PREPARED REMARKS
                             of
                     MICHAEL K. POWELL
                        Commissioner
             Federal Communications Commission
                              
                              
                   445 12th Street, S.W.
                FCC Commission Meeting Room
                      Washington, D.C.
                       March 30, 1999
  
  
  Thank you for joining us today.  The year 2000 will be upon us in 276 days, 10 hours and
  59 minutes, but who is counting?  Actually, we are.  Today, I am pleased to announce the
  release of the FCC's Y2K Communications Sector Report - an extensive analysis of the
  readiness of the telecommunications industries to have their computers ready and able for
  the new millennium on January 1, 2000.
  
  I am pleased to recognize two key officials who have played vital leadership roles in
  working on the Y2K issue:
  
           John Koskinen of the President's Council on Year 2000 Conversion, who
          coordinates the Federal Government's efforts with respect to the Y2K problem
          and with whom I work closely as Co-chair of the Council's working group on
          telecommunications; and 
  
           Michael Armstrong CEO of AT&T, who also chairs the Network Reliability
          and Interoperability Council (NRIC), a federal advisory group to the FCC
          whose efforts with respect to the Y2K problem have been invaluable.
  
  I would also like to acknowledge William Kennard, Chairman of the Federal
  Communications Commission, and thank him for his support, encouragement, and
  commitment of time and resources.
  
  This Report analyzes the Y2K readiness as of January 1999 of five industry sectors: (1)
  wireline telephone; (2) wireless telephone; (3) cable television; (4) broadcast television and
  radio; and (5) satellite.
  
  It also contains special sections dedicated to the international telephone network and
  emergency services.  
  
  In addition, we have attempted to offer limited, but useful consumer tips for each of these
  services. 
  
  Today's interim report card on the Y2K readiness of the communications industries is
  mixed, but we are guardedly optimistic about this industry as a whole.  In the Report, we
  cover each sector in detail, but let me offer some general observations:  
  
           High marks for the largest companies in each separate sector that have already
          completed Y2K fixes, and have systems in place to quickly resolve any isolated
          and minor disruptions.  These large companies serve much of the population,
          which indicates that the vast majority of the consumer public will experience
          minimal disruptions.
  
           Warning grades for smaller and medium-size companies that have been
          proceeding too slowly in addressing potential Y2K issues. These smaller
          companies have either not adopted the necessary systematic approach to
          preventing Y2K problems, or have adopted systematic approaches with
          completion deadlines dangerously close to January 1, 2000, leaving little time
          to solve problems discovered in their testing processes. 
  
           Below average grades for sectors that have failed to provide full and complete
          information to allow us to assess their readiness and to validate their claims
          that they are, or will be, Y2K ready.  Although they may be doing well, we
          have no choice but to acknowledge some risk in sectors whose companies are
          unwilling to respond to requests for information.
  
  The assessments are based on information collected from a number of sources, including
  FCC-sponsored public and private forums, industry umbrella groups, the work of NRIC,
  and voluntary and mandatory surveys of each sector.  
  
  It is important to remember that Y2K remediation is the responsibility of industry,
  collectively, and each company, individually.  Nonetheless, we recognize the important
  role our agency can, and has, played in coordinating activity and facilitating the flow of
  critical information.  
  
  In fulfilling this role, we have employed a three-dimensional approach that drives all of our
  efforts on the Y2K issue:  (1) outreach and advocacy to raise awareness; (2) monitoring
  and assessment to keep track of industry efforts and to facilitate the development of
  workable solutions; and (3) contingency planning to ensure that the industry has a plan
  to deal with inevitable failures.  This Report is one product of that process.
  
  Though we can prod, facilitate, coordinate and even threaten industry to fix this problem,
  the ultimate responsibility rests with them to deploy the resources and execute a
  remediation plan that will ensure service to their customers. . . our citizens.  While some
  companies should be proud of  the progress that is reflected in this Report, they dare not
  pause, for time continues to tick away and this is a task for which there are no extensions. 
  
  I am going to take just a few minutes now to highlight our assessments in each sector:
  
  WIRELINE
   
  Perhaps, of all these industries, the most critical to the nation is the wireline telephone
  network.  The telephone network is a critical infrastructure upon which virtually everyone
  relies.  It is vast and complex, and consists of many players that must work together to
  complete a single phone call.  
  
  The wireline telecommunications industry, however, is probably better equipped to
  address these challenges than most.  These companies maintain a high level of reliability,
  have top quality experts, and are working together to address the Y2K problem. 
  
