History: Year 2000


Disaster when the clock strikes twelve (970702)

Millennium bug: Ensuring you beat the bug

Millennium bug: The SoHo solution

Millennium bug: Steps to take

Millennium bug: Beware of myths

Millennium bug: Directors face claims over date change

Wall Street Prepares For Millennium Bug’s Bite (970709)

Companies Face Early Bite From Millennium Bug (970721)

New millennium could be a cybernightmare (970930)

Millennium bug is far from beaten (980422)





Disaster when the clock strikes twelve (970702)


“There was also a very practical reason why January 1, 2000 was the date that really mattered, and it was a reason that would never have occurred to anyone a mere 40 years earlier . . . come the first dawn of ‘00, myriads of electronic morons would say to themselves, ‘00 is smaller than 99. Therefore today is earlier than yesterday . . . recalculate all mortgages, overdrafts, interest bearing accounts . . .’ The result would be international chaos on a scale never witnessed before.” ­ The Ghost from the Grand Banks by Arthur C. Clarke


Arthur C. Clarke’s prediction of global chaos caused by two computer digits, offered as science fiction nearly ten years ago, may yet prove to be catastrophically prophetic.


The closer we get to the end of the century, the more we learn of the scale of the problem computers will have in calculating dates into the next millennium. Latest news suggests that the PC ­ equipment which was hitherto thought to be safe from what is now known as the Millennium bug ­ is just as vulnerable as the biggest mainframe.


The bug affects computers and software that store year dates in a two-digit format and therefore cannot cope with 00 coming after 99. A system which fails is said to be non-compliant with the Year 2000. New evidence suggests that between 4 and 16 million PCs in the UK alone could be affected by the bug, with repair costs stretching into tens of millions of pounds.




“The general view used to be that only legacy systems such as mainframes were affected,” says Robin Guenier, executive director of government sponsored agency Taskforce 2000. “Now it is emerging that desktop systems are also subject to the same problems.”


1. Software applications: Programs such as accounting software and spreadsheets which are designed to conduct calculations on date ranges are subject to the bug if they can only cope with two-digit year dates (eg 88). For example, a spreadsheet used to calculate a person’s entitlement to company benefits based on joining date will produce numerical errors if it cannot cope with the rollover to the year 2000. Spreadsheet files saved in older version formats may also suffer from problems even if used in newer compliant versions of the software.


2. Operating systems: Most of the current operating systems such as Windows 95 and OS/2 are Year 2000 compliant. Older versions of operating software may not be. Windows 3.1 file manager reportedly has trouble handling the date rollover.


3. System software: If software which makes the computer run ­ basically telling it to boot up, accept keystrokes and suchlike ­ cannot cope with a four-digit date, it will return erroneous dates to application software (even if that software is compliant).


4. Hardware: The ultimate source of the date and time on a PC is the Real Time Clock (RTC) within a chip called a CMOS. The most common design of CMOS parts in PCs may or may not be able to cope with the new century properly, depending on how they have been configured. Some RTC designs cannot handle the new century numbers, and so after 1999 will give an incorrect date when queried.


5. Pinning down the culprit. There are two things to note. First, problems with compliance are inter-related. A PC with a compliant operating system and Bios may still be at risk if the RTC is non-compliant. Similarly, a PC with a compliant RTC may fail if the applications software cannot cope with four-digit dates.


In addition, it is just about impossible to allocate responsibility for the Millennium Bug. The basic engine bay of a PC is its motherboard. This holds the processor chip and other components ­ such as chips holding the Bios software ­ which make up the engine of the machine.


There are about a dozen companies selling Bios software to more than 200 PC motherboard makers around the world. These manufacturers, in turn, sell products to PC manufacturers in batches. A PC maker may buy a motherboard from one manufacturer one month, and from another the next.


Not only that, but Bios software and motherboards are constantly upgraded throughout the life of a PC model. Because of this, it may be impossible to pin down which motherboard and Bios combination is compliant and which not, until some form of responsibility to comply is imposed on every part of the manufacturing chain. Since almost 60 per cent of motherboards are made in the Far East, this may prove difficult to achieve in the short term.


