nric focus group i, subcommittee 1 year 2000 readiness of the telephone industry final.v1...

990114/AGR 1

NRIC Focus Group I, Subcommittee 1Year 2000 Readiness of the Telephone Industry

Final .v1

NRIC Focus Group One

Subcommittee 1Network Assessment

January 14, 1999

Gerry RothVice President

GTE Technology Programs

This document and the information contained herein is intended, and for all purposes shall be deemed, a Year 2000 statement and a Year 2000 readiness disclosure as those terms are defined under United

States federal law

990114/AGR 2


Final .v1

Scope of Effort• Provide assessment of Year 2000 compliance of Public Switch Telephone

Network (PSTN)– Participants:

• 7 Large Local Exchange Carriers (LEC) 98.5% • 22 Medium to Small Local Exchange Carriers .5%• 3 Large Inter-Exchange Carriers (IXC) 82.0%

– For addition in April following FCC questionnaire• Wireless• Cable• Satellite

• International Assessment– Presentation by relative risk and potential impact of Year 2000 non-compliance – Risk to U.S. ranked by traffic volume

• Methodology– Direct query of Large Local Exchange Carrier and Inter-Exchange Carrier

Participants in November• September 1998 and December 1998 (estimates)

– Indirect query of medium and small Local Exchange Carriers• September 1998 only

– International• 6 data sources--risk assessments weighted and combined• Correlation to 1997 international calling patterns from/to the U.S.

990114/AGR 3


Final .v1

Participating Local Exchange Carriers & Inter-Exchange CarriersIndustry Coverage

Coverage by Participating Inter-Exchange Carriers(as a percentage of 1997 Total IXC Revenue)

Total 95.1BParticipating 78.3B

Coverage by Participating Local Exchange Carriers(as a percentage of Total U.S. Access Lines)

Total 193.6MParticipating 190M

Participating Companies

99%

Others1%

Participating Companies

82%

Others18%

990114/AGR 4


Final .v1

Y2K AssessmentCoverage by Participating Carriers

Participating Companies Others

990114/AGR 5


Final .v1

Y2K Lifecycle Compliance StatusLarge and Medium Size Local Exchange Carriers

September 30, 1998

Large Companies Midsize and Small Companies

94%

71%

54%

62%

47%

39%

50%

84%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Awareness Renovation Validation Implementation

990114/AGR 6


Final .v1

Y2K U.S. Public Switched Telephone Network Compliance StatusLarge and Medium Size Local Exchange Carriers

September 30, 1998

Large Companies Midsize and Small Companies

% Switches Y2K Ready % Non-Switch Network Components Y2K Ready

% Network & ISApplications Y2K Ready

63% 64%62%65%

60%

73%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

990114/AGR 7


Final .v1

Y2K Lifecycle Compliance StatusRate of Change

Large Local Exchange Carriers

September - December 1998

94%

71%

54%

62%

98%

86%

74%

81%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September 30, 1998 December 31, 1998

Awareness Renovation Validation Implementation

990114/AGR 8


Final .v1

Large Local Exchange Carrier Compliance StatusRate of Change

September - December 1998

73%

63% 64%

85%

79%

86%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September 30, 1998 December 31, 1998



990114/AGR 9


Final .v1

Public Switched Telephone Network Y2K Readiness Major Inter-Exchange Carriers

December 31, 1998



74%

84%84%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

990114/AGR 10


Final .v1

Leve

l of

Ris

k Medium

Low

International Status by Region Perceptions of Risk

High

1.0

2.0

3.0

4.0

5.0

Cen

t &

So

uth

Am

eric

a

Su

b S

ahar

a A

fric

a

Ind

ian

su

b c

on

tin

ent

Eas

tern

Eu

rop

e (i

nc.

Ru

ssia

)

Mid

dle

Eas

t &

No

rth

Afr

ica

(no

t Is

rael

)

Asi

a P

acif

ic

No

rth

Am

eric

a

Wes

tern

Eu

rop

e (i

nc.

Isra

el)

Regional Average

Score

The scores blend such that the following score ranges apply: 4.1 - 5.0 = Low Risk 3.1 - 4.0 = Medium Risk 1.0 - 3.0 = High Risk; based on uncertainty

Regional Range of

Responses

990114/AGR 11


Final .v1

International Status by CountryPerceptions of Risk

Afg

hani

stan

Ban

glad

esh

Col

umbi

aE

gypt

El S

alva

dor

Gua

tem

ala

Laos

Nig

eria

Som

alia

Vie

tnam

Zai

reN

epal Kuw

ait

Arm

enia

Cos

ta R

ica

Ecu

ador

Eth

iopi

aS

audi

Ara

bia

Mor

occo

No.

