Y2K Articles, Reports & Databases


Year 2000 Meltdowns: They're Here
By David Lohnes
September 1998, Professional Insurance Agents Magazine


Over the past several months I have been collecting news articles relating to the year 2000 problem. Here are a few of the more amusing (and disturbing) samples.

This past April, the computer network that schedules patient appointments at three hospitals and 75 clinics in Pennsylvania shut down &endash; all because one person punched in an appointment for January 2000.

Royal Sutherland Hospital in New South Wales has identified two processors, a laser camera, and an ultrasound machine that will be rendered inoperable come 2000. The value of the equipment is estimated at more than $550,000 and must be replaced.

Several Diamond Shamrock gas stations in Boulder County, Colo., are not able to accept credit cards with "00" as an expiration date. The clerk has to manually punch in the card number and set the expiration date to "99."

Last fall, Phillips Petroleum Co. engineers ran year 2000 tests on an oil-and-gas production platform in the North Sea. The result: In a simulation, an essential safety system for detecting harmful gasses such as hydrogen sulfide got confused and shut down. In real life, that would have rendered the platform unusable.

At midnight on Jan. 1, 1997, 660 process control computers that run the smelter potlines at the Tawaii Point Aluminum smelter in Southland, New Zealand, could not account for an extra day stemming from the 1996 leap year and crashed. Five pot cells were ruined, leaving the aluminum company with a repair bill estimated at more than $570,000. Two hours later, Comalco's Bell Bay smelter in Tasmania shut down with the same problem.

Unlike information technology systems and software that can be overhauled centrally, embedded chips are difficult to find and even harder to test. "Embedded chips are the most insidious of things. They can control everything from lifts and air conditioning to intelligent transport systems and chemicals added to the water supply," said Thom Fox, who manages automation projects for consultant engineers Sinclair Knight Merz.


Global implications

One global study, released in December 1997 by the Gartner Group of consultants, predicts failure of 50 million embedded system devices. The U.S. computer industry has forecast a failure rate of 500 million, or 2 percent of the 25 billion chips installed in electronic components worldwide, but cannot identify which 2 percent.

On Jan. 1, 1997, the millenium bug hit a law enforcement computer in New Zealand. The system, which controls criminal records, driver's licenses, vehicle registration, and more, wouldn't let police set court dates two years hence.

When the Hawaiian Electric utility in Honolulu ran tests on its system to see if it would be affected by the Y2K bug, "basically, it just stopped working," said systems analyst Wendell Ito. If the problem had gone unaddressed, not only would some customers have potentially lost power, but others could have gotten their juice at a higher frequency, in which case, "the clocks would go faster, and some things could blow up," explained Ito.

In 1993, the Associated Press reported that Mary Bandar, a 104-year-old resident of Winona, Minn., turned down an invitation to attend kindergarten. A computer, triggered by the fact that she was born in 1888, fired off a notice to begin school in the fall.

Air traffic controllers at an emergency meeting of the International Federation of Airline Controllers (January 1998) simulated the year 2000 date change. Their screens went blank.

A computer glitch at Smith Barney put roughly $19 million into each financial management account. The brokerage firm has 525,000 such accounts. Their spokesman said customers were not affected in any way. What wasn't said was that the computer programmers who made the error were attempting to make Y2K repairs to a database. The changes had been successfully tested offline, so the crew decided to conduct a live test in conjunction with the firm's main software.

People celebrating their 101st or 102nd birthdays have been getting junk-mail pitches for pabulum and kindergarten forms.

BankBoston recently had to replace many of the cash advance terminals in its branches because the chips inside the machines couldn't recognize newly issued Visa cards that listed "00" as the expiration date. The machine knew the expiration date couldn't be less than the current date, and decided 00 is less than 97, so it refused to process cash advances.


Even the IRS is vulnerable

The IRS uncovered an unintended side effect of its effort to eliminate the year 2000 computer bug: About 1,000 taxpayers who were current in their tax installment agreements were suddenly declared in default due to a programming error.

A jail in California almost released early two violent felons sentenced to 100 years each because computers indicated their parole dates were in 97. They are actually to be released in 2097.

It took a good year 2000 debacle to kick-start a millennium project at one Fortune 500 financial services company in the Midwest. In early January 1996, the company's consumer loan system encountered the "00" date and sent about 200 customers bills for 96 years' worth of interest.

One-third of 873 companies worldwide surveyed by the Meta Group research group haven't even assessed their computer systems to see what needs to be fixed. And the Cap Gemini survey found 82 percent of technology managers saying they underestimated their costs for addressing the year 2000 problem. The laggards include the auto, utility, and insurance industries.

