US District Court Judge Thomas Penfield Jackson could release his "findings of law" in the federal antitrust case against Microsoft sometime this week, now that talks have broken down.

Jackson had appointed 7th Circuit Court of Appeals Chief Judge Richard Posner last November to mediate talks between Microsoft and plaintiffs - the US Department of Justice (DOJ) and 19 state attorneys general. Posner announced yesterday that mediation "proved fruitless" because "it is apparent that the disagreements among the parties concerning the likely consequences of continued litigation, as well as the implications and ramifications of alternative terms of settlement, are too deep-seated to be bridged".

Microsoft chairman Bill Gates said that mediation failed because the DOJ and the states didn't work together. He added: "Between them, they appeared to be demanding either a break-up of our company, or other extreme concessions that go far beyond the issues raised in the lawsuit.

"In good faith we had a lot of good ideas. We really covered what should have been all the legitimate concerns and certainly went beyond the issues in the case. There were divisions and extreme views on the other side that brought us to the point where a mediation wasn't going to be successful."

It’s not my fault Gates also said that if the government had a "sane" proposal to settle the case, mediation might have worked.

However, asked by a reporter if the problem had been with the state attorneys general, Gates replied: "I think that's going a tiny bit too far." Gates said in both the statement and in comments at the conference that Microsoft "certainly went the extra mile" to try to arrive at a settlement with the government.

Microsoft's mediation team of senior executives and lawyers spent more than 3,000 hours on the settlement attempt in the last four months, according to the company. Gates said that mediation has been a top priority of his and other top company executives.

The effort put into the negotiations was one of the reasons Posner decided to issue his statement. He wrote that he wanted "to correct the impression created by some news reports that there were no serious negotiations until two weeks ago. On the contrary, almost 20 successive drafts of a possible consent decree had been considered by the parties before it became clear late last night that the case would not settle, at least at this stage of the litigation."

Not the DOJ’s fault either The statement went on to praise the DOJ and Microsoft saying mediation did not collapse "due to any lack of skill, flexibility, energy, determination, or professionalism" on the parts of those two sides. But, Posner did not specifically mention the state attorneys general. Various reports claimed the states were insistent on a harsher remedy than Microsoft was prepared to accept.

The Washington Post today quoted Joel Klein, the assistant attorney general for the DOJ antitrust division, saying that the DOJ will work for a remedy "that prevents Microsoft from using its monopoly in the future to stifle competition, hamper innovation and limit consumer choice". The newspaper further cited anonymous sources close to the government who said that Microsoft would not budge on its "final, final offer", which was "wholly inadequate" as far as fixing damage done by Microsoft's anti-competitive behaviour.

Judge Jackson last November issued his "findings of fact," in which he ruled that Microsoft is a monopoly. The next step is for him to issue his verdict. Jackson had reportedly been ready to issue the verdict, but delayed its release because it seemed that the two sides were close to a settlement to end the litigation.