Business 2000: A year of uncertainty in technology

By CHRIS BARTON IT editor

The untruths began at the dawn of the new millennium. The Year 2000 electronic date change problem, aka the Y2K bug, didn't cause chaos, mayhem and the end of society as we know it.

The bug didn't even bark, let alone bite.

Information technology experts told us that was because we had prepared so well.

But many knew they had been had. Was it really necessary to spend $1.2 billion to make New Zealand's computers read the date properly?

The conspiracy theorists had a ball. There was no bug. It was an idea cooked up by the computer industry to make a killing by getting everyone to upgrade their hardware and software.

Fanned by media hype and Ken the Cockroach, star of the Y2K Readiness Commission's ad campaign, the idea caught on like wildfire.

Worldwide "remediation" costs for Y2K were estimated at between $US300 billion and $US600 billion.

But in the aftermath, research company IDC was quick to jump on the backlash bandwagon, calculating that overstating the Y2K problem caused companies to spend $US70 billion more than they needed to.

The truth is that there were one or two problems - like the New York video-store customer who was charged $NZ180,000 on New Year's Day for renting The General's Daughter. The silly computer was billing the day-late video as though it was 100 years overdue.

In New Zealand, according to the Readiness Commission - which kept details about such matters close to its chest - the only glitches were "several fax machines and elevators malfunctioning briefly."

The Herald managed to track down a few instances of bug outbreak, including a Tauranga woman who found that the clock on her blood-sugar reader had not worked since midnight on December 31.

There were also a few invoices with silly dates or amounts owed, and some odd computer system outages.

The official line was that these were nothing to do with the bug; they were either a one-in-a-million malfunction, a planned maintenance shutdown or human error.

No doubt about it, we were conned.

So the "I Told You So, I Was Right and You Were Wrong, Nya, Nya Award" goes to Datagroup's Rollo Gillespie, who early in 1999 wisely wrote: "New technology holds a fascination and excitement for everyone, but it needs to be applied cautiously and without being under the threat of a 'hard wired' deadline such as 31 December, 1999."

The "I Told You So After The Event, Nya, Nya Award" goes to Alex Heffer, a software company owner who sent an email to the Herald early in the New Year headlined, "Crime of the Decade," accusing consultants and the media of spreading an "embedded computer chip apocalypse theory."

We are all wiser now. When computer geeks come calling about upgrades we greet them with wreaths of garlic around the neck and make sure we have a sharpened wooden stake in our back pocket.

But the industry thrives on false expectations.

Joint winners in the "HUBB (Hyped Up Beyond Belief) Award" are Wap, ASP and anything with an "e" at the beginning.

Wap (wireless application protocol) phones were going to be the next big thing. With Wap we could read our email, surf websites, order pizza, play online games and listen to music all from the comfort of our mobile.

Great, but Wap was also hellishly expensive, difficult to set up and ugly to use on the mobile's small screen.

Unkind people dismissed it with the phrase, "Wap is cwap."

ASP was also big but only in the mind. The main problem was the name. ASP stands for application service provider - not the viper that bit Cleopatra's breast.

Although no one understood what this meant, the industry was gung-ho. "Apps on tap," they said.

The idea was to rent, rather than buy, software which would be accessed by the internet.

Great in theory, but apps-on-tap users found that they had to pay through the nose for ever. Unkind people dismissed it with the phrase, "This is too darned expensive."

Then there was e-hype e-business, e-bank, e-shop, e-tail, e-gad. The Government climbed on board the e-train by holding an e-commerce summit in November at which it unveiled its e-commerce strategy.

About 500 businesspeople - rounded up from all over New Zealand by the high priest of "e," Sir Gil Simpson, attended.

The "Best Performance by a Stunned Mullet Award" goes to the six ministers, including Prime Minister Helen Clark, whom the Government wheeled on stage to show that it was serious about the "e" thing.

Unfortunately, the ministers either sat there looking bored and wondering what "e" stood for or got up and spoke trite words which clearly showed they had no idea.

The great tech-stock lie was revealed in April when insanely overvalued "e" and computer stocks all over the world crashed and burned.

New Zealand escaped the most devastating fallout mainly because our exchange performs miserably anyway and our tech stock portfolio is sparse.

It was also because New Zealanders didn't "get it," according to sources close to e-stock king Eric Watson. We're glad we didn't, Eric.

The "Pig Will Fly Like a Lame Duck Award" goes to brat pack wannabe Tim Connell, who helped out pack leader Eric by taking the terminally sick e-tailer Flying Pig off his hands.

The newly anointed one then parlayed his entire fortune for a 30 per cent stake in lame duck Wilson Neill. The hospitality company trying to reinvent itself as go-ahead tech stock has had a tough year, unable to relist on the main board - and is at present languishing in the 5.5c-a-share doldrums.

