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by Michael K. Powell
Federal Communications Commission
Before the
NAB99 Convention Super Session of the Year 2000 Problem


Las Vegas, Nevada
April 19, 1999

(As Prepared For Delivery)

Thank you, Eddie [Fritts], for the kind introduction. Well, there are 256 days, 11 hours, and 05 seconds to January 1, 2000. But who is counting? To be absolutely honest, I am. As you know, January 1st is a very important date for me because of my stewardship of the communications industry's effort to mitigate against the Year 2000 ("Y2K") Problem, which I would like to discuss with you in a moment. But it is equally important because it represents the first page, of the first chapter, of our brand new collective future in communications generally and the television and radio broadcast industry specifically.


In recent months, there has been much public attention drawn to the effects that the Year 2000 Problem may have on unprepared computers, automated and intelligent systems, and microprocessor-controlled machines that are used virtually in all industries of the global economy. This deceptively cute shorthand represents the now all-too-familiar problem that stems from the inability of unprepared computers and other related automated and intelligent systems to process correctly the millennial date change that will occur on January 1, 2000.

In the 1950s and 1960s, computer designers and programmers, in order to reduce the need for expensive computer memory and data storage, developed the convention of storing calendar year dates using only the last two digits for the date year. Thus, the calendar year 1967 was represented as "67." As a consequence, computerized systems and networks may erroneously assume "00" to be "1900," not "2000," and thereby not function properly in the year 2000. In some cases, the hardware and software will continue to work, but they will generate and process spurious data that may not be detected for months or even years after.

It took awhile before there was a consensus on what to call this technical phenomenon. But I must tell you, I find it a bit ironic, if not disturbing, that this three letter abbreviation was brought to us by the very same folks that abbreviated the software code that brought us this problem in the first place!

Although no matter how funny the name, the Y2K Problem is serious. Among the cacophony of commentators' voices, there are wildly differing scenarios, which range from "business-as-usual" to apocalyptic, that suggest that there is much about the Year 2000 Problem that is hard to predict. What we can predict, however, is that there are thousands of legacy networks, systems and applications which were not designed to account for the millennial date change on January 1, 2000.

The implications of the Y2K Problem are especially significant for the telecommunications industry because communications rely upon the relatively seamless interconnection of numerous disparate, complex networks. Senator Robert F. Bennett, Chairman of the Senate Special Committee on the Year 2000 Technology Problem, was right on the mark when he called the global telecommunications infrastructure "the central nervous system of modern society."

Ensuring the health of this "central nervous system" is our collective critical task. In the past week, there has been a tremendous amount of reporting and assessment activity towards that end. We at the Federal Communications Commission and the Federal government have been working extremely hard with industry to try to ensure that problems associated with this phenomenon fall on the annoyance side rather than the catastrophic side. NAB and the broadcasting community have been working hard as well, and I commend you for your efforts.

Before going into the nitty-gritty of how we assess the Y2K-readiness of the broadcasting industry, let me elevate the discussion a bit and suggest that the Y2K issue is much more profound than you may realize. It is a problem and an event that has much to tell us, not just about our past relationship with technology, but about our present and future as well. Let us think about that for a second.


For such a seemingly simple problem, the Y2K Problem is proving to be tenaciously difficult and a time-consuming technical issue to eradicate. The challenge is much more than simply upgrading a few billion lines of code. What is most difficult is the discovery and replacement of embedded microprocessor chips, which affect things that many people and businesses never think about: security systems, air conditioning units, elevators and escalators, and machinery.

This dimension of Y2K tells us something about our increasing dependence on unseen, tiny computers. Computers increasingly are shedding their gray and beige plastic clothing and diving deep into our daily lives. They are burrowing into our cars, microwave ovens, toasters, coffeemakers, fax machines and, as you are well aware, into our televisions and our radios. Consider that the average U.S. home now has more computing power than the entire Massachusetts Institute of Technology did 20 years ago. And, these little "chippy" creatures are not content with their current capabilities, computers will increasingly and ultimately interact not just with a few, but with the full range of human senses--sight, hearing, smell, taste and touch. Thank goodness we are going into the year 2000 and not year 3000, for the next millennium will be infested with such embedded computers.

