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Special Event

Millennium 2000: Computers Power Up Glitch-Free as Questions Abound Over Need of Massive Spending Programs

Aired January 3, 2000 - 11:06 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JIM CLANCY, CNN ANCHOR: Workplace computers are being powered up all across the United States, and thus far no reports of major Y2K problems. Earlier, the financial markets of Asia and Europe gave it a test, and trades went through with hardly a glitch.

Kathleen Koch is now at the National Y2K Center in Washington -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Jim, the grade so far is an A plus. This final day that experts say was so very crucial is going very smoothly across the United States and around the world. Still, experts here at the federal Y2K center aren't ready to declare victory yet, and they're watching very closely in case anything changes.

(BEGIN VIDEO CLIP)

JOHN KOSKINEN, PRESIDENT'S COUNCIL ON Y2K CONVERSION: We're continuing to monitor how things go around the globe. There's been an increase in the amount of minor glitches that are being reported, nothing thus far that looks very surprising or unexpected. I think the challenge today will not be the banking and financial industry. I think it will be the small retailers and commercial establishments to see how they function. There have already been somewhat humorous reports of glitches, which are humorous because they're isolated.

(END VIDEO CLIP)

KOCH: Glitches like the customer in Colony, New York, who returned a movie to a video rental store only to learn that he owed $91,000 in late fees. The computer said that he was returning the movie 100 years late. Or there was the novelist in China who was, ironically, writing stories about the millennium bug when his computer crashed and all of his files were destroyed during the Y2K 2000 rollover.

So, people, when they see problems like that, many are saying, maybe this was all hype, maybe the $200 billion that apparently was spent around the globe to solve the Y2K problem was all a waste. But officials here say not so, it's because that money was invested that we are standing here with so little bad news to report. And they also point out that now governments are better prepared to handle any future emergencies and that companies that have updated their computer systems will now operate more efficiently and more productively -- Jim.

CLANCY: Well, there are some people that are wondering, is it safe to return that generator to the store, will I need it. How many more days might we have to go before we can declare that, well, the big problems aren't going to be there?

KOCH: Jim, obviously, the first question is will the stores take those generators back, and many aren't without some kind of a surcharge. But we are hearing that we are over the major hump, the concern about infrastructure like power, like telephone, telecommunications, going down. However, there is one date looming in the distance, that's February 29th. There could be some small glitches then, because apparently some of the experts that put in the Y2K fixes did not realize it was a leap year.

CLANCY: Kathleen Koch, our thanks to you. Glad you didn't have any bad news for us, today.

KOCH: Me, too.

CLANCY: All right. Some cute stories, though -- Daryn.

DARYN KAGAN, CNN ANCHOR: Well, Kathleen brought up the subject: was this just hype or did we really need to come up with this big effort. Officials do say the threat of a breakdown was real and that chaos was averted through a massive worldwide effort. But questions linger, as CNN's Jonathan Karl reports.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CORRESPONDENT (voice-over): Before the ball dropped on the new millennium, roughly $200 billion was spent to avert a Y2K computer catastrophe, about half of that in the United States alone. The federal government spent $8.8 billion on Y2K fixes, corporations an estimated $100 billion, and the Federal Reserve stockpiled an extra $50 billion in cash, enough for every household in the U.S. to withdraw $2,000.

All of this spending was fueled by dire warnings about Y2K catastrophes.

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: Now this is not one of the summer movies where you can close your eyes during the scary parts.

KARL: The president was not alone. Last January, Robert Bennett, the Senate's point man on Y2K wrote, "There are no brakes on the vehicle on which we are traveling. Each day brings us closer to the brink." A Senate report last fall suggested people stockpile food and water.

Perhaps the leading doomsayer was Ed Yourdon, whose best-selling book "Time Bomb 2000" predicted massive global disruptions. When Yourdon woke up to find his Web site still running on New Year's Day he wrote, quote, "After hearing repeated reports on television that nothing had gone wrong, I wondered if I was going overboard." The government's top Y2K expert says that corporate America did not go overboard by spending billions to stop the millennial bug.

KOSKINEN: They actually spent that money because their systems were at risk. It was an urgent management issue that they dealt with, it appears to everyone now, very successfully.

KARL: An all that money spent updating computer systems may bring companies added benefits.

HARRIS MILER, INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA: Now they have better systems, better control of their information technology systems, and their customers, the citizens, the people that use the systems are going to benefit from this on the medium and long term.

KARL (on camera): But why did countries like Italy, which spent a fraction of what the U.S. spent on the Y2K issue, have no apparent problems at all? That's a question Y2K experts are still trying to answer.

Jonathan Karl, CNN Washington.

(END VIDEOTAPE)

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