|Where the Industries Stand
|In today's networked world, no office is an island. Whether a
company makes it through January 2000 unscathed by the Y2K computer
bug will depend on the smooth functioning of computer systems at
myriad other organizations, such as those that provide package
delivery, electric power, phone service, payroll checks and sewage
treatment. As a result, the Year 2000 readiness of the nation's key
economic "sectors" specifically the energy, telecommunications and
financial services industries has emerged as a priority for
everyone from regulators in Washington to small-business owners in
Hawaii. The following is a closer look at those three critical
For telephone companies, fixing the date problem is proving to be a Herculean undertaking. Many billing
software systems, which have tens of millions of lines of computer code, require comprehensive revisions. Microchips "embedded" in electronic switches and other equipment need testing. Interconnection points with other carriers must be examined.
The country's largest phone companies, including AT&T Corp. and Bell Atlantic Corp., say they are well along in their repair work.
AT&T, for instance, has repaired 72 percent of the affected
systems, said John Pasqua, a vice president in charge of AT&T's
Year 2000 program. The glitch impacts less than 20 percent of the
company's systems and less than 1 percent of the firm's total
computer code needs fixing, he said. Still, the project isn't cheap
for AT&T; It spent $113 million on the effort last year and plans
to shell out $350 million this year, much of it for testing.
"We must investigate every one of our systems," Pasqua said.
"That's not a drop in the bucket."
The Federal Communications Commission expects large carriers
such as AT&T to enter the new millennium largely unscathed, but
regulatory officials say they are concerned about many of the
country's 1,300 small rural phone companies, many of which do not
have a dedicated Y2K staff. The FCC and industry executives also
are alarmed by the laggardly rate of repairs in many other
countries. The Gartner Group, a consulting firm, estimates that as
many as 10 percent of the world's 800 million phone lines will be
connected to non-compliant phone networks.
Like their telecommunications counterparts,
utility companies face distinct challenges in fixing mainframe
software, finding embedded devices in power plants and ensuring
that the transmission networks they share with other firms work
For most companies, the mainframe side of the equation has been
relatively straightforward; they started working on the issue more
than a year ago and have a clear idea of just what needs to be
done. It's the embedded chips that give industry executives and
analysts pause: A typical coal-fired
electric power plant can have
hundreds of devices that rely on microchips, from temperature
regulators to fire alarms.
Washington Gas Light Co., for example, has
found about 300
different types of embedded systems
in its storage, distribution
and metering facilities.
But the company is still contacting
manufacturers and performing tests
to see what will and what won't
work in 2000.
Despite the embedded-chip problem, officials at Washington Gas,
Virginia Power and Potomac Electric Power Co. maintain that their repairs are on
schedule. Each plans to have most critical systems fixed by year's end and to devote
most of next year to testing.
Some legislators and analysts, however, question whether the
sector as a whole is moving quickly enough. Only two of the 10
largest U.S. utility companies have fully completed checking their
embedded systems, according to a survey recently conducted by a
Senate committee. "Quite honestly, I think we are no longer at the
point of asking whether there will be any power disruptions, but we
are now forced to ask how severe the disruptions are going to be,"
said Sen. Christopher Dodd (D-Conn.).
Of the country's critical sectors, the
financial-services industry is the farthest ahead in tackling the
date glitch, technology specialists say. In some cases, the problem
was addressed years ago, because of the need to issue loans and
trade securities that expire 30 years in the future. On other
systems, banks started making fixes in the early 1990s, realizing
the importance of date-related calculations to their day-to-day
NationsBank Corp., for instance, started checking its systems in
October 1995. The bank, which has devoted 300 full-time employees
and 1,900 part-timers to the task, is halfway through the repair
work and expects to be finished by the end of the year, said Robert
H. Large, the company's Y2K director.
Among the systems it's playing close attention to are
automated-teller machines. "It was one of the earliest things we've
looked at," Large said. "We've identified all the software and
hardware changes we need to make."
On Wall Street, the securities industry last week completed a
initial test of its systems with only minor problems. Early next
year, brokerage firms will conduct a full-scale simulation of stock
trading in January 2000.
© Copyright 1998 The Washington Post Company
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