tion of the communications common carrier industry has traditionally been divided between the Federal Government and the states. Regulation of CATV systems has involved both federal and local authorities; public broadcasting and educational communications involve state and local governments to a significant degree; the operation of public safety communications systems (police, fire, ambulance, etc.) is usually under the direct operational control of local officials; and in many cases, local governmental communication facilities and services are funded in whole or in part through federal grant-in-aid programs.

To provide guidance and assistance to state and local governments, OTP undertook and completed the following tasks: (A) a review of the various federal telecommunication assistance programs; (B) the issuance of OTP Circular Number 2 requesting all executive agencies to provide information on their current and planned telecommunications research programs which might affect state and local programs; (C) studies for the states of Hawaii and Alaska to identify their unique communications requirements; (D) the preparation of a Cable Com'munications Handbook for local government officials to provide a basis for community planning and decision; (E) a conference between communications officials of Hawaii, Alaska and the U.S. Trust Territories to strengthen their communication planning procedures.

To provide national policy guidance to state and local governments on the implementation of the nationwide emergency telephone number "911", OTP has prepared a coordinated national policy, contracted for a community planning handbook on “911” implementation, and provided for the establishment of a federal information clearinghouse on "911."

To provide support for public safety telecommunications, OTP is seeking the improvement of the national law enforcement teletype system (NLETS), which services state and local law enforcement agencies in 48 states. OTP is also pursuing an effort to identify the issues that arise from the potential delivery of public services via modern communication methods (CATV, satellites, etc.) with particular emphasis and priority on the communication aspects of the delivery of emergency medical services.

Finally, OTP maintains a continuing program of consultation with state publie utility commissions and with the FCC concerning the impact of specialized communication carriers, cable systems, spectrum usage, data communications and other developments in comunications which involve regulatory policies and practices. OTP engages in an active dialogue with state and local officials in order to respond to communications problems and issues as they arise.

E. MOBILE COMMUNICATIONS

The frequency spectrum available for mobile radio services has been tripled by the FCC in a series of actions taken in 1970 and 1971. The mobile communications industry should no longer be limited by a frequency shortage but will face more clearly classical supply and demand limitations. This will raise a number of issues as to appropriate types of new systems, new services and the institutional structure to support them and the manner in which the larger bloc of spectrum will be sub-allocated among the competing mobile services. The transition from spectrum scarcity to spectrum abundance must be regulated to create an industry structure that is sensitive to future demands for communications services of all types, including improved mobile telephone services for all areas, integrated dispatch services, and public telephone services for domestic aircraft. It is equally important, as the spectrum available for mobile communications expands, to provide for the maximum amount of competition, both in the manufacture and sale of equipment and in the actual provision of service to the public.

In early 1972, OTP commenced a program, using staff, contract, and Policy Support Division resources, to assess the technical, economic, and institutional effects of proposed new mobile systems and services and to fomulate policy guidelines for the development of the expanded industry including guidelines for the introduction of competition. It is expected that the results of this program, along with recomendations to the FCC concerning policy guidelines for mobile communications will be forthcoming soon. Additionally, in cooperation with the FCC, DOT, LEAA, HEW, and HUD, OTP will continue to assess the feasibility of a pilot program to demonstrate innovative uses of mobile communications services in support of public safety, emergency health services, highway safety, and transportation in general.

F. NEW TECHNOLOGY

During the past decade, there have been radical improvements in communications technology resulting from independent research and development of U.S. industry, research in the academic community, the U.S. space program, and other government-sponsored R&D. These technologies provide opportunities for vastly improved and expanded communications services, which could have significant social and economic effects if exploited properly.

OTP maintains in conjunction with the National Science Foundation and the Department of Commerce, an ongoing study effort designed primarily to identify areas in which new technological advances are occurring and to evaluate the effect of these technologies upon the existing structures of the domestic communications industries. In 1973, OTP plans to identify the current state-of-theart in the major fields of communications technology, to determine the existence of any gaps in research, and to anticipate any potential future policy problems. If necessary, OTP will recommend policy guidelines regarding the applications of new technology.