Kor

eaR

oman

iaU

rugu

ayY

ugos

lavi

aK

enya

Sri

Lank

aC

ambo

dia

Chi

na

0.0

1.0

2.0

3.0

4.0

5.0

Level of Risk

Low

Medium

High

The scores blend such that the following score ranges apply:4.1 - 5.0 = Low Risk3.1 - 4.0 = Medium Risk1.0 - 3.0 = High Risk; based on uncertainty

Zim

babw

eLi

thua

nia

Phi

lippi

nes

Mex

ico

Ven

ezue

laA

rgen

tina

Cha

d Moz

ambi

que

Rus

sia

Indi

aIn

done

sia

Bra

zil

So.

Kor

eaD

enm

ark

Isra

elJo

rdan

Pak

ista

nP

uert

o R

ico

Tha

iland

Tur

key

Sou

th A

fric

aH

unga

ryG

erm

any

Italy

Japa

nM

alay

sia

Aus

tria

Bul

garia

Cze

ch R

epF

ijiP

olan

dS

udan

U.A

.E.

Fin

land

Tai

wan

Bah

rain

Chi

leF

ranc

eB

elgi

umN

ew Z

eala

ndN

orw

ayP

ortu

gal

Sw

eden

Sw

itzer

land

Car

ibbe

an Is

.H

ong

Kon

gN

ethe

rland

sP

eru

Sin

gapo

reA

ustr

alia

Can

ada

Irel

and

Spa

inB

erm

uda

Pan

ama

UK

US

A

990114/AGR 12


Final .v1

International Status by CountryPerceptions of Risk Impact

Col

umbi

aE

gypt

Kuw

ait

Sau

di A

rabi

a Chi

na Phi

lippi

nes

Afg

hani

stan

Ban

glad

esh

El S

alva

dor

Gua

tem

ala

Laos

Nig

eria

Som

alia

Vie

tnam

Zai

reN

epal

Arm

enia

Cos

ta R

ica

Ecu

ador

Eth

iopi

aM

oroc

coN

o. K

orea

Rom

ania

Uru

guay

Yug

osla

via

Ken

yaS

ri La

nka

Cam

bodi

aZ

imba

bwe

Lith

uani

a

0.0

1.0

2.0

3.0

4.0

5.0

Impact of Failure

Level of Risk

Low

Medium

High

HighImpact

MediumImpact

LowImpact

The scores blend such that the following score ranges apply:4.1 - 5.0 = Low Risk3.1 - 4.0 = Medium Risk1.0 - 3.0 = High Risk; based on uncertainty

Ger

man

yIta

lyJa

pan

Hon

g K

ong

Aus

tral

iaC

anad

a UK

US

A

Mex

ico

Ven

ezue

laA

rgen

tina

Rus

sia

Indi

aB

razi

lS

o. K

orea

Isra

elP

uert

o R

ico

Sou

th A

fric

aM

alay

sia

Aus

tria Tai

wan

Fra

nce

New

Zea

land

Sw

itzer

land

Car

ibbe

an Is

.S

inga

pore

Spa

inB

erm

uda

Cha

d Moz

ambi

que

Indo

nesi

aD

enm

ark

Jord

anP

akis

tan

Tha

iland

Tur

key Hun

gary

Bul

garia

Cze

ch R

epF

ijiP

olan

dS

udan

U.A

.E.

Fin

land

Bah

rain

Chi

le Bel

gium

Nor

way

Por

tuga

lS

wed

en Net

herla

nds

Per

uIr

elan

d Pan

ama

990114/AGR 13


Final .v1

Countries of Major and Significant Interest to the U.S.(as determined by Intercontinental Traffic Patterns, sorted by Perceived Risk)

* Minutes of use from 1995 Data (Source: ING Barings - Telecommunications Map of the World, 2nd Edition, September 1997)

Col

umbi

a (3

16)

Jam

aica

(23

1)

Chi

na (

283)

Phi

lippi

nes

(338

)

Indi

a (3

37)

Bra

zil (

385)

So.

Kor

ea (

460)

Isra

el (

285)

Ger

man

y (9

53)

Japa

n (8

99)

Ital

y (3

83)

Dom

inic

an R

epub

lic (

508)

Tai

wan

(38

0)

Fra

nce

(544

)

Sw

itzer

land

(21

3)

Hon

g K

ong

(418

)

Net

herla

nds

(246

)

Aus

tral

ia (

351)

UK

(1,

716)

El S

alva

dor

(144

)

Gua

tem

ala

(129

)

Ecu

ador

(14

6)

Sau

di A

rabi

a (1

12)

Trin

idad

& T

obag

o (1

01)

Gre

ece

(117

)

Ven

ezue

la (

177)

The

Bah

amas

(10

2)