I imagine that most of you know of George Moore's Law. That is, the intense pace of the growth in microprocessor power is represented by Moore's Law which holds that the speed of the microprocessor doubles every 18 months. Consider, for example, that microprocessors have only been around for 25 years and yet their performance has multiplied by at least a factor of 10,000. The most state-of-the-art microprocessors can literally process a billion instructions each second. (The first microprocessor, by comparison, could process approximately 400 instructions or calculations per second). Theoretically, the expansion in microprocessor power could continue infinitum. What does this bode for the future? Well, I was recently struck by very thought-provoking essay authored by Michael Malone for Forbes magazine. Mr. Malone wrote:

"It is a curious fact that every animal--from the torpid giant tortoise to the frantic housefly--is given as its birthright about 1 billion heartbeats. . . .It is as if every species would have his same threescore and ten, the same span of experiences, no matter how quickly or slowly it was forced to live them. But in the digital, solid-state world that is the new metronome of life, it is a different story. The modern integrated circuit chip will soon be able to perform approximately 1 billion operations per second. One gigahertz. A billion electronic heartbeats: the equivalent of a lifetime in a single second. And, of course, at the end of those billion beats, there won't be a tiny electronic death but another billion-beat second, and another. And since silicon is incredibly stable and invulnerable to almost everything. . . there will be a billion more of these digital lifetimes for each chip--more than all the generations of life on earth--before it goes dark. Producing whole cosmologies of change that are beyond human comprehension."

As a consequence, ever-smaller embedded microprocessors will continue to burrow themselves into our daily lives. In the computer industry, there is a new discussion that has begun to surface. Business Week magazine recently titled the discussion "Beyond the PC." The computer industry is now dealing with the trend of the thin client, smaller and entirely unique computing devices that liberate consumers from the desktop, such as the PalmPilot. These devices are made possible by tiny computers and advances in power. As you all have recognized by your commitment to convergence at this convention, it is wise, too, to be thinking "beyond the TV." These machines and systems (again, no longer clumsy and intrusive like personal computers) will be invisible to the human eye, and will be tremendously autonomous and intelligent. However, they will also be ever-present and, more importantly, eternal (by our standards of life).

This should take your breath away!


Digitalization, or what I refer to as the "march of zeros and ones," is another defining attribute of our collective technological future. Who would have imagined a few short years ago that the whole of human communication and the entirety of our senses could be reduced to two simple digits, zero and one? In essence, digital has become the Virtual Planet's common language. Simple binary code married with microprocessor power and intelligence allow nearly anything to be shared with anyone, at any time, unencumbered by distance, human languages and perhaps even political or socio-economic barriers.

Digital also brings "sameness" to communications. With digital technology, arrange the zeros and ones in a long string and you can transmit a telephone call. Arranged in another string of zeros and ones, you have a video picture. In another, you have data or some combination of all and more. As a consequence, telecommunications industries that have long been defined by their use of particular underlying technologies are finding their services, their markets and their customers converged. No longer is twisted-copper wire the hallmark of a phone company. No longer is coaxial cable the exclusive domain of those who bring us CNN and ESPN. And no longer are the airwaves the exclusive stuff of broadcasters. Each of these industries is finding they have new competitive vulnerabilities as well as new opportunities. So are their customers.

The Digital Era will certainly be an era of abundance, not scarcity. And this industry will have to struggle to secure its place. I only hope that regulation wakes up to this reality and that we cease the fictitious rationale of scarcity in order to defend the indefensible proposition that broadcasters are uniquely undeserving of full First Amendment protection.


The Year 2000 Problem is also teaching us a great deal about the interconnectivity of our economy and the world. For example, the phone system will work if it continues to receive power. The power industry says it will be able to supply power, as long as it has telecommunications. The financial system will continue to function in the United States, but only as well as it can continue to settle transactions overseas. Manufacturers think they will continue making widgets, as long as the transportation system continues to function and deliver just in time inventory. It goes on and on. Few Americans probably appreciate the depth of our dependence on other nations of the world, but Y2K is showing all of us what an interdependent place the world has actually become.

And our technology cosmos is increasingly intertwined. Just consider that hundreds of millions of users of communications services throughout the country transmit voice, data and video information through a communications infrastructure composed of wireline telephone networks, cellular and personal communications system ("PCS") networks, satellite constellations, and broadcasting and cable television systems. The Internet adds another layer of interconnectivity and complexity, and is a powerful force tying the world together. Let me say a brief word about the Internet.

