- The Washington Times - Tuesday, January 4, 2000

Small companies seemingly handled the first day of business in the new year without widespread computer problems.

But the federal government said it may be difficult to know for sure just how many small businesses suffer year-2000-related problems.

"I think what's going to happen unless we really do find 200,000 or 300,000 of them that didn't do their work and are now standing in line over the next few days trying to get upgrades or patches is that a lot of that work is going to get done and fixed and nobody will notice it except their customers," John Koskinen, chairman of the President's Council on Year 2000 Conversion, told reporters at a briefing yesterday.

While the federal government may have to wait a bit longer to determine the impact on small companies of the year-2000 bug, Mr. Koskinen predicted it is unlikely that isolated computer problems at small employers will harm the economy.

"I would stress … that we have no concerns that these will accumulate into any significant amount of failures that will affect the economy or even be noticed in the economy," he said.

"They will simply be either glitches or aggravations for those dealing with them, or in some cases, for small business, if they have slightly more complicated systems and did nothing, they could have, obviously, more longer-range problems as they go forward," Mr. Koskinen said.

Two domestic problems did receive much attention yesterday.

A video rental store in New York charged a customer a $91,250 late fee because the company's computer system determined the movie was returned 100 years late.

"It did have a happy ending since they went back to paper and pen, figured out the right charge, and gave the customer a free video rental, whom I am sure will be encouraged to bring it back promptly tomorrow," Mr. Koskinen said.

The Godiva Chocolate Co., owned by Campbell Soup Co., had no problems Jan. 1. But Sunday, the first day of its fiscal week, the company's cash registers were down in New York City stores. The company fixed the problem.

A U.S. Department of Defense year-2000 problem also was fixed yesterday.

A ground station that processes information from military satellites was restored to normal operation after the year-2000 bug infected it New Year's Eve, defense department officials said. Although the satellites were not affected, a ground-based processing station was knocked out for two to three hours at 7 p.m. EST Friday.

Year-2000-related problems with support systems at seven nuclear plants that reported computer errors were fixed or the plants overcame problems by switching to backup systems, the Nuclear Regulatory Commission reported.

A malfunction at the Oak Ridge nuclear weapons plant in Tennessee caused no operational problems and was corrected within hours, federal officials said yesterday.

The Small Business Administration planned to monitor small companies yesterday through 10 regional and 70 district offices to measure the effect of year-2000 problems.

An estimated 100 calls to member businesses and associations yesterday revealed only minor problems, SBA Deputy Administrator Fred P. Hochberg said.

"There were small, scattered things, like a credit card swiper that didn't work for a couple hours, but every day there are credit card swipers that don't work for a couple of hours," Mr. Hochberg said.

Mr. Koskinen said Dec. 13 about 10 percent of credit card transactions fail routinely from equipment breakdowns, user errors and consumers trying to make purchases even though they have exceeded their credit limits.

The absence of a flood of problems came as a relief, Mr. Hochberg said.

"There was concern too many things would happen at once. If problems are scattered, we can handle them," he said.

A Department of Commerce hot line for small businesses has received and answered year-2000-related questions from 121 businesses since establishing a 24-hour call center Thursday.

"There is some trepidation out there," said Scott McIntyre, a senior manager at KPMG Consulting, the company contracted to run the hot line (800/925-7557) for the National Institute of Standards and Technology office in Gaithersburg, Md.

Small businesses seem to be handling the date change well so far, Mr. McIntyre said. But that doesn't mean small entrepreneurs won't have problems later.

"It may be premature to tell for sure," he said. "No one has called and said their plant shut down or they can't make payroll."

Standard questions include whether it's safe to turn on PCs and whether programs known to be non-compliant have a downloadable fix available on the Internet, Mr. McIntyre said.

Companies that didn't experience computer errors yesterday shouldn't grow too confident that they have escaped the computer bug, said Ted Haddad, senior vice president of federal systems at CCD Online Inc., a technology consulting company in Falls Church, Va.

"The good news is that the new year started well," Mr. Haddad said. "But not [all software programs] get exercised on day one, two or three. For instance, you may not do payroll more than twice a month."

The Gartner Group, a Connecticut technology research firm, estimates 55 percent of all computer problems linked to the year-2000 bug will occur within the first 10 months of 2000, and about 10 percent of those errors will cause computers to crash, while 90 percent will corrupt data.

Mr. Koskinen defended the government's aggressive campaign to eradicate the year-2000 bug. The government spent $8.5 billion to fix computers.

The year-2000 computer problem stems from a cost-saving shortcut in which software programmers devoted only two spaces in a date field to designate the year. That older software assumes the year always will begin with the digits "19." If technicians don't fix computers, they could shut down or malfunction when they interpret the digits "00" as meaning 1900 and not 2000.

"What is bemusing … is the fact that everyone worked at this so well and cooperatively and we've had this great success, has led some not to declare victory and say it's a marvelous accomplishment, which I genuinely believe it is, but to basically say, 'Well, it must not have been a problem. People must have spent $100 billion naively,'" Mr. Koskinen said.

"But corporations don't naively spend hundreds of millions of dollars, and boards of directors and CEOs and heads of information technology departments don't waste money if they can avoid it. And I am satisfied that the track record and the history will show that," he said.

Globally, the year-2000 bug didn't infect any one country significantly. Worldwide problems, like U.S. difficulties, caused minor disruptions rather the major dilemmas.

In Hong Kong, three government departments said some personal computers suffered minor glitches.

Weather observations in part of mainland China had to be made by hand after the circuit board of a solar-measuring device in the remote northwestern region of Ningxia failed to roll over to 2000.

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