January 15, 1998

Senior Microsoft officer tries to prove in his testimony that Government has little understanding of relationship between Microsoft's operating system and its Internet browser software; David Cole, Microsoft vice president who oversaw development of Windows 95 and Internet Explorer software, says Judge Thomas Penfield Jackson's order to stop forcing computer makers to install Microsoft's Internet Exploreer along with its Windows 95 software was broadly and inartistically worded, and left company no choice but to suggest to computer makers that they consider deleting computer files that are essential to both Windows 95 and Internet Explorer, even though deleting those files would wreck software necessary to operate computer; Judge Jackson is considering whether to hold company in contempt and fine it $1 million a day for failing to comply with his order; Microsoft's appeal of order will be heard by Federal appeals court judges Laurence H Silberman, Stephen F Williams and A Raymond Randolph (M)

Caryn James's Critic's Notebook column says never has law of low expectations been more evident than during current misbegotten television season; notes most promising new series have already fizzled, with season only half over; blames networks for being too fearful to try anything new; photos (M)

Smuggling Ring Uncovered Five Americans pleaded guilty to charges of smuggling nurses from the Philippines and South Korea into the United States. Page A14.

Federal prosecutors bring first insider trading charges after probe into possible illegal trading that occurred in shares of Lotus Development Corp before it was bought by IBM in 1995; Robert M Cassano and Gerad P Mazzone are accused of participating in schemes that generated $200,000 in illegal profits for total of six people; schemes allegedly stemmed from leak from IBM employee, a relative of Cassano's, concerning IBM's confidential plans to buy Lotus; relative has not been identified; Cassano is accused of passing merger information on to Mazzone, and suggesting that he buy shares of Lotus and secretly share any profits with him; Mazzone is said to have told three other people about pending Lotus offer; Mazzone is also charged with witness tampering and perjury in connection with his attempts to dissuade witness from testifying truthfully to Securities and Exchange Commission (M)

Yan Zhen Zhao, 16-year-old girl whose skull was fractured by construction debris that fell from atop Brooklyn elementary school, dies in Kings County Hospital Center; ongoing criminal investigation into case will now seek to determine whether Zhao's death was result of reckless manslaughter, criminally negligent homicide or an accident; photo (M)