**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

Minimizing Regulatory and Information )

Technology Requirements That Could Adversely Affect )

Progress Fixing the Year 2000 Date Conversion Problem )

### YEAR 2000 NETWORK STABILIZATION POLICY STATEMENT

> **Adopted: October 4, 1999 Released: October 4, 1999**

**By the Commission:**

**Introduction**

1\. The Federal Communications Commission (hereinafter the
\"Commission\" or \"FCC\") considers the Year 2000 (\"Y2K\") Date
Conversion Problem, or so-called Y2K Problem, to be one of the
country\'s most pressing technical concerns. The Commission has worked
deliberately and patiently to raise awareness of the Y2K Problem,
monitor the efforts of industry to address it effectively, and
facilitate the development of contingencies in event of unseen
disruption scenarios.

2\. In this regard, we are also concerned with the impact any of our
regulations may have on the efforts already undertaken by the
communications industry to prepare their systems for the year 2000
date-rollover. Accordingly, we herein adopt this \"Year 2000 Network
Stabilization Policy Statement\" (hereinafter the \"Policy Statement\").
We believe that by adopting the policies outlined in this statement we
will facilitate the ability of all communications providers to establish
stable and secure network environments necessary to continue to perform
meaningful Y2K tests and to implement appropriate Y2K solutions prior to
the January 1, 2000 millennial rollover.

3\. The Policy Statement conveys the Commission\'s intention to consider
industry requests for stay of regulatory requirements, where
appropriate, as a precaution against potentially disruptive non-Year
2000-related modifications and upgrades made to various systems and
networks pursuant to the implementation requirements of Communications
Act of 1934 or the Commission\'s rules. We will consider these requests
as they relate to any of the industries over which we have regulatory
oversight including the wireline, wireless, radio and television
broadcast, cable television, satellite and international
telecommunications industries.

# Background

4\. Simply stated, the Y2K Problem[^1] is the inability of some
computers and other related automated and intelligent systems to process
correctly the millennial date conversion that will occur on January 1,
2000. In the 1950s and 1960s, computer designers and programmers, in
order to reduce the need for expensive computer memory and data storage,
developed the convention of storing calendar year dates using only the
last two digits for the date year. Thus, the calendar year 1967 was
represented as \"67.\" As a consequence, computerized systems and
networks may erroneously assume \"00\" to be \"1900,\" not \"2000,\" and
thereby not function properly in the year 2000. In some cases, the
hardware and software will continue to work, but they will generate and
process spurious data that may not be detected for months or even years
after.

5\. The Y2K Problem also has the potential to affect billions of systems
and products that use microprocessors and so-called computer
\"microchips\".[^2] Microprocessors and microchips can be found in a
wide range of consumer products, such as toasters, washing machines,
microwave ovens, dishwashers and video cassette recorders. They are used
extensively in automobiles, trucks and other transportation vehicles.
Microprocessors and microchips are also used extensively in industrial
applications such as environmental and climate control systems,
manufacturing systems, and power distribution systems. Microchips and
microprocessors are used extensively in communications systems.

6\. The implications of the millennial date change problem are
especially significant for the communications industry because
communications rely upon the seamless interconnection of numerous
disparate networks and systems. Consider hundreds of millions of users
of communications services throughout the country which transmit voice,
data and video information through a communications infrastructure
composed of wireline telephone networks, cellular and personal
communications systems, satellite communication systems, broadcasting
and cable television systems, and the Internet. Many critical programs,
such as Federal Reserve electronic fund transfers and Medicare benefit
payments, also depend upon this ubiquitous infrastructure and,
consequently, could be seriously affected if the Y2K Problem interrupts
telephone and data networking services.

# Discussion

7\. Ensuring the health of the critical communications \"nervous
system\"[^3] is the collective task of industry, the Commission, and
other interested stakeholders, not the least of whom are communications
end-users. For their part, the major U.S. communications providers have
generally worked aggressively to remediate their various systems and
networks. The Network Reliability and Interoperability Council
(\"NRIC\"), a federal advisory committee that reports directly to the
FCC, recently conveyed to the Commission that the major communications
companies reported having completed the remediation of 98% of their
networks as of June 30, 1999. In the domestic context, the NRIC
assessment addresses the Y2K-readiness of the country\'s local exchange
carriers representing over 92 percent of the country\'s total access
lines and of inter-exchange carriers whose revenue comprised
approximately 82 percent of the industry total revenue for long-distance
service.[^4]

8\. By no means does industry contend that it has completed their
testing and validation efforts. Consequently, NRIC represented that the
current focus of major carriers and providers remain steadfastly on
testing and contingency planning at all levels. In this context, the
major communications providers and prominent trade organizations have
commenced a dialogue on the issue of network protection and
stabilization to minimize problems associated with the Year 2000
changes.

