The Year 2000 Bug:
Time to Sound the Alarm, or Just a Lot of Hype?

ABC News Nightline
Tuesday, October 20

(This is an unedited, uncorrected transcript.)

FORREST SAWYER Search through the Internet these days and you keep coming across a strange new word, teotwawki. The word stands for the end of the world as we know it and it refers to the effects of a tiny, seemingly innocuous computer glitch, a tiny glitch a lot of people say could literally blow the lights out on civilization. Now that sounds like science fiction, but believe me, this problem is real. We just don't know how real it's going to get.

It works like this. Back when computer memory was scarce and expensive, programs were written to recognize dates by just two digits. So 00 equaled 1900. Which means there are countless computers and memory chips sitting out there waiting to go haywire when 00 suddenly means not 1900 but the year 2000. In a world where computers move food and fuel and people and ideas, that spells a potential meltdown. It's called the Y2K or Year 2000 bug and you're going to hear a lot about it in the coming months. At best, because we're so late dealing with this, we're likely to see some dislocations and confusion. At worst, well, at worst, you're going to need a lot of supplies, along with a few weapons to keep marauders out of your stash. The survivalist mentality is coming back with a vengeance and correspondent Gina Smith has been watching.

GINA SMITH, ABCNEWS (VO) It's 8:00 am, already a hot day here in this affluent southern California community and like many other local families, the Olmstead family packs up the Volvo station wagon and sets off early. But Scott Olmstead and wife Barbara aren't going to the beach or some cool woodsy highway. They're heading east and straight up into remote high desert country and there it's even hotter. Temperatures in the desert today will top 110 degrees. Welcome to the Olmsteads' second family home. Not much to look at, but that's kind of the idea. They aren't expecting many visitors. (interviewing) You asked us in your report not to reveal the town where your little retreat is here. Why is that?

SCOTT OLMSTEAD We are making preparations for ourselves and for some family members. There is no way that we can feed or otherwise help dozens or hundreds of people and it's just best if we not be put in that position of having to decide who comes and who stays and who can't come.

GINA SMITH (VO) Olmstead is a so-called Y2K survivalist, one of thousands of people nationwide who are making serious preparations for what they believe may be chaos, chaos resulting after the Y2K bug strikes computers on New Year's Day of the year 2000.

SCOTT OLMSTEAD I can see a lot of crime. I can see looting and arson, burning, the kinds of things that happened in the LA riots. I can see a lot of desperate people who don't have food. Maybe they don't have water. Maybe they don't have electricity. Maybe they've lost all their savings because the banks have collapsed or the stock market has collapsed. All those things are possibilities.

GINA SMITH What struck me coming out here is how this is the only place for miles that's fenced in.

SCOTT OLMSTEAD Well, we fenced it ourselves so that people can't drive right up to the house. In the worst case, if people were fleeing the cities we'd like not to be able to have them drive up to our door.

GINA SMITH So you'll know before they get here?

SCOTT OLMSTEAD Right. We'd like to keep them at bay, some distance.

GINA SMITH (VO) So for the last six months, the Olmsteads have been preparing for a worst case scenario, the failure of the millions of computers powering the country's electric grid, food distribution system, water treatment system and other essential services. The goal is total self-sufficiency.

SCOTT OLMSTEAD We wanted a property with a well so that we would have an assured supply of water in case the power went out. This well has a one horsepower pump at the bottom of it, about 200 or 250 feet down. And we're going to buy a generator. Actually, we bought a generator just recently that we're going to bring up here.

GINA SMITH To power this in case the power goes out?

SCOTT OLMSTEAD That's the main use for it is to make sure we can pump the well.

GINA SMITH How long do you think you can use a well like this?

SCOTT OLMSTEAD We'll probably have enough propane that we could use it for a year or two. I mean, way more than necessary.

GINA SMITH And this is the propane tank?

SCOTT OLMSTEAD This is 300 gallons of propane. We're going to use it for running the generator.

GINA SMITH So you have propane. Do you have other fuel sources?

SCOTT OLMSTEAD Our other fuel source is wood. We're going to have a wood burning stove and lots of wood. We'll probably get some more in here and have, again, somewhere around six months to a year's worth of wood to burn.

GINA SMITH (VO) A pile of firewood, a propane supply, a generator, a well and soon a year's supply of dehydrated food.

SCOTT OLMSTEAD This is apple sauce mixed with water. This is potato granules, also mixed with water and a little butter.

GINA SMITH (VO) To finance the cost of their survival retreat, the Olmsteads have gotten into the dried food distribution business. During the evenings and on weekends, they spend their spare time putting together food samples and sending them out to other like-minded people.

