Text: Y2K Council Chairman Koskinen on Year-end Preparations

(Appears at joint House hearing November 4) (2630)

Speaking at the final House of Representatives hearing of the year on the year 2000 (Y2K) computer problem, John Koskinen, chairman of the President's Council on Year 2000 Conversion, offered reassurance that the country's basic infrastructure is ready for the date change January 1, but added that "not every system will be fixed" by that time.

Koskinen said November 4 that the information now available indicates that electric power grids, telecommunications networks, financial transaction systems, and key national transportation systems in the United States "will make a successful transition" to the year 2000. But he said that "no amount of testing can ensure perfection," and he expects some problems in sectors where large numbers of organizations were late in starting their Y2K preparations or are continuing to take a "wait-and-see approach."

Koskinen urged all organizations to monitor their systems for problems during the rollover period, and to have contingency plans in place to minimize disruptions that do occur.

He also debunked several "myths" about the Y2K problem:

-- Everything Y2K-related will happen on January 1. The public should know, Koskinen said, that January 1 is just one of several dates to monitor. Information technology professionals will be checking systems well into the new year, looking, for example, for flaws in billing cycles and possible slow deterioration in services.

-- Self-reported Y2K-readiness evaluations are not reliable. Most organization test reports, he said, have been reviewed by independent authorities or by the government, and no major discrepancies have been found.

-- Y2K problems will bring about "doomsday" results, such as the launch of nuclear weapons or a halt to international trade. No available information indicates any truth to these stories, Koskinen said.

Koskinen presented his testimony at a joint hearing of the House Subcommittee on Government Management, Information, and Technology, and the House Subcommittee on Technology.

Following is the text of Koskinen's prepared testimony:

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Testimony of The Honorable John Koskinen

Special Assistant to the President,

Chairman of the President's Council on Year 2000 Conversion

before a joint hearing of the House Subcommittee on Government Management, Information, and Technology, and the House Subcommittee on Technology November 4, 1999

"Y2K: Myths and Realities"

Good afternoon, Chairwoman Morella, Chairman Horn and members of the subcommittees. I am pleased to appear before you today to discuss the Year 2000 (Y2K) issue.

I would like to start by thanking the subcommittees for your continuing interest in the Y2K issue. Your efforts have helped to increase the visibility of this important challenge within the Federal Government and the country as a whole.

I think it is altogether fitting that, with 57 days until January 1, we are gathered here to discuss the American public's questions about Y2K that are reflected in the ambitious set of objectives you have announced for today's hearing. I will not attempt to cover all of the topics outlined in the objectives, as you will hear today from others with expertise in several of these areas, but I would like to address what I believe are some of the more important myths and realities regarding the Y2K issue. I will also discuss the Federal Government's plans for the date rollover as well as steps individuals can take to prepare for the century date change.

Y2K Myths and Realities

As public awareness of the Y2K issue has increased, so has the level of debate about Y2K myths and realities. Where possible, the Council has been working to separate fact from fiction -- in our quarterly assessment reports, at public events and press conferences, in Y2K Community Conversations held across the country, and most recently through our new Y2K and You booklet and "Y2K Preparedness Checklist." I appreciate the opportunity today to address some of the myths and realities that I think are most important for the public to understand with less than two months remaining until January 1.

One of the more troubling Y2K myths is the notion that January 1 is a seminal date on which everything, or nothing, Y2K-related will occur. A corollary of this myth is that we will all be able to "close the books" on the Y2K issue and declare victory or defeat by the end of New Year's Day. As you know, Year 2000 challenges can happen any time a computer that is not Y2K-compliant comes into contact with a Year 2000 date -- before or after January 1. In fact, a number of businesses and governments have already had to use Year 2000 dates in their automated operations. Information technology professionals are well aware that the Y2K challenge is not limited to January 1 and will be monitoring systems well into the New Year for flaws in billing and financial cycles and possible slow degradations in service. So I think it is important for the public to know that January 1 is just one of the important dates in the life of the Y2K issue.

