Subject: #604: The Y2K Problem, Part 1
=======================Electronic Edition========================
. .
. HEADLINES: .
. THE Y2K PROBLEM, PART 1 .
. ========== .
. Environmental Research Foundation .
. P.O. Box 5036, Annapolis, MD 21403 .
. Fax (410) 263-8944; Internet: erf@rachel.org .
. ========== .
=================================================================
THE Y2K PROBLEM, PART 1
We've been hearing about this problem for some time now, but like
most people we have been ignoring it. As with many problems, we
clip articles about it, then file them for later reference. It's
the Y2K problem. To a scientist, Y means Year and K means 1000,
so Y2K refers to the year 2000 problem. It's a computer problem
with possibly-serious environment and health implications.
Like most people, we are very suspicious of alarming predictions
about the year 2000. What finally focused our attention on the
Y2K problem was a small item in the back pages of the NEW YORK
TIMES Saturday June 13th.[1] It began, "The nation's utilities
told a Senate panel today [June 12] that they were working to
solve expected computer problems when 1999 ends but that they
could not guarantee that the lights would not go out on Jan. 1,
2000."
The utilities say the lights may go out. This seems like a
problem worth examining.
The TIMES went on, "An informal survey by a Senate panel of 10 of
the nation's largest utilities serving 50 million people found
none had a complete plan in case its computers failed because of
the problem." The TIMES explained, "Many electrical plants use
date-sensitive software to run built-in clocks that monitor and
control the flow of power. These could fail if not updated."[1]
The utilities say the lights may go out, yet none of them has a
full contingency plan. How serious could this problem become?
As we examined the items in our "Y2K" file, we found opinions
ranging all over the place. Some people said, "This is a fake
problem invented by people who want to sell fixes." Others said,
"This is going to be the end of civilization as we know it."
Where does the truth lie?
I worked 5 years in the Computing Center at Princeton University,
so have more than a passing familiarity with computers. My
crystal ball is as hazy as any one else's, but here is an attempt
to offer a realistic look at the nature of this Y2K problem.
Unlike most problems, we know when this one is going to hit us:
on January 1, 2000, just a little over 500 days from now.
Here is the crux: Many computers only recognize dates by two
digits. In these computers, 67 is 1967 and 98 is 1998. In these
computers, a 00 date will mean 1900, not 2000, unless their
software is re-written. When such computers start calculating or
comparing dates after 1999 they won't work right --they may
simply shut down, or they may seem to run fine but produce
incorrect information that is very hard to detect.
Computers that have this Y2K problem are called "noncompliant"
computers, and it turns out there are quite a few of them.
Many noncompliant computers are the really big "mainframe"
machines that serve as the central nervous systems of financial
institutions (banks, savings & loans, credit unions), stock
exchanges, air traffic control systems, missile defense systems,
government tax agencies, the Social Security Administration, the
Medicare program, the insurance industry, and all of the Fortune
1000 multinational corporations. (And of course this problem is
not limited to the U.S. Every industrialized country depends
heavily upon large mainframe computers.)
A report published by Merrill Lynch, the financial management
company, says flatly, "When the millenium arrives, many computer
systems and global networks will fail because of an inability to
properly interpret dates beyond 1999."[2]
Mainframes will not be the only computers to fail on January 1,
2000 if they are still noncompliant by then. Many industrial
machines contain "embedded systems" --computer chips that are
literally embedded within some larger piece of equipment, such as
power stations, oil refineries, telephone switches, burglar
alarms, emergency room equipment, air traffic control systems,
military defense gear, and chemical plants, among others.
By the year 2000, there will be an estimated 25 billion embedded
systems, according to the Gartner Group, which advertises itself
as the world's foremost authority on information technology.[3]
By Gartner Group's estimate, two-tenths of one percent of these
25 billion embedded systems will be noncompliant.[4] Two-tenths
of one percent of 25 billion is 50 million. Therefore, the
problem, according to Gartner Group, is to identify and replace
those 50 million noncompliant embedded systems in the next 500
days. To solve this problem, someone would have to identify,
replace, and test about 100,000 chips each day between now and
December 31, 1999. Does the U.S. have enough technicians to
identify, replace and test 100,000 chips each day? It seems
unlikely.
These embedded systems tend to be embedded in the nation's core
infrastructure --in the water, sewage, and electrical utilities,
in railroads and other transportation systems, in hospitals, in
police and fire services, in the defense infrastructure, and in
petrochemical (and other manufacturing) plants.
BYTE magazine, a technical computer journal, wrote recently, "One
commonly cited problem is associated with gadgets that monitor
periodic maintenance. When the clock strikes twelve on New
Year's Eve, 2000, these devices might think it's been 99 years
since their last maintenance, realize that's too long for safe
operation, and shut down."[5]
Virginia Hick, who writes a column called "Technology and You"
for the ST. LOUIS POST DISPATCH recently interviewed Peter de
Jager, a well-known Y2K consultant to industry. (See
www.year2000.com). Here is what Hick wrote:[6]
".... De Jager talked recently with an executive of a company
that makes a volatile gas --he would not identify the company
more specifically --who told de Jager how his plant discovered
the seriousness of faulty embedded chips.
"The plant found a chip that failed when the date was moved
forward. When the chip failed, it shut off a valve that would
have shut down the cooling system. A cooling system shutdown,
the executive said, would have caused an explosion.
"That was great news," de Jager said. "Because they checked
--there will be no explosion. They're replacing the chips."
"De Jager worries about the companies that are not checking,"
Hick wrote.
