U.Va. educators craft Microsoft deal
Judge says settlement not enough; all waiting to see if company ups its offer or goes to court

Glen Bull

By Matt Kelly

It was the most money Glen Bull had ever been asked to consider. Half-a-billion dollars. His face lit up as he counted out five followed by eight zeros. But the judge said it wasn’t enough.

Bull and Joe Garofalo, co-directors of the Curry School’s Center for Technology and Teacher Education, rewrote the proposed settlement of a civil suit against software company Microsoft, accused of overcharging customers. The settlement called for Microsoft, instead of reimbursing overcharged customers, to contribute money, software and technology to schools. Bull and Garofalo reviewed, refigured and redrafted the original agreement in an effort to make it acceptable to all parties as well as effective and beneficial for schools.

The core of the plan was the eLearning Foundation, funded — but not controlled — by Microsoft, that would funnel money and technology into the nation’s poorest schools.

Joe Garofalo

But U.S. District Judge J. Frederick Motz rejected the agreement, saying that there was not enough money in it to benefit schools. In quashing the deal, designed to derail about 100 class-action suits against Microsoft alleging over-charges, Motz also worried that free software and reduced price computers would give Microsoft an unfair competitive advantage in the educational market.

All sides are waiting for Microsoft to decide whether to up its offer or go to trial.

“The judge said the concept was viable, he just felt it needed more money,” Bull said.

If Microsoft offers more money, the settlement deal could be back on its feet. Even if ultimately rejected, though, Bull said some foundations are interested in the eLearning concept and may fund it at a lower level.

“We had nothing to do with the level of funding and the legal issues,” Garofalo said. “We were looking for things to change to make the settlement good for the schools, based on our expertise and a variety of feedback.”

Bull and Garofalo, whose center is devoted to incorporating technology into schools, are considered experts in the field. Bull was instrumental in creating the statewide Virginia Public Education Network which connects Virginia schools to the Internet, a program later copied in Texas. The professors recently convened a conference of 17 educational leaders focused on integrating technology into teaching. The center, created in the mid-1990s at the Curry School, also seeks to prepare the next generation of technology leaders and shape technology policy.

The pair suggested the eLearning Foundation be funded with $500 million in cash to work with 1,600 disadvantaged schools in the country. Microsoft said it also will contribute $1.1 billion in software, hardware and in-kind service, though Bull and Garofalo said they only focus on the cash part, since they believe the dollar figures on the software and hardware portions are inflated. They suggested more options for the hardware and software, including items such as digital microscopes, and more technical support.

Bull said they were used to dealing with people who thought their visions were too grand. “Now we’re being told it’s not enough.”

Working on the settlement plan was a Herculean effort, with Bull putting in 10- to 15-hour days. Garofalo put in less time, but also juggled other projects on which the center was working.

“The last two weeks were hectic,” said Garofalo the day after documents were submitted just in time to meet one of the frequently shifting deadlines. “With every change we had to run the numbers again and structure the options differently.”
Zahrl Schoeny, an associate professor of education, and Chris O’Neal, director of the Virginia Initiative for Teaching and Leadership, helped Bull and Garofalo with background research.

There were times working on the settlement became surrealistic. The duo went to the federal courthouse in Baltimore for a hearing with about 200 lawyers.

Counselors sat in every available seat, including the jury box. One attorney from Tennessee had an order from a Tennessee judge to stop the proceedings, but Motz called the Tennessee judge on the telephone from the bench and worked out the details with him. The Tennessee lawyer slunk up to the balcony and stayed there the rest of the day. About 8 p.m., the judge excused himself from a heated bench conference to wave goodbye as the Tennessee attorney was leaving and wish him a happy trip.

“With all that going on, he kept one eye on that guy all day,” Bull marveled.
They were also unimpressed with economists involved in the case, one of whom made an $8 billion error in his calculations, and another who estimated the value of a Microsoft education package at $330 million, when the company had only sold $80 million of that package the previous year.

There is also opposition saying the settlement does not punish Microsoft enough.
“They want to tie up Microsoft in court for 10 years,” Bull said. “I am amazed at the depth of animosity toward Microsoft.”