But the "Is Nothing Sacred Award" goes to the three words, "I love you." Emotionally challenged geeks all over the world couldn't resist the subject line on this email.

Hoping that the contents would reveal a secret admirer, they clicked on the attachment en masse and unleashed one of the worst computer virus outbreaks the world has ever seen.

Justice for IT was blind, bound and hog-tied in 2000. In April, United States District Court judge Thomas Penfield Jackson found in favour of the Department of Justice in its anti-trust lawsuit against Microsoft.

The good judge said Microsoft abused its monopoly power, stifled innovation and harmed consumers. His remedy was to order that Microsoft be split in two. Bill Gates said phooey. The landmark case has now gone to appeal and will take years to be resolved.

Telecom New Zealand also abused its monopoly power. At least that's what the High Court and the Commerce Commission seem to think. Justice Judith Potter granted an interim injunction against Telecom over its disconnection of free internet provider i4free, which had refused to use Telecom's 0867-prefixed dialling scheme.

Belatedly, the Commerce Commission also decided that the 0867 regime was anti-competitive and brought a case against Telecom too. The phone giant's chief, Theresa Gattung, said phooey.

Both landmark cases are now before the High Court and will take years to be resolved.

The "Beacon of Hope Award" goes to Justice Potter, who ordered Telecom to reconnect i4frees phone lines and said: "I find it difficult to accept, notwithstanding this 'novel and difficult' problem, that Telecom does not have the wit or resources to manage this situation" - after Telecom stretched truth to its most elastic limit by arguing that i4free's traffic was overloading the Airedale St exchange in central Auckland.

The American Way arrived in New Zealand this year with several hundred thousand internet users joining the land of the free by signing up to freenet, i4free or zfree. Kiwis had never had it so good surfing the web for nix instead of $40 a month. In response, the largest of the paid-for providers, Xtra, dropped its monthly charge to $24 and within weeks so did everyone else.

But the free trend was really just a ruse, which is why Clear Communications convincingly takes out the "I Have the Cunningest of Cunning Plans Award."

No one really understands what interconnection agreements are, but in the esoteric world of telecommunications, where most talk is about dense wave division multiplexing over fibre optics, the telcos needed something more interesting to argue about.

So they developed an exceedingly complex system of termination payments, whereby one carrier pays the other around 2c a minute for traffic passing from one network to the other and vice versa.

Think of it like a toll gate at the border between two countries but with a weird twist. The more people you get to visit your country the more the other country has to pay you in border crossing fees.

Clear found that it could entice lots of internet users over to Clearsville by supporting the free providers and giving them a slice of the termination payment action. In America they call this a kick back. Telecom calls it "perverse incentives." Clear calls it hard-ball business and tells Telecom to read the contract.

Telecom read the contract, realised it was screwed, and renegotiated. Clear came away at least $20 million better off and decided to stop paying perverse incentives to the free providers from the end of 2000. At least one free service is now moving customers onto a subscription.

But the "Home of the Brave Award" undoubtedly goes to music sharing program Napster and the thousand of courageous souls who use it to swap songs over the internet for free. The peer-to-peer technology which threatens to decimate traditional business involving the resale of digital media has the music industry in litigation war mode.

Democracy hung in the balance in late 2000 while Americans decided whether man or machine could count votes. In the end they trusted a patently stupid machine which, like most of us, had never heard of chads. But rather than finding out what they were and whether they were the vote-casting marks of thousands of Americans, the dumb machine ignored them. The US Supreme Court decided the machine was right.

New Zealand's democratically elected Government showed similar wisdom in 2000. The "Pregnant Chad Award for Longest Gestation" goes to the Crimes Amendment Bill covering computer misuse and anti-hacking laws.

The need for the legislation was first mooted in 1989 and it still hasn't passed into law.

Information Technology Minister Paul Swain promises it will be by the end of June but no one is holding his or her breath.

The minister was also the winner of the "Covert Chad Award for the Best Disguise as an Interception Device" for trying to bury mass surveillance legislation among his bill's anti-hacking clauses.

The minister of snoop wants to allow Government security agencies to intercept our email and hack into the private information stored on our computers.

The "Dangliest Chad Award" goes to the Ministry of Economic Development for its handling of the radio spectrum auction that would never end.

After six months of trying to sell 2G and 3G spectrum to the highest bidder, it is still without a result. Why? Because bidders were allowed to withdraw their bids whenever they felt like it. Duh!

The "Faintest of All Dimpled Chads Award" goes to the Government for its light-handed response to telecommunications regulation.

Instead of seizing the moment to bring fast, affordable broadband internet access to all New Zealanders, the Coalition, in the face of furious political lobbying by Telecom and Vodafone, showed a complete absence of intestinal fortitude and consigned the country to sit in the slow-passing lane of the road to e-commerce and the knowledge economy.

Herald Online features:

2000 - Year in review

2000 - Month by month

2000 - The obituaries