FEDERAL TELECOMMUNICATIONS SYSTEM (FTS)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84-00780R001200060017-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 14, 2016
• Document Release Date: August 14, 2002
• Sequence Number: 17
• Publication Date: April 29, 1966
• Content Type: MF

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2 9 ' PR H66
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MEMORANDUM FOR: Acting Deputy Director for Support
SUBJECT: Federal Telecommunications System (FTS)
REFERENCE: Memo for D/OL from DD/S, same subject, dated
7 February 1966
1. This memorandum is for information only.
2. In response to your request in reference, attached are the
results of our review of developments in subject system and other
means of communication referred to by the Bureau of the Budget (BOB).
The attached material and the summary in this memorandum have been
prepared in consultation with interested Agency components including
the Offices of Communications (OC) and Security (OS), and the Records
Administration Staff (RAS), as.well as the Office of Logistics, Tele-
phone Facilities Branch (OL/TFB).
3. The ITS consists basically at present of a Government net-
work of leased.long-distance telephone circuits, teletype circuits,
and a message system operated by GSA. CIA is using the telephone
and teletype circuitry to a limited degree.
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SUBJECT: Federal Telecommunications System (FTS)
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7. With respect to the BOB report concerning the effectiveness
of overall communications, GSA has long contended that more use of
long-distance telephone calls and less of written correspondence can
result in an overall saving. This Agency's usage of long-distance
telephone is very limited because of security and not economy. Due
to this limitation, the greatest potential for Agency communications
economy appears to be in the area of correspondence. For example,
Agency Private Branch Exchange (PBX) telephone toll costs are less
than $1.5,000 per year. In contrast, the RAS estimates overall inter-
office and intraoffice correspondence costs for this Agency to be
$12 million annually. Thus, any change in procedure or practice which
reduces the cost per unit of correspondence can bring about vastly
greater savings than any similar measure on telephone toll calls such
as adoption of FTS. Two significant economy measures in correspond-
ence procedures are the "speed letter" and "self-mailer". The savings
realized from just these two innovations amounts to more than $85,000
annually. It is therefore concluded that a constructive internal
objective for this Agency under the broadened concept of total com-
munications management is to promote further economy in correspondence.
Such measures should not be aimed at less correspondence, but at a
more economical cost per unit for this mode of communication.
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SUBJECT: Federal Telecommunications System (FTS)
8. In spite of its shortcomings, FTS will probably continue to
be promoted by GSA as it has in the past since the system offers ad-
vantages to some agencies having large volumes of unclassified communi-
cations traffic throughout the United States. These advantages are not,
however, generally applicable to this Agency and it is recommended that
we continue to decline any future GSA offers to integrate Agency communi-
[?A.i inn, c,,c+ori,r .,4 4-1 4..1_ _ --
GEORGE E. MELOON
Director of Logistics
1. FTS Long-distance Telephone Service
2. Developments in Agency Correspondence
3. Form 1831, "Speed Letter", and Form 1709, "Self-mailer"
4. Memo for D/L from D/S, subj: "GSA Operated FTS", dtd
14 April 1966
5. Memo to D/L from D/CO, subj: "FTS", dtd 19 April 1966
Attachments:
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FEDERAL TELECOMMUNICATIONS SYSTEM (FTS)
LONG-DISTANCE TELEPHONE SERVICE
1. The Telephone Facilities Branch, Logistics Services Division
(TFB/LSD), was consulted on 29 March 1966 for the purpose of obtaining
the viewpoint of that component on recent developments in FTS long-
distance telephone service. Following is a summary of the opinion
and comments received on the FTS service with related information con-
cerning the Agency long-distance telephone system:
a. Quality of Service
(1) The FTS has not been provided with sufficient long-
distance telephone facilities and equipment at any time since
its inception in 1964 to keep pace with the traffic demands
on the system. GSA and the Bureau of the Budget apparently
now recognize the fact that these deficiencies are serious
enough to require some corrective action. Some additional
long-distance circuits, subscriber access trunks, and FTS
switching equipment have been provided, but to date, the
overloading problem has not been solved. FTS long-distance
facilities remain inadequate and there are constant delays
in completing calls during normal working hours because of
busy circuits. The delays are often lengthy and result in
loss of productive man-hours as well as frustration and in-
convenience on the part of the individual user. In this
respect, GSA would oppose the use of present Agency telephone
operators in placing and expediting FTS system calls. Each
individual placing a call is required to direct dial into
the FTS system and do his own followup with FTS operators
until the call is completed.
