NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 1 NRIC IV Focus Group One Subcommittee 1 Network Assessment Report #2 April 14 th, 1999 Federal Communications Commission Washington, D.C. Gerry Roth Vice President GTE Technology Programs This document and the information contained herein is intended, and for all purposes shall be deemed, a Year 2000 statement and a Year 2000 readiness disclosure as those terms are defined under United States federal law

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 2 Executive Summary United States Public Network Status –U.S. Telephone Service providers are on track to complete Year 2000 remediation programs Approximately 90% of the local, and 99% of the long distance switches in the U.S. Public Switched Network are deployed as of March 1999 Mid and small sized local companies trail the larger companies, but appear to be on track for 3rd and 4th quarter 1999 completion –Major carriers predict the Y2K completion and roll-out of all essential systems and products by June 1999 NRIC is estimating 98% by June to allow some margin of error No company is indicating technical difficulty with completion Range of responses is very narrowly distributed around the average International Risk Assessment –From all sources, the perceived risk of compliance has increased since our last report Approximately 75 % of countries sampled have increased risk 191 countries assessed, vs. 84 in December

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 3 Y2K Lifecycle Compliance Status Large Local Exchange Carriers (greater than 92% of U.S. Access Lines) Essential Systems Only

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 4 Y2K Network Compliance Status Large Local Exchange Carriers Essential Systems Only

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 5 Y2K Lifecycle Compliance Comparison Large, Midsize, and Small Local Exchange Carriers December 1998 Actuals Data Source: Large--NRIC Midsize--NRIC/USTA Small--NRIC/FCC Essential Systems Only

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 6 Y2K Network Compliance Comparison Large, Midsize, and Small Local Exchange Carriers December 1998 Actuals Data Source: Large--NRIC Midsize--NRIC/USTA Small--NRIC/FCC Essential Systems Only

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 7 Y2K Lifecycle Compliance Status Major Inter-Exchange Carriers (82% of U.S. Revenue) Essential Systems Only

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 8 Y2K Network Compliance Status Major Inter-Exchange Carriers Essential Systems Only

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 9 International Status

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 10 Change in Risk Perception - December to March Telecommunications Risk Assessment by Country Countries: 84

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 11 International Status by Region Comparison of Perceptions of Risk - December to March SubIndianMiddle EastEasternCentral & AsiaNorthWestern Sahara Sub & Europe South PacificAmerica Europe Africa Continent North Africa (inc. Russia) America(inc. Israel) High Risk 4th Q or Unknown Medium Risk 3rd Q Low Risk 2nd Q or Before The scores blend such that the following score ranges apply: =Low Risk; =Medium Risk; =High Risk; based on uncertainty High Risk Medium Risk Low Risk Countries: 84 Dec. /191 Mar.

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 12 High Medium Low Country Name (Millions of Annual Minutes) Major Interest > 200M Minutes Significant Interest Between 200M - 100M Minutes Level of Risk Countries of Major and Significant Interest to the U.S. (as determined by International Traffic Patterns, sorted by Perceived Risk) Total 1997 Traffic = 29,106 mMitt Countries: 53

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 13 Y2K Risk to U.S. International Traffic To and From Countries with greater than 100mMitt Total Traffic *mMitt: million of Minutes of Intercontinental Telecommunications Traffic mMitt Source: Telegeography, Inc. Countries: 53 Total 1997 Traffic = 29,106 mMitt

NRIC IV Focus Group I, Subcommittee 1 Year 2000 Readiness of the Telephone Industry Report 2-final 14 Review of Year 2000 Recommendations from 14 January 1998 Report Increase Wireless participation from CTIA and FCC data collection –Covered in the FCC report, NRIC will not use in Network assessment Map Key Government Installations to coverage areas (in process) –Using NCS inquiry to USG –NARUC offices to obtain small company status Risk methodology added to plan completeness –Draft definition of “Done” - to be included in round 3 –Individual companies need to indicate results Assess impact with other sectors –Tri-industry group meetings have begun –Electric - Telecommunications - Oil & Gas NRIC working with International Y2K Telecom User Alliance, ITU, FCC, and State Department on international status assessments