ITAA's Year 2000 Outlook July 2, 1998 Volume 3, No. 25 Published by the Information Technology Association of America, Arlington, VA Bob Cohen, Editor bcohen@itaa.org Read in over 70 countries around the world ITAA's Year 2000 Outlook is published every Friday to help all organizations deal more effectively with the Year 2000 software conversion. To receive a subscription to this free publication, please sign up on the web at https://www.itaa.org/transact/2kout looksub.htm. ITAA's Year 2000 Outlook is sponsored in part by CACI International Inc., DMR Consulting Group Inc., and Y2Kplus Justice Department Gives Green Light to Y2K Info Exchange The Department of Justice (DOJ) has issued a business review letter giving the Securities Industry Association a green light to exchange information about the Y2K status of manufacturers and vendors, product test information, and problems in remediating p articular products. In a letter issued this week, Assistant Attorney General Joel Klein notes that the Department "has no current intention to challenge the information exchanges proposed by the SIA." "…the Department does not believe that the proposed conduct will have anticompetitive effects," Klein writes, adding, "The information exchanges…should not diminish competition amongst SIA's member securities firms. No pricing or customer information wil l be disclosed. Nor is there any proposed conduct that would directly lessen competition in the procurement of computer services. The information to be exchanged about vendors will be stated in an objective nonjudgmental manner. No recommendations will be made." Tom Brunner, a partner at Wiley Rein & Fielding, said the business review letter is significant both in that it is broadly framed, signaling a position of non-interference; and that it happened so fast, in a few weeks rather than a few months. Brunner sa id the DOJ's logic applies to any collaborative effort targeting Year 2000. Robert Bell, also a partner at the firm, said that anti-trust lawyers in other industries may conclude that the DOJ guidance provided to SIA is sufficient to their needs and that industry specific business review letters, covering the same ground, are not necessary. Information exchanges about particular vendors are of particular anti-trust concern because they raise the possibility of vendor boycotts. The DOJ letter specifies that there will be no collective boycotts. "Each SIA member will make its own individual judgment about whom to hire for the necessary remedial work." The DOJ letter does not raise the issue of collaboration on other types of Y2K- related lessons learned. Bell said that generally speaking, the law does not attach anti-trust problems to groups sharing best practices information. FCC Y2K Roundtable Connects Telecom Buyers and Sellers The Federal Communication Commission (FCC) gave telecommunications carriers and equipment manufacturers something of a channel to communicate their Y2K status this week to concerned end users. An FCC roundtable drew 25 representatives large and small tel ecommunications companies as well as telecom customers and related organizations to discuss the Year 2000 health and welfare of the wireline network. Reports coming out of the invitation only meeting suggest that the telecommunications industry's message was well received. According to one government official at the meeting, the large carriers appear to be on track for delivering Y2K-enabled critical components of the basic network system. He said that participants offered a "range of candor" about their past, present and future Y2K activities. Lingering concerns, he said, relate to the status of international network systems and small domestic carriers. One such concern relates to the potential of problems originating with a smaller telecom player but cascading to affe ct major parts of the network. And even with the meeting's reassuring dialogue, this official said that no one at the FCC "is breathing easier." The roundtable, he said, is just one step in an on-going process. One meeting participant representing an end user organization may not be breathing better but he did say that the telecommunications carriers are becoming more candid with their Y2K status information. In the past, he said, carriers have wanted to talk i n generalities about their conversion programs. Now he indicated some carriers are more willing to talk about specifics, including compliance schedules for both network elements and service offerings. He also said he wants to know details about percenta ge completed, test plans, test schedules and results. Without this information, he said, his own organization's attempts to perform contingency planning are made much more difficult. "I am dismayed by any user implication that telecommunications carriers have willfully elected not to get the information out," says GTE Vice President Gerard Roth. "The public switch telephone system is extremely complex and answers were, in all likelih ood, not yet available when the questions were asked. We get the information out if the information is knowable." The telecom executive maintains that his industry has been and will continue to be very open about their Year 2000 status. He points out, that common carriers are caught in "the middle of the food chain," between OEM equipment and true public switch netw ork interoperability. Manufacturers, for instance, could be looking to make changes to a telephone switch with six million lines of code, a lengthy process. Once the equipment is compliant and delivered to telecommunications service provider, the logist ics challenges kick in. Rollout schedules may be impacted by anything from forest fires in Florida to El Nino effects in Washington State, Roth said. Meanwhile, at least one meeting participant indicated that in Y2K terms, the FCC is on the right wavelength. Their