[ Text | WordPerfect | Audio | Report ]

fcclogo NEWS

Federal Communications Commission
445 12th St. N.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

FCC Releases Y2K Communications Sector Report

March 30, 1999

On Tuesday, March 30, 1999, the Federal Communications Commission, in conjunction with the Network Reliability and Interoperability Council, released the Y2K Communications Sector Report. This report covers five industry sectors: wireline telephone, wireless telephone, cable television, broadcast television and radio, and satellite. In addition, the Report included special sections dedicated to the international telephone network and emergency services.

Present at the release were Commissioner Michael Powell, who serves as the Defense Commissioner and co-chairs the Telecommunications Sector Working Group for the President's Council on Year 2000 Conversion; and John A. Koskinen, Chair of the President's Council on Year 2000 Conversion.

Copies of the Report can be obtained on the FCC's website <www.fcc.gov>. The FCC's Year 2000 Task Force can be found at <www.fcc.gov/year2000/> and can be reached at (202) 418-2379 or year2000@fcc.gov. The contacts for the Task Force are Marsha MacBride, Executive Director, (202) 418-2379, and Robert Cannon, Deputy Director, (202) 418-2421. Press Contacts are Nancy Plon, (202) 418-2899, and Audrey Spivack at (202) 418-0500.

The Report

Perhaps of all communications networks, the most critical to the nation is the wireline telephone network. Telephone companies around the world provide critical services to their customers. Whether it is completing an emergency phone call or transferring trillions of dollars in electronic fund transactions, we rely upon the telephone network to operate smoothly and seamlessly. As we approach the millennium, it is imperative that all aspects of the telephone network, as well as all communications systems upon which we rely, are reviewed for problems stemming from the "date-rollover" problem or "Y2K." The goal of this Report is to help define the problems posed to communications companies and consumers by the Year 2000 date rollover, to explore how pervasive those problems are, and to identify industry progress in addressing those problems.

Simply put, the Y2K problem is caused by a "shortcut " used in many computers and microchips to conserve memory space. In order to conserve scarce memory, programmers used two digits to reflect the year. For example, the year 1972 would be stored as "72." As a result, computers, microchips, and software that use a two-digit year are at risk of recognizing "00" as the year 1900 and not the year 2000. If a program is set to act in a certain way, at a certain time, and it thinks that it is the year 1900, it may perform incorrectly or stop working altogether.

The telephone network is vast and complex. Many different companies own and operate different parts of the network and must work together to complete a call from point A to point B. Any single call could employ telephone, wireless telephone and satellite services. To transmit each and every call, automated and intelligent machines and systems make calculations for the most efficient path to take, out of seemingly limitless combination of services and operators. To provide this robustness the network necessarily consists of millions of interconnected parts and hundreds of million of lines of computer code. Each of these must be checked for possible Year 2000 problems.

As daunting as the challenges may appear, the telecommunications industry is probably better equipped to address and resolve Y2K problems than most. In support of this proposition, we note five fundamental points about this industry.

--- This complex industry is engineered for near unfailing reliability. Its success is measured by its ability to complete a call 24 hours a day, 7 days a week, and it meets this high standard with almost unfailing regularity.

--- In order to maintain this reliability, telecommunications companies have a strong stable of experienced experts trained in network reliability issues.

--- There are telecommunications trade associations and consortiums that have a long history of developing standards and addressing network issues and then sharing their findings among industry members.

--- Telephone companies have extensive contingency plans to deal with natural and other disasters, and thus are well positioned for retooling these plans for Year 2000 problems.

--- Most Americans receive telephone service from just a handful of very large carriers that have extensive Y2K plans in place. As a result, we believe the telecommunications industry can bring the kind of experience and resources to this problem that are needed to minimize the impact of Y2K on the telephone network.

It is important to remember, however, that the telephone network constitutes only a part of the communications industry. Cable television, broadcast television, and radio are also important communications resources. This report also looks at the Y2K issues challenging those industries and how they are progressing.