The result is that many, if not most PC manufacturers are still shipping non-compliant PCs, despite claims to the contrary. This is because most have succeeded only in ensuring that their BIOS is compliant. They have failed to check and repair their RTC problems.


In a recent test of 2,500 PCs, 82 per cent failed to roll over to the year 2000 properly, and of those that failed nearly a quarter did so because of the RTC, even though the BIOS was working properly. According to Guenier, a problem in establishing reliable data on the issue is that there are so many unknown variables in establishing the problem and in testing for it.


“Because the problem covers hardware and software it is extremely difficult to predict how it will manifest,” he says. “If you only use your PC for word-processing it may not matter to you, but if you do home banking or use an accounts package, a non-compliant PC will almost certainly affect you after January 1, 2000.”


The upshot is that if you have a PC or laptop on your desktop, there is a 70 to 80 per cent chance that it will not be fully Year 2000 compliant. If you are running an old accounting package, ditto. This is not the same as saying that you will have a problem in the new millennium. Although no one knows for certain, it is likely that those who use their PC for simple tasks which do not manipulate dates will notice no difference.


However, there are also reports that games players may be at risk from scrambled dates after January 1. Rumours, claims and counter-claims run rife. The problem is that almost every “expert” involved in offering advice or a solution has something to gain from the situation, either as manufacturer, consultant or software supplier. This can make it difficult to separate fact from hype.


There are signs, however, that the industry is at last waking up to the issue. “The Year 2000 problem is something that I believe every PC manufacturer will have to address seriously,” says Alistair Hollands of Japanese computer giant Fujitsu. “By the end of this year I expect to see almost all of them offering buyers hard evidence of complete compliance, in much the same way that we’re doing with our logo certification.”




Millennium bug: Ensuring you beat the bug


FIRST, don’t panic. Your PC may not be Year 2000 compliant but that doesn’t mean it will stop working or burst into flames come the fateful day.


If you only do word-processing, then the problem should not affect you too much. But it may be worth running a check and fixing with a reputable commercial solutions.


Generally, the older your hardware and software, the more likely it is not compliant. The test-and-fix software such as Millennium Buster should point out potential problems and offer to install a fix. Upgrading the Bios with a new version from the manufacturer is not recommended unless you are an experienced user.


If you use your system for accounts or home banking, or you are accessing date calculations on a standard package such as a spreadsheet, contact the software creators to find out if your version is compliant. If not, ask if there is an upgrade available, or replace with a competitive compliant version which can import your old data. The millennium fixes will not cure these application software faults.


There are reports that any software that accesses the RTC directly will not be cured by the available fixes. So far no off-the-shelf software has been found to do this apart from certain games (eg DOOM). Take care if playing these over an office network after the rollover (the computers may incorporate non-compliant RTCs).


Those considering buying a new computer should ask for a letter confirming total Year 2000 compliance from the vendor. Retail company Comet has just launched a Year 2000 compliant scheme; every PC it sells will incorporate a sticker guaranteeing compliance. Other retailers will soon follow suit.




Millennium bug: The SoHo solution


SMALL office and Home office (SoHo) businesses may have the most to fear from using equipment that is non-compliant with Year 2000. Most at risk are those with their accounts systems on non-compliant networked or standalone PCs. If their system fails to roll over on December 31, 1999, who will suffer and who will be blamed?


Small companies may have the right to redress if the system they purchased should reasonably have been expected to cope with the millennium. But what is reasonable, and what about older systems? If their non-compliant system corrupts one of their customers’, for instance ­ who is liable? What about liability to the Inland Revenue or Customs and Excise arising from the failure?


These questions should be addressed now, and professional legal advice sought. Trading laws still apply. If you supply or are supplied with a defective product or service the same rules apply if the defect is through a Year 2000 problem as through any other cause. The cost of simply upgrading a low-value system may be less than embarking on an expensive legal process. For higher-value systems, the arithmetic may be different.