(2) The use of FTS long-distance service is uncon-
trolled in that neither GSA nor any using agency can deter-
mine which components or individuals within an agency are
responsible for initiating long-distance telephone traffic.
By contrast, this Agency's long-distance service is com-
pletely controlled in this respect. The individual and
the component can be readily identified as necessary for
security purposes, billing confirmation, and estimating
budget requirements. Although similar controls could be
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established in the FTS service with automated equipment,
GSA and Bureau of the Budget do not recommend it at this
time and FTS will apparently remain primitive for an
indefinite period from the standpoint of message identi-
fication and accounting equipment.
(3) Mr. studied the FTS when it was estab-
lished in l9 an included the following statement in the
study concerning the lack of message identification and
accounting control equipment: "The FTS will eliminate
these existing control features and there will be an
illusion that FTS is provided without cost. Such an
impression could result in an increase in traffic and
more lengthy conversations which in turn would create
busy switch and trunk conditions." This prediction is
quoted here since it has been proven completely valid by
subsequent events. It is now generally recognized by GSA
and Bureau of the Budget that the unexpected growth of
FTS has been due to the misunderstanding that increased
calling could be encouraged without incurring additional
expense (see paragraph 4 of attachment to reference).
The added long-distance FTS traffic produced by this
illusion contributes further to the overloaded condition
of FTS circuits and equipment outlined in (1) above.
Since GSA and Bureau of the Budget do not plan to install
message identification and accounting equipment, FTS will
continue to invite imprudent use of long-distance circuits
as to persons called, frequency of calls, and length of
conversations. GSA and Bureau of the Budget apparently
fail to recognize even now that realistic message identi-
fication and accounting controls, such as those maintained
by this Agency, foster efficient long-distance service
rather than inhibit the prudent and economical use of this
service.
(1) In summary, the quality o FTS telephone service
falls far short of Agency standards at this time and there
is no positive indication it will reach the level of Agency
standards in the foreseeable future.
b. Cost of Service
(1) Due to the absence of message identification and
accounting equipment, billings for FTS long-distance ser-
vice are based on a formula described vaguely by the Bureau
of the Budget as "the results of a sampling of FTS users".
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The Bureau of the Budget admits further that the distribution
of charges under the FTS formula "became of necessity an
arbitrary assessment". In other words, PI'S does not have
the capability to apply a definite toll call rate structure.
Neither GSA nor the using agency can verify the accuracy of
billings or trace the source of sudden fluctuations in total
long-distance calls and costs.. For example, if this Agencyts
long-distance telephone costs increased 75 per cent under
FTS, no data could be obtained as to whether certain com-
ponents or individuals were responsible for the increase.
Further, such an increase might be an arbitrary assessment
on the part of GSA to cover an apportioned share of overall
increasing FTS costs.
(2) The major subscribers to FTS service have experi-
enced a 75 per cent increase in long-distance telephone
costs since the beginning of FTS. In contrast, Agency
Private Branch Exchange (PBX) long-distance costs have
increased only 20 per cent during the same period (present
average $12,000 per month - 1964 average $10,000 per month).
The Agency increase is even less than the normal overall
growth in telephone costs estimated by the Bureau of the
Budget to be 33 per cent.
