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The Denver Business Journal

April 24, 2000

Title: Final Tally for Y2K Bug Tops $433M

L. Wayne Hicks Business Journal Managing Editor

Before your eyes glaze over at the thought of another story about the millennium bug, at least read this: Colorado's largest public companies shelled out nearly $434 million to avoid any Y2K glitches.

The money appears to have been well-spent. None of the 20 largest companies reported any big problems with their computer systems when the calendar rolled over to 2000 from 1999, according to annual reports on file with the Securities and Exchange Commission.

In fact, despite fears that a programming shortcut would trick computers into thinking 2000 was really 1900 and crash, nothing happened other than global handwringing. Airplanes didn't fall from the sky. Telephones didn't stop ringing. Missiles weren't mistakenly blasted from their silos.

More than half of that $434 million was spent by one company -- the Denver-based phone company U S West Inc., which wound up with a $271 million price tag from Y2K.

"Was it worth it?" asked Laurie Deffenbaugh, who was communications director for U S West's Y2K program. "Absolutely. We found as we worked through on our business that we did have areas that needed remediation."

U S West originally forecast it would spend just $175 million on finding and fixing any problems the millennium bug could cause, but Deffenbaugh said that initial estimate didn't take into account capital expenses such as new hardware and software.

Deffenbaugh said there wasn't any doubt about calls getting through. What the company was trying to avoid, she said, were errors in customers' bills and similar customer service problems.

Overall, the cost for all 20 companies was largely in line with projections made by the companies in late 1998 and early 1999, when the SEC began requiring public companies to disclose the cost of fixing the Y2K problem.

That early estimate projected those 20 public companies would spend between $370.4 million and $410.4 million.

Most of the companies overestimated how much computer repairs would cost. Golden-based brewer Adolph Coors Co., for example, originally expected to spend between $30 million and $45 million, but wound up with a final price tag of $34.6 million. And Public Service Company of Colorado Inc., which projected that keeping a Y2K glitch from turning the lights off would run $40 million, spent $33.1 million.

Qwest Communications International Inc., the Denver-based telecommunications phone company, nearly hit a bull's-eye with its projections. Expecting to spend between $16 million and $21 million, Qwest spent $20 million on eradicating the millennium bug.

In preparing for the rollover from Dec. 31, 1999, to Jan. 1, 2000, Qwest set up five command centers to monitor possible problems. The company reported "minor" problems arose with some of Qwest's internal systems, but "there were no year 2000 issues which caused disruptions of voice, data or Internet services to customers," the company reported to the SEC.

At U S West, which is in the process of merging with Qwest, Deffenbaugh said the phone company's command center was quiet on New Year's Eve. "We were looking for things to do," she said. "There were no disruptions to speak of."

Ball Corp., the aluminum can maker in Broomfield, began searching for any Y2K-related problems in its computer systems years ago. The company addressed the problem early by taking the millennium bug into account when it was upgrading or enhancing its technology. By the time Ball launched a formal Y2K program in 1996, many of the Y2K problems facing Ball "had either been resolved or were near resolution," according to the company's annual report.

Ball was preparing for a worst-case scenario of the millennium bug shutting down its manufacturing process. The company spent $3 million solving any problems, only $1 million more than originally forecast. http://www.bizjournals.com/journals/high_tech/doc/2000/04/24/denver_story1.html

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-- (Dee360Degree@aol.com), April 24, 2000

Answers

And don't forget when US West went
down last November.

US West computers go down with computer glitch

or from gophers?

U.S. West phone customers report outages (gopher attack)

or billing problems in December

Computer glitch leads to high bills for U.S. West customers

-- spider (spider0@usa.net), April 24, 2000.