Y2K: Large Telecommunications Companies Falling Behind on Y2K - Year 2000 software crisis - Industry Trend or Event

Cambridge Telcom Report, May 31, 1999

BellSouth, Comcast and Cox Communications Rated "Low" for Y2K Progress; MCI, Ameritech, Bell Atlantic, Sprint Rated "Below Average"

Many of the nation's largest telecommunications companies appear to be falling behind schedule in preparing their computers for the Y2K computer bug, according to Weiss Ratings Inc., the only provider of Y2K readiness ratings on Fortune 1000 companies, banks and insurance companies.

Among the 23 leading companies, seven were rated "low," six "below average" and five "average" in their Y2K preparations. None were rated "high." The remaining five did not disclose data deemed sufficient by Weiss to assign a Y2K readiness rating.

Bell South, Comcast Corp., Cox Communications Inc. and Cablevision Systems Inc. were among those companies that received "low" ratings, an indication of potentially serious delays in preparing their computer systems for the millennium. MCI Worldcom Inc., Ameritech, Bell Atlantic and Sprint were all rated "below average." AT&T, GTE Corp. and U.S. West were among those rated "average."

"Slow progress could have an impact on a company's productivity and earnings before and after the deadline. So investors should seriously consider the Y2K readiness rating among the various fundamental factors that guide their decisions," said Martin Weiss, Ph.D., chairman of Weiss Ratings. "Unfortunately, based on the companies' disclosures, we cannot determine what most consumers want to know -- whether or not we will have a dial tone on our phones come January 1, 2000."

The following are the nation's five largest telecommunications companies by revenue with their Weiss Y2K Ratings:

Company                     Weiss Y2K Rating
AT&T Corp.                  Average
Bell Atlantic Corp.         Below Average
BellSouth Corp.             Low
GTE Corp.                   Average
SBC Communications Inc.     Below Average

Overall, the 19 telecommunications companies rated by Weiss have budgeted $3.9 billion for Y2K-related preparations, but have spent $1.8 billion, only 46% of the funds allocated.

"With the short time remaining, this indicates widespread delays. The potential repercussions for our nation must not be ignored," said Dr. Weiss. "Even if only a small percentage of the U.S. population is unable to use its phones and faxes on January 1, 2000, it could be a major disruption for the country and the economy."

The Weiss Y2K Ratings for telecommunications companies, as well as for the Fortune 1000, are based on a proprietary model that compares Y2K budgets and expenditures over time and in relation to industry peer groups, as disclosed in each company's public SEC filings. Separately, Weiss provides Y2K ratings on banks, S&Ls and insurance companies based on its Y2K questionnaires received directly from these institutions.

Weiss also publishes financial safety and Y2K readiness ratings on insurers, banks and S&Ls. The accuracy of its ratings has been favorably reviewed by the U.S. General Accounting Office (GAO) as well as national consumer organizations. For more information, contact Weiss Ratings at 800/289-9222 or visit the Weiss Ratings Web site at www.weissratings.com.