Millennium bug: Steps to take




1. The ultimate fix is to replace any non-compliant Real Time Clock and Bios parts. This is normally a job for a computer engineer, and may not be possible. In any event, the expense of the upgrade may exceed the costs of the alternatives. Note that simply upgrading a Flash Rom BIOS will not fix a non-compliant RTC.


ACTION: Ask the manufacturer or supplier of your PC about upgrade solutions.


2. The next best thing is to locate a third-party fix. These software or hardware solutions are installed on the computer. They intercept any incorrect date information from the Bios or RTC and replace it with the correct century information. Since these solutions will not be truly effective until the date they are needed, they cannot be fully tested. Opportunists are sure to take advantage of the fear and confusion surrounding the issue and offer bogus remedies.


Of 14 products given a recent independent test, three ­ Millennium Buster (£29.99, tel 01262 601006), Millennium BIOS Board (£59.99, tel 01202 776302) and Y2KPC Pro (£30, tel 0181-340 8336) ­ were noted as effective solutions. One, Taskforce 2000 (£195), apparently failed to provide any perceptible benefit (nb it has no connection with the DTI supported agency). Other products, good and bad, are bound to appear before the critical date.


ACTION: Solace Consultancy has conducted a comprehensive study on the issue and evaluated products which are currently available. Contact: 01424 734277 for a copy of the findings.




1. There is currently no third-party software fix. The only option is to replace or upgrade the old software with a compliant version from the original creator, or to buy a competitive replacement that can import your old data properly.


ACTION: Ask your software authors about the compliance issue. If the software is critical to your business, obtain confirmation of compliance in writing.




Millennium bug: Beware of myths


PC USERS are being misled by myths about the Year 2000. These are the main ones:


1. I can test my PC for compliance by advancing the date to beyond January 1, 2000, now. FACT: This will not test for complete compliance as it will not test the RTC or the BIOS properly. This procedure may damage copy-protected or time-sensitive software (such as shareware) on the machine.


2. A simple BIOS fix will make my PC compliant. FACT: This will not fix potential software application problems. Buyers should beware of third-party BIOS upgrades purporting to do so. BIOS software is delicate and often tailored to the manufacturer’s specification. Third-party products may break any custom features.


3. I bought my machine recently so it must be compliant. FACT: PCs are still being shipped which are not fully compliant. These include big name Pentium machines.


4. My machine will melt down on January 1, 2000 if it is not compliant. FACT: The problem will not stop the hardware working, although certain software may refuse to work. It will cause errors in applications that use date for calculations.


5. Apple Macintosh computers are immune to the problem. FACT: While Apple hardware does not show the problem, applications software may not be free of trouble on rollover.




Millennium bug: Directors face claims over date change


DIRECTORS who fail to tackle the Year 2000 problem may face claims from company members or, if the organisation becomes insolvent, the Liquidator, who will be pressed into action by creditors (Gavin Pickering writes).


It will not be sufficient for directors to argue that they were computer-illiterate, although they will have a much better chance of refuting a claim if they can show steps have been taken to remedy the problem.


There have been many predictions that businesses will suffer at midnight on December 31, 1999 and that some will even go out of business.


If that happens then the people affected ­ often shareholders and creditors ­ will look for someone to point the finger at. Directors’ personal wealth is an obvious source of recoupment. Those who believe they have no obligation to parties beyond the corporate veil may find it is their own company, either through its members or a Liquidator, that looks to them to recoup avoidable losses suffered because they have not taken the Year 2000 problem seriously.


Although big financial institutions such as high street banks face the largest cost of compliance (NatWest and Barclays estimate a combined bill of £200 million), smaller companies also face a significant cost in curing the problem and carry the biggest risk of insolvency.


It is not enough to wait until the Year 2000. Businesses will be affected before then if, for instance, their stock purchasing systems rely on forward ordering.


