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Year 2000 bug threatens phone serviceCopyright 1998 Gannett Company, Inc.
May 19, 1998, Tuesday, FINAL EDITION
SECTION: MONEY; Pg. 1B
BYLINE: Steve Rosenbush
NEW YORK -- Make a phone call on Jan. 1, 2000, and there's a good chance that the call won't go through.
There's a 50% to 60% chance each major carrier will suffer at least one failure of a mission critical system, says Lou Marcoccio, a research director with The Gartner Group. And that's despite the industry spending more than two years and billions of dollars to rid their systems of Year 2000 bugs.
The telecommunications industry trails banks and insurers in fixing Year 2000 problems, making some network trouble inevitable as the millennium nears, experts warn.
Small, midsize and foreign-based carriers will be affected most. France, Germany, Japan as well as many countries in southeast Asia, central Africa and Latin America have spent less time and resources to fix the problem.
U.S. fire and police department dispatch systems are vulnerable, too, the Federal Communications Commission says. So are many older corporate switchboards, owned and operated by telephone users, not telephone companies.
At the heart of the problem are software programs that must be rewritten to differentiate the year 1900 from 2000.
Telephone networks are computerized at every level, from the transmission of calls to billing and ordering of supplies. Programs throughout the system must be fixed. Every piece of problem equipment must be identified, given a priority, fixed and tested.
Failures could range from billing problems to a complete lack of phone service. It's impossible to say how widespread they will be or how long they will last, Marcoccio says.
But "no one is putting telecommunications companies under the microscope the way bankers are examined," says David Baker, a technology analyst at Schwab Washington Research Group. The Federal Communications Commission can't impose a solution but it has sent letters to hundreds of companies calling for action. FCC Commissioner Michael Powell says "the vast majority of police and fire equipment is not Year 2000 compliant."
Gartner says big U.S. carriers are spending $ 70 million to $ 400 million each to fix their Year 2000 problem. AT&T, the largest, expects to spend a total of $ 463 million on the problem in 1997 and 1998. It has hundreds of people working on the problem full time, says AT&T's John Pasqua.
SBC Communications Group is spending $ 250 million to fix its Year 2000 problem.
The potential legal liabilities are huge. "If some of these systems go down you are going to have a lot of cases," says Steven Brummel, a partner with the Weil Gotshal & Manges office in Brussels, Belgium.
-- Bill (email@example.com), May 19, 1998