Microsoft has sent a revised proposal to the European Commission over how it intends to comply with the anti-trust ruling against it.

Microsoft believes it has addressed most of the concerns raised by European regulators, but the two sides continue to wrangle over half a dozen remaining issues, said a Microsoft spokesman. They relate partly to how Microsoft's protocols can be distributed with open source products, he said.

A Commission spokesman confirmed that Microsoft submitted its revisions in a letter onThursday. The Commission is studying it closely to determine whether it meets its demands, but it has not ruled out the possibility that Microsoft could still be fined $5 million per day for noncompliance.

Last year, the Commission ruled that the software giant had abused its desktop dominance to gain an unfair advantage in related markets. Among the sanctions imposed against the company, Microsoft was ordered to license certain workgroup server protocols to competing vendors to allow them to develop products that work well with Windows.

It was also ordered to offer a version of Windows without its media player software and fined 497 million euros.

Last month, the Commission rejected Microsoft's initial licensing terms for the protocols, prompted by complaints from the Free Software Foundation Europe that the terms were unfair to open-source developers. On 21 March, the Commission gave Microsoft an informal two-week deadline to come up with better terms before it decided whether to fine it for non-compliance.

The Commission detailed 26 concerns with Microsoft's initial licensing proposal. Microsoft has "accepted or offered proposals to address" 20 of those concerns, but the two sides continue to debate the remaining issues, he said.

Among the sticking points are: The Commission had complained that the licensing terms do not allow Microsoft's protocols to be distributed in open source products because of potential violations of Microsoft's intellectual property.

Another has to do with whether developers who licence Microsoft's protocols in Europe can develop and sell their products outside of the EU.

The Commission had also complained that the terms for evaluating whether to licence the protocols were too strict. Microsoft has satisfied that concern by lowering the evaluation fees to 500 euros a day per reviewer, from $5,000 for one day and $7,000 for two days. Fees are credited if a licence is signed, Microsoft said.

It has also proposed a more flexible structure and lower rates for royalties, and vendors would be able to license a subset of the protocols rather than having to license all of them, which had been another of the Commission's concerns, Brookes said.

"Since receiving the feedback from the Commission, we've worked basically around the clock. We feel we've made significant progress," said a Microsoft spokesman.

Some Microsoft rivals, notably RealNetworks, have accused the company of delaying its compliance efforts intentionally. Last week, Microsoft responded to complaints about the version of Windows without its media player software.

The company accepted a name, Windows XP Home Edition N or Windows XP Professional Edition N, instead of its own proposal, Windows XP Reduced Media Edition, which was rejected by European regulators as unappealing.

It also agreed to change various registry settings that rivals said made the unbundled version of Windows dysfunctional.