The telecommunications sector is part of the critical "golden triangle" which includes the banking and electrical power systems. What is this triangle mean? The failure of one will collapse the other two within a matter of weeks. All are heavily computerized, interdependent and at substantial risk from the millennium bug. This transfer of information is critical for our survival, and would severely collapse our economy without it. The modern social division of labor rests on our ability to trade and transfer money "from a distance". The inability of banks to communicate means instant loss of liquidity, and eventually, failure.
A telecommunications network is sensitive to the weak link problem, where a single digit error can bring down the whole system. AT&T has 400 million lines of code, began its remediation efforts in 1997, and has so far only spent half of its y2k budjet (According to third quarter SEC filings ). Besides AT&T, Sprint, MCI, there are 1400 smaller carriers that can wreak havoc on the rest of the system. Since we are a global economy, the reliability of inter-continental communication requires the funtional ability of foreign countries' carriers, and are woefully unprepared in dealing with y2k. It is a case where 99% compliant is not good enough--the 'virus' dillema.
We are an international economy with increasing interdependencies. Even if all US carriers get compliant, what good is it if we cannot call out to any other country, and therefore do business? If a company cannot get a dial tone to a country where a supplier of critical goods and services resides, it may not be able to deliver its own product. this is most critical in the banking industry. Every day untold billions of dollars are transfered between countries by means of satelites and under-sea cables which are control by time sensitive computers.
Manufacturing processes require the communication system to order parts and services. Since companies rely on computer enabled "just in time delivery" inventories are no longer stored with little room for slack. If a company cannot deliver its product due to serious supply chain disruptions, it will go bankrupt.
The telecommunication industry also depends on y2k defective suppliers to stay in business. Manufacturers may be unable to deliver replacement parts and services due to their own y2k failures and bankruptcies. If the financial and banking system collapses, they will be unable to receive billing payments and pay their own suppliers. If there are wide-spread power failures, they will be unable to keep the communication lines operational, thereby bringing the rest of the economy down with it. But the power industry also requires functioning communication lines between plants for automated power production--the ultimate catch-22. If the Banking system collapses, so does our means of payment. These large companies will fail to deliver their product within a few months due to inability to pay their suppliers, employees, stockholders and therefore keep business operational. E-mail Feedback welcome: D. Fisher