Y2K is first and foremost a business problem. Reviewing systems for Y2K problems and fixing them is something every business must do for itself. However, the Federal Communications Commission is the government agency that is responsible for overseeing the communications industry and, as such, plays an important role. The FCC has adopted a three-dimensional approach to addressing the problem.

1. Outreach and Advocacy

The first dimension is outreach and advocacy. Through speeches, articles in periodicals, letters to companies and governments, and public forums, the FCC has sought to raise awareness about the Y2K problem and to encourage action. Through tools such as our webpage we have endeavored to provide companies with both information and resources for addressing the Y2K problem.

2. Monitoring and Assessment

The second dimension is monitoring and assessment. Through surveys, forums, meetings with the industry, information sharing with industry associations and public sources, such as congressional testimony by industry members, the FCC has been monitoring the industries' efforts to get ready.

3. Contingency Planning and Regulation

The third dimension is contingency planning and regulation. We not only have been monitoring efforts at contingency planning, but also have been trying to provide information and promote the adoption of contingency plans. Even if all steps are taken to fix the foreseeable Y2K problems, it is still prudent to plan for the unexpected. We also have reviewed ways to promote industry preparedness through regulatory means, such as highlighting the rules and obligations with which carriers and others will have to continue to comply even during the date-rollover.


In order to assess the Y2K-readiness of the communications industry, the FCC has employed a variety of methods and sources. We have issued voluntary and mandatory surveys. But our assessment is also based upon other sources, such as the twelve public and private forums held with members of the industry. In addition, we have worked extensively with industry umbrella groups and we have relied extensively on the work of the Network Reliability and Interoperability Council (NRIC), a broad-based federal advisory group that was chartered to advise the Commission on network reliability issues, including Y2K. We also have incorporated public sources, including statements made by companies, users, consumers, and others involved with the communications industry.

Most companies addressing the Year 2000 problem have devised a process for finding Y2K problems throughout their systems and for methodically remediating those systems. First, equipment types are usually broken down into categories or subsystems. Communications systems can be broken down into three major subsystems: (1) network elements, (2) support systems, and (3) auxiliary systems. Each of these subsystems is then reviewed using a step-by-step process aimed at minimizing the possibility that any part of the business will go unexamined. The process used by many businesses includes the following steps:

--- Inventory
--- Assessment
--- Remediation
--- Unit Testing
--- System or Integration Testing
--- Rollout

As a result, our survey measured readiness by asking companies to respond with information on how far along they were in each of these steps. This report includes these survey responses on an aggregated basis, broken down by industry.


Each of the industry sections included in this report concludes with a series of recommendations directed at consumers of communications services. It is our hope that these tips will provide guidance on reasonable steps that consumers could take to minimize any impact that a potential Y2K disruption (or even non-Y2K events) might have on their lives. Although we believe that the majority of consumers will not need to rely on any of the recommendations included herein, contingency planning is an important part of Y2K readiness.


Wireline Telecommunications

Our analysis of the public telephone network indicates that the largest local and long distance carriers are well on their way to being ready for Year 2000. These carriers are expected to be 100 percent ready, including having their contingency plans in place, by the second quarter of 1999. The seven largest local exchange carriers control approximately 92 percent of all U.S. access lines and the largest long distance companies account for 82 percent of total U.S. long distance revenues. The remaining carriers, which we define as medium/small, lag behind the large carriers in their remediation and contingency planning efforts and nearly half of the medium/small carriers surveyed by the Commission reported not having formal processes for managing Year 2000. These findings are of concern to us. We are particularly concerned that a large proportion of medium/small carriers appear to lack formal remediation and contingency plans and, therefore, may not be taking the necessary steps to become Year 2000-ready. We are encouraged by the testing results of the Telco Year 2000 Forum, an industry group comprised of seven of the largest local carriers. The Telco Forum spent six months testing system interoperability and found only six anomalies. The Alliance for Telecommunications Industry Solutions (ATIS) has been conducting intercarrier interoperability testing, and results of that testing should be released in April.