(3) If the Agency should incur increasing long-dis-
tance usage and costs at the same rate as FTS subscribers,
additional space must be programmed in the Headquarters
Building to house additional telephone equipment. Under
FTS rules, the direct costs of the additional equipment
and the indirect costs of additional space requirements
would be borne by the Agency. The Agency telephone system
is now equivalent to that serving a community of 100,000
population. Further rapid expansion of the Agency system,
which would undoubtedly be precipitated by subscribing to
FTS is not considered economically sound nor justifiable
from any other standpoint.
c. Security of Service
(1) The FTS provides direct-dial service between any
telephone instruments having direct access to the approx-
imately 200 FTS community terminals throughout the United
States. These are referred to in the trade as "on-network"
calls and the assistance of an operator is normally not
required to complete these calls. The assistance of an
FTS operator is required, however, for calls to and from:
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(a) Any community which is not connected with an
FTS terminal.
(b) Any non-Government instrument.
To complete these calls, the caller must furnish the called
number and identify himself to the FTS operator as follows:
"Name, Agency, City and Telephone number from which you are
calling". Eighty per cent of Agency long-distance calls
fall in this latter off-network category. The FTS identi-
fication requirements for such calls are not compatible
with Agency security measures.
(2) Due to the congested traffic conditions on the
FTS system, many agencies are resorting to commercial toll
networks for better service. This is, of course, contrary
to FTS policy, and GSA and the General Accounting Office
are auditing the records of commercial toll calls completed
by FTS subscribers. Under the present Agency system,
records of commercial toll calls are not disclosed, unless
the Agency agrees to such disclosure. Pressure would be
exerted to scrutinize Agency records of commercial toll
calls if the Agency subscribed to FTS service. GSA and
GAO rely on such inspection to assure that subscribers
are using FTS to the maximum extent possible. External
audits, inspections, and surveys of Agency commercial toll
call records would not be compatible with Agency security
measures.
(ii) The nature of much Agency activity is such that
it is necessary to protect the identity of the caller and
the called party, and to withhold the release of records
of such calls. Assuming that the problems surrounding
the quality and cost of FTS service will eventually be
solved, the security obligations of this Agency will con-
tinue to preclude participation in the FTS long-distance
telephone service, except in those individual cases where
security and cover would be preserved by such participation.
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2. In summary, participation in FTS would represent foremost a
hazard to the security of Agency long-distance telephone calls. It
is a double-edged sword in this respect and vigilance should be
exercised to avoid entrapment. There are, at present, security
hazards inherent in the use of FTS long-distance facilities as well
as substandard service, indefinite rates per call, and drastic in-
creases in overall costs to users which require the disassociation
of this Agency with the FTS at this time. The other edge of the
sword may become even more hazardous to Agency security in the future.
FTS, including GSA, GAO and other Federal entities interested in com-
munications, will be in a position to inspect an accounting and
identity record of each FTS long-distance call, if the system is up-
dated with automated message identification and accounting equipment.
This is considered a likely future development in order to overcome
user dissatisfaction with inequitable billings and unstable costs.
If this occurs, Agency association with FTS long-distance service
would become even less tolerable from a security standpoint than at
present.
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DEVELOPMENTS IN AGENCY CORRESPONDENCE COMMUNICATIONS
1. The Records Administration Staff was consulted on 4 April
1966 concerning overall Agency policy on correspondence. Specific
information was requested on any new concepts accomplished or planned
which would contribute to a reduction in the cost of correspondence
as related to the broad concept of communications referred to by the
Bureau of the Budget. Following is a summary of the information ob-
tained on this subject:
a. Correspondence Volume and Cost
Approximately 8,000,000 pieces of interoffice and intra-
office correspondence are prepared annually at an estimated
total cost of $12,000,000. There are no figures available
which separate the volume and cost of domestic correspondence
from the overall total. Based on the above overall volume
cost figures, however, the average cost of each piece of cor-
respondence is $1.50. Using this figure as a basis for com-
parison, the average cost of each piece of correspondence is
approximately $1.00 less than the average $2.51 cost of the
domestic long-distance telephone call.
b. New Developments in Correspondence- and Savings Potential
The Records Administration Staff is constantly striving
to improve correspondence efficiency and economy. Any im-
provement which will expedite the preparation and transmission
of correspondence can, in turn, help to reduce or stabilize
the volume and cost of Agency telephone calls. An outstanding
example is the relatively new development of "speed letters"
and "self-mailer letters". These letters are now being used
in lieu of traditional correspondence at the rate of more than
65,000 per year. The cost of these letters is about 15 cents
each. They reduce preparation time and tend to reduce tele-
phone toll calls when a crucial deadline is not involved.