At San Francisco-based Bank of America, the fifth largest U.S. bank, 1000 people are working full-time examining 200 million lines of code. Currently, only 35 percent of the code is fixed. Estimated price tag for the job: $250 million.

Banks are being subjected to extraordinary scrutiny by regulators and scrambling to pass stiff audits that started last spring. The Federal Reserve Board already ordered one cease-and-desist last November on three affiliated banks in Georgia for their lack of preparedness. Expect more.

Edward E. Yardeni, chief economist for Deutsche Morgan Grenfell Inc., said, "There have been pretty explicit threats from the Fed. They'll break kneecaps to get banks ready for this." Still, Yarndeni predicts that from 5 percent to 20 percent of banks will fail as a direct result of year 2000 glitches.


A web of problems

One particularly alarming aspect of the problem is that those who fix their own problems may still encounter troubles when doing business with others who haven't made fixes in a world where many computer systems are interlocked.

Supposedly, there are three major traffic systems manufacturers in the U.S. An unconfirmed report states that two of these manufacturers are involved in a copyright infringement lawsuit &endash; with each other. A pending lawsuit prevents either manufacturer from making changes to its software or hardware until settled. Given that similar cases have taken years, it's likely that they will be unable to make their systems Y2K compliant by the year 2000. It is also likely the public and municipalities may never be informed.

Sen. Robert Bennett, R-Utah, who heads the Senate's newly created Subcommittee on Year 2000 Computer Problems, sent out a list of systems that absolutely must be upgraded in time, starting with the public utilities. In a speech on the Senate floor, he said, "If they shut down, it's all over. It will not matter if every computer in the country is Y2K compliant if there's no power to run them." Bennett's next concern is the telecommunications system, followed by transportation. Computer glitches could cripple air traffic control, global positioning satellites that guide navigation, automated rail systems and even the computers that operate traffic lights.

A recent audit found that the federal government's year 2000 upgrades are behind schedule, and many of the most critical government systems may not be ready in time, jeopardizing everything from Social Security and Medicare checks to student loans and tax returns.

Industry is also in jeopardy, Bennett said. General Motors surveyed its manufacturing plants and found that all of its robotic systems use faulty microchips.


The government's 'severe vulnerabilities'

Joel Willemssen, director of the General Accounting Office's Civil Agencies Information Systems, told the House Ways and Means Committee that Social Security, Medicare and the division of the Treasury Department that processes all government checks still has "serious vulnerabilities" to the year 2000 problems. Most government agencies have taken so long to even assess their systems, it is "unlikely they will be able to renovate and fully test all mission-critical systems by Jan. 1, 2000," Willemssen said.

"Power companies have thousands of embedded chips in their equipment and the fact is that most of them will not be tested before year 2000 problems begin to affect them," said Kent Morgan, director of marketing at Saver, a provider of alternative power-supply systems. "There is a real possibility that we are going to have blackouts throughout North America."

Most companies rely on conventional battery- or diesel-powered uninterruptible power supplies in the event of an emergency. But modern UPS systems rely heavily on software that could itself be subject to year 2000 problems, experts said. Ron Pitt, vice president of software development at Exide Electronics, one of the largest makers of UPS equipment, said, "A lot of companies have (power) systems that automatically shut servers down at certain times of the day on certain days of the week. If the software thinks it's a different day, it might bring the server down at the wrong time." Exide has put its systems through year 2000 testing and is now working its way through its customer base to ensure all its installed systems have been upgraded to millennium-compliant versions. "That's not easy when you have a half-million installed systems and three tiers of distribution," he said. "We can't guarantee we'll get to everybody."

A recent study by the Information Technology Association of America found 44 percent of the 450 companies surveyed had experienced information systems failures.

But perhaps the most shocking revelation has been the discovery that the full force of the problem is greater than the sum of its individual manifestations. If a supplier of a particular item or service has a problem, then so does the organization it supplies. If a customer has a problem, then revenue is at risk. The managing director of ITAA, Allan Horsley, put it neatly when he described the year 2000 computer problem as a $1 trillion jigsaw puzzle without borders.


PIA to the rescue

I have been working with PIA (Professional Insurpance Agents) on a course designed to inform you of the problems that will effect you, your companies and vendors &endash; including banks, accountants, attorneys and other suppliers. More importantly, we'll be giving you instructions on how to test for the problem within your agency, how to fix or repair the simpler problems and sample letters to send to companies and vendors to determine if their systems are compliant.

We hope that by being prepared we can minimize the disruption as much as possible.


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