Deal restricts company practices; states aren't yet part of pact.

Executives of Microsoft Corp. and government officials said Friday they are hopeful that several states' attorneys general who could stand in its way will sign off on a proposed settlement of the company's long-running antitrust case. The settlement pact, which Microsoft and the U.S. Justice Department reached late Wednesday and presented in court Friday, imposes a broad range of restrictions on Microsoft's business practices, which would be upheld by an independent, on-site, three-member panel of computer experts. Under the terms of their agreement, Microsoft may not enter into licensing agreements with PC manufacturers that restrict them from working with other software developers, a practice referred to as "exclusive dealing." It also would require Microsoft to provide other software makers access to elements of its Windows source code, called application programming interfaces, or APIs, which are necessary for them to make their applications work under the Windows operating system. However, it does not impose any restrictions on the features Microsoft is allowed to incorporate in its Windows operating system, which was at the heart of the government's case against the company, which has been wending its way through the legal system since 1997.