The savings realized from these two new concepts in correspond-
ence compared to traditional types of correspondence amounts
to more than $85,000 annually. It appears that there is great
potential for further Agency efficiency and economy in this
area due to the substantial volume and cost of this mode of
communication.
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c. Relationship of FTS to Agency Correspondence Volume
It is the opinion of the Staff that Agency participation
in FTS would actually do little in reducing the volume of
correspondence and, therefore, would not result in any materi-
al savings to the Agency.
2. It is concluded that an aggressive Agency-wide program aimed
toward simplifying correspondence procedures and practices can do much
to reduce total Agency communications costs.
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 DATE
REPLY REQUESTED
SPEED LETTER
LETTER NO.
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TO :
FROM:
ATTN:
SIGNATURE
REPLY
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SPEED LETTER
REPLY REQUESTED
DATE
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ATTN:
FROM:
SIGNATURE
REPLY
DATE
SIGNATURE
ApPFGYe--j Pam: 1
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LETTER NO.
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FROM:
ATTN:
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DATE
io61' 1831
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CENTRAL INTELLIGENCE AGENCY
Washington, D.C. 20505
Date
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Reference
P
PLEASE READ CAREFULLY
P
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CONTRACT (HAS) (HAVE) NOT BEEN RECEIVED AND DELIVERY WAS DUE ON
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Reference
PLEASE READ CAREFULLY
ACCORDING TO OUR RECORDS, ITEM(S)
CONTRACT (HAS) (HAVE) NOT BEEN RECEIVED AND DELIVERY WAS DUE ON
PLEASE ADVISE ON REVERSE OF THIS LETTER.
2.= MATERIAL AS SPECIFIED IN "REMARKS" BELOW HAS BEEN RECEIVED BUT IS UNACCEPTABLE FOR THE REA-
SONS STATED. PLEASE REPLACE AT ONCE. PLEASE FURNISH IMMEDIATE INSTRUCTIONS FOR RETURN OF
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15 DAYS OF DATE OF THIS LETTER, THE MATERIAL WILL BE Q DISPOSED OF WITHOUT FURTHER NOTICE.
r--
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NOT ACCEPTABLE. PLEASE FURNISH IMMEDIATE INSTRUCTIONS FOR RETURN OF UNACCEPTABLE MATERIAL
ON REVERSE OF THIS LETTER. IF INSTRUCTIONS ARE NOT RECEIVED WITHIN 15 DAYS OF DATE OF THIS
FROM: Chief, Support and Control Staff
Procurement Division
vviinuui rU IHLN NOTICE.
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ITEMS OF THE ABOVE PURCHASE ORDER AS SPECIFIED IN "REMARKS" ARE UNDER THE QUANTITY ORDERED
AND THE ENTIRE QUANTITY ORDERED IS REQUIRED. PLEASE ADVISE ON THE REVERSE OF THIS LETTER
WHEN WE MAY EXPECT DELIVERY.
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CENTRAL INTELLIGENCE AGENCY
Washington, D.C. 20505
Date
Order/Contract No.
Reference
P
I
PLEASE READ CAREFULLY
ACCORDING TO OUR RECORDS, ITEM(S) COVERED BY THE ABOVE ORDER/
CONTRACT (HAS) (HAVE) NOT BEEN RECEIVED AND DELIVERY WAS DUE ON
PLEASE ADVISE ON REVERSE OF THIS LETTER.
