Sigh ... Warren I am going to ask for your indulgence once here on TUHS as I try to get any new discussion moved to COFF, but I guess it's time to renew this history as enough people have joined the list since the last time this was all discussed ... I'll do this once -- please take any other discussion off this list. It has been argued too many times. Many of the actors in this drama are part of the list. Sadly we have lost a few, sometimes because of the silliness of the argument/trying to give people credit or not/person preferences, etc.
If you want to comment, please go back and read both the TUHS and COFF archives and I suspect your point may have already been made. If you really do have something new, please move to COFF.
Looking at a few online sources, Linus actually said when "386BSD came out, Linux was already in a usable state, that I never really thought about switching. If 386BSD had been available when I started on Linux, Linux would probably never had happened".
A number of us, such as Larry and I have discussed this a bunch both online and in person. What would become 386BSD was actually available as early as 1988, but you needed to know the public FTP address of where to get it at UCB (which the UCB licensees had access to that FTP server). Bostic was still working on what would become the 'NET' release, but this tarball offered a bootable system and did have things in it that later AT&T would require UCB to remove. In fact, this system would have X10 ported to it and was a reasonably complete 'distro' in today's terms.
By formal definition, the tarball and the rest of UNIX from Research is and always has been, 'Open Source' in the sources were available. But they were licensed. This was fairly typical of much early software BTW. The binary nature only came about with the minicomputers.
The tarball in question was fairly easy to find in the wild but to use the sources as a system, you technically needed an AT&T license. An practically you needed access to a BSD box to rebuild them, which took a license - although by then SunOS was probably close enough - although I do not know anyone that tried it.
The sources in the tarball were not 'Free and Open Source' -- which becomes the crux of the issue. [Sadly the OSS folks have confused this over the years and that important detail is lost]. Many people, such as myself, when the AT&T suite began got worried and started hacking on Linux at that point as the not nearly as mature but sort of works version without networking or graphics had appeared [386BSD had both and a real installer - more in a minute]
FWIW: Linus could have had access to the BSD for a 386 tarball if we had asked in the right place. But as he has said later in time, he wanted to write his own OS and did not both ask the right folks at his University, or try to get permission. Although he has said he access to Sun3 and has said that was his impetus for his work. This is an important point that Larry reminds us of, many institutions kept the sources locked away like his U of Wis. Other places were like liberal about access. IIRC Larry sometimes refers to it as the "UNIX Club."
In my own case, I was running what would become 386BSD on my Wyse 32:16 box at home and on an NCR 386 based system in Clemson as I was consulting for them at the time. I also helped Bill with the PC/AT disk driver[WD1003 and later WD7000/SCSI controllers], as I had access to the docs from WD which Bill did not. I think I still have a photocopy of them.
What basically happened is as BSDi forked and that begets a number of things, from hurt feelings to a famous law suite. A number of us, thought the latter was about copyright (we were wrong it was about trade secret). We were worried that the AT&T copyright would cause UNIX for an inexpensive processor to disappear. We >>thought<< (incorrectly) that the copyright that Linux was using, the GPL, would save us. Turns out >>legally<< it would not have, if AT&T had won, at least in the USA and most NATO Allies - the trade secret applied to all implementations of Ken, Dennis, and the rest of the BTL folk's ideas. All of the Unix-like systems were in violation at this point. BSDi/UCB was where AT&T started. The problem is that while the court found that AT&T did create and own the >>ideas<< (note ideas are not the source code implementation of the ideas), they could not call the UNIX 'IP', trade secrets since the AT&T people published them all both academically in books like Maury Bach's, much less they had been forced by the 1956 consent decree to make the license available, they had taught an industry. BTW: It's not just software, the transistor 'gets out' of AT&T under the same type of rules.
In reality, like PGP, since there was lots of UNIX-based IP in other places, it hard to see in practice how AT&T could have enforced the trade secret. But again -- remember Charlie Brown (AT&T CEO) wants to go after IBM, thinking the big money in computers in the mainframe. So they did believe that they could exert pressure on UNIX-like systems for the higher end, and they might have been able to enforce that.