Y2K: TEN DAYS AND COUNTING

	December 21, 1999
	Gwen Ifill has our Y2K story.

GWEN IFILL: With holiday celebrations just around the corner, federal officials are making lists-- and checking them twice-- to make sure the Y2K computer bug doesn't crash the party. Computers at the nation's air traffic, Social Security, and banking systems have all been federally certified Y2K ready. And Energy Secretary Bill Richardson, speaking at a Washington power company last week, said the nation's utilities are prepared, too. BILL RICHARDSON: I am very happy to report that 100 percent of the nation's providers of electric power are now reporting that they are Y2K 100 percent ready. GWEN IFILL: Just three years ago, the utilities, scores of other companies, and federal agencies were not so sure they'd be celebrating. In 1997, only 21 percent of the federal government's vital computer systems were free of the so- called millennium bug. $100 billion later, private companies say they are fully prepared, and federal officials say they're 99 percent ready, too. The Y2K glitch is found in computer software and chips that may misidentify dates ending in "00" to read the year 1900 instead. Experts have warned such a mistake could cause everything from problems with automatic teller machines and health care devices, to outright breakdowns in shipping and computers abroad. Governments and private companies are taking little for granted. They are concerned Y2K bugs could still lurk undetected in computer systems. Utilities are keeping extra reserves on hand just in case there is an unexpected loss of power, and local governments are stocking up on supplies, too, even beefing up police protection to guard against any havoc created by Y2K computer breakdowns. NASA, which says its computers are Y2K ready, still plans to get the space shuttle Discovery home by the New Year, just in case. But some warn not enough is being done. Today critics of the Nuclear Regulatory Commission urged the government to shut down nuclear plants on New Year's Eve. JAMES RICCIO: If the NRC has rules requiring that reactors shut down when a hurricane approaches, doesn't it make sense to place reactors in the same condition to face the technological hurricane that could be caused by the Y2K computer bug? GWEN IFILL: In Washington, federal officials will be monitoring nuclear plants and other Y2K concerns at a $50 million command center near the White House. The center will act as an information clearinghouse for federal agencies, private industry groups, and for news of Y2K developments abroad. GWEN IFILL: Joining me now is James Bond, director of energy, mining and telecommunications at the World Bank; Republican Robert Bennett of Utah, chairman of the Senate's Special Committee on the year 2000 technology problem; and Lou Marcoccio, research director at the Gartner Group, a business and technology consulting firm. Welcome, gentlemen. Senator Bennett, ten days from now is d-day for lack of a better term. What's going to happen? SEN. ROBERT BENNETT: No one knows. We have never lived through a thing like this before. It may well be that all of the preparation that you talked about in your opening will pay off the way we hope it will. And absolutely nothing bad will happen. And if that is indeed the case, a lot of folks will say, gee, you wasted all our time and money. Look, there was no problem. But I think more likely there will be a series of random incidents that will pop up in places that we didn't recognize were not compliant. We'll only find out after the fact. My expectation is that these will not be connected. They will not cascade into a building kind of problem or disaster, and that they'll be fixed relatively quickly. But as I say, we've never had an experience like this before, and we're going the find out. GWEN IFILL: Mr. Marcoccio, the federal government is feeling awfully confident that they have their Y2K problems under control. What about local governments and 911 emergency services and things like that? LOU MARCOCCIO: Well, we find that local cities and towns, especially here in the U.S., have addressed the problem relatively well. There still are smaller towns that have not addressed the problem or have finished. Many of them are planning to finish on December 31, actually. But the majority of them have finished and have finished on time. And their initial focus has been emergency services, 911 and so forth. So we feel pretty confident that those services and most critical services in those areas are going to be --basically make it through this pretty well. GWEN IFILL: And banks, ATM's, should we be taking a lot of money out of our accounts this weekend? LOU MARCOCCIO: We don't recommend taking any money out of banks. The banking industry has done actually far better than any industry on addressing the problem overall. Things like ATM's and so forth, the initial threat that people had thought a couple years ago was that we may have some power outages that may cause us not to be able to address ATM's and so forth. But even power utilities and so forth have addressed this problem exceptionally well. And we don't believe that's a threat. We don't believe people need to take money or withdraw money from the bank at all. GWEN IFILL: Mr. Bond, let's assume within our borders of the United States and many developed countries this problem has been addressed. What about in other countries abroad that we obviously will have interaction with or who will have their own concerns, who are maybe not as computer efficient or at least not as technologically advanced as the United States. Are there problems which are likely to be brewing there? JAMES BOND: Gwen, there's an enormous range of these countries, from very, very poor countries to countries that are really quite advanced in terms of computer systems. And within each of these countries, we get an enormous range of each industry. And so I think it's very difficult for us to single out any given country, but certainly there are likely to be some sectors in some countries that might have problems and other sectors more likely won't. GWEN IFILL: Tell us what you mean by sectors. JAMES BOND: What I mean are industries. I agree with Lou that generally the financial industry, banks, ATM's, transfer of financial resources have pretty much dealt with the problem. I think where we're likely to come across glitches might be, for example, in some of the power, electric power industries, possibly health care, the health care industry. Here the progress has been much more spotty, much less complete. GWEN IFILL: Senator Bennett, if you can pick up on that point, obviously the health care industry is a major one. Would we want to be in the hospital for elective surgery on New Year's Eve? SEN. ROBERT BENNETT: Well, I've told everybody to avoid elective surgery on New Year's Eve. But frankly, it depends on which hospital. There are... The