A number of government-backed organisations have circulated information to help businesses cope with the problem. The Department of Trade and Industry released an information pack in February setting out a checklist for Year 2000 compliance. Large firms of accountants including Deloitte Touche and Arthur Anderson are planning to start reviewing companies’ millennium strategies from the end of this year.


Any company that does not demonstrate an adequate one may have its accounts qualified. Some companies already refuse to deal with other companies which cannot demonstrate strategies for dealing with Year 2000. The Government and local authorities are also likely to insist on confirmation of compliance.


The DTI action checklist includes these suggestions for directors:


Ensure the problem is understood at senior level and treated as a business priority.


Assign someone senior to be responsible.


Familiarise other organisations on which the security of the business depends, and ensure they take steps to deal with it.


Take a full inventory of hardware and software and perform a vulnerability check.


Dedicate resources to facilitate changes required.


Remember that other systems may also be date-sensitive ­ eg security and lifts.


Directors have some time left to make sure their company’s computer systems can cope with the date change. If they do, not only will they ensure no claims are made against them they could also find themselves with a welcome commercial advantage over their competitors.




Wall Street Prepares For Millennium Bug’s Bite (970709)


NEW YORK- The millennium bug’s potential to shut down computer systems across the globe is not just the stuff of science fiction, industry analysts said. It’s also a market- mover waiting to happen.


As programmers and computer scientists roll up their sleeves and set about correcting the year 2000 problem, businesses will have to dip deeper into their technology budgets to fix the computer glitch, analysts said.


That could translate into delays on emerging technologies and charges against some companies’ earnings if their current budgets do not stretch far enough.


The year 2000 problem refers to the need to reprogram computers to recognize that a year ending in 00 is 2000, not 1900. Older programs saved memory space by representing the year as its last two digits, with a prefix of 19 assumed.


As a result, uncorrected date-sensitive programs, like payroll systems or flight plans, will be unable to read the year 2000 correctly when making calculations.


Absolutely there will be a slowdown of development,” said technology consultant Peter de Jager. A company might have to delay putting up a Web site, stall a data warehousing project or simply halt work that is not mission-critical” until its systems are year-2000 compliant, he added.


But given investor skittishness and what some see as an alarmist mentality already surrounding the problem, companies are very, very nervous about speaking on this issue,” he said.


In addition, companies that go public with their millennium spending may run the risk of providing damaging information to future plaintiffs should they fail to correct the problem before it affects operations.


But time is running out for disclosure, according to Michael O’Connell, a research analyst for technology services company Gartner Group Inc.


Analysts are starting to take this into account now,” he said, adding that millennium costs already factor into Wall Street’s earnings forecasts.


O’Connell said he expected the Securities and Exchange Commission to increase its pressure on companies to belly up to the bar” and account publicly for year 2000 renovations in the second half of this year, if not sooner.


Under guidelines adopted by the Financial Accounting Standards Board a year ago, companies cannot capitalize costs for millennium corrections and must report them during the fiscal year they occur.


“Fixing the problem will be of a material impact to earnings,” O’Connell said.


While each company’s needs are different, the Gartner Group estimated it costs $1.10 per line of code to remedy the millennium bug, a widely accepted figure.


That means a mid-sized company might have to spend $5 million to become year-2000 compliant while a large corporation could spend hundreds of millions of dollars, analysts said.


The good news is everyone is affected,” de Jager said. “When everyone is slowing down, you’re not losing the race.”




Companies Face Early Bite From Millennium Bug (970721)


LONDON - The millennium bug is not supposed to explode inside the world’s computers until midnight on January 31, 1999, but some companies will begin to feel its impact within months.


Firms which have had warm, long-term relationships with their bankers will suddenly find the atmosphere chilling over lunch if they respond negatively to the question :”And of course, you are millennium compliant?”.


No? Sorry, I’m afraid we will have to call in your loans. “


Accountants will be rehearsing similar conversations.


Sorry. We must qualify your accounts to make clear that you are likely to cease trading shortly after New Year’s Day, 2000 because your business is exposed to the millennium bomb.”


