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News In Review

May 10, 1999

Telecom:
Phones Keep Ringing

Carriers are investing heavily to make sure the phone network is Y2K compliant

By Mary E. Thyfault

pie chart

The Y2K Package:
  • Y2K Under Control

  • Financial Services

  • Transportation

  • Government

  • Telecom

  • Utilities
    • Dial-tone telephone service is one of the most reliable things in American life. The nation's telecommunications carriers intend to keep it that way as the calendar rolls over to the year 2000.

    The telephone industry is spending between $3 billion and $3.5 billion to make sure the nation's phone networks are Y2K compliant. The Federal Communications Commission says it's "cautiously optimistic" that "phone service disruptions will be minor and remedied quickly" for most customers.

    "We have more infrastructure in this country to deal with these kinds of situations than exists anywhere else in the world," says Skip Patterson, executive director of Bell Atlantic Corp.'s year 2000 program office. "We like our infrastructure, we like our comfort."

    Confidence is high that the telecom industry is dealing with the Y2K issue, according to an InformationWeek Research survey of 240 IT professionals, ranking behind only the financial industry when it comes to Y2K compliance. Survey respondents said they have a confidence level of 8.2 on a scale of 10 that their carriers wouldn't experience any significant service disruptions.

    Telecom carriers have an advantage: They use many of the same switches, hardware, software, and operating support systems, which come from just a few suppliers. "The suppliers have done rigorous testing," Patterson says. "We've tested individually, and we've tested hardware and software components that are common to all of us."

    Another plus: Only about 20% of the key devices that run the network are time- and date-sensitive. "In our industry, the most sophisticated technology--our switches--are not affected by Y2K," says John Pasqua, AT&T's year 2000 VP.

    Still, the FCC and others are concerned that small and midsize U.S. phone companies and dozens of overseas companies aren't prepared. Carriers and analysts predict that the largest carriers--seven provide local service to 92% of America--will be the most reliable. But the smallest 1,200 carriers are either further behind in their Y2K plans or are providing little information, analysts say.

    Another concern is wireless service. While wireless handsets are unlikely to have Y2K problems, the FCC fears there's a Y2K preparation gap between large and small wireless service providers. Large operators have completed almost 60% of their Y2K fixes, but only about half of those serving fewer than 500,000 customers have implemented a remedial plan or process.

    AT&T, the nation's largest carrier, will have spent about $650 million on Y2K through the end of this year. The carrier has already Y2K-certified critical hardware and software for all AT&T applications and systems that run the business and are used to offer network services. AT&T has more than 3,000 applications representing 380 million lines of code, and it says it has assessed, repaired, and certified all applications that are important to customers. In addition, 92% of these applications and their dependent network elements have been deployed and in operation since the end of March. "We're on the right path and entering the final stretch," says AT&T's Pasqua.

    MCI WorldCom Inc. is spending almost as much: $250 million on Y2K before this year and another $250 million this year to examine and update 275 million lines of code, about 2,000 application systems, and nearly 1,000 network systems.

    MCI WorldCom planned to make the majority of itskey business systems--including network- and customer-interface systems--Y2K compliant by the end of the first quarter. The remaining business-critical systems, as well as less essential systems, are targeted for compliance by June 30, with full remediation throughout the company's network no later than Sept. 30.

    Sprint Communications Co. plans for critical applications, including the network and systems for service and billing, to be in compliance by June 30. At the end of February, Sprint's long-distance division had tested 79% of its network elements and 85% of its information systems. In its local-services division, Sprint had tested 95% of its network elements and all of its information systems and applications.

    One major local carrier, Bell Atlantic, has completed 90% of its initial testing and plans to finish by the end of June. Bell Atlantic started by testing individual systems, then small clusters of systems that interact. Eventually, it will test the larger systems that are used for entire business processes, such as placing calls, ordering service, invoicing, pricing, and delivering service.

    Another big local carrier, SBC Communications Inc., has brought 98% of its systems into year 2000 compliance, and has tested 88% of those systems. When it comes to the 1,200 SBC network switches, the company says it's 90% done with the project. SBC's 7,000 building and facilities systems are fully compliant and its 117,000 desktops are 88% compliant. SBC says that more than 99% of the company's systems will be upgraded by June 30.

    A third local carrier, GTE Corp., plans to complete all but three of 500 Y2K enterprisewide compliance tests by the end of June. The three tests will be done by mid-July, and will include one that involves a new system. GTE has 900 people dedicated to Y2K, down from as many as 1,200, and is spending $370 million to bring its systems into compliance. After tests are complete, GTE will conduct a quality review, making sure there are no oversights.

    Only Minor Glitches
    All this testing hasn't turned up much. So far, most Y2K carrier glitches have been minor, involving personal productivity or minor scheduling programs and not directly affecting customers. "Out of more than 1,000 test cases, there were a handful of anomalies, and we were able to retest those successfully," says AT&T's Pasqua. Still, the company is "not declaring victory," he says, and will keep testing until time runs out.

    MCI WorldCom says it's had a few system glitches with forward-looking applications experiencing minor date-related problems. The carrier says it addressed the problems immediately, either through temporary or permanent remediation.

    Bell Atlantic had a minor problem when a handful of PCs didn't roll over from 1998 to 1999 properly, says Patterson. It happened before the carrier had finished remediation of the PCs. SBC's only problem was a minor billing issue in 1996. GTE, meanwhile, says it had minor glitches with spreadsheets and personal calendar programs that were fixed quickly and easily, says Gerry Roth, the VP in charge of Y2K.

    When it comes to bringing the telecom industry's systems into compliance, carriers are more likely to patch than replace systems. "Generally speaking, we make decisions to replace systems based on corporate or business unit strategic planning, not Y2K," Roth says. At the same time, remediation techniques have improved over the last two years, and companies such as GTE are discovering problems they missed the first time, Roth says.

    Carriers have also put a lot of focus on interoperability testing with each other and with other industries. AT&T, for example, is working with companies in the financial, power, transportation, and public-safety sectors.

    The Telco Year 2000 Forum, a group of seven of the largest local carriers, completed six months of interoperability testing and found only six anomalies. None of the six affected service. In April, the Alliance for Telecommunications Industry Solutions said it found no anomalies in its intercarrier interoperability testing between local and long-distance carriers.

    As time runs out, it becomes more likely that some people may have trouble getting their calls connected overseas. "With the exception of principal trading partners, there are probably going to be some real rough spots in the road," especially in less-developed countries, says Bell Atlantic's Patterson.

    Will problems in small countries create a snowball effect for the worldwide interconnected telephone network? "We don't think so," Patterson says. "There's already intelligence built into the network to prevent such a thing, and it's been quite successful." But he adds, "to a degree it's all speculative trying to predict the future."

    Adds GTE's Roth: "Y2K has been difficult, but it looks like it's on track for a safe landing."


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