Government’s Role in Reducing “Year-2000” Risks
Leon A. Kappelman*
Department of Business Computer Information Systems, College of Business Administration,
University of North Texas, Denton, TX 76203-5249. E-mail: kapp@unt.edu
Jerry L. Johnson
Texas Department of State Information Resources, Austin, TX 78711-3564.
Kathy Rosmond
Department of Social and Health Services, Olympia, Washington 98504-5886.
The year-2000 computer problem poses many risks to
modern economic society. There are important roles
that governmental bodies can play in helping to mitigate
these risks. Some of these are regulatory and others
legislative. This article outlines these initiatives.
Introduction and Overview
Most people are at least aware that there is something
called the “year-2000” century date problem with comput-
ers. Less understood are the extent and probability of the
risks posed by this problem and the degree to which it might
adversely affect the public’s safety and general economic
welfare. Most governmental year-2000-related activities
have focused on dealing with the problem in their own
operational systems. Yet, as far as the responsibility that
government has to protect the public’s safety and economic
well-being, besides comparatively timely and reasonably
diligent efforts by federal regulators of financial institutions
and, more recently, the federal regulators of publically-
traded companies, government agencies at all levels have
been almost totally negligent in their duty to serve and
protect the public.
At a time when public sentiment favors less government
control, getting some legislatures and agencies to step up to
that kind of intervention may be difficult. But the year-2000
problem is not a “business as usual” situation. We need
informed and decisive leadership. Government actions such
as these would greatly serve the country:
1. Antitrust exemption so enterprises can freely share their
solutions with each other;
* To whom all correspondence should be addressed.
© 1999 John Wiley & Sons, Inc.
JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE. 50(4):354 –357, 1999
2. the choice to amortize costs so enterprises move more
quickly instead of delaying year-2000 expenses and their
impact on current earnings;
3. the creation of mechanisms to facilitate information shar-
ing without fear of legal repercussions;
4. the extension of statutes of limitations so that scarce
resources could be focused on remediation instead of
litigation;
5. the limitation of certain legal liabilities for enterprises
that can demonstrate a specified degree of diligence in
resolving their year-2000 problems, particularly in the
area of matters beyond the control of enterprise manage-
ment (e.g., a year-2000-related supplier failure); and,
6. some leadership on issues like certification of nuclear
power plants and waste dumps, water and sewer systems,
oil and chemical pipelines and plants, other potential
life-threatening and environmentally hazardous facili-
ties, as well as critical infrastructures like power gener-
ation and distribution facilities, medical devices and fa-
cilities, telecommunication networks, and the like.
We are not sure how far government can, or should, go
in monitoring the compliance of private or not-for-profit
organizations that provide essential services to citizens.
Nevertheless, government should assume significant re-
sponsibility for educating the public and raising awareness
regarding the issues. Moreover, public figures can provide
solely needed leadership to help foster the high degree of
cooperation and communication required to effectively deal
with this problem in the time available. Though people
resist government intervention, the fact is that most people
depend on government-monitored services like emergency
response systems, banking and securities dealers, oil/gas-
line distribution, food and drug industries, and the airline
industry, to name but a few. Using the example of a hypo-
thetical “State” state government and its agencies, we ex-
amine the role of government in protecting the public safety
CCC 0002-8231/99/040354-04
and the economy. Enterprises in certain industries provide
essential public services and they must be held accountable
to be “year-2000 ready” and the government agencies listed
in the following paragraphs are charged with requiring that
this happen.
It is worthy of note that there is no standard definition of
what it means to be “year-2000 ready” or “year-2000 com-
pliant.” And regrettably, at least with respect to dealing with
immediate year-2000-related concerns, it is far too late for
government or other entities to try to impose retrofitted
standards onto an already fragile technology infrastructure.
Nevertheless, in the long term, such initiative may be ad-
visable, just as standards for things like telecommunications
equipment and electrical plugs, outlets, and transmission
frequencies have served the national interest, fostered com-
petition, and protected the public well-being. For our pur-
poses, we assume that “century compliant” simply means
that things will work as well in the next century as they do
in the current one and that no date-related failures will
occur. If this is not the case, then they are non-compliant.
Court Systems
While the pardon and parole systems have to deal with
dates into the year 2000, other less obvious systems dealing
with scheduling court action or documenting evidence could
also be at risk. Recommendations: The State Administrator
for the Courts should take responsibility to see that the
appropriate jurisdictions are aware of, and are correcting,
any problems in the state, appellate, district, municipal, and
juvenile court systems.
Criminal Justice Systems
Sentencing and environmental (i.e., buildings and facil-
ities) control systems could be affected by the year-2000
problem. Recommendations: The Department of Correc-
tions needs to ensure that the sentencing and environment
control systems (especially security) are year-2000 ready in
the correctional institutions.
Electric Power Generation and Distribution Systems
Power plants, both nuclear and conventional, use com-
puter systems and smart valves that could result in system
failures. The grid that distributes electrical power also is at
risk. Recommendation: The State Public Utility Commis-
sion (PUC) should initiate a proceeding to assess the year-
2000 readiness of all power plants and the potential impact
on the power grid itself. The proceeding should determine if
each utility has conducted a year-2000 risk assessment,
developed a corrective action plan, and established a date to
become year-2000 ready.