Conclusion No. 1: If we lived in a community with one or more
chemical plants, we would be asking our local government to hold
public hearings on the Y2K problem, seeking public assurances
from local plant managers that they really have this problem
under control. What written plans do they have for assessing
these problems, and how large a budget have they committed to
solving them? What progress can they demonstrate? Does the plant
manager have sufficient confidence in the plant's safety systems
to be at the plant with his or her family at midnight December
31, 1999, to celebrate the new year?
Now let's return to the mainframe problem. Because non-compliant
computers could harm a company's financial picture (up to and
including bankruptcy), on January 12, 1998, the federal
Securities and Exchange Commission (SEC) issued SEC Staff Legal
Bulletin No. 5, which requires publicly-held companies to report
their progress toward solving their Y2K problems. On June 10,
1998, Steve Hock, president of Triaxsys Research in Missoula,
Montana, testified before the Senate Banking, Housing and Urban
Affairs Committee that his company had examined the SEC filings
of America's 250 largest corporations.[7] Mr. Hock told the
Senate that 114 of the 250 companies had filed no Y2K information
with the SEC. Of the 136 companies that HAVE filed Y2K
information, 101 reported their progress on the assessment phase
of the problem. Of these 101, 60% revealed that they have not
yet completed their assessments of the Y2K problem.
Mr. Hock testified that 36 companies reported their estimated Y2K
project costs and how much they had so far spent. The average
company reported having spent 21% of the expected total costs of
Y2K fixes. Mr. Hock concluded, "[The] data shows remarkably
little progress by the largest US companies in addressing the
Year 2000 problem. Most of the work has been compressed into an
extremely tight window of time. Given the information technology
industry's long history of failure to complete large scale system
conversion projects on time, this is cause for serious
concern."[7]
The New York Federal Reserve Bank has said that it will take more
than a year for a large corporation to test its computers for Y2K
compliance AFTER all their software has been fixed.[8] This
means all fixes must be completed by September or October of 1998
so testing can begin in time. But many large corporations are
still at the stage of assessing the problem, and it's now late
June.
How big is the task for a complex corporation? State Farm
Insurance --a company that believes it is on top of the Y2K
problem --began working on the problem in 1989 and found that it
had 70 million lines of computer code to convert, 475,000 data
processing items, more than 2000 third-party software programs,
900 shared electronic files, plus miscellaneous telephone and
business equipment in 1550 corporate and regional service
facilities. State Farm still has 100 employees working "around
the clock" on nothing but Y2K.[9]
But even a forward-looking company like State Farm could be
harmed by this problem if its customers, suppliers, partners,
bankers, and regulators aren't compliant by the year 2000. As
Merrill Lynch says, "Even institutions that have fixed their own
internal problem will feel the ripple effects from problems
occurring externally."[2]
A survey of small businesses by the National Federation of
Independent Businesses (NFIB) reported June 1 that 75% of small
businesses have done nothing about the Y2K problem.[10] The NFIB
estimated that 330,000 small businesses will go bankrupt and
another 370,000 will be "temporarily crippled" by the Y2K problem.
Conclusion No. 2: Portions of the nation's basic infrastructure
(utilities, transportation, defense, manufacturing) seem likely
to be disrupted by the Y2K problem. Furthermore, parts of the
world's core commercial institutions, such as banking and
insurance, seem likely to be disrupted by the Y2K problem.
Therefore, in our opinion, we each would do well to ask
ourselves: if the electric utilities may not be reliable, the
petrochemical industry (which delivers our gasoline) may have
difficulties of its own, the trains may not run well, and the
world banking system may be plagued by errors and glitches, how
can we be sure that our employers will be able to pay us so that
we can put food on the table? It even seems as if we should be
asking, how can we be sure there will be food in the grocery
stores? Given what we know, these seem to be reasonable
questions.
More next week.
--Peter Montague
==========
[1] "National News Briefs; Utilities Say Outages Are Possible in
2000," NEW YORK TIMES June 13, 1998, pg. 16.
[2] See <http://www.ml.com/woml/forum/millen.htm/ftpsearch.htmll>.
[3] See: <http://gartner12.gartnerweb.com/public/static/home/-mll
home.html> (omit the hyphen).
[4] Thanks to Roleigh Martin for the Gartner Group estimate. See
<http://ourworld.compuserve.com/homepages/roleigh_martin/y2journ.htm>.
The most comprehensive --and most pessimistic --web page on Y2K
is that of historian Gary North: .
[5] Edmund X. DeJesus, "Year 2000 Survival Guide," BYTE (July 1998),
pgs. 52-62.
[6] Virginia Hick, "Expert Warns Computer World is Running Out of Time
to Meet 2000; Code is Broken and Needs to Be Fixed Fast, He Says," ST.
LOUIS POST-DISPATCH Nov. 19, 1997, pg. C8.
[7] Mr. Hock's testimony is available at <http://www.senate.-puserve.com/homepages/roleigh_martin/y2journ.htm
gov/~banking/98_06hrg/061098/witness/hock.htm> (omit the hyphen).
[8] See <http://www.ny.frb.org/docs/bankinfo/circular/10937.html/y2journ.htm>.
[9] See <http://www.statefarm.com/about/year.htmcular/10937.html/y2journ.htm>.
[10] See <http://www.amcity.com/sacramento/stories/060198/-7.html/y2journ.htm
smallb2.html> (omit the hyphen).
Descriptor terms: computers; accidents; chemical plant safety;
explosions; fires; y2k problem; chiliasm; millenarianism; merrill
lynch; embedded systems; gartner group; sec; gary north; roleigh
martin;
################################################################