Another important myth deals with the reporting of Y2K readiness data. It goes something like this: Self-reported Y2K information is not valid since people will not voluntarily report problems, so virtually everything we've heard in terms of industry and government progress reports cannot be believed. This is not true for several reasons. Most organizations have structures in place whereby independent authorities have been reviewing the results of Y2K testing. In some industries, such as electric power, government agencies have conducted selected audits of the reported information and found no major discrepancies. And, most importantly, the industry surveys done for the President's Council have been conducted pursuant to the "Year 2000 Information and Readiness Disclosure Act," which the Congress passed at our urging last year. This Act guarantees individual companies that their responses to these surveys will be treated confidentially, which substantially increases the likelihood of candid responses.

We cannot rule out entirely the possibility that someone, somewhere has at one time or another created a rosier report of their Y2K progress than justified to appease their superiors or shareholders, but I think the overwhelming majority of self-reporting has been very responsible. As I've often said, if the self-reporting on Y2K was truly like allowing students to grade their own papers, everyone should have reported total compliance a long time ago. It would have saved countless organizations months, and in some cases years, of bad publicity. Instead, some companies in the surveys we've been provided have noted that they were behind industry goals or the majority of their peers.

Finally, I'd like to address some of the myths that take the form of Y2K "doomsday" scenarios such as the claims that the Y2K issue will cause nuclear weapons to launch themselves, the Federal Government is planning to use the Y2K issue as an excuse to "take control" of key institutions in the United States, and problems related to the date change will cause all foreign trade to grind to a halt. None of the available information suggests that any of these stories are true. Nuclear weapons require human intervention to launch, no computer malfunction -- Y2K or otherwise -- will cause weapons to fire themselves. However, we are concerned about the ability of the Russian early warning systems to function effectively during the rollover period. We are pleased that Russia has agreed to participate with us in a joint stability center in Colorado, where we will share information from our early warning system to ensure that there are no misunderstandings.

I would also like to stress that the Federal Government is not planning to use the date change as an excuse to usurp the authority of existing organizations. To the contrary, the Y2K challenge's complex nature and vast scope has caused the Federal Government to advise State and local governments that they need to be prepared to respond to possible Y2K problems on their own, at least initially. With regard to foreign trade, the developed countries most important to U.S. trade, such as Mexico and Canada, appear to be in good shape for the date change and vital areas such as international shipping and air transport are reporting increasing levels of compliance. While some developing countries are likely to experience some Y2K failures, which could create difficulties for those who are trading with companies in these countries, there is no indication that these problems will have a negative impact on the overall U.S. economy.

There are a number of Y2K realities, as well as myths, that deserve our attention as well. I'd like to address two such realities. First, it is important for the public to know that our basic national infrastructure is ready for the date change. The information provided to the President's Council and the public indicates that the electric power grids, telecommunications networks, financial transaction systems, and key national transportation systems will make a successful transition to the Year 2000. According to the most recent industry and government assessments, 99 percent of the nation's electricity supply is ready, 99.6 percent of banks are ready, all of the local and long distance carriers that serve over 90 percent of the American public are ready, and the air traffic control system as well as most airports and major airlines are ready.

The second Y2K reality is that, in spite of all of our best efforts to fix and test systems, there will be problems. Not every system will be fixed before January 1, and no amount of testing can ensure perfection. We have already seen Y2K problems surface in instances where systems had been fixed and tested, as was the case for some of the minor problems that a few Federal agencies experienced with the transition to fiscal year 2000. We also expect failures in sectors where large numbers of organizations were late in starting or, even more troubling, are taking a "wait-and-see approach." The important thing is for all organizations to be monitoring their systems for Y2K problems during the rollover period and to have updated contingency plans to allow them to minimize any disruptions that could be created.