Emergency Response Systems
While not a specific year-2000 problem, ground receiv-
ers that use the Global Positioning System (GPS) satellite
JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE—April 1, 1999
system may fail in August 1999 due to a date-related pro-
cessing problem. Many of the emergency response systems
are using GPS to track emergency vehicles for 911 systems.
Recommendation: The Emergency Communications Com-
mission should alert all 911 system operators in the state of
the potential problem and assist in identifying vendors of-
fering equipment and systems that have corrected this prob-
lem. Moreover, emergency response and emergency man-
agement agencies should work with other agencies and the
Federal Emergency Management Agency (FEMA) to help
identify high-risk areas and make contingency plans.
Environmental Risks
The year-2000 problem poses serious environmental
risks from many of the year-2000-related areas described in
the sections concerning electric power generation and dis-
tribution, petrochemical refineries and oil/gas-line distribu-
tion, and water and waste treatment. Recommendation: The
State Natural Resource Conservation Commission (NRCC)
should work closely with other agencies and the federal
Environmental Protection Agency (EPA) to help identify
high-risk areas and take regulatory action to protect the
public’s safety and the environment, as well as make con-
tingency plans.
Financial Institutions
Banks and credit unions also are at risk. On June 17,
1996, the Comptroller of the Currency, Administrator of
National Banks, issued an advisory letter (AL 96-4) to the
chief executive officers of all national banks, department
and division heads, and all examining personnel. The advi-
sory letter contained a statement by the Federal Financial
Institutions Examination Council (FFIEC) that alerted fi-
nancial institutions to risks that may be present in existing
computer systems as the industry enters the new century.
The FFIEC consists of the Federal Reserve Board of Gov-
ernors, the Federal Deposit Insurance Corporation, the Na-
tional Credit Union Administration, the Office of the Comp-
troller of the Currency, and the Office of Thrift Supervision.
On May 5, 1997, the FFIEC issued a more extensive state-
ment including “Year-2000 Examination Procedures” and
additional advisories have subsequently been issued. Rec-
ommendation: The Finance Commission and the Credit
Union Department should issue letters advising all state-
chartered banks, savings and loans, consumer credit enter-
prises, and credit unions that they have a responsibility for
analyzing the year-2000-related risk of their internal com-
puter systems, and should consult with affected vendors
(e.g., automated teller machines) and customers to ensure
they are addressing the year-2000 issue. Based on the risk
analysis, management should develop and implement an
action plan to deal with any identified systems changes
required to achieve year-2000 compliance.
355
Hospitals and Medical Facilities
Year-2000-related problems have been found in medical
lab equipment and other medical devices. Patient record
systems could also have problems. Recommendation: The
State Department of Health should initiate proceedings to
determine if hospitals and medical facilities have conducted
year-2000 risk assessments, developed a corrective action
plan, and established a date to become year-2000 ready.
Insurance Industry
The insurance industry has many of the same year-2000
problems as financial institutions. Recommendation: The
State Department of Insurance should initiate proceedings
to determine if insurance companies have conducted a year-
2000 risk assessment, developed a corrective action plan,
and established a date to become year-2000 ready.
Petrochemical Refineries and Oil/Gas-Line Distribution
Systems
Refineries and oil/gas-line distribution systems are con-
trolled by computer systems and use smart valves that could
be at risk. Recommendation: The State Railroad Commis-
sion and NRCC should initiate proceedings to determine if
refineries and managers for oil/gas-line distribution systems
have conducted a year-2000 risk assessment, developed a
corrective action plan, and established a date to become
year-2000 ready.
Telecommunication Systems
The voice telephone system has known problems that could
result in service failures, incorrect billings, and other problems.
The Federal Communications Commission (FCC) is aware of
the problem but, as yet, has not initiated any action to ensure
that local exchanges or the long-distance networks are ready
for the year 2000. Recommendation: The PUC should initiate
a proceeding to assess the year-2000 readiness of all local
carriers and long-distance providers. The proceeding should
determine if each utility has conducted a year-2000 risk as-
sessment, developed a corrective action plan, and established a
date to become year-2000 ready.
State and Regulated-Industry Investments
Several state agencies (e.g., treasurer, employee, and
teacher retirement systems) and universities invest funds in
stocks and bonds. Moreover, several regulated industries
including banking and insurance invest in such financial
instruments. Furthermore, banks make loans to other enter-
prises. Economists and bankers like Federal Reserve Chair-
man Greenspan, Federal Reserve Governor Kelley, and Dr.
Edward Yardeni have all indicated that there is a high
probability that some degree of year-2000-related economic
problems will occur. Given the seeming large percentage of
356 JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE—April 1, 1999
stock-and-bond-issuing public and private enterprises that
have done very little, to date, to address their year-2000-
related issues, it would appear that there is an uncomfort-
ably high risk of insolvency, default, and diminished market
valuations. Recommendation: State agencies and universi-
ties, as well as agencies that regulate industries that make
such investments, should require companies or entities is-
suing bonds or stock or otherwise borrowing to document
their efforts to address the year-2000 problem for such state
agencies and/or regulated institutions.
