Y2K: Now is not the time to panic

When the clock strikes midnight on December 31, the biggest problem you could be facing may not come from your computer, but from your friends and neighbors.

Companies monitoring the Y2K bug say that some of the most immediate problems that will strike around the New Year could come from panic and hoarding caused by fear of the bug, not the bug itself.

"It will be similar (to a major storm). But when we have a blizzard, or even a 2-inch snowstorm, you typically have a smaller subset of people" stocking up on perishables and candles, said Lou Marcoccio, an analyst at Gartner Group Inc., who has been tracking Y2K spending and problems. Marcoccio said that where storms might cause 6 percent to 8 percent of the public to stock up on goods, Y2K fears might see more than two-thirds of the populace do so.

Analysts said that they didn't think there would be any systemic reason for people to panic. But that doesn't mean that minor problems couldn't cause people to over-react and trigger a larger problem.

Marcoccio said the problem feeds off itself. Say a consumer goes to the gas station to fill up on December 31, and comes upon long lines. Then he heads to the supermarket, which is out of milk, bread and candles. Then the ATM won't let him withdraw more than $200. Pile up the shortages, and panic can begin to set in.

"The good news is, the (supplies) get replenished a few days later. But for those couple days what people are afraid of, shortages, is just that. It's just like in a snowstorm," he said. Marcoccio reiterated that supplies will be replenished. He said the grocery industry has been working with suppliers and supermarkets to ensure that the food supply will not be affected.

Ready for Y2K
That seems to be the case in most of the "mission-critical" systems around the US. Public utilities, for instance, have been checked out, and are expected to function normally -- not perfectly -- come the new year.

Analysts note that for utilities, Y2K problems likely won't affect operations. "The No. 1 area for (utilities) expected problems were office and financial. Operational support was way down the list," said John Gantz, senior vice president and chief researcher at International Data Corp.'s Project Magellan.

Gantz said that most large industries should come through okay as well.

"Counting all sizes, businesses in the US are about 75 percent complete (in Y2K remediation)," Gantz said. While he noted that this might not sound good, "if you look at the data closely, you see that large companies, which employ over half the people and are the companies that run our economy, are 95 percent complete with their projects," he said.

Small biz a problem
Those unprepared small businesses may be much more vulnerable, even though most of them should be able to develop manual work-arounds to computer issues. But small glitches in other sectors of the economy, such as a problem with delivery systems at the post office or Federal Express, could have serious repercussions for these firms, analysts said.

One big potential troublespot is government systems, particularly local governments.

The Commonwealth of Massachusetts, for example, surveyed its cities and towns about two months ago, to find that only half were able to even report their Y2K status. And of those that reported, half said they weren't even planning to be done until the 31st of December.

"Most of (the problems) are administrative -- things like payroll. But if you don't pay teachers for a week or two, chances are you won't have school for a while," noted Gartner's Marcoccio. "Tax collecting reports, motor vehicle registrations -- all those things can be affected. Some are inconveniences, and others are more serious."

The real threat
Still, analysts don't see much to worry about in the U.S. What they do worry about are security threats.

Hackers, terrorists and criminals may take advantage of the Y2K craziness to attack, they said. Already, several viruses have been discovered that were set to go off on January 1.

And earlier this month, the U.S. government issued a warning about terrorist threats to attack during New Years and Ramadan celebrations. In late December two alleged Algerian terrorists were arrested in Washington state and Vermont.

Areas that attract large crowds of people and large amounts of media are prime targets, they said.

Short of staying away from crowds, though, there's not much an average citizen can do about terrorism, analysts noted. As for viruses, and hacks, the warning there are the same as always -- make sure you have anti-virus software, don't open files you download you get off the Net or in from anonymous e-mail, and back up your system.