BARBARA OLMSTEAD This is how we're spending our lives these days. We're preparing in one way or another. It takes up a lot of our time and I think that this is why a lot of people are not doing anything. It does eat into your life.

GINA SMITH (VO) Olmstead, a computer programmer with 28 years of experience and a PhD from Stanford, quickly came to the conclusion that extreme precautions were in order once he understood how widespread the Y2K problem really is. But for his wife Barbara and his 14-year-old stepson, David, the idea took a little getting used to.

DAVID OLMSTEAD I've just been kind of going with the flow, really. I, it's kind of scary to think that we could be without food and water and stuff for a couple days, possibly months, weeks.

BARBARA OLMSTEAD At first I thought he was really exaggerating and that it couldn't be as bad as he was making it out to be. And frankly I went through all of those stages, I was angry, I was in denial. And then I realized once I started reading all of these things that were being printed from the Internet and mainstream articles that there really was a problem and it wasn't going to go away.

GINA SMITH (VO) And there are other tough adjustments to make. The Olmstead family recently made the difficult decision to purchase a gun.

SCOTT OLMSTEAD That's a big step. I'm not a gun nut. I don't really like guns. It's strictly a self-defense measure and I would hope that I would never have to use it. It would be in an extreme situation that I would.

GINA SMITH Are you going to learn how to use it?

SCOTT OLMSTEAD Oh, yeah, we'll go take some lessons or whatever you do down at the firing range. We'll get to learn how to use it and know how to use it.

GINA SMITH Your wife?

SCOTT OLMSTEAD Yeah, I think I'll make her do it, too.

GINA SMITH Your son?

SCOTT OLMSTEAD I know he would love to do it.

GINA SMITH (VO) But what if after spending all this time and money the doomsday scenario he's preparing for never arrives? Olmstead says he won't feel a bit silly.

SCOTT OLMSTEAD As a matter of fact I would feel no sillier than if I bought hurricane insurance and the hurricane didn't arrive or if I bought fire insurance for my house and the house doesn't burn down. You don't feel s illy, you feel relieved and that's what I would feel if everything works out fine. I'm preparing for the possibilities that it won't work out fine and that's what my thinking is right now is that it's not going to work out exactly fine. And you do what you can do and that's what you do.

GINA SMITH (VO) I'm Gina Smith for Nightline in southern California.

FORREST SAWYER Well, the Olmsteads' view may be extreme, but there are others that are concerned. When we come back, we'll hear from people responsible for managing the problem, including the man who has to worry about it for the entire federal government. (Commercial Break)

FORREST SAWYER Joining us here in Washington is JOHN KOSKINEN, the federal government's point man for dealing with the Year 2000 bug and in a moment, Mr Koskinen, I'd like to get your perspective on what the problem is. But first, listen to this cross section of views from people who are working to find solutions in both private industry and government.

PALOMA O'RILEY, CASSANDRA PROJECT Well, actually, the problem itself is technically very simple. What the catch is we've waited too long to start working on it. It's kind of like the Golden Gate Bridge. If you told a worker to remove and replace a rivet on the bridge, that's very easy to do. It hardly takes any time at all. But if you told the worker that he needs to change out all the rivets on the bridge and he only has 48 hours to do it, that's a problem.

JOEL ACKERMAN, INFORMATION SYSTEMS SPECIALIST None of us know what to expect. We know there will be problems. We don't know where they will be. We don't know how strong they will be or how long lasting they will be. But we do expect there will be problems because failures have already been found and identified.

CATHY MOYER, CASSANDRA PROJECT Everything in our lives today is a computer at some level. Your microwave is a computer. But there are computers in sewage treatment plants. There are computers in power distribution centers, power generation plants, elevators, the camera that you guys are using to film this interview is filled with microchips, embedded systems that have some vulnerability to the Year 2000.

STEVE DAVIS If today was January 1st, the year 2000, I think you could guarantee that we'd be in a very chaotic state and that many system would fail, many of these disruptions we talked about would actually happen. The probability depends directly on how much we do to mitigate these things over the next few months and a lot has to happen before '99 because really some problems can happen during the '99 year.

RICK COWLES, Y2K CONSULTANT The Global Positioning System is used to synchronize the power grid in various different locations in the United States and the Global Positioning System is going to be rolling over on August 22nd, 1999, it's going to be transitioning into a new realm. When it does that, there are ground based receivers that can't interpret the date properly and because they can't interpret the date properly, they're going to be non-functional.

JIM LORD, AUTHOR Even if the computers that were used to control a nuclear power plant, for example, were OK, you still have a long, long chain of other computers that all have to be operating correctly in order for that nuclear power plant to stay in operation.