Telephone companies, however, are responsible for remediating only public networks; they are not directly responsible for customer equipment, such as telephones and fax machines, or private internal networks. Owners, such as residential customers and businesses, are responsible for ensuring that their own equipment and software are Year 2000-compliant. If this equipment does not work, consumers will not be able to access the telephone network even if the network experiences no Y2K-related problems.


According to the industry, wireless handsets have very few Y2K problems associated with them. If a wireless communications system is integrated into a computer system, however, it should be reviewed for Y2K-related problems. The Commission's survey of wireless carriers revealed a large gap between the preparedness of very large companies and smaller wireless companies. Only about half of the operators serving less than a half-million customers have implemented a remedial plan or process, while large operators have completed almost 60 percent of their fixes. These results are based on composite survey responses that include specifically targeted major commercial operators supplemented with a random sampling from wireless licensees.

The response rate to this survey was disappointingly low, with only approximately 31 percent of those surveyed responding. As a result, we must associate some degree of risk with this industry because we do not know the status of so many of the carriers. We do note, however, that the respondents collectively serve over 42 million of the total 108.3 million wireless subscribers reported in the Commission's most recent wireless competition report.

Broadcast Television and Radio

According to our assessment, the American public should continue to have access to critical news, emergency information and entertainment services on January 1, 2000. Individual Y2K-related disruptions should be isolated. Because virtually all listeners and viewers have several free, over-the-air signals available, service outages that may occur likely will leave affected viewers and listeners with several other alternative broadcast stations to rely on.

Many broadcasters indicate that they have adopted a formal plan to address Y2K. These owners account for a majority of the stations represented in the assessment. The assessment revealed that these broadcasters were largely aware of the Y2K problem and are taking steps to address it. Many broadcasters expect to complete with their Y2K remediation plans in the first half of this year, with ample time for any additional testing or correction prior to January 1, 2000.

Those broadcasters who do not have formal plans also appear to be taking steps to ensure the continuation of service on January 1, 2000. These steps include contacting vendors and performing system integration testing designed to reveal any Y2K-related problems in mission-critical and other station equipment. However, the lack of a formal remediation plan is a concern and makes it difficult to know how far along in the process these broadcasters really are.

Cable Television

According to our survey results, Y2K problems are not likely to cripple cable system operations and it appears that the vast majority of the nation's 65 million cable subscribers will continue to receive a substantial level of cable television service on January 1, 2000. However, a cable system delivers a multitude of video channels, received from a variety of sources. As a result, isolated channel outages and limited problems may be encountered.

Sixty percent of the respondents to the FCC's survey have implemented a formal Y2K remediation plan or process, while most of the remaining respondents indicate that they are addressing Y2K concerns as they arise or as part of regularly scheduled system monitoring and upgrades. Our survey indicates that large- and medium-size cable operators plan to complete repairs and unit testing by the summer of 1999. We note, however, the limited interoperability testing that has been conducted to date. Our survey also indicates that many small operators have testing and rollout dates that extend through December 1999, leaving little margin of error for unforeseen trouble or unexpected test results.

In addition, small operator respondents indicate that they sometimes lack necessary access to Y2K information, vendors, personnel and financial resources. However, small operators, on average, report that they are close to concluding their risk assessment and expect to complete contingency planning by July 1999. Ironically, some small cable operators are also fortunate to have older equipment that is not date or time sensitive and therefore not susceptible to Y2K problems.

Satellite and High Frequency Broadcasts

With regard to the satellite industry, the industry consensus is that Y2K problems are unlikely to affect satellites now in orbit. The FCC contacted 32 operators and received 28 submissions, but only 12 of the submissions included complete sets of data. The mediocre response rate to this survey does not, in and of itself, indicate a lack of Y2K preparedness. In fact, many of the companies that responded have stated that they regard themselves to be Y2K-compliant in most respects. However, without more specific information, we must assign a certain amount of risk to this industry.

