NEW YORK-If telecommunications companies worked in a vacuum, they would probably be well fortified against the Year 2000 electronics bug that threatens to hobble microprocessor-reliant equipment.
Wireless networks that are newer than traditional landline systems often are equipped to pass muster in the new millennium. And some telecom equipment vendors have found the Year 2000 problem will not affect call processing. Most say a relatively simple software upgrade is all that’s needed to ensure resistance to the bug.
The problem is telecommunications companies don’t function in the kind of small universe that would make Year 2000 readiness a simple goal. The industry’s vulnerability comes from dependence on interconnections among scores of networks and telcos that may not be ready to comply with Year 2000 benchmarks.
“The actual equipment changes that the manufacturers are talking about are fairly simple,” said Paul Minkin, senior director of U.S.-based Bellcore’s Year 2000 division. (Bellcore, now an independent company, originally was the R&D arm of AT&T and then of the resulting Baby Bell companies after AT&T was split up.) “The problem with the Year 2000 is that there are many changes to make. On a one-by-one basis, it’s really trivial. The problem is the magnitude of the changes and whether equipment is going to operate with other equipment on the network.”
At this late date-by many accounts the 11th hour in the effort to stave off the millennium bug-telecom firms should have completed their internal work on developing and testing Year 2000-compliant systems. They should be well onto determining if equipment from many suppliers will work with each other.
“Interoperability testing is an important part of what every company has to do,” said Marsha McBride, executive director of the U.S. Federal Communications Commission’s (FCC) Year 2000 task force. “Not everybody is going to be able to test with everybody else before the time is up.”
Exactly when the time is up may not be as clear-cut as conventional wisdom holds. Experts say a series of dates preceding the actual rollover from 1999 to 2000 are also potential sources of problems. With the pressure bearing down so heavily, many preventative efforts have been focused on contingency planning, such as drawing up alternative lists of equipment suppliers for compliant equipment.
“There are still quite a number of companies just getting started,” said Bellcore’s Minkin. “They have to look at where the high risk areas are and whether those can be resolved in time. The companies starting the discovery process now need to look very keenly at contingency planning.”
To make the greatest impact in the little time left, information technology (IT) professionals are addressing the most critical spokes in the global telecommunications wheel. As a result, major telecommunications systems and global commerce centers are quickly moving up the priority lists of Year 2000 planners.
“There are major gateways around the world, and if one of them would have a problem, then everybody who is linked to the gateway could be affected,” McBride said.
At the same time, telcos that aren’t quite ready to fully tackle the millennium-bug challenge have the opportunity to take some short cuts. Companies can participate in “smart” or “observer status” testing by watching the testing practices of similarly equipped companies, McBride said.
Companies requiring such steps are likely to come from developing nations, where research has shown telcos lag the rest of the world. Corporations in the United States and Europe are more prepared to overcome millennium bug problems than Asian and South American telecom companies, according to the investment research firm Warburg Dillon Read.
Ian Hugo, assistant director of Task Force 2000, a British initiative, worried that so many respondents to a mid-year International Telecommunications Union (ITU) survey indicated they would not be prepared to test their compliance strategies until at least the middle of next year. Some mobile carriers and satellite companies responded that they expect to complete their compliance and test strategies in similar time frames.
A troubling finding in the survey by the ITU was that roughly 35 of the 230 global telcos participating had no responses at all, Hugo said. The key issue, he added, is global interoperability testing. “The problem is you can’t do any of that until the individual telcos are well on the way to compliance, and that’s not going to occur until the second half of 1999,” Hugo said. “Then I wonder how much time is left for testing.”
At least some of the fault rests with network equipment vendors, Hugo asserted. “There’s a telecommunications forum here, and they’re saying the telecom equipment providers are being very evasive about their compliance status.”
For their part, equipment vendors said they are prepared to meet the Year 2000 challenge. For example, Motorola Inc., which began implementing its compliance procedures last year, has converted all its software, which it began deploying in May, said Jim Estes, senior director of Motorola’s Year 2000 readiness program. The company also has audited suppliers of cellular infrastructure equipment to ensure they are compliant.
Northern Networks also said it is ready. Nortel launched its millennium-compliance program two years ago and expects to have more than 90 percent of its wireless products compliant by year’s end, said Reza Rahdar, Nortel’s Year 2000 wireless project manager.
Michael King, associate research analyst at Meta Group, a research firm, said wireless carriers generally are well-prepared for the millennium. Still, he said, wireless companies face a unique risk. “Wireless carriers are particularly sensitive to Y2K because they have so many outlying switching stations and antennas. Because their antennas are far, they rely more on embedded systems, such as heating and air conditioning controls using microprocessors, to maintain network integrity,” he said.
Telecom equipment vendors have another set of millennium-related problems with which to contend-lost revenues from customers that are diverting funds from network upgrades to Year 2000 compliance projects, according to Warburg Dillon Read, the investment firm. Recent quarterly SEC filings by companies such as Lucent and Cisco reveal that they “are far more concerned about potential lost revenues than about internal software fix costs,” a recent Warburg report said.
“We believe this poses a much larger risk to 1999 earnings for telecom equipment vendors than the impact of actual expenses to become Y2K compliant,” the report said.
