company would have to deal with it daily."

Although Microsoft and the Justice Department said they didn’t need a mediator to oversee settlement talks — a tactic that already failed once — Kollar-Kotelly said one will be appointed Oct. 12 unless the case is settled by then. She said she expects regular updates on the talks’ progress.

"We’re certainly pleased with the schedule," Assistant Attorney General Charles James said on the courthouse steps.

Likewise, Microsoft spokesman Vivek Varma said the company "looks forward to resolving this case as soon as possible."

The hearing was the first time the new judge presided over the historic antitrust case. An appeals court overturned U.S. District Judge Thomas Penfield Jackson’s original verdict to break Microsoft in two, and Jackson was removed from the case for making pejorative statements against Microsoft executives.

The federal appeals court, in a unanimous ruling, said Microsoft was guilty of holding an illegal monopoly and sent the case back to the district court to decide a new penalty.

If the case isn’t settled by Nov. 2, a penalty will be devised in court, Kollar-Kotelly said and set a swift schedule for that phase that sided with prosecutors in most aspects.

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