G. COMPUTERS AND COMMUNICATIONS

In recent years, the two separate industries of computers and communications have come to intersect in several important areas. The use of computers in communications has enabled, or made considerably less costly, new modes of transmission, switching. network design, and system administration. Conversely, the use of communications in conjunction with computers has permitted the sharing of data-processing resources and the pooling of information banks, and has provided an access to computers that has opened up new opportunities across the entire spectrum of endeavor, including business, education, and social services, to name only a few.

The concerns in this area are in part common with those of other areas of domestic communications: Determining the division between competition and regulation, and for the latter, defining a governmental role which avoids inhibiting or restricting the flow of ideas and information. At the same time, however, computers and communications pose some issues which are unique, such as the threat to privacy, equal opportunities to information, and the protection of intellectual property rights.

OTP has commenced one program in this area which will be vital to the task of providing policy guidance. It initiated a review of the basic economies which underlies computers and communications, and therefore, to a great extent, control both its own development and the requirements for policy. From this program, it is expected that a basic understanding of this new combination of industries, as well as the analytic tools and concepts needed to guide it, will be developed.

II. GOVERNMENT COMMUNICATIONS

A. FEDERAL COMMUNICATIONS POLICY AND PLANNING

The Federal Government's own communications consume from 5 to 10 billion dollars per year. The major concerns in this field are avoidance of duplication, effective management of the acquisition of new systems, achievement of compatibility among systems, and satisfactory operating performance. The major objectives of the OTP program in the area of Federal communications are: first, identifying all the communications activities and resources of the Federal Government; second, determining the needs for effective information exchange among the various departments and agencies; third promoting economy in the government's use of communications, through sharing of facilities, elimination of duplication, and effective use of commercial services: and finally, encouraging the use of communications to improve productivity and enhance coordination of Federal Government activities. During 1973, arrangements for the interagency coordination required to achieve these objectives will be strengthened and aligned as appropriate with the Administration plan for the coordination of departmental activities. The areas of government communications to be involved are: communications networks, aids for radio navigation, satellite programs, communications of the Executive Office, audiovisual activities, equipment and facilities standards, and procurement practices.

In the previous year, OTP completed a review of all existing studies and analyses pertaining to the integration of the two largest comunications networks in the Federal Government, the AUTOVON network and the Federal Telecommunication System. Based on this review, it was decided that the systems should not be merged. However, this review revealed conflicting considerations concerning the degree of interconnection and inter-usage that should be sought. To resolve these conflicts, OTP directed a field test of service to selected military installations to obtain first-hand data relative to economic and service benefits which might accrue as a result of mutuality of service. The test has been completed and the results are being analyzed. Completion of the analysis will provide adequate information upon which to base decisions concerning further integration or interoperability of military and civilian comunications activities.

OTP has completed a review of existing and planned radio navigation aids operated or used by various elements of the Federal Government. It has begun work with the affected Federal departments and OMB to (1) coordinate the navigation satellite programs of the various departments; (2) determine the minimum mix of navigation aids and systems to meet government and civilian requirements; and (3) structure a coordinated national navigation program, It has formulated a plan to designate a single system for long-range general purpose navigation and will issue this plan to the affected department for planning and budgeting guidance and to the civil community for its information, The major portion of review of the government's present communications satellite program initiated last year will be concluded in 1973. The collection of information with regard to such programs is nearly complete. Several programs have already been identified for a more detailed analysis which will be aimed at identifying satellite systems which can be (1) reduced or eliminated, (2) consolidated with others, or (3) expanded to serve additional users. A major consideration in the design of government communications systems is selecting the best means of meeting unique needs, particularly those of the national security community. Special requirements for survivability and security, for example, can be met by highly specialized systems, or by designing general purpose government networks to include these features.

