WASHINGTON-The wireless industry could be headed for an unexpected headache caused by the
dreaded millennium bug. Insurance companies are telling wireless carriers they need additional liability insurance to
cover lawsuits related to the Y2K computer bug, according to Jay Kitchen, president of the Personal Communications
Industry Association.
The Y2K bug is a glitch in computer programming where two-digit date fields could mistake
the year 2000 for 1900 and shut down or operate incorrectly.
Kitchen told reporters last week that while carriers
have been preparing to combat the millennium bug, the announcement by insurance companies was unexpected.
It
is unclear how far-reaching the situation might be. AirTouch Communications Inc., for example, refused to comment
on anything related to the Y2K issue. For its part, Bell Atlantic Mobile said it has not been asked to obtain additional
liability coverage for Y2K, according to BAM’s Bill McCue.
The Cellular Telecommunications Industry
Association is not aware of the problem. “I don’t know if it is real or unreal,” said Brian Fontes, CTIA’s
senior vice president for policy and administration.
Liability insurance will not cover lawsuits resulting from the
Y2K problem. “Generally speaking, computer crashes are not covered under liability insurance. Since Y2K is a
known, or fortuitous, event and since insurance covers accidents, it would be inappropriate to wait for the event and
then ask insurers to foot the bill,” said Dan Zielinski, spokesman of the American Insurance Association. AIA is
a trade association representing property and casualty insurance companies.
The millennium bug was a popular
topic last week. The problem was essentially the only communications-related issue-with the exception of a vague
reference to encryption-President Clinton commented on during his State of the Union address. “I want all the
folks at home listening to this to know that we need every state and local government, every business large and small to
work with us to make sure that this Y2K computer bug will be remembered as the last headache of the 20th Century,
not the first crisis of the 21st,” the president said.
On Capitol Hill, legislation was introduced and hearings
held on the subject last week.
Sen. John McCain (R-Ariz.), chairman of the Senate Commerce Committee,
introduced the Y2K Act. The Y2K Act would compensate for actual losses while ensuring the courts do not unfairly
punish defendants who have made good faith efforts to remedy the technology failure.
“My goal is to provide
incentives for fixing the potential Y2K failures before they happen, rather than create windfalls for those who
litigate,” McCain said.
On Wednesday, the Senate Special Committee on the Year 2000 Technology Problem
was told by the Comptroller General of the United States that “while our country is considered among the leaders
in addressing this issue, the fact remains that both public and private organizations still face a daunting task in
providing reasonable assurance that it will truly be business as usual on Jan. 1, 2000, and continuing throughout this
pivotal transition year,” said David Walker.