Federal Government Rollover Activities -- Information Coordination Center

The subcommittees have heard in recent testimony from the Office of Management and Budget about the progress of Federal agency remediation efforts, as well as contingency and "Day One" planning. I will therefore provide a brief overview of the activities of the Council's Information Coordination Center (ICC). The ICC will be the Federal Government's central point for coordinating a wide range of information on system operations and events related to the Y2K transition that will be collected by government emergency centers and the private sector. The ICC will gather information about system operations in Federal agencies; among State, local, and tribal governments; in critical areas of the private sector; and internationally.

To accomplish this task, we are relying to the greatest extent possible on existing structures and expertise. Domestically, information on system operations will be collected by the States and provided through normal channels to FEMA, which will review the reports and pass them on to the ICC. In addition, the ICC will receive reports from national information centers established, many for the first time, by the private sector. The status reports will be provided to appropriate lead agencies. In the case of electric power, for example, the Department of Energy will receive the industry reports, analyze them, and forward the information to the ICC. In addition to electric power, we presently have agreements with the banking, finance, telecommunications, oil, gas, airline, pharmaceutical and retail industries to operate information centers during the rollover period and to share information with the ICC.

The ICC will receive international status reports from the State Department, the Defense Department, the intelligence agencies, private sector information centers and national Y2K coordinators around the world. In addition, the ICC will work with the National Infrastructure Protection Center and Computer Emergency Response teams here and around the world to monitor unauthorized intrusions into systems.

Information gathered by the ICC will be the basis for complete, regularly updated national and international status reports that will be provided to all Federal agencies and organizations sharing information with the center. These reports will help agency decision-makers determine what, if any, Federal actions are appropriate in response to Y2K-related difficulties. Status reports will also be provided on a regular basis to the public.

The ICC has been testing data collection methods with agency operations centers and private sector information partners. We also conducted a limited training exercise in gathering information from Federal agencies related to the so-called 9/9/99 problem. More extensive training sessions are planned for November and December. The ICC will begin 24-hour monitoring operations on December 28, 1999, continuing through the first few days of January 2000 or longer if conditions warrant.

Personal Preparedness

As I mentioned earlier, based on the available information, we do not believe the Y2K issue will create significant problems in the United States, but no one can rule out the possibility that there won't be temporary disruptions in some services. We believe it is likely that any disruptions will be short-lived, like temporary problems caused by storms, and will not cause long-term challenges. In light of that situation, the Council is advising the public to take reasonable steps to prepare themselves and their families for the date change.

At the beginning of this month, we published Y2K and You, an informational booklet on the Y2K issue as well as a "Y2K Preparedness Checklist," which I am submitting as part of the record. The checklist is an expansion of the Council's previous guidance on personal readiness for the Year 2000. Our suggestions include preparing for the long holiday weekend by having at least a three-day supply of food and water, keeping copies of important records before and after January 1, 2000, and checking with manufacturers to make sure that home electronic equipment is Y2K ready.

It is important to note, however, that we are advising individuals to adapt the recommendations in the checklist to their own personal situations and Y2K information made available by their local service providers. I think the most important Y2K information any of us can have is about the readiness of our own communities. There is no "one size fits all" for the entire country with regard to preparing for Y2K. People need to take the time to read Y2K notices being provided by local governments, banks, phone and power companies, supermarkets, and others so that they have a better understanding of what to expect in their neighborhoods and can prepare accordingly.

Perhaps most importantly, whatever people are going to do to prepare, they should do it early. If everyone waits until the last moment to take even modest precautions, supply systems could be overwhelmed.

Conclusion

When I appeared before you in January of this year, I closed by saying that overreaction by the public to real or perceived Y2K risks was in some ways our greatest challenge. I still believe that. On the other hand, our goal is not public complacency. All of us need to encourage the public to take the appropriate steps to be ready for date change. As I said in January, the way to achieve this delicate balance is to provide people with as much information as possible about Y2K readiness efforts -- the good and the bad. Thank you for the opportunity to discuss these important issues with you today.

I would be pleased to answer any questions you may have at this time.

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(Distributed by the Office of International Information Programs, U.S. Department of State)