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K.C. Neel
With cable operators, there's no middle ground. Either they've dropped a wad of dough to circumvent potential problems associated with Y2K, or they've dismissed the entire notion.
AT&T Broadband & Internet Services has spent more than $117 million in Y2K-related equipment upgrades and tests to make sure its 10 million subscribers are set for the new millennium. On the other hand, Massillon Cable TV in Massillon, Ohio, hasn't spent a dime.
"I've told people that I'll be at the headend on Dec. 31 and if something goes wrong, I'll fix it," says VP Bob Gessner. Massillon counts 450,000 customers.
Most MSOs say the exact cost of preparing for Y2K is difficult to pinpoint because a significant amount of money allocated to fix any potential problems are also linked to routine equipment upgrades and modifications.
"The amount of money we've spent to upgrade our systems has totaled about $4 million over the past couple of years, says Steve Fox, VP-digital services and information technology for CableOne Inc., which counts 733,000 subscribers. "But of that, only about $1 million to $2 million is directly and solely related to Y2K. We had to upgrade our addressable controllers and our billing system, which are Y2K-related. But we also have standardized our PCs and LANs, which help with any Y2K problems but which we didn't do strictly for that reason."
Other MSOs agree. Still, many have formed specific business units to address the Y2K issue. AT&T put its Y2K division together over two years ago to first identify where problems might occur. John Gabbert, VP-year 2000 program says, "We basically went through and checked every step from the time the customer calls us to the service activation."
Fixing potential Y2K problems wasn't difficult, he says, but finding some of them was tricky. "We first had to assess the problem," he says. "What was going to happen at midnight on Jan. 1?
AT&T built five labs to conduct end-to-end testing of its operations as it prepared for the year 2000. The task force first took an inventory of every converter box, controller, uplink/downlink, billing system and computer-generated dispatch system. At the height of its Y2K preparedness program last year, AT&T had some 300 employees and contractors working on the issue.
Problems can lurk in any corner of a system, operators say. Patrick Vertovec, chairman of CableLabs' Year 2000 committee, says one or two computers at the system level may not be a problem, but a dozen up and down the line could spell trouble.
Gabbert says other issues after the New Year could also cause problems. He says, 2000 is a leap year meaning an extra day needs to be included in all mathematical equations. "We have to recognize that little tid bit of information or all the other calculations won't match up," he says.
MediaOne Group, which counts 6.2 million subscribers, broke down its risk assessment evaluations into three subcategories - high, medium and low - with high-risk being those issues that would have an adverse impact on the business, its customers and employees.
By Sept. 30, the Denver-based MSO being purchased next year by AT&T, had completed 98% of its Y2K-compliant testing and the company had budgeted up to $70 million for costs related to compliance. At the end of the third quarter, a spokesman says, that number would be closer to between $50 million and $60 million.
Time Warner Inc, counting 12.6 million subscribers, says it identified about 600 worldwide "mission critical" potential problems after Dec. 31. An item was coined "mission critical" if it impaired the company's ability to produce, market and distribute products; pay its employees, artists and vendors; and meet its regulatory requirements.
The company figures Y2K compliance will cost between $50 million and $85 million by year's-end and about 75% of those costs had been incurred before June 30. Time Warner's remediation program will likely roll into 2001, a company spokesman says, as temporary solutions to Year 2000 problems are replaced with upgraded equipment.>A
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