Arg

entin

a (1

89)

Rus

sia

(105

)

Tha

iland

(11

9)

Pak

ista

n (1

16)

Sou

th A

fric

a (1

01)

Pol

and

(165

)

Chi

le (

111)

Sw

eden

(14

4)

Bel

gium

(13

9)

Sin

gapo

re (

151)

Per

u (1

46)

Spa

in (

177)

Irel

and

(152

)

0.0

1.0

2.0

3.0

4.0

5.0

Millions of Minutes

Level of Risk

Low

Medium

High

Major Interest> 200M Minutes

Significant InterestBetween 200M - 100M Minutes

Country Name (Millions of Minutes)

990114/AGR 14


Final .v1

Y2K Risk to U.S. Intercontinental Traffic (determination of risk by country of originating / terminating traffic)

* mMiTT: million Minutes of Intercontinental Telecommunications Traffic

Source: Telecommunications Map of the World, 2nd Edition, September 1997

Medium Risk4728 mMitt*

Low Risk5599 mMitt*

High Risk1645 mMitt*

36%

21%

43%

990114/AGR 15


Final .v1

Year 2000 Assessment Conclusions• General

– All participating companies are progressing at approximately the same rate

– Small companies somewhat behind the larger ones

– Progress to date is very encouraging

– All participating companies on a trajectory for timely completion of PSTN

– Results of this study become a good benchmark for non participating companies to follow

• Local Exchange Carriers (LEC)– Participating LECs cover 99% of all switched access lines in U.S.

– Small to medium companies lag large Local Exchange Carriers by 10-15%

– All participating companies were better than 65% complete by September 1998• December estimate at 76%

• Readiness– All large companies projecting readiness complete June 30, 1999

– Medium and small LECs• 50% by end of 2nd Quarter 1999• 32% by end of 3rd• 18% by end of 4th

– Participating companies are 29/1300 = 99% of all access lines

• 1271 companies constitute the remaining 1%

990114/AGR 16


Final .v1

Conclusions

• Inter-Exchange Carriers (IXC)

– Participating IXCs represent 82% of inter-exchange market

– Most network elements have been certified compliant and are being rolled out

– Participating IXCs will be in a position to support the LEC completion date of June 30, 1999

– Major IXCs at 60% readiness or better as of September 1998

• December estimate at 81%

– All IXCs project a June 30, 1999 readiness

990114/AGR 17


Final .v1

Conclusions

• International

– North America, Asia Pacific, and Western Europe are medium to low risk

– North East Asia, Middle East & North Africa, and Eastern Europe are medium to high risk

– Central & South America, India & Subcontinent, Sub Sahara Africa are high risk

– Regions and countries of most concern to U.S. identified

– Regional impact of risk varies widely by country and telecom provider

– Most information is based on perception of risk or is anecdotal -- based on inconsistent and unofficial information

990114/AGR 18


Final .v1

Recommendations• Increase activity in Wireless assessment led by FCC

• Map key U.S. Government installations nationwide to telecom compliance areas

• U.S. Government engage in direct inquiry on Y2K status to countries determined essential to U.S. telecommunication traffic patterns

– Work with the ITU, U.S. State Department, and others to accurately assess the true risk to the U.S.

• Add the risk of methodology inconsistencies to perceived completeness of plans

– Specifically test deficiencies

– Effective quality programs

• Assess results of this study with respect to other economic sectors to determine potential secondary risks and impacts

990114/AGR 19


Final .v1

Recommendations

• A more proactive role should be undertaken by the FCC (working the appropriate government offices) to support those countries requesting assistance from the ITU and World Bank and/or that have high telecommunications traffic with the U.S.

• For countries whose Year 2000 readiness may be an issue to U.S. companies, we recommend that the FCC assign an International Contingency Planning Coordinator to support interested U.S. companies in their contingency planning around regions or specific countries that are perceived to be high Y2K risk

990114/AGR 20


Final .v1

Summary

• Public Switched Wireline and Long Distance Telephone Operations in the United States (and North America) appear to be on an appropriate path for Year 2000 compliant operations

• More and better information is required for a complete global assessment, including wireless and cable operations

• Lack of information in and of itself does not necessarily indicate lack of progress

990114/AGR 21


Final .v1

Future Work

• Marry FCC questionnaire results in NRIC sources for a more inclusive report

• Update International data sources and measure their improvement

• Re-question the LEC and IXC data sources for: – validation of December 1999 data– Actual data for February 1999– Estimation targets for March 1999

• Increase Wireless participation and measure their network completion

nric focus group i, subcommittee 1 year 2000 readiness of the telephone industry final.v1...

Documents

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telephone industry final

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v1 990114agr1 nric focus

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v1 990114agr6 y2k

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