posture, he indicated, is to encourage telecommunications companies to share information with customers. A more formal approach, such as a n FCC rulemaking on the issue, would take months, probably not completed until after the Year 2000, he said. On a related note, Mike Nelson, chair of the FCC's Year 2000 Working Group, left the agency this week for a job in the private sector. Yardeni Ups Recession Likelihood; IW Expert Cites Cyber Threats Speaking at a Washington, D.C. press conference this week, Deutsche, Morgan, Grenfell Chief Economist Edward Yardeni raised his "subjective probability" forecast of a recession from 60 percent to 70 percent. Yardeni compared the Y2K situation to the 1973-1974 oil shortage. "…in a very similar way, I believe a disruption in the flow of information, which is clearly vitally important for running our businesses and our governments, can also cause a global reces sion." Yardeni pointed out that the oil shortage effectively ended when motorists were able to refill their tanks. Corrupted data in the Year 2000 could be water in nation's economic gas line. Yardeni called global leadership on the issue "utterly pathetic" and the Y2K Conversion Council efforts in the U.S. "dangerously inadequate." "They are creating the false impression that we are dealing with the problem in every aspect and, therefore, the re is no reason to really be concerned about it, that the policymakers are addressing the issue," Yardeni said. If not impressed by the federal government effort, Yardeni indicated that at least Uncle Sam is up front about federal agency activities. "The only organization on the planet Earth that is providing quarterly progress reports is the U.S. Government. Oth er governments are not doing the same. Businesses are not doing the same," Yardeni said. The economist said the "full monty" is needed on this issue. Arnaud de Borchgrave, senior analyst at the Center for Strategic and International Studies working in the area of cybercrime, cyberterrorism and cyberwarfare, also spoke at the press conference. He said the information warfare (IW) community is wary of a dversaries who may consider launching a cyberattack under the guise of a Year 2000 disturbance. de Borchgrave said experts believe that "the Year 2000 crisis may be exploited by our adversaries at a time when it will be impossible to distinguish between computer breakdowns and an IW attack…" Or real Y2K problems could be misinterpreted as cyberwar: De Borchgrave said, "It seems to me that the national security dimensions of the Y2K were made crystal clear by Bill Cohen at a NATO Conference in Brussels three weeks ago when he offered his Russian opposite member whatever help he was to provide to prev ent, as he put it…'confusion or unthinkable calamity when Y2K problems might blank out early warning computers and panicked officers might assume or suspect Western sabotage and spring into action.'" De Borchgrave said the Russian government sent its first Y2K compliance warning just over one month ago. "Until then only one third of Russia's 50 leading companies…had ever heard of Y2K," he said. Yardeni and de Borchgrave spoke at a press conference conducted by the National Association of Manufacturers (NAM). NAM President Jerry Jasinowski called Y2K "an extraordinarily large global disaster in the making…" Closer to Home ITAA Praises IEEE Work on Standard Y2K Compliance Definition ITAA has commended the IEEE for its vote to adopt a common definition of Year 2000 compliance. "We are delighted that the IEEE has done the 'heavy lifting' necessary to make this standard language a reality," said ITAA President Harris Miller. "We belie ve that this standard language should be widely embraced, both in this country and overseas. Let's stop discussing Y2K compliance and start achieving it." The definition is available on the web at http://grouper.ieee.org/groups/2000/p2000-1.doc. ITAA*2000 Certifications Announced Two organizations received ITAA*2000 certification this week: the Research and Development Division of HTE, Inc. of Lake Mary, Florida; and the Corporate Research and Development Institute of Kirchman Corporation of Orlando, Florida. ITAA*2000 is the indu stry's century date change certification program, which examines processes and methods used by companies to perform their Year 2000 software conversions. Both participated in rigorous evaluations of their approaches to date conversion, with extensive ana lysis in eleven discreet process areas deemed necessary to a successful Year 2000 conversion. Business to Business Alydaar Software Corporation, Charlotte, NC, has been awarded Y2K remediation contracts by Advanced Micro Devices, Inc. and The Aerospace Corporation. Data Dimensions Inc., Chicago, IL, has announced the availability of ProVisia, a planning and estimating toolkit. SCB Computer Technology, Inc., Memphis, TN, has won two contracts with the Commonwealth of Kentucky. One of the contracts is to provide network integration and professional staffing services; the other is to provide Y2K assessment and consulting services . Thinking Tools, Inc., Monterey, CA, has entered into a strategic partnership with Y2Kplus, Inc. Under this partnership, Y2Kplus will market the Think 2000 software product as their "Best of Class" solution for Y2K risk assessment. ITAA Y2K Information Center Solution Providers Directory http://www.itaa.org/script/2000vend.cfm ITAA*2000 Certification Program http://www.itaa.org/2000cert.htm Outlook Archive http://www.itaa.org/script/get2klet.cfm Legislative and Litigation Table http://www.itaa.org/Y2Klaw.htm Calendar http://www.itaa.org/y2kcal.htm Vendor/User Status Questionnaires http://www.itaa.org/questmain1.htm Copyright ITAA 1998. All rights reserved. The Information Technology Association of America, 1616 N. Fort Myer Drive, Suite 1300, Arlington, VA 22209. Internet: http:\\www.itaa.org