This kind of comment is going to be heard increasingly in coming months as it becomes obvious that some companies have been deaf to the millennium bug problem.


And all because computer programmers took the easy way out.


Many computers and chip driven machines across the world may fail when clocks tick into the next century because of short cuts taken by some programmers in the 1970s and 1980S.


Dates were abbreviated to single figures such as 77” or 92” to save what was then precious and expensive program space. It didn’t matter that they would read the year 2000 as 00” and crash, or begin sending out erroneous data.


Computer technology was so fast moving, none of these abbreviated programs would survive to 2000, right?




Many of these programs and chips are still in use, and promise chaos as the new century dawns.


Banks must peer into the future when deciding if customers will be able to repay loans. Accountants must report possible threats which may destroy a company’s ability to trade.


This is going to be a problem for banks and accountants. The millennium bug is potentially a problem and is one of those topics which will move from barely being a dot on the horizon to looming very large over the next six months,” said Andy Kyte, research director at the high-tech consultancy Gartner Group.


Companies with long-term supply contracts also have to make sure they are not suddenly left in the lurch when 2000 dawns.


Many organizations are extending their own 2000 compliance down through their supply chain. If they get unsatisfactory responses, then these companies may be removed from the preferred supplier chain,” said Malcolm Stirling, director of Year 2000 services at management consultants KPMG.


According to Massimo Spallo, associate partner at Andersen Consulting, many companies which fail to prepare adequately for the millennium bug won’t be blasted out of existence overnight. They will be gradually rendered uncompetitive.


What will happen will be more subtle than a sudden failure. The cost of processing every business transaction will be more expensive. Computers will generate false data which will upset customers and lead to disputes. This implies lower productivity for the company and loss of business,” Spalla said.


KPMG’s Stirling agrees that the bug’s physical impact will be devious.


I think spectacular systems crashes are unlikely. It will be the insidious mistake that creeps in resulting in some miscalculation that could go on for many years,” he said.


Accountants must be on their guard.


I haven’t heard of accounts being qualified yet, but the audit round is underway now and I think that for qualification to take place, you’d be looking for a particular type of organization, like a telephone based insurance firm that had wall-to-wall IBM Assembler, and you knew they weren’t compliant and couldn’t carry on after 2000 — no business without the computer. That business would be under threat,” said Starling.


Assembler is a particularly dense form of computer code used in ubiquitous COBOL programs.


The struggle to repair and update computers to make sure they work on 2000 has soaked up much of the available computer analyst workforce. As the countdown continues, some companies are faced with the prospect of time running out. They will have to face the fact that some systems will not be repaired in time.


But even companies which have invested wisely and early to defuse the bug, may not be home free.


A lot of software developers have fudged the issue. They say systems are compliant but you can’t always assume that’s true. With the absence of testing tools it is very difficult to prove one way or another,” said Dennis Keeling, business software analyst at technology consultancy Ovum.


The software might work but the computer might not. You solve one problem, look underneath and find another. You are constantly working down layers of the problem,” he said.


Adam Wright, industry analyst with research institute SRI International, agrees.


There is no such thing as Y2K (year 2000) certification, primarily because, given the vast amounts of code we’re discussing here — the systems of an average size company contain, say, one to 10 million lines of code — it would probably take more than two-and-a-half years to check each one individually,” he said.


Some businesses have probably ensured they will comfortably survive 2000, according to accountants Ernst and Young.


From our work it is fairly clear that banking and finance are more advanced with year 2000 than manufacturing,” said Nick Fitzhugh, Year 2000 team leader at Ernst and Young.


But having said that, all businesses of any size and sophistication are dependent on IT systems. Very few are so immature that they don’t uses computer systems in some shape or form.”




New millennium could be a cybernightmare (970930)


Talk of recession is rare these days, but some


prominent forecasters are saying the economy’s


seemingly charmed life could end in the year 2000 with a crash as key computer system failures trigger widespread work stoppages.