DOUG CARMICHAEL, Y2K CONSULTANT Part of the problem with the electrical utilities is it's not just their computer programs or the chips which run their electric power lines and things like that. They themselves usually run fuel like oil or coal, which run on railroads and ships and we don't know about those ships and railroads at this point. It's still an open question.

STEVE DAVIS If there is a prolonged power outage in the northern hemisphere it's going to be cold. I'm concerned about how people will keep warm, if there's disruptions to the food supply how people will get food, how they'll react just perceiving that that might happen is one issue. How they'll react if it does happen is another.

DOUG CARMICHAEL Flying looks very difficult because the FAA is in trouble and the insurance companies are saying that they might not insure flights in the early part of 2000. But that's based on guesses now as to how it might be. It's conceivable since there's such a focus on this that the FAA will actually get it together. They certainly are doing a tremendous amount of work.

JOEL ACKERMAN I do expect that there will be failures and there will be some people hurt, possibly some people dying because of health care problems related to Year 2000. But we really don't know yet. We've never done this before. So what we have to do is just keep working on it. The worst case could be widespread patient care problems that result in deaths. We're certainly hoping that that won't be the case and we're working to minimize that.

STEVE DAVIS The banking industry is going to be the best prepared, I think. There are bank inspectors and regulatory efforts in place that are hounding these people and they're at risk of cease and desist orders.

DOUG CARMICHAEL It's been very hard to get everybody involved because first of all it sounds stupid that a couple of little numbers could cause this much trouble. We just don't have an image of the world that that makes sense in. At a deeper level, the idea that the technology could fail threatens our fundamental beliefs that progress works and technology works and human beings can solve any problem that we're confronted with.

JOEL ACKERMAN The Third World War really needs to be a war on Y2K. We need to mobilize, we need to communicate, we need to get everyone active and working on this.

FORREST SAWYER A number of views. And now Mr Koskinen, it's your turn. I believe we've managed to sell the idea that you've got a problem facing you there in the federal government. But put your hat on, how bad is that problem?

JOHN KOSKINEN, PRESIDENTIAL COUNCIL ON YEAR 2000 (Washington) Well, I think ultimately the risk to the American public is not going to be from federal systems. We have some of the largest, most complicated, antiquated systems in the world, but we've been working on it for over three years in most of the agencies so that I'm confident that the vast majority of the mission critical systems of the federal government are going to work. But I do think we have exposures in other areas both domestically and internationally.

FORREST SAWYER Well, there's the problem. Now, you know painfully well that it's not just your enclosed system that you have to worry about. Those computers are in touch with other computers all around the globe, in other national systems, in other private systems and if they don't come along with the program, you've got trouble.

JOHN KOSKINEN That's exactly right. This is a classic example of the growing interdependency between all operating organizations, which is why we're spending a lot of time not only looking at federal systems and not even only looking at the systems we relate to, you know, with states or other governments, but actually reaching out beyond those and trying to do whatever we can to further the solution in the private sector as well as internationally.

FORREST SAWYER So if you, we've seen the Olmsteads and they're really worried and there are a lot of people who are very worried and some who are not so worried. Where do you sit as you look at the problem, as you stretch out through 1999 into the year 2000?

JOHN KOSKINEN Well, I think those commentators who noted that it's too early to tell, I think, are about where we are. This clearly is a serious problem that everybody should be treating as such, but on the other hand, there's no indication yet that there are going to be basic failures of the infrastructure in the United States and therefore I think that there is no basis for people disrupting their lives at this time to be prepared for that. On the other hand, it doesn't mean that we don't have a lot of work to do and that people should not be taking it seriously.

FORREST SAWYER All right, let's pause and when we come back if you would, Mr Koskinen, I'd like to see what you think are some of the danger points and what we need to do between now and the year 2000, when we come back. (Commercial Break)

FORREST SAWYER We are back again with the government's Y2K czar John Koskinen. Mr Koskinen, I was taken with that one commentator, Paloma O'Riley, who said it's like trying to replace all the rivets in the Golden Gate Bridge and you've got 48 hours to do it. Are we that far behind?

JOHN KOSKINEN I don't think so. Some people haven't started and those are the ones we're worried about. But clearly in the private sector as well as in the government, there are agencies and companies that have been working on this problem for several years. Replacing the rivets in the Golden Gate Bridge over a longer period of time is not impossible. But we are concerned internationally as well as domestically about those who haven't started.

FORREST SAWYER Well, what are the problem areas as you see it? Clearly there are some that you think are doing pretty well and some you think are not doing so well.

JOHN KOSKINEN Our concerns right now are internationally about a significant number of countries that have yet to begin work on this problem in any meaningful way.