Meeting such requirements creates a dilemma for policy makers. Specialized systems with limited capacity are relatively inefficient for day-to-day use, and seem costly if relegated solely for emergency or backup use. On the other hand, incorporating special features in general purpose systems raises the cost of such systems for all users and can result in an unwarranted expansion of the demand for such features. This dilemma must be taken into account in developing policies and plans affecting Federal communications and a more explicit strategy must be developed for resolving it, including the development of good working relations with the Department of Defense and other national security agencies.

A study has been completed of the applicability of new communications technology to the unique needs of the Executive Office of the President. Particular emphasis was given to the possible utility of wideband and high speed data services. This study provides guidelines for the introduction of new equipment when and as needed, while ensuring that all equipment fit into an integrated system capable of evolution as technological potential and government needs change. During 1973, key technical and economic questions will be resolved, and a demonstration of selected new capabilities will be begun. This will also provide a basis for recommendations on other inter-agency communications systems. OTP is conducting an interagency study to improve the management of all audio-visual activities within the Federal Government. This study will review in-house versus contract decisions for the production of audio-visual materials, the volume of and need for government-owned facilities and equipment, and the potential for interagency coordination and cooperation for effective utilization of such facilities and equipment.

An improved process for the development of Federal communications standards has been established with initial emphasis on standards for data communications and standards to promote the interoperability of government communications networks. In 1973, emphasis will on one of the key elements of such networks, modulator-demodulators, or modems.

A review of government policies and practices for the procurement of telecommunications equipment and services has been started. Its goal is to develop. updated and improved government policies and practices in the light of recent

changes in regulatory practices and in the structure of the industry, particularly the introduction of competitive suppliers of specialized services and interconnecting equipment. One important factor in the study is the clarification and application of the government's policy of maximum reliance on the private sector for the provision of services and facilities. Another is the problem of reconciling conflicting approaches to computer and communications procurement when systems composed of both elements are involved. A third factor of importance which will be considered is the unique and difficult problem relating to the procurement of satellite communication systems and services.

Finally, OTP has established the Government Communications Policy and Planning Council. The Council, consisting of representatives of key Federal agencies, will provide a focal point for bringing the potential benefits of communications technology to all Federal agencies as a means of increasing productivity, coordinating operations, and improving the delivery of services to the public. The Council will enable these benefits to be obtained without costly duplication or bureaucratic delay, and through effective cooperation among all of those responsible for Federal communications policy and planning.

B. EMERGENCY PREPAREDNESS

The purpose of the emergency preparedness program is to insure that national and Federal communications resources will be available and applied, in emergencies, to meet the most critical national needs. This is a demanding task, because of the numerous contingencies that must be provided for-both with respect to the nature and location of the disruption and with respect to the nature and location of the services which, in one or another circumstance, it must be considered vital to restore. Emergency communications plans and capabilities must comply with three basic principles: first, maximum dual use of facilities for both emergency and routine operations; second, balanced survivability among communications and the facilities which are supported by communications; and third, focusing of responsibility to assure accomplishment. These principles are implemented within the framework of the Federal Government's overall emergency preparedness program, only part of which deals with telecommunications.

Policies and plans for managing the nation's telecommunications resources during war emergencies or natural disasters have been completed. These plans delineate the responsibilities of various Federal agencies regarding telecommunication, and indicate the coordinating arrangements to be used.

In 1972, OTP engaged in a review of the policies and procedures under which critical private line services would be restored by the United States communication common carriers. This review resulted in issuance by OTP of revised policies and procedures for the restoration of such services under a system of defined priorities. Work is now proceeding in conjunction with other Federal agencies to evaluate the currently assigned and requested priorities and to determine whether, and how, the number of priority circuits should be reduced.

With regard to its responsibility of determining policy for warning citizens of attack or of emergencies, OTP in 1971 issued a policy that any use by the public of home radio receivers in a nationwide radio warning system would be strictly voluntary. At that time a number of studies were undertaken to determine the most effective and economic alternative approaches to providing warning. Several of these studies will be completed during 1973, and further actions for improving the provision of warning to citizens will be made.