9\. As mentioned above, the major communications companies have
generally been working diligently during the past several years on Year
2000 remediation. Most companies have devoted tremendous amounts of
executive management leadership, human resource assets, financial
capital and technical expertise on both the direct and indirect effects
of the problem. It has come to the Commission\'s attention that, in a
number of instances, in both private industry and within the government,
networks that were remediated, tested, and determined to be Year
2000-compliant have been disrupted by the addition of other systems,
databases, and changes to networks not related to Year 2000. In effect,
these changes threaten to \"undo\" Year 2000-remediation performed on
networks, at a time when much work remains to be done.

10\. Consequently, on a going-forward basis, the industry generally and
many of the individual companies specifically are planning on
implementing a network stabilization period in order to ensure the
establishment of stable Year 2000-compliant environments. The industry
maintains that the \"Commission needs to be sensitive to any and all
rulemakings and orders which would impact computer systems and require
software changes\" and advises the Commission \"to schedule and
coordinate implementation requirements so they do not fall within the
months in which software code is to remain unchanged.\"[^5]

11\. The issue of network protection and stabilization also has
specifically arisen in a number of Commission proceedings. For instance,
in considering an extension of time for the compliance date under
Section 107 of the Communications Assistance for Law Enforcement Act,
the Commission took into account the need to avoid the Y2K problem when
it established a new compliance deadline of June 30, 2000.[^6] Moreover,
the network stabilization period issue was also addressed in a
proceeding involving a request for a waiver in New York of the ten-digit
dialing requirement in the Commission\'s rule governing area code
relief. In the Commission\'s *Order*, the Network Services Division of
the FCC\'s Common Carrier Bureau stated that \"\[w\]e share Bell
Atlantic\'s concern with the Year 2000 problem, and agree that its
network stabilization period is prudent given the uncertainties
associated with the Year 2000 problem.\"[^7] Consequently, the Division
granted an extension of the temporary waiver until after the network
stabilization period.

*12. Because of concerns associated with Y2K, the FCC\'s Wireless
Telecommunications Bureau also postponed the start of its planned cycle
of paging auctions from December 9, 1999 to February 24, 2000. The
bureau specifically noted in a public notice that it "recognizes that
\[wireless companies\] preparing their existing businesses for the Y2K
roll-over while preparing for an auction could present formidable
problems for potential bidders.\"*[^8]

13\. We are also cognizant of the steps that other federal agencies have
taken to address this issue. The Office of Management and Budget
(\"OMB\") transmitted a memorandum regarding the minimization of
regulatory and information technology requirements that could affect
Year 2000 conversion in May 1999. In relevant part, the memorandum
counsels that Federal departments and agencies, to the extent possible
given their respective statutory responsibilities, "should not establish
requirements that would have an adverse effect on \[Year 2000\]
readiness, if such requirements can be delayed or if there is an
alternative that would not have an adverse effect.\"[^9]

14\. The Securities and Exchange Commission (\"SEC\") has also
promulgated Year 2000-readiness guidelines. In August 1998, the SEC
issued a policy statement regarding a regulatory moratorium to
facilitate the Year 2000 conversion. The SEC\'s policy statement
established a moratorium on the \"implementation of new \[SEC\] rules
that require major reprogramming of computer systems by SEC-regulated
entities between June 1, 1999 and March 31, 2000.\" [^10]

# Policy

15\. Given the forgoing, the Commission establishes the following
principles to facilitate the ability of all FCC-regulated entities to
establish stable and secure network environments necessary to continue
to perform meaningful Y2K tests and to implement appropriate Y2K
solutions prior to the January 1, 2000 millennial rollover:

i\. The Commission will consider, where applicable, the potential
effects on Year 2000 remediation of regulatory actions that require
changes to computerized systems and networks utilized by the
communications industry.

ii\. The Commission will consider industry requests for waivers, stays
of regulatory requirements, and other related petitions for extensions,
where appropriate, as a precaution against potentially disruptive
non-Year 2000-related modifications and upgrades made to various systems
and networks pursuant to the implementation requirements of the
Communications Act of 1934 or the Commission\'s rules.

iii\. The Commission reserves the express right to implement new rules
and regulations, where such rulemaking is necessary or required to
protect the public interest in response to statutory implementation
requirements, emergency conditions or special circumstances that may
arise in the days remaining prior to the millennial date roll-over. To
reiterate, however, the Commission will be sensitive to individual
waiver requests or, in the alternative, act on its own motion to stay
rules during this short period of time.

iv\. The Commission does not propose to establish a regulatory
moratorium period in which all regulatory actions that may affect
communication systems or equipment are suspended. We do not believe that
such sweeping action is necessary to stabilize the industry\'s remedial
efforts or to protect the interests of the public.