State Police Issues
The State Police needs to ensure that all safety and
protection systems function properly. This could include the
statewide law enforcement microwave communications sys-
tems, the computer systems that contain criminal history
and offender information (including fingerprint identifica-
tion systems), the sophisticated equipment in patrol vehi-
cles, and the jails. Recommendations: The State Police
should initiate proceedings to determine if these safety and
protection systems are year-2000 ready.
Transportation Control Systems
Motor vehicle, highway, and railroad traffic control sys-
tems use computers and devices with embedded micropro-
cessors that could fail or produce incorrect timing se-
quences. Recommendation: (1) The State Department of
Transportation (DOT) should be made aware of the poten-
tial problem and should assist local communities with the
identification of vendor equipment and systems that have
year-2000 problems and the possible solutions. DOT should
work with the State Railroad Commission to assess the
safety of highway/rail crossing sites. (2) The Railroad Com-
mission should initiate proceedings to determine if each rail
system manager has conducted a year-2000 risk assessment,
developed a corrective action plan, and established a date to
become year-2000 ready.
Water- and Waste-Treatment Systems
Most modern systems that control the treatment and
distribution of drinking water and waste water use comput-
ers and “smart valves” with embedded microprocessors.
Problems with the control systems, hardware or software, or
the smart valves could result in total system failures, con-
tamination of ground water, and/or contamination of drink-
ing water. Recommendation: The NRCC should initiate a
proceeding to assess the year 2000 readiness of all water
districts, municipal water supplies, and waste-water treat-
ment facilities. The proceeding should determine if each
utility has conducted a year-2000 risk assessment, devel-
oped a corrective action plan, and established a date to
become year-2000 ready. The NRCC also should make
information available about known problems and potential
solutions for specific vendor-supplied systems and equip-
ment.
United We Stand, Divided We Fall
It would appear that given the late start of many govern-
mental entities to begin solving their own year-2000 prob-
lems, let alone deal with their regulatory responsibilities in
this regard, combined with the large number of potential
problem areas as outlined above, that in most cases it is not
possible to mitigate all of the risks faced by any particular
country, state, municipality, community, enterprise, family,
or individual. This calls for:
(1) Serious risk-based triage so that the available resources
and time can be focused on the industries, agencies,
enterprises, and systems that pose the greatest potential
for disruption and/or devastation; as well as
(2) adequate contingency planning and preparations to en-
sure the continuation of essential governmental, infra-
structure, social, civic, medical, and business services in
the event of, what appears to be, the inevitable difficul-
ties that will ensue when the century hand strikes 20.
It is not government’s responsibility to do this alone. It is
up to each one of us to do our part, but government does
share some of the responsibility. Regrettably, many govern-
ment agencies have done absolutely nothing with regard to
year-2000 related risks that are undoubtably their responsi-
bility (e.g., the EPA and the President’s Council on Critical
Infrastructure Protection (PCCIP)). At the state government
level, more energy has gone into year-2000 liability-limit-
ing legislation than into actual efforts to ascertain and
resolve year-2000 problems. So preposterous are these ac-
tivities that Nevada has gone so far as to declare year-2000
damages by government agencies to be merely “acts of
God”— certainly not the kind of motivation state agencies
need to give year-2000 remediation their best efforts. Does
legislative irresponsibility know no bounds?
JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE—April 1, 1999
Nevertheless, by mid-1998, there were indications that
the tide was shifting at least in some quarters. The year-
2000 efforts in the states of New York, California, Penn-
sylvania, and Washington have conspicuous governor spon-
sorship and appear to be proceeding favorably. Some states
have even enacted spending freezes on non-year-2000-re-
lated information technologies. Legislation is pending in
California that will effect some of the policies suggested at
the beginning of this article. Heretofore totally inert federal
agencies like the Federal Communication Commission, the
Food and Drug Administration, and the Nuclear Regulatory
Commission are beginning to show signs of year-2000-
related regulatory life. Even the White House has demon-
strated a growing concern and created the President’s Coun-
cil on the Year-2000 Conversion. Where this all leads us by
January 2000 depends on just how many of these kinds of
activities take place in the months ahead.
Whether we think so or not, every one of us is a com-
puter user and every one of us depends on information
technologies for essential goods and services. In the final
analysis, it is a matter of individuals at every level of society
choosing to face this problem and doing something about it.
The success of a county governed of the people, by the
people, and for the people depends on the actions of its
citizenry. So, when it comes to the year-2000 problem, ask
yourself: Am I part of the problem or part of the solution?
The choice is yours.
Acknowledgments
Earlier partial versions of this article appeared in the
book, Year 2000 Problem: Strategies and Solutions from
the Fortune 100 (Leon A. Kappelman, Ed., 1997, Boston:
International Thomson Press, ISBN 1-85032-913-3; for
information, call toll-free 888-906-8410 or visit www.
year2000.unt.edu/book) and the Year/2000 Journal, 1(6),
1997.
357