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GAO report on outages at online trading sites
From: Sean Donelan <sean () donelan com>
Date: 11 Jun 2000 02:00:25 -0700
Another government agency weighs in on the lack of public reporting
of outage information. Early this year the FCC was working on a
"voluntary" method for ISPs to report outages. So far, I haven't heard
of a single ISP voluntering.
This week the General Accounting Office issued a report on online
trading web sites, and the lack of disclosure about network problems
and system outages.
Watching the Stock Watchers
(The Industry Standard)
When a system outage occurs at your online brokerage, the only way you might
find out is if you're stuck in the middle of a trade or if the media reports
the outage. But it happens more frequently than is reported.
Many outages occur in small geographic areas and for just a short amount of
time. But brokerages aren't required to disclose these outages to customers,
the Securities and Exchange Commission or to any other regulatory body. Many
times they don't even keep records of their own on small outages.
The U.S. General Accounting Office has a problem with that.
The full GAO report is http://www.gao.gov/new.items/gg00043.pdf
One interesting statistic was 11 firms reported a total of 88 outages
between January and September 1999. About 40 percent of the outages
lasted for less than 25 minutes, but some firms didn't track any outage
lasting less than 25 minutes. So there may be a statistical problem
with the data.
For comparison, the telephone industry reported a total of 170 outages
between July 1998 and June 1999. The telephone industry doesn't track
most outages lasting less than 30 minutes (except for a few special
Even if you normalize for 3/4 of a year, it seems the Internet is actually
more reliable than the telephone network. Or, what I suspect is really
happening, both the telephone industries and the online brokers statistics
are measuring the wrong stuff.
But the real $64000 question is during periods of market volitility, would
you be able to reach a broker by telephone easier than you would be able
to access an online trading web site. The GAO didn't really answer that
- GAO report on outages at online trading sites Sean Donelan (Jun 11)