House Subcommittee Holds Hearing on Y2K Conversion in Telecommunications
(June 17, 1998) The House Ways and Means Committee, Subcommittee on Oversight, held a hearing on Tuesday on Year 2000 problems in telecommunications systems. In what has become an almost weekly ritual on Capital Hill, an oversight committee called in several government officials and industry leaders to report on the status of Y2K conversion efforts.
Telecommunications industry representives expressed confidence in their Y2K compliance efforts. Federal Communications Commission Commissioner Michael Powell said that "only private companies can fix these problems." He also stated that "our approach to this matter is to leverage our existing regulatory relationship with industry, and to encourage and promote a cooperative mission oriented relationship, that would allow us to actually get this problem licked, rather than set up regulatory consequences."
Rep. Bob Portman (R-OH) conceded that "we are not very good up here in Congress at programming or at testing telecommunications networks, so maybe we can't help too much."
The telecommunications industry is on top of Y2K conversion efforts, according to telco executives. AT&T's A.J. Pasqua stated that "we are confident that AT&T will be successful in meeting the Year 2000 challenge." AT&T began work in 1996, and anticipates completion this year.
GTE's Gerard Roth stated that "the work being done to remediate and test the Public Switched Telephone Network (PSTN) is well thought through, is being acomplished at an acceptable rate, and represents the best known solution to Y2K we are able to accomplish." However, he explained that the problem is not just for GTE to become compliant: industry interdependencies make it necessary to make all elements of the PSTN compliant.
Telecommunications equipment manufacturer Lucent is likewise confident. Ronnie Lee Bennett stated that "the Year 2000 date change will not significantly affect Lucent's ability to deliver products and services to its customers on a timely basis into the next century."
Rep. Nancy Johnson (R-CT), Chairman of the Oversight Subcommittee of the Ways and Means Committee, presided at the hearing. "The Y2K problems affect virtually all telecommunications network components. Because a single noncompliant component could potentially shut down an entire network, rigorous testing will be necessary," said Johnson in a prepared statement. "To minimize the adverse consequences of noncompliant telecommunications systems, a massive logistical effort will be required-- including closely monitoring the status of the Y2K readiness programs of the local and long distance carriers."
FCC Commissioner Michael Powell
Powell does not favor a top down regulatory approach to the Y2K problem in telecommunications. He testified in his opening remarks that "there is very little time to get this job done. Only private firms can fix these problems, and we must have their cooperation. And we must have their timely disclosure of information ... We at the FCC are depending -- our experience shows, that a heavy regulatory approach will be to guarded (?) communication, the involvement of lawyers rather than technologists and managers, and a huge loss of time while we haggle over requests and regulatory demands. Significant time to my mind would be lost to developing, issuing, evaluating, and compiling lengthy data requests, and such efforts would divert the agency's limited resources, and those of companies, from actually working the problem, which after all is what matters the most."
Powell continued that, "the FCC has been working this problem for a number of years. More importantly, so have most of the major carriers. Indeed, I think it would be important to understand that this industry is probably better equiped and positioned to address this issue than most in our economy. And let me give you a few reasons why. First and foremost, this industry is dependent on a highly complex technical network that is engineering for near unfailing reliability. ... Thus these companies have a strong stable of trained experts in network reliability issues. They have experience with identifying threats to network reliability, ... " Powell also cited the beneficial effects of industry consortia and umbrella organizations.
Finally, Powell said that the telecommunications companies profit motive will lead them to become compliant. "The industry's own self interest happens to be congruent with that of regulators. They well understand that they could potentially face financial ruin, diminished good will and brand name, regulatory troubles, and perhaps most importantly, legal liability."
Y2K Compliance by Government Agencies
While the witnesses expressed confidence in the telecommunications companies to deal with Y2K problems, some expressed concern about government agencies' compliance. Joel Willemssen of the General Accounting Office stated that "we see varying degrees of strength at different agencies." He listed the Social Security Administration as one that is doing well. However, he added that "in other areas that strength is not always so apparent." (Powell stated that, "I have very little information about individual agencies.")
Willemssen later added that "there is no way everything is going to get done on time."
Rep. Johnson asked several questions to solicit information regarding whether the Office of Management and Budget has facilitated agency requests to obtain contractor help to work on Y2K compliance.
Hearing Participants
Four Congressmen participated, Rep. Nancy Johnson (R-CT), Rep. William Coyne (D-PA) and Rep. Karen Thurman (D-FL), and Rep. Bob Portman (R-OH).
The Subcommittee heard from eight witnesses. (The following links are to their prepared statements in the Ways and Means Committee website.)