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1998-06-09 14:33:56


TIME Warns: Don't Worry About It



TIME says that many government computers won't make it. Then it warns us in the same issue not to worry about y2k.

This indicates an amazing ability to live in two mental worlds. First, government computers won't make it. Second, private computers will. Conclusion: no big problem.

I guess we really have seen the end of Keynesianism and the welfare State. If government, which takes 40% to 50% of whatever we earn, should fail, no economic problem! No economic costs in shifting back to the free market. Easy! This implication is drawn from TIME, not THE FREEMAN.

The author refuses to cite statistics. Instead, he uses "many." For example, he says that the electrical power industry will only suffer minor blackouts. The big firms are dealing with the problem. What is his evidence? None.

I ask: Which big firms? How far into their repairs are they? How can they survive if the little firms can't distribute power through the grid? No answers in TIME. Has any power company announced its compliance? No. TIME ignores that fact, too.

Telephones? No problem. Evidence? AT&T promises to be compliant in late 1998. They will test the repairs in 1999. Other evidence, besides AT&T's assurances? None.

As for banks, there is no problem. Because . . . well, just take his word for it. And the bankers' word. "Many in the numbers-laden banking and securities industries have been pouring money and manpower into the Y2K problem for two or three years." There it is again: many. There is also an assumption: money spent (how much?) is code made compliant.

Is there any compliant money center bank on earth? No. But don't worry. Be happy.

As for embedded chips, there is a slight problem, possibly. There may be 5% bad chips. "That's still a lot of chips to be checked. . . ." There is a nice, hard figure: 5%. "A lot" sounds, well, vague. So, let's get specific. The installed base of chips is estimated to be 25 billion to 40 billion chips. So, 5% of 25 billion is 1.25 billion chips; 5% of 40 billion is 2 billion chips. Let's see: locate 2 billion bad chips, then remove them by hand, then replace them (if they are still in production, and if the new models fit in the old motherboards). Do this in 12 months, leaving several months for testing. No problem!

And what of the rest of the world, where most of the code is located? Not a word.

This is from TIME (June 15).

* * * * * * * * * *

On Jan. 1, 2000, May and many other software experts believe, millions of computer systems could go haywire, shutting down life as we know it and turning our information age into a digitally dysfunctional society. Electric and phone service could be lost. Banks and supermarkets shuttered. Life savings could vanish and lives be imperiled.

Really? No, not really. Well, not likely anyway. . . .

Still, there are grim reports that corporate America isn't taking the Y2K task seriously enough, a danger that will be highlighted this week at Senate subcommittee hearings. . . .

Left uncorrected, the Y2K problem could certainly wreak havoc. But for the most part, it is being corrected--at a collective cost estimated at anywhere from $50 billion to $600 billion. And that does not include what the Federal Government, which is dramatically and perhaps dangerously far behind in dealing with the Y2K issue, will spend (see box). . . .

This much is beginning to emerge from the fog of claims and counterclaims: while there are more than a few fatalists like May, most of the folks responsible for fixing the nation's electronic infrastructure actually think we're going to make it into the next millennium with only minor, if any, disruptions of vital services. There are technical reasons for their saying so, and probably a few public relations ones too. But the primary motivator may be that those companies have survival instincts of their own. . . .

Many of the most dire Y2K scenarios are predicated on the assumption that the glitch will KO the country's electric utilities, turning out not only your lights but everything from the pumps at the gas station to the Slurpee machine at the 7-Eleven. It's a plausible theory. . . .

But there are reasons to believe that blackouts may be averted or, at worst, short-lived. Most of the larger utility companies have shifted their Y2K efforts into high gear and are speeding their repairs by sharing their findings through an online clearinghouse set up by the Electric Power Research Institute. The utilities are also under regulatory pressure. The Department of Energy has set a July 1 deadline for power companies to provide assurances that Year 2000 problems will be remedied in time.

The real assurance, however, may be that many utilities aren't counting on complete success. Rather, most plan to have extra people and manual work-arounds in place for critical systems, according to Jon Arnold, chief technology officer at the Edison Electric Institute, which represents the public utilities that generate more than three-quarters of the country's electricity. . . .

Whether or not you see the street-lamps glowing as you head home from your auld lang syne, you will probably be able to call Aunt Margaret the next morning and wish her a Happy New Millennium. AT&T, for one, says it will have fixed and tested most of its heavily computerized network by the end of this year, and will spend next year making sure its systems work with upgraded gear at other phone companies.

It seems increasingly unlikely you will need to convert your mattress into a safe-deposit box either. Many in the numbers-laden banking and securities industries have been pouring money and manpower into the Y2K problem for two or three years. Their megamergers notwithstanding, Citibank and NationsBank each say they will be done with their internal fixes this year, and are scheduling tests to make sure money can flow through the Federal Reserve. The Securities Industry Association, meanwhile, has scheduled a Year 2000 "dress rehearsal" next month for its members, who handle about 90% of the trading volume in the U.S., with a full-blown readiness test scheduled for March 1999.

O.K., you will have money, but will there be anything to buy? You bet, say manufacturers. "Trucks will be rolling on Jan. 1, 2000," insists Bill James, a vice president at the Grocery Manufacturers of America, which represents large food- and consumer-product makers such as Kellogg and Procter & Gamble. James fully expects some computers to crash, but he points out that there's typically a 15- to 20-day supply of food in the distribution pipeline, which should cover any short-term shortages. "That [extra supply] is not something we're normally proud of," he says, "but it might come in handy." . . .

Tests suggest that only a small percentage of medical devices could be impacted by the date change, and fewer still will directly affect patient care. Despite some predictions, makers of implanted devices such as pacemakers and defibrillators say these devices will not be affected since they use sensors and not date-based calculations to time the delivery of their electrical impulses. . . .

In fact, fewer than 5% of the chips embedded into things like elevators and medical devices are at risk for Y2K foul-ups, says Jim Duggan, research director for the Year 2000 program at the Gartner Group. That's still a lot of chips to be checked, but even many of the suspect ones are programmed with manual overrides or "soft-landing" outcomes where safety is an issue. (Nonetheless, the Gartner Group estimates that litigation costs over Y2K service and product failures, both real and imagined, could soar to $1 trillion or more.) Duggan's forecast for the impact of Jan. 1, 2000, sounds like a tolerable weather report: "It's going to be like a couple of inches of snow that stays on the ground for a few days."


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