# Conclusion

16\. We reiterate that the Commission cautions parties against
attempting to use our network stabilization policy to \"forestall\" or
\"roll back\" disfavored regulations, or to use this policy for purposes
of competitive advantage. This policy is intended solely to address the
unique circumstances and challenges presented by the Year 2000 Problem.

17\. Accordingly, IT IS ORDERED that this Policy Statement IS ADOPTED,
to be EFFECTIVE upon publication in the Federal Register.

18\. The notice and comment and effective date provisions of the
Administrative Procedure Act do not apply to this action, which is a
non-binding, general statement of policy. 5 U.S.C. §§ 553(b)(A), (d)(2).

19\. This action is taken pursuant to sections 1, 4(i), 201(b) and
303(r) of the Communications Act of 1934, as amended, 47 U.S.C §§ 151,
154(i), 154(j), 201(b), 303(r).

## 

## FEDERAL COMMUNICATIONS COMMISSION 

> Magalie Roman Salas,
>
> Secretary

[^1]: Also known as the \"Millennium Bug.\" Moreover, the millennial
    date change issue is often referred to as the \"Century Date Change
    Problem\" because several other important dates, prior to and
    following the rollover to January 1, 2000, can potentially affect
    the unprepared electronic infrastructure. For example, September 9,
    1999---or 9/9/99---is an important date because the string of four
    9s is often used by computer designers and programmers as a
    termination code to close or shut down applications. Another
    important example is February 2000, which contains a leap year day
    (*i.e.*, one additional day that February 1900 did not possess) that
    automated and intelligent systems may not be able to process
    correctly. There are over 12 different computer date change issues
    that are implicated by the millennial date rollover.

[^2]: According to the Gartner Group, Inc., a private consulting firm,
    there are approximately four billion microprocessors currently used
    in everything from the average modern automobile, to transoceanic
    supertankers, to automated industrial process machines, to any
    variety of computational and medical equipment. *See* Neil Munro,
    *The Big Glitch*, National Journal, June 20, 1998, at 1424-25. Some
    of the four billion microchips---roughly 160 million, or 4
    percent---perform some date-related function. *Id.* at 1425. Using
    Gartner\'s estimate of 160 million potentially affected
    microprocessors, \"industry would have to find and fix about 288,000
    defective chips every day between now and the end of 1999.\" *Id.*

[^3]: *See Hearing Before The Senate Special Committee On The Year 2000
    Technology Problem*, 105th Cong., 2d Sess. (July 31, 1998) (opening
    remarks of Senator Robert F. Bennett, Chairman, Senate Special
    Committee on the Year 2000 Technology Problem).

[^4]: Network Reliability and Interoperability Council Focus Group 1
    read-outs January 14 and April 14, 1999, www.nric.org.

[^5]: *See* Letter to FCC Commissioner Michael K. Powell from Mr. Eugene
    J. Baldrate, Vice President-Regulatory Affairs, Cincinnati Bell
    Telephone (Dec. 18, 1998); *see also, e.g*., Letter to FCC
    Commissioner Michael K. Powell from Mr. Thomas E. Richards,
    Executive Vice President-Communications & Information, Ameritech
    (Mar. 17, 1998), Letter to FCC Commissioner Michael K. Powell from
    Ms. Mary McDermott, Senior Vice President, Personal Communications
    Industry Association (rec'd March 24, 1999).

[^6]: *See* *Petition for the Extension of the Compliance Date under
    Section 107 of the Communications Assistance for Law Enforcement Act
    by AT&T Wireless Services, Inc. et al.,* Memorandum Opinion & Order,
    adopted September 11, 1999.

[^7]: *See* *New York Department of Public Service Petition for
    Expedited Waiver of 27 C.F.R. § 52.19(c)(3)(ii)*, NSD File No.
    L-98-03, Order, at ¶ 3 (Dec. 4, 1998).

[^8]: *See* \"Auction Notice and Filing Requirements for 2,499 Paging
    Upper Band Licenses Scheduled for Feburary 24, 2000; Minimum Opening
    Bids and Other Procedural Issues,\" *Public Notice*, DA 99-1591
    (rel. Aug. 12, 1999) (*filing requirements notice for the 929 MHz
    and 931 MHz upper band paging service aucti*on).

[^9]: *See* Memorandum from Jacob J. Lew, Director, Office of Management
    and Budget to Heads of Executive Departments and Agencies (May 14,
    1999), at 1 (available via the Internet on the World Wide Web at
    \<http://www.cio.gov/minregi.htm\>).

[^10]: *See* Securities and Exchange Commission Policy Statement on
    Regulatory Moratorium to Facilitate the Year 2000 Conversion
    (Divisions of Market Regulation, Corporation Finance and Investment
    Management), Aug. 27, 1998, at 1 (available via the Internet on the
    World Wide Web at \<http://www.sec.gov/rules/concept/33-7568.htm\>).