One of the strongest warnings to date of the potential danger to the world economy from computers being unable to recognize the year 2000 came in a statement issued by the central banks of the top 10 industrialized countries after meeting in Basel, Switzerland, Sept. 9.


The statement noted a potential for chaos and failure in the international banking system unless the world’s banks take action immediately not only to ensure that their own computers can function after the turn of the century but that their billions of business and individual customers are ready for the changeover.


“The year 2000 issue is potentially the biggest challenge ever faced by the financial industry,” the G-10 officials said, noting that “weak links in the payments system” could pose a risk even to banks and businesses whose computer systems are functioning smoothly.


The year 2000 problem may seem small and technical, but the G-10 concluded that it would be “formidable” for anyone who doesn’t take it seriously. Computers and computer-driven equipment that are not programmed to read the date “January 1, 2000” must be reprogrammed or replaced.


Based partly on the Basel report, some prominent forecasters on Wall Street -- including Deutsche Morgan Grenfell and J.P. Morgan -- see dire consequences for the economy and financial markets unless business and government pick up the pace of efforts to resolve the computer problem.


Only about 11 percent of American businesses so far have reprogrammed their systems, while key government agencies such as the Internal Revenue Service and Defense Department admit they have a long way to go. Still, U.S. institutions by and large are miles ahead of their counterparts overseas, the experts say.


“The year 2000 problem is a serious threat to the global economy,” said Edward Yardeni, Deutsche Morgan Grenfell’s chief economist. Otherwise known for his optimism, the closely watched forecaster puts the odds of a mild recession starting in 2000 at 35 percent --”significant, but not inevitable.”


“Computers are critical to transportation, energy, distribution, payroll, just-in-time manufacturing processes, international trade, delivery of oil supplies, aircraft flying patterns and scheduling - everything is affected by this one,” he said, adding that it would be impossible to predict where things will go wrong but that something almost certainly would.


“The main risk is the domino effect,” where computer and business failures start out as isolated instances and then spread to other sectors, he said.


In the United States, the biggest threat appears to be the IRS, which recently got a “D-minus” grade from the General Accounting Office because it is so far behind upgrading its outmoded computers.


The tax-collection agency, which takes in one-fifth of the income generated by businesses and individuals each year, “unambiguously admits their computer systems probably will fail in 2000,” Mr. Yardeni said.


Other forecasters dismiss such dire predictions, saying the economy can withstand any disruptions caused by the computer changeover at the turn of the century and is likely to even prosper before then because of the universal rush to buy the equipment needed to correct the problem.


Some corporate and government managers believe software manufacturers soon will develop a “silver bullet” to quickly and cheaply resolve the problem for most computer users, though many experts downplay that possibility.


“They’ve got three years to figure it out. I’m not worried about it,” said Joel Prakken with Macroeconomic Advisers, a St. Louis forecasting firm. “Only people using old programs and the Cobalt program developed 25 years ago are going to get screwed up by this.”


David Wyss, economist with DRI/McGraw-Hill in Boston, said “serious” economic disruptions could occur as a result of major failures of computers and microchips, particularly in the banking or telecommunications system. “But no catastrophe seems likely,” because most businesses seem to be taking adequate precautions.


Should a calamity occur -- like the failure of a major foreign bank -- the Federal Reserve and other central banks will step in to prevent a recession, he said.


“It will probably be only a hassle, not the end of Western civilization,” he said.




Millennium bug is far from beaten (980422)


Vital industries not at all certain disaster won’t strike


Airlines, utilities and nuclear power regulators gave cold comfort yesterday to a Parliamentary committee demanding guarantees that Canadians will be spared major service disruptions during the early days of the new millennium.


In fact, the best the vice-president of Ontario Hydro’s Year 2000 Project could offer the standing committee on industry was an admission that “we have a lot of work to do.”


Ted Clark said only about 40 per cent of the utility’s critical systems are Y2K compliant, with 618 days or about 20 months left to go before the turn of the century. He added that the utility is marshalling a small army of about 500 technicians to tackle the remaining 60 per cent.


