2:00 a.m. Nov. 3, 2001 PST     WASHINGTON -- The Beltway's chattering classes took a break Friday from anthrax scares and Afghanistan bombing to focus on the Microsoft antitrust suit once more.

The Justice Department and Microsoft inked a tentative deal this week that drops the antitrust suit in exchange for five years of regulations imposed on the software company. Some state attorneys general, who also sued Microsoft, have yet to sign on.

Read on to find out what Washingtonians are saying, and why.

Attorney General John Ashcroft, in response to a question about selling out: That's totally false. And we believe that this settlement is a very strong settlement -- that it not only encompasses the relief that was signaled by the Court of Appeals, but that this has additional safeguards.

And on the proposed agreement, in which Microsoft admits no wrongdoing: This Final Judgment does not constitute any admission by any party regarding any issue of fact or law.

Microsoft Chairman Bill Gates, speaking at a press conference: I want to thank the mediator, Eric Green, whose efforts helped everyone involved to negotiate this settlement. We all worked hard to achieve it.

Eric Green, court-appointed mediator, professor at Boston University Law School, on the settlement talks: I was walking across the street between the Department of Justice and the offices where Microsoft were.... People slept on the floor in various rooms. We took over a war room of the Department of Justice where the states and the Justice Department worked together.

Charles James, antitrust chief at the U.S. Department of Justice: Companies can compete with Microsoft for middleware media players, e-mail, instant-messaging software. There are tough provisions for Microsoft -- a full-time onsite technical oversight team. We think this brings stability to the industry.

House Majority Leader Dick Armey (R-Texas): Businesses should not be afraid that when they create popular products, they'll be saddled with endless litigation. They shouldn't be second-guessed by lawyers and bureaucrats. It's the consumers who benefit when companies spend less time in the courtroom and more time developing new products.

And: I urge the state attorneys general to avoid dragging this case out in these tough economic times. This is a case that the government should never have brought.

Bob Levy of the libertarian Cato Institute: Microsoft's billionaire rivals will have failed in their attempt to use government to win in the political arena what they couldn't win in the marketplace.... Consumers won't have to pick up the tab, while high-tech executives devote more resources to politicking than to the development of integrated products.

An AOL Time Warner spokesman, in response to a Washington Post query about the media giant's anti-Microsoft lobbying: We don't talk about any conversations we have with policy makers.

And on the proposed agreement that lets Oracle, Sun and AOL continue the attack: The (to-be-appointed technical oversight committee) may preserve the anonymity of any third-party complainant where it deems it appropriate to do so upon the request of the United States or the third party, or in its discretion.

Ed Black, president of the Computer & Communications Industry Association, funded by Microsoft competitors: Microsoft has been declared an illegal monopolist by nine federal judges, including one who determined it was necessary to break up the company. They should be held accountable for their unlawful actions and prevented from further abusing their monopoly position.

The libertarian Competitive Enterprise Institute: The settlement makes sense.... It is not a big loss for Microsoft, which retains freedom to integrate new applications into Windows, as long as the door also stays open for others.

Elliot Spitzer, attorney general of New York: Those of us from New York these days believe good things happen in extra innings.... I think we're in the bottom of the ninth, and by the 10th or the 11th we will have an agreement. The document is an enormous step forward. (It) does not give everything, but it realizes the risks, and fairness is important for the national economy. Eliminating uncertainty is one of the things which would be good to the economy.

Richard Blumenthal, attorney general of Connecticut: There is a lot that has been accomplished -- a lot of good in this settlement. It holds the prospect for making the market more competitive. I am committed to push for a settlement in (the) national interest. There is a powerful dynamic for resolving issues in this case.

Gates: We hope that when the state attorneys general have fully reviewed the settlement, they will also agree that it's the right way forward.

Ed Black, president of the Computer & Communications Industry Association, funded by Microsoft competitors: The provisions of the proposed settlement are an invitation to further abuse. Microsoft will be free to continue their illegal practices, only now the Justice Department will have been complicit in this activity.

House Judiciary Chairman James Sensenbrenner, through a spokesman: We have not issued a statement on that.

Bob Levy of the libertarian Cato Institute: To settle the case, Microsoft will have to make more concessions than justified by this baseless lawsuit, and the company still faces litigation from competitors, opportunistic trial lawyers, the European Union and perhaps even state attorneys general who don't agree to the settlement.

And on the proposed agreement on Microsoft's digital rights management: (Microsoft will not be required) to document, disclose or license to third parties ... documentation or portions or layers of communications protocols the disclosure of which would compromise the security of anti-piracy, anti-virus, software licensing, digital rights management, encryption or authentication systems, including without limitation, keys, authorization tokens or enforcement criteria.

Tom Miller, attorney general of Iowa: We worked very closely with the Department of Justice. I want to thank Microsoft for the spirit they brought.... Right now states need to do due diligence. The agreement represents progress. (The settlement is) somewhere in the middle/gray area. That's the nature of a settlement.

Jonathan Zuck, president of the Association for Competitive Technology, funded in part by Microsoft: The regulation by Washington of the industry are things the Department of Justice and the three stooges of AOL, Sun and Oracle pushed for. There is now a potential for a balkanized Windows standard. Fact is we could end up with multiple versions of Windows. The Court of Appeals threw out two-thirds of the case, which is why this agreement has to deal with Windows.

Lars Liebler, of the Computing Technology Industry Association, which receives money from Microsoft: We think it is good news.... It's not easy to have an individual technology review that found there are valuable benefits for the integration of software. We don't think it's going to hinder consumers. (We) are hopeful the state attorneys general will soon reach an agreement.

Tom Miller, attorney general of Iowa: As elected law enforcement officials, we believe that it is imperative that we fully assess the specific language of the Agreement. We will complete this evaluation by Tuesday and will communicate our decision at that time to Judge Kollar-Kotelly.

Tom Schatz, president of the conservative Citizens Against Government Waste: Attorneys general of states should be looking at other uses of their resources, not putting it towards litigation.

Eric Green, court-appointed mediator, professor at Boston University Law School: This agreement ... presented today cannot be claimed to be a victory for one side or another. It was hammered out through day and night bargaining sessions. There were nights we worked without rest.

Charles James, antitrust chief at the U.S. Department of Justice: I am hoping and I am anticipating that there will be broad state support from the situation. My understanding of the circumstances is that they're taking time to study the agreement, and that people ought not read into these situations any divisions.

Attorney General John Ashcroft, on whether the Sept. 11 attacks changed anything: We believe because it exceeds the kind of relief that was signaled in the Court of Appeals opinion of earlier this year, that it is a very strong outcome, and an outcome which would be a good outcome whether or not September 11th had taken place.

Microsoft critic Michael Maynard: This settlement is gutless. It places no real restrictions on Microsoft nor does anything to slow down its continued horizontal or vertical market antitrust violations.

Science fiction author Charles Platt: Microsoft is in the position of Winston Smith in 1984, after his period of torture was complete. He could return to his everyday life and even have liaisons with his former lover (contrary to state policy), because the state had completed its punishment of him, had demonstrated its power and no longer had any interest in him. The exercise of power, purely for its own sake, was the only point of the enterprise, according to Orwell.