FORREST SAWYER What is a significant number?

JOHN KOSKINEN It's probably over half the countries in the world, I think, don't have a meaningful program in place. Domestically, we think that most of the large organizations are devoting significant resources, both financial and personnel, and are making suitable progress. Our concern is small to medium sized organizations, a large number of whom are doing fine but unfortunately there are still a lot of them, both in the public sector and in the private sector, that have not understood the impact or the possible impact this problem could have on them.

FORREST SAWYER All right, let's just quickly run through this. The Department of Defense, they have to be in communication with their computers with a lot of defense contractors and on and on and on. How bad are they?

JOHN KOSKINEN The Department of Defense has some of the largest challenges in the government. They really have a corner on the market on the microprocessors or embedded chips. All of those smart weapons are smart because they have embedded chips in them. They all have to be tested and the department now has a full court press going through all of the services and all of their systems, but they're going to have a challenge all the way through, I think, the middle of next year.

FORREST SAWYER The financial system. I just read a recent poll that says 38 percent of computer industry executives are considering withdrawing all of their personal assets from banks or investment houses. Is that reasonable?

JOHN KOSKINEN No, I think there's no basis for that. As one of your commentators noted, I think the financial system is probably in the strongest position of any in the country. The bank federal regulators have been working for over two years with every bank in the United States and the last surveys they've done in their examinations show that only one or two percent have any significant delays in their progress at all. Similarly, the SEC and the Securities Industry Association have been working very closely with their members so that I think there is no basis at this time for having any major concern about either the banks or financial institutions.

FORREST SAWYER But remember, we've already learned from the crisis we've been having, this is an international system that we've got. Everybody's connected to everybody else and you just said half the countries in the world haven't even looked at it, including Japan.

JOHN KOSKINEN No, I didn't say Japan. Japan actually, I was just there three weeks ago meeting with the prime minister and other senior level government officials and they are making a major effort across the full economy. Most of the countries that we're concerned about are the developing countries that have decided that if they don't have major mainframe operations, the problem isn't theirs and as you've heard on this program, the embedded chips affect everything.

FORREST SAWYER A lot of those executives who are thinking about taking their money out of banks are also swearing that on January 1st, 2000, they're not about to get on an airplane.

JOHN KOSKINEN Well, contrary to growing public opinion that the FAA is going to be the poster child of failed systems, I'm confident that the FAA system is going to work. In fact, I've announced I'm flying to New York on New Year's Eve in 1999 and I'll take the first plane back, commercial plane back the next day. I think the FAA is in very good shape. But we are working and beginning to work more closely with airports that we don't m anage directly. They're run by state and local, metropolitan authorities. They have a lot of embedded chips. Not all of them are making the progress that we think is appropriate.

FORREST SAWYER What if I take a flight to Bali?

JOHN KOSKINEN A flight to Bali is a different issue. We are, the FAA is working with international air traffic associations and the airlines and the FAA will not allow anybody to fly anywhere where there are going to be delays or any difficulties and at this point we don't have guarantees in a lot of other countries about their air traffic systems. But we're confident that ours is going to work.

FORREST SAWYER Now, I know you're working very hard, but if you had to guess where are the dislocations going to come?

JOHN KOSKINEN Dislocations I think are going to come in this country in a lot of smaller or medium sized cities and counties where mayors or city managers or county executives have not yet really understood the seriousness of the problem. And if they don't start soon, it really will be too late for them and I think that's where we have a greater risk. It won't happen everywhere and if we continue to work as we are, this week is Y2K Action Week, trying to get everybody who's a small to medium sized organization to pay attention, there's still time.

FORREST SAWYER You remember the Olmsteads, who are spending so much of their time putting away, who are actually taking weapons training. What can you say to them to convince them that they're wasting their time?

JOHN KOSKINEN Well, I don't, I think everybody has to make their own judgment. What we're trying to do with the American public is say that we're going to continue to provide all of the information we have. My goal is to have everybody in the American public feel that they know everything I know and then they will, I think, behave appropriately and respond appropriately. At this juncture, all I can say is that there is no basis on which the information I have for people to decide that they ought to disrupt their lives but on the other hand everybody has to make their own judgment.

FORREST SAWYER John Koskinen, the Y2K czar for the government, you've got a big job and we're all pulling for you. Thank you, sir.

JOHN KOSKINEN Thank you. That is our report for tonight. I'm Forrest Sawyer in Washington. For all of us here at ABC NEWS, good night.

Content and programming copyright 1998 ABC News. Transcript by Federal Document Clearing House, Inc. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to ABC News. This transcript may not be copied, resold or redistributed in any media.

-- Bill (billdale@lakesnet.net), October 21, 1998