Pick up a telephone on 1 January 2000, and you can expect to hear a dial tone in most locations, according to a report released Tuesday by the Federal Communications Commission.
The FCC concluded that the recent consolidation of most of the US telecom industry into a handful of major players had made it easier for the companies to deal with Y2K. But smaller telecommunications companies are still behind schedule in their preparations for the new millennium.
"We are guardedly optimistic about the industry as a whole," said FCC Commissioner Michael Powell, in a speech following the report's release. The telecom industry "is probably better equipped to address these challenges than most."
The FCC reported that the nation's biggest local and long-distance phone companies are nearly finished with their Y2K readiness programs. The agency gave high marks to the seven biggest local carriers -- which together represent about 92 percent of the market -- and to the major long-distance companies that serve about 82 percent of the population.
The 1,200 smaller telcos that compete with the big players appear to be lagging behind, however. The FCC said it had difficulty getting data from a lot of smaller telecommunications companies, possibly because of worries about liability or procrastination in putting Y2K compliance programs in place.
Nevertheless, the government said the telecom industry is better prepared than most businesses because of customer expectations of guaranteed round-the-clock dial tone.
The companies also have their own interests to look out for. In recent years, network service failures -- like America Online's in 1996 and PanAmSat's in 1998 -- dealt a blow to the companies' share prices and profits.
Telecoms have also been taking advanced action to make sure Y2K glitches don't affect one of their most precious assets: their billing systems. AT&T, which runs one of the world's most complicated billing systems, has spent years working out its Y2K strategy.
Y2K preparedness has come at a price. Most of the largest telecommunications companies are spending upwards of $400 million to prevent problems, the FCC said.
Industry groups have organized tests to determine how well telecom networks are protected against date trouble. Still, the telecom industry will have to wait another nine months to find out if its networks are truly Y2K-ready. There are an infinite number of paths a phone call may take from caller to receiver.
AT&T Chairman Michael Armstrong noted the dilemma early on in an initial meeting of the Network Reliability and Interoperability Council, a Y2K readiness group.
According to the FCC report, AT&T analysis found that "testing every potentially vulnerable system in the AT&T network would require 60,000 test years to complete."