“Everyone wishes they had started sooner,” Mr. Clark told the committee, after conceding that it’s taken Ontario Hydro some 36 months to get this far.


Under a barrage of questions from committee members, gathered to gauge the readiness, or lack thereof, of Canadian industry for the year 2000 “rollover,” he admitted that “I can’t make you feel 100-per-cent confident that everything is going to function.”


And while Ontario Hydro is grilling its own suppliers to assess their preparedness, “in some cases,” he said, “we’ve found compliance statements have not proved to be accurate.”


He told the MPs that about half of the herculean task facing utilities and virtually every other sector of the economy involves testing and retesting computer fixes already carried out.


Similarly, the director of Canada’s Atomic Energy Control Board, Kurt Asmis, said when it comes to software “the devil is in the details.”


“We will make sure that our systems are safe as we can possibly make them,” he told the committee.


In a written report, the board said it is giving priority to “components where failure could challenge the safety of the (nuclear power) plant,”


“You’ll have to excuse me if I worry,” said industry committee member Eugene Bellemare.


“I still see a big shudder as hospitals, traffic lights, gas stations all don’t work and it’s 20 below. It would be a hell of a mess and you can’t guarantee that won’t happen.”


In an interview, he said organizations have taken a casual attitude to the Y2K problem and are mounting contingency and emergency plans “at the end of the war.”


Mr. Bellemare said he is gravely concerned by the lack of solid assurance from industries that provide key services to Canadians, saying that the impact of the millennium bug on utilities and energy providers could leave pockets of the country freezing in the dark.


He said fallout from what was once dismissed as an innocuous computer problem could make the ice storms that hammered eastern Ontario and Quebec last winter seem like a walk in the park.


The so-called millennium bug is a programming error that means software does not recognize the year 2000, or reads it as another date, an error that left uncorrected would cause computer systems to fail around the globe.


Studies say fixing the glitch will cost the world’s businesses and governments up to$600 billion, $12 billion in Canada.


The industry committee hearings were a response to report issued last October by federal Auditor-General Denis Desautels that said business --and the federal government -- are both far behind in their preparations for the millennium.


And Canada, tardy as it may be, is better prepared than the rest of the world, according to a recent report.


That might not ease the mind’s of airline passengers, advised yesterday to avoid flights to such destinations as Asia, South America and the Middle East any time soon after the turn of the century.


Representatives of the airline industry in Canada were able to assure the committee that they are on schedule in dealing with the software problem, even though Jean-Paul Bourgeois, enterprise systems director for Air Canada, suggested that the same level of comfort has not been provided by the airline’s suppliers and vendors.


He said Air Canada wants certificates of assurance from suppliers, adding that they may not remain in that capacity if the assurances are not forthcoming.


Clifford Mackay, president and chief executive of the Air Transport Association of Canada, said he is confident major carriers here, heavily reliant on software and embedded computer chips, will be ready well in advance of the start of the year 2000. Generally, airline and other industry officials who appeared before the committee said they have completed about half of the work needed to be ready for the Y2K. If problems remain, or airlines lack confidence in facilities at scheduled destinations, Mr. Mackay said their planes will not fly.


Sid Koslow, vice-president of engineering for Nav Canada, which is responsible for the country’s air navigation system, said finding potential errors in software is the real challenge. “Once problems are identified they are relatively easy to fix.”


Meanwhile, the cost of fixing computer software glitches before the start of the Y2K will probably trigger a one-time global inflationary hit, “but not a recession,” said Gaylen Duncan, president and chief executive officer of the Information Technology Association of Canada.


He said business will fail, and those that have not started to prepare their computer systems for the turn of the century, should “commence an orderly windup now.”


Carol Stephenson, president and CEO of the Stentor Resource Centre Inc., a group representing Canada’s major telephone companies, said “you will get a dial tone” on New Year’s day, 2000, but allowed that isolated disruption will probably occur.


The industry committee is expected to issue an interim report within a month that could recommend compliance audits by organizations including air carriers, utilities, railroads and oil and gas providers.