High Frequency (HF) broadcasting, also known as Shortwave Broadcasting, is an international service where transmissions are intended to be received by the general public in foreign countries. HF Broadcasters are licensed by the FCC to operate between 5,950 kHz and 26,100 kHz. In response to the FCC's survey, a majority of HF broadcasters, representing both large and small stations, indicated that most HF licensees are scheduled to be Y2K-compliant before the millennial rollover. The data provided in these submissions support a guardedly optimistic assessment of HF broadcast stations' Year 2000 readiness.


Because global telecommunications rely upon seamless interconnection of various domestic and foreign networks, the international dimensions of the Y2K problem are especially significant. Although U.S. telecommunications companies appear to be working diligently to prevent any Y2K disruptions, the international picture is less certain and the FCC remains concerned about whether enough is being done on a global basis to ensure that there are no significant network disruptions or failures.

NRIC conducted an assessment of international telecommunications readiness, which covered 84 of the 225 countries in the world. The NRIC assessment study, a partial snapshot of the global Year 2000 problem, reported that the countries facing a "high risk" of network problems tend to be countries with lower "teledensity," and thus lower dependence on telecommunications services. It categorized the regions of Central and South America, the Indian Sub-Continent, and Sub-Sahara Africa as high risk. The regions of North America, Asia Pacific and Western Europe were categorized as low-to-medium risk. Moreover, the International Telecommunication Union prepared an assessment of its member-countries and private sector participants.

Recent survey results found that 52 percent of 304 respondents who supplied specific dates expected to be Y2K-compliant by March 1999. The remaining percentage of respondents said they would be compliant by the end of this year.

Emergency Services

Emergency services are critical to life and safety. Emergency service communications are made up of a collection of different services, including 911 calls, dispatch services, wireless communications to response teams, and the Emergency Alert System. Telephone companies have been remediating their 911 systems as part of their Y2K programs. In that regard, the Telco Year 2000 Forum's tests of 911 have revealed no failures or anomalies associated with Y2K. Dispatch centers or Public Safety Answering Points are extremely important to emergency service call processing. Local communities own these systems and must take the steps necessary to prepare these systems for Y2K. As for the wireless systems that are used to reach emergency response teams, manufacturers report that conventional systems are not date sensitive and therefore not typically at direct risk for Y2K-related problems. However, if a cellular phone system uses computer switching, it may be at greater risk.

The Emergency Alert System (EAS) is another important element of emergency communications. All broadcast stations and cable systems must participate in EAS. Vendors of EAS equipment indicate that their equipment is compliant or that they have compliant versions available. Cable operators and broadcasters responding to the survey are addressing EAS as part of their overall remediation process.


We are encouraged by the progress being made by the larger companies to prepare for the year 2000, and are cautiously optimistic about the ability of these companies to withstand even unforeseen problems with minimum disruptions to the services they provide. It is important to remember that in many industries, these large companies serve the vast majority of consumers. For example, over 92 percent of people receive phone service from just 7 local telephone carriers, and the top 20 local telephone companies serve over 97 percent of U.S. customers. And while these large telephone companies cannot guarantee that customers will have no Y2K-related problems, we generally concur with their assessment that for most of their customers phone service disruptions will be minor and remedied quickly.

We remain concerned, however, about the smaller companies. Many of the small-and medium-size companies that have adopted a systematic approach to addressing Year 2000 have completion deadlines dangerously close to millennium rollover, leaving little time for delays from vendors or remediation as a result of problems discovered in the testing process. And whether in telephone, cable, broadcast or wireless, many small companies have not adopted a systematic approach to addressing Y2K, an approach that we believe is necessary to adequately address the problem.

- FCC -