vast majority of American hospitals seem to be fully compliant. Many, many of them are now operating on software that has been completely rewritten and installed just for the Y2K problem. The difficulty with the health care industry is that it is so fragmented. There are so many small clinics or individual doctor's offices that it becomes almost impossible to get a complete picture of everything that's going on. But if you happen to be in an emergency situation where it's necessary for you to be in a hospital, and you are in a major hospital connected with one of the larger chains, the chances are overwhelming that you're going to be just fine. And while statistically we would expect some of the inner-city hospitals and rural hospitals to have the biggest problem, mainly because they have the least money, I've checked with some rural hospitals here in my home state of Utah, for example, and they're just fine, as well. It becomes a factor of the preparedness of the hospital administrator and how diligent he or she may be in getting things under control. GWEN IFILL: Mr. Marcoccio, it seems one of the problems we're facing here is that we don't know what we don't know. How do you gauge public reactions to an event that you can't gauge what the response might be, what the actual event might be? LOU MARCOCCIO: Well, we've been surveying some of the general public on a regular basis to find out what their plans are for January 1 or just prior to. Are they going to go out and buy additional food; are they going to withdraw money. Are they going to take other extreme actions? We have seen a softening over the past six months in general public perception, and people are much more informed of the problem. People seem to feel more comfortable in general. We're hopeful that no major event will cause any kind of increase in anxiety, whether it be some kind of security issue or some kind of major failure in a company that gets made public prior to. One of the things that we need to understand is that most computer failures in most companies ran aren't really going to be made public. This kind of information is pretty much going to stay inside a company, unless it affects the general public. So things like government services and transportation and other areas that do affect the general public, those things will be more obvious and more visible. And if any problems arise and are made generally aware to the general public, then this could increase some level of anxiety. GWEN IFILL: Mr. Bond, we are all focused on January 1 as being "the" date. But in reality, will this my out over days, weeks, months? JAMES BOND: Yeah, absolutely. Certainly January 1 is a key date, but for a start, these kinds of problems might occur over a period starting January 1. And, in fact, just knowing what's going on, some of the results will only come through in things like trade statistics on imports and exports, on the GDP numbers, numbers of economic growth. We may not learn about some of the glitches from a macroeconomic perspective for three months or even six months. So it will take a while for us actually to see the results as they feed through into the general economy. GWEN IFILL: You saw in our taped piece a reference to nuclear concerns. Do you think that's legitimate at all? JAMES BOND: I can't speak really for the nuclear side. But on the electric power side, some of the World Bank's clients, the countries where we work, there are clearly some of the power plants that do have a control systems with embedded chips. And no one really knows how these chips will react. So even if only one out of 1,000 or one out of 10,000 reacts in a way which is unpredictable, this could have an effect on the electric power plant itself. GWEN IFILL: Senator Bennett, is that a legitimate fear? SEN. ROBERT BENNETT: It is. The testing that has been done, however, demonstrates that our earlier estimates, which was... which showed that the embedded chip problem would be the biggest problem, were probably wrong -- that the embedded chip problem now appears to be much less than we originally thought when we got into this. And as to the comment that was on your tape, I don't think a nuclear plant is any more dangerous than any other kind of plant with respect to the Y2K problem. Ironically, because we have not been building nuclear plants in this country in recent years, Europe is almost entirely dependent on nuclear power; we in this country for whatever reason have decided we don't like nuclear power, most of the nuclear plants therefore are quite old and therefore they are not as computerized and automated as some of the newer plants. And that means that the Y2K fix in those plants can take place a little easier than one that is more heavily computerized. Now, nuclear is frankly the first place I went when I got concerned about the power grid for all of the reasons that the individual on your tape would raise. But frankly, I don't think there has to be any specific singling out of a nuclear plant because of Y2K concerns. GWEN IFILL: Mr. Marcoccio, if we are no longer as concerned here in the United States about this problem, is there still a potential at all for a global crisis? LOU MARCOCCIO: Well, as far as the global status or issues, like my associate from the World Bank mentioned, we do have some countries and some industry sectors in some countries that just aren't as prepared. But, you know, in our analysis, we find that the countries that are least prepared are also countries that deal with significant power outages every day, significant telephone service outages every day and so forth. So, yes, they may deal with some additional outages perhaps in some of those areas, but they're actually better suited for dealing with some of those issues. For instance, if we were to deal with a significant power outage, which is not going to happen, but if we had a significant outage in the U.S., for several days at a time, this would be devastating to most of our businesses and our economy. But if that was to happen in a country that was to have four or five power outages that lasted an hour or two or three hours a day, several times in a day, and it was to cause a few more hours without power, it would be relatively low impact. GWEN IFILL: Okay. So here's a real test, Senator Bennett, where are you going to with on New Year's Eve? SEN. ROBERT BENNETT: I'm going to be in the Utah command center with Governor Levitt, the governor of Utah. We have our own version of that command, international command center that you talked about earlier in Washington here in Utah, and we'll be receiving information from all over the state as to what's happening with respect to Y2K here. Our expectation is that about 2:00 in the morning Mountain Standard Time we'll be all wrapped up and I can go home. GWEN IFILL: Mr. Bond, I'll be meeting you at the ATM machine. Thank you gentlemen all very much.