William Kennard is the chairman of the Federal Communications Commission. He testified before the Senate Committee on Commerce, Science, and Transportation on April 28.
He made it clear that if the telecommunications system fails, there will be an economic catastrophe.
He made it clear that no one in authority in the industry paid any attention to the problem until 1996.
He said that the FCC itself is not compliant. He hopes it will be. It needs funding.
He said that private industry is responsible for fixing the y2k problem, not the FCC.
He said that the FCC now has a full-time y2k coordinator. As recently as a month ago, it didn't.
He said that problems will begin in 1999.
He said that some foreign nations are not doing enough to fix the problem.
He reminded the Senators that the FCC has jurisdiction only over U.S. firms.
He said that they're working on it.
Other than this, he didn't say much.
But he is absolutely certain of one thing: "Because it is very difficult to determine all the ways in which the Year 2000 bug can affect information and computer systems, it is not easy to predict what will happen on January 1, 2000. Companies are still testing their systems and finding new problems."
So, it's "not easy to predict what will happen." But that was early in his testimony. By the time he was nearing the end, he reconsidered: "Because we cannot know how many of the Year 2000 problems will be fixed by January 1, 2000, it is impossible to make an accurate prediction about what will happen on that date." From "not easy" to "impossible" in less than 30 minutes. This is what I'd call up-to-the-minute analysis.
He did offer a guideline for evaluating how well the FCC is doing its job to motivate the U.S. telecommunications industry. He said, "Accordingly, the Commission is encouraging companies to cooperate with each other and with their customers on Year 2000 solutions. Furthermore, we hope to encourage companies to make more information available to the general public." So, when we get clear, unambiguous reports on the y2k progress of our local phone companies, we'll know that the FCC is on top of the situation.
Until you get such reports, whenever you think of the FCC in relation to y2k, think of this phrase: "Hello? Hello?"
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While most attention has been focused on the problems that will occur on January 1, 2000, it is possible that serious problems will develop next year because some programmers wrote programs that interpreted the year "99" or the date "09-09-99" to mean that the program was to terminate. The consequences of the Year 2000 problem may also last beyond 2000 because the part of a computer program or a computer system affected by the Year 2000 bug might not be used very frequently. Thus, problems might not be detected until months or even years after the start of the year 2000. . . .
The Year 2000 problem has been described by some as the greatest challenge ever to face information system managers. . . .
While the seriousness of the Year 2000 problem has been recognized by computer experts and information system managers for more than 15 years, in most companies only in the last year or two has it been taken seriously at the CEO level. . . .
Communications and the Year 2000 Bug
Because it is very difficult to determine all the ways in which the Year 2000 bug can affect information and computer systems, it is not easy to predict what will happen on January 1, 2000. Companies are still testing their systems and finding new problems. . . .
At the FCC, we are very concerned that the Year 2000 problem has the potential of disrupting communications services worldwide. The communications infrastructure is absolutely critical, not only to the economy, including the general commerce, transportation and banking sectors represented on this panel today, but also to national preparedness, military, public safety ,emergency and personal communications.
Every sector of the communications industry -- broadcast, cable, radio, satellite, and wireline and wireless telephony -- could be affected: the United States Emergency Alert System relies on television and radio broadcasts, the transmission of which may be affected by the Year 2000 problem; in some areas of the country, radio, cable and satellite systems are the only sources of up-to-date news and information; and police, fire departments and other emergency personnel rely on radio systems to communicate. We must ensure that all of these forms of communications continue uninterrupted.
All sectors of the global economy, including financial markets, depend upon reliable telecommunications networks to conduct transactions. It therefore is critical that telecommunications networks continue to be able to handle national and international financial transactions. Every night, billions of dollars in financial transactions move across the country and around the world over telecommunications circuits. Any failure to handle that special traffic correctly could cause a major economic disruption. Because global telecommunications rely upon the seamless interconnection of networks, the international dimensions of the Year 2000 problem are especially significant.
Satellite systems also present a significant concern to us. Satellite systems interface with virtually every aspect of the global economy, including banks, air traffic systems, cable systems, and government systems. Failure to make satellite systems Year 2000 compliant could cause disruptions in a range of day-to-day activities. . . .
Because we cannot know how many of the Year 2000 problems will be fixed by January 1, 2000, it is impossible to make an accurate prediction about what will happen on that date. That will depend entirely upon how well industry deals with the problem -- how much time, attention, money, and staff they devote to fixing their computer and communications systems. . . .
So what is the industry doing to address this problem? With wireline telecommunications, because the phone companies realize that the Year 2000 problem could disrupt service and adversely affect their bottom lines, they are very motivated to fix the problem. . . .
The wireless industry appears to recognize the seriousness of the problem as well. We remain concerned, however, that not enough is being done to ensure that the radio systems used by the police, fire, and other public safety agencies are Year 2000 compliant. Some entities in the wireless industry have made a great deal of progress; others still have a long way to go. . . .
America also relies upon global telecommunications networks, which are only as strong as their weakest links. The International Telecommunications Union has created a Year 2000 Task Force to promote international awareness and to provide guidance on Year 2000 readiness. Concerned as we are about our own preparedness, we are also concerned that some countries are far behind us in addressing the problem.
U.S. satellite companies also have adopted remedial measures to address the Year 2000 problem. Some satellite companies in developing countries, however, have not yet taken the necessary steps to prevent system failures, which raises significant concerns. . . .
But it is clear to everyone that this problem is not like most issues that the FCC must address. The industry and individual communications companies are the only parties who can take the steps necessary to ensure that their networks are Year 2000 compliant. New FCC rules and orders cannot solve the Year 2000 problem. Coordinated private sector action is needed.
Our primary role is to motivate and to facilitate. Let me briefly explain our approach.
First, the FCC is hard at work fixing our own computer systems to make sure they work on and after January 1, 2000. So far, we have requested a total of more than $8 million to upgrade or replace our computer and communications systems to ensure that they are Year 2000 compliant. I believe that the FCC's Office of the Managing Director, which is in charge of our computer systems, is on top of this problem. We are in the middle of a major computer upgrade and, as part of that upgrade, much of the old, non-compliant software is being replaced. We do not have that many computer systems and the ones we have are not as complex as some others. So I'm confident that they will be fixed in time, provided we get the requested funding.
Second, we are working with all segments of the communications industry to ensure that everyone understands the seriousness of the Year 2000 problem and devotes adequate resources to fixing it. . . .
We believe that information and cooperation are the keys to addressing the Year 2000 problem. Accordingly, the Commission is encouraging companies to cooperate with each other and with their customers on Year 2000 solutions. Furthermore, we hope to encourage companies to make more information available to the general public. . . .
Earlier this month, Commissioner Michael Powell, who in his role as Defense Commissioner worries about the reliability and security of our nation's telecommunications networks, agreed to serve as the point man for the Commission's Year 2000 efforts. He is providing the leadership needed to ensure that all the relevant parts of the Commission are focused on this problem. He is also leading our effort to reach out to industry and other parts of the Federal government. In this role, he represents the Commission on the President's Council on Year 2000 Conversion, chaired by John Koskinen, which was created in February and met for the first time earlier this month. . . .
But in the end, individual companies have the responsibility for addressing this problem. Only they can accurately assess their vulnerabilities and only they can fix their systems.