During 1972, a new manner of activating the Emergency Broadcast System (EBS) was implemented under OTP's direction. Further changes to improve the effectiveness and efficiency of the EBS will be studied and implemented during 1973.

To provide increased understanding of communications problems which arise when natural disasters occur, several actual disaster situations were studied and the lessons learned were incorporated into pertinent plans and procedures. This practice will be continued in order to provide a larger base of experience for evaluating warning and emergency communications systems and procedures.

C. COMPUTERS AND COMMUNICATIONS

Recent technological advances in the field of computers and communications have produced the potential for several alternative industry structures, for the provision of data processing as well as data communications services. Which 90-184-73-2

of these alternatives will eventually become dominant will be determined both by the regulatory policies adopted by government, and the inherent economic characteristics of computers and communications. This process--the emergence of an industry structure-has already commenced; however, many important questions remain unanswered, and many pertinent areas have not even been explored.

The development of hybrid computer-communications systems has significant implications for the Federal Government in two important fields. First, it will affect procurement of the government's own data processing and communications services. In particular, new hybrid systems may allow economies to be obtained through the sharing of network services by departments and agencies now obtaining such services independently. Secondly, the development of hybrid computer-communications systems may lessen the need for the government to design and operate its own hybrid systems, by making these available in the private sector. To assure that government use of computer and communications systems is effective and economic, OTP, during the past year, developed a model of hybrid networks that enables a thorough investigation of the economic implications of alternative system structures, sharing policies, and telecommunications tariff arrangements. During 1973, initial use of the model will be made to study high priority issues, including the economics of system sharing within the Federal Government. Also during 1973, an initial survey will be made of the security issues relevant to shared computer-communications systems, such as the maintenance of personal privacy and the preservation of confidentiality of personal information.

III. INTERNATIONAL COMMUNICATIONS

A. INTERNATIONAL SYSTEMS AND FACILITIES

1. General Policy and Industry Structure

Since its inception, OTP has conducted a continuing review of the operating and institutional arrangements of the international communications industry. The structure and performance of this industry have been a concern to Congress and others for many years, and this concern increased with the advent of the new technology of communication satellites and the creation of a chosen instrument (Comsat) to represent United States interests in the international use of this technology. As a result of a highly complex and artificial industry structure (largely the creation of Government regulation), the traditional problems of rate and investment regulation are particularly acute in the international field; and, because of divergent incentives, there are widely divergent views in the industry with respect to the best "mix" of international transmission facilities (i.e., cables and satellites). It thus becomes necessary for the FCC to rule on competing or alternative proposals for new facility construction, and to allocate the traffic among various facilities and carriers, causing strains in foreign relations and in the relations of U.S. industry to foreign carriers.

OTP now has in the final stages of development proposals and recommendations which seek to enhance industry performance through improved incentives within the existing industry structure. These will soon be forwarded to the concerned Congressional committees in response to requests for Administration views on this matter.

2. International Communications Satellites for Mobile Communications

(a) Aeronautical Satellites.-OTP has concentrated on developing a U.S. Government position with regard to arrangements with the European nations to evaluate the use of satellite communications in improving air traffic control over the high seas. Negotiations with the European Space Research Organization (ESRO) on a coordinated evaluation program commenced in 1971 and were continued during 1972. It is expected that the satellite channels required for the evaluation will be provided by a new entity to be owned jointly by ESRO and a private U.S. company. The State Department, FCC, and DOT/FAA have closely coordinated their interests in this area with OTP throughout this year. (b) Maritime Satellites.-OTP has actively participated in intra-governmental policy discussions aimed at providing satellite communications to civilian ships on the high seas. Current international discussion of this subject is taking place in the International Maritime Consultative Organization (IMCO). The U.S. Government is participating in the necessary preparatory work of defining the