  Our assessment of the wireline industry divides the industry into two groups: 1) the seven
  largest local telephone carriers providing service to 92% of the country, which are
  participating in the NRIC assessment process, and 2) the remaining small and medium size
  carriers that the Commission surveyed directly.
  
  Our analysis reveals that the largest local and long distance carriers have nearly completed
  their Y2K remediation.  These carriers are expected to be 100 percent ready, including
  having their contingency plans in place, by the second quarter of this year.  The same is
  true for the largest long distance carriers that account for 82% of total U.S. long distance
  revenues.  This means that the vast majority of telephone consumers can expect few, if
  any, Y2K disruptions.
  
  The remaining carriers, however, lag behind the large carriers in their remediation and
  contingency planning.  Nearly half of those surveyed by the Commission reported not
  having a formal plan in place for managing the Y2K problem.  This is obviously of concern
  to us and we will be redoubling our efforts with respect to these carriers.
  
  As anyone who has studied this problem will tell you, testing is critical to having any real
  confidence in remediation results.  In this sector, we have had fairly rigorous and
  comprehensive testing.  And, the reports are encouraging.  After 6 months of testing, the
  industry found only 6 anomalies, which have now been fixed.  More testing results will be
  released in April 1999. These results give us confidence that their survey responses and
  our guarded optimism is justified.
  
  WIRELESS
  
  According to the industry, wireless handsets have very few Y2K problems associated with
  them.   The Commission's survey revealed a similar gap between the readiness of large
  and small wireless carriers.  Our assessment, however, was hampered by a disappointingly
  low response rate from the wireless carriers that we surveyed.  As a result, we must
  acknowledge  a certain degree of risk with this industry until we are able to assess a
  broader portion of the industry.  We intend to continue working with this industry to get a
  better picture of its overall efforts.
  
  BROADCAST
  
  The broadcasting industry appears to be adequately readying itself for the Year 2000, and
  we believe the public will continue to have access to broadcast services throughout the
  year 2000 date rollover.  Unlike some other industries, there is a high degree of
  redundancy in the broadcasting industry, as most Americans receive many no-cost over-
  the-air broadcast signals.  Thus, if one station were to potentially go down, a viewer or
  listener could switch to another station.
  
  CABLE
  
  According to our survey results, Y2K problems are not likely to cripple cable system
  operations and it appears that the vast majority of the nation's 65 million cable subscribers
  will continue to receive cable service on January 1, 2000.  It should be remembered,
  however, that cable receives its video channels from a variety of sources, including
  broadcast signals and satellite programming.  As a result, isolated channel outages and
  limited problems may be encountered.
  
  SATELLITE
  
  The industry consensus is that the Y2K problem is unlikely to affect satellites now in orbit. 
  Few satellites actually have date sensitive components and the more likely area of
  difficulty will be in the ground segment.  We received quantifiable data from only 12 of 32
  operators contacted, however, so we do not feel we have enough information to speak
  authoritatively on the status of readiness of this industry.  
  
  INTERNATIONAL
  
  In this Report, we convey the findings released by NRIC in January 1999 on the risk
  facing the international network.  Those findings reaffirm our concern that other parts of
  the world are not as far along as we would like or expect.  This area will require
  intensified attention.
  
  EMERGENCY SERVICES
  
  The Report dedicates a special section to emergency services. Testing to date has not
  revealed problems with remediated 911 equipment.  Nonetheless, some of the enhanced
  systems possess fairly sophisticated equipment for identifying callers, problems and
  locations.  Though nothing we have seen suggests widespread problems, we think it
  prudent to expect some delays in call processing in some systems.  In emergency
  situations, time can be of the essence, so we will continue to work diligently with this
  sector. 
    CONCLUSION
  
  We are guardedly optimistic of the overall assessment of telecommunications industry
  readiness and activities in preparing for the year 2000.  Interestingly enough, the results in
  these sectors mirror those of other industries with regard to the disparity between the
  readiness of the larger companies and some of the smaller and medium sized companies.
  
  This assessment is merely a snapshot as of January 1, 1999.  Fortunately, the Y2K
  remediation process is an on-going one, not a static one.  For our part, we are going to
  continue to monitor and prod the companies in the telecommunications sector to explore
  ways to reduce this gap between large and small company readiness.  
  
  Everyone in the industry needs the next assessment to show them receiving a big "E" for
  effort.