Microsoft has pulled back from a plan to exclude rival media players from portable music devices using its software. Details of the plan--and the reversal--were contained in a quarterly status report that Microsoft and the Department of Justice filed on Thursday with the federal judge that oversees the company's landmark antitrust settlement. Microsoft has been trying to find ways to make portable music players that run its software compete better in a market dominated by Apple Computer's iPod player and companion iTunes software. Under the program Microsoft had proposed, device makers that included a CD with Windows Media Player and other software would have had to agree not to include any other software, including rival media players. "When Microsoft circulated a draft of the specification to a number of manufacturers, the draft specification said that if the company chose to include the CD with its music players, it had to do so on an exclusive basis; that is, the company could not also distribute those music players with additional software, including alternate media players," Microsoft and the Justice Department said in the filing.