Senate Addresses Year 2000 Problems

(April 29, 1998)  The Senate Commerce Committee held a hearing on Tuesday on the Year 2000 problem.  FCC Chairman William Kennard provided testimony on Y2K problems in telecommunications.  Also, the Senate formed a new committee to deal with Y2K problems, which will be headed by Sen. Robert Bennett (R-UT).

Sen. John McCain (R-AZ), Chairman of the Commerce Committee, stated that, "The scope of the problem is large and complex.   The federal government alone has about 8,000 mission-critical systems, and 60,000 secondary ones."

The Committee received testimony from several government and private sector leaders regarding Y2K problems, particularly in monetary, financial, and telecommunications matters.

Edward Kelly, who is a Member of the Board of Governors of the Federal Reserve System, summarized the Fed's assessments of likely Y2K related spending, economic consequences of unremedied glitches, and its efforts to correct its own systems.  The Fed maintains applications that process and settle payments and securities transactions between depository institutions in the United States.

Kelly's prepared statement predicted that, "The Year 2000 problem will touch much more than just our financial system and could have adverse effects on the performance of the overall U.S. economy as well as the economies of many, or all, other nations if it is not corrected."  Moreover, "A few economists already are suggesting that Y2K related disruptions will induce a deep recession in the year 2000.  That is probably a stretch, but I do not think that we shall escape unaffected."

He discussed the likely fallout of unremedied problems, and raised as possible comparisons the 1996 winter storm, and the summer 1997 UPS strike.  "Hopefully any Y2K shock to our information infrastructure would also be transitory and would share the characteristics of these shocks ..."

Y2K In Telecommunications

William Kennard, Chairman of the Federal Commission Commission, also submitted a lengthy report to the Commerce Committee.  "At the FCC, we are very concerned that the Year 2000 problem has the potential of disrupting communications services worldwide. The communications infrastructure is absolutely critical, not only to the economy, including the general commerce, transportation and banking sectors represented on this panel today, but also to national preparedness, military, public safety, emergency and personal communications."

Kennard summarized the progress being made in the various components of telecommunications.  "With wireline telecommunications, because the phone companies realize that the Year 2000 problem could disrupt service and adversely affect their bottom lines, they are very motivated to fix the problem. Most companies are devoting significant resources to the problem." 

"The wireless industry appears to recognize the seriousness of the problem as well.  We remain concerned, however, that not enough is being done to ensure that the radio systems used by the police, fire, and other public safety agencies are Year 2000 compliant.  Some entities in the wireless industry have made a great deal of progress; others still have a long way to go."  "The cable industry also has recognized that it needs to address the problem, and to that end created a working group in February..."

"America also relies upon global telecommunications networks, which are only as strong as their weakest links. The International Telecommunications Union has created a Year 2000 Task Force to promote international awareness and to provide guidance on Year 2000 readiness. Concerned as we are about our own preparedness, we are also concerned that some countries are far behind us in addressing the problem."

"U.S. satellite companies also have adopted remedial measures to address the Year 2000 problem. Some satellite companies in developing countries, however, have not yet taken the necessary steps to prevent system failures, which raises significant concerns."

Senate Year 2000 Problem Committee

Also on Tuesday, the Senate also formed a new Year 2000 Problem Committee.  It will have oversight, but not legislative, jurisdiction.  It will be chaired by Sen. Bob Bennett (R-UT).  Sen. Chris Dodd (D-CT) will be Vice-Chairman.  Other members will include  Sen. Daniel Moynihan (D-NY), Sen. Jon Kyl (R-AR), Sen. Jeff Bingaman (D-NM), Sen. Susan Collins (R-ME), and Sen. Gordon Smith.