With the introduction and pervasive use of Internet we are literally able to shrink our world, and expand our reach beyond our current place and station in life. For example, it is no more difficult now to communicate or interact with a friend or colleague on the other side of the world than it would with your neighbor across the street. With the Internet on the World Wide Web, you and I are able to access resources and services from every corner of the world. Ranchers and farmers, for their part, use cellular phones, GPS, and on-line services to monitor commodities. There is something for everyone!

And no sector need be left out. No region need be left out. Technology has opened, and will continue to open, various enterprises and activities--communications, data and information services, education, entertainment, software, electronics, and financial services, just to name a few--to new interaction, consumption, trade, and investment. We must come to grips with the lessons of the Internet Protocol ("IP") and the Internet generally.

Indeed, as Mitchell Waldrop described it, the Internet is at "the edge of chaos--where the components of a system never quite lock into place, and yet never quite dissolve into turbulence, either." This is a long way from the sophisticated tin cans and string we are accustomed to regulating. From my perspective, IP and the Internet are also de-constructing competitive concepts. Innovation is no longer captured in the computers and switches of a few institutions, but instead will rest in the hands and imaginations of millions who can easily stroll across all boundaries--physical, social, political and organization. Thus, the users rule!

The pressing of intelligence to the periphery of networks and to users turns existing networks on their heads and poses a real threat to incumbents. George Gilder aptly described this phenomenon in discussing what he called the new "microcosm":

"The law of the microcosm is a centrifuge, inexorably pushing intelligence to the edges of the network. Telecom equipment suppliers can no more trap it in the central switch than IBM could monopolize it in mainframes."

And, as evidenced by this convention's theme, this industry is responding. As Robert Lindstrom notes in his article "Digital Mindset," found in your NAB materials, after a slow start this community is awakening. It is grappling with its place in the converged world. The list of developments is eye-popping:

These technological breakthroughs will transform what you produce and how you produce it. It will challenge your traditional business model and will invite new paradigms for advertising and revenue sources.


As I mentioned before, there has been a tremendous amount of reporting and assessment activity in the communications industry. Notably, on March 30, 1999, the Federal Communications Commission ("FCC") issued its comprehensive Report on the Y2K-readiness, as of January 1999, of five industry sectors:

(1) wireline telephone; (2) wireless telephone; (3) cable television; (4) broadcast television and radio; and (5) satellite. The FCC's interim report card on the Y2K-readiness of the communications industries is mixed, but we are guardedly optimistic about this industry as a whole.

In our analysis, the broadcasting industry appears to be adequately readying itself for the Year 2000 Problem, and we believe the public will continue to have access to broadcast services throughout the year 2000 date rollover. Specifically, for those licensees responding to the FCC that they had a formalized process for addressing Y2K, 50 percent estimated that they would complete remediation by March 1999. Seventy-three percent are estimated to be completed by June 1999.

Without a doubt, though, we are concerned about those broadcasters that have failed to respond to our assessment or have failed to adopt a formal remediation plan. We will continue to be vigilant to engage these firms to determine their Y2K-readiness and to provide meaningful guidance on their remediation. With fewer than 260 days to January 1, 2000, it is apparent that no firm can afford to put off attending to this issue. Often we hear that Year 2000 remediation efforts are hindered by the notions that "it's someone else's problem," or that an eleventh-hour magic pill will be developed to fix the problem. Unfortunately, there are no magic or universal solutions. Henry Kissinger once remarked, "competing pressures tempt one to believe that an issue deferred is a problem avoided: more often it is a crisis invited."


In this hair-raising talk about the future, let us not forget that this industry has a noble and venerable history of providing important services. You are uniquely positioned to rally to the aid of citizens in time of crisis, natural disasters, and war. This industry is often the source of news and information when storms rip families from their homes and infrastructure has collapsed. Radio, and later television, were the irreplaceable source for news of developments at home and abroad in time of war and threats to national security.

You may very well be needed again if the Y2K Problem conspires to produce a storm that affects the well-being of the public. It is imperative, then, that this industry fix its Y2K problems and test them fully, for if other systems in our country do fail we will be turning to you to find out what is happening. It will be a tragedy if you cannot answer that call.

One final word for all you technologists and programmers out there. As you rush to create new and innovative products and services, just remember (to borrow from an old margarine commercial) "it's not nice to fool mother nature," so please, please, please no shortcuts. We do not have the energy to do this again.

Thank you.