MATERIAL AS SPECIFIED IN "REMARKS" BELOW HAS BEEN RECEIVED BUT IS UNACCEPTABLE FOR THE REA-
SONS STATED. PLEASE REPLACE AT ONCE. PLEASE FURNISH IMMEDIATE INSTRUCTIONS FOR RETURN OF
UNACCEPTABLE MATERIAL ON REVERSE OF THIS LETTER. IF INSTRUCTIONS ARE NOT RECEIVED WITHIN
7
I'1VI I,.G.
RETURNED TO YOU ON A COLLECT BASIS.
MATERIAL AS SPECIFIED IN "REMARKS" HAS BEEN RECEIVED BUT IS OVER THE QUANTITY ORDERED AND IS
NOT ACCEPTABLE. PLEASE FURNISH IMMEDIATE INSTRUCTIONS FOR RETURN OF UNACCEPTABLE MATERIAL
ON REVERSE OF THIS LETTER. IF INSTRUCTIONS ARE NOT RECEIVED WITHIN 15 DAYS OF DATE OF THIS
FROM: Chief, Support and Control Staff
Procurement Division
rr 1 1 n u U 1 r UK I H t F NOTICE.
RETURNED TO YOU ON A COLLECT BASIS.
ITEMS OF THE ABOVE PURCHASE ORDER AS SPECIFIED IN "REMARKS" ARE UNDER THE QUANTITY ORDERED
AND THE ENTIRE QUANTITY ORDERED IS REQUIRED. PLEASE ADVISE ON THE REVERSE OF THIS LETTER
WHEN WE MAY EXPECT DELIVERY.
QUANTITY ORDERED
QUANTITY RECEIVED
QUANTITY REJECTED
REJECTED MATERIAL VALUE $
FORM USE PRE1
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AD S A LE, AND MAIL
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c
Director of rity
nowara j. s orn
MEMORANDUM FOR: Director of Logistics
SUBJECT : General Services Administration Operated
Federal Telecommunications System
1. This Office has been advised that the Office of Logistics,
Planning Staff, anticipates briefing the Deputy Director for Support
concerning the current position of this Agency with regard to our
participation in the Federal Telecommunications System.
2. By memorandum for the Acting Deputy Director for Support
from the Director of Logistics, dated 1 May 1964, objections have
been specified and a recommendation made that we decline GSA's
invitation to participate in the FTS. At that time, the Office of
Security concurred in this recommendation for security reasons
predicated upon the limitations under the National Security Act of
1947 and the Central Intelligence Agency Act of 1949 relating to
the DCI's responsibility for "protection of intelligence sources and
methods from unauthorized disclosure". Since the limitations of
these enactments still pertain, the current position of this Office
would be to recommend against participation in the Federal
Telecommunications System.
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y t GSA FPMR (41 CFRI 101-11.6
UNITED STATES GOVERNMENT
Memorandum
Director of Logistics
DATE: 19 APR 1966
FROM : Director of Communications
SUBJECT: Federal Telecommunications System
REF : DDS Memorandum 66-0689, dated 7 February 1966
25X1
1. We suggest that the substance of the following be incorporated
in the response to the reference concerning the Office of Communications'
usage of the FTS teletype circuit and teletype message service.
and the procurement of teletype circuits.
2. Attached is an extract of the U.S. Code Citation which GSA
uses as their authority for operating the FTS to provide message service
Attachment:
Extract of U. S. Code
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40 USC g 295. Operation of public utility communications services
serving governmental activities.
The Administrator of General Services is authorized to provide and
operate public utility communications services serving one or more
governmental activities, in and outside the District of Columbia, where
it is found that such services are economical and in the interest of the
Government. This section does not apply to communications systems
for handling messages of a confidential or secret nature, or to the
operation of cryptographic equipment or transmission of secret,
security, or coded messages, or to buildings operated or occupied
by the Post Office Department, except upon request of the department
of agency concerned.
In 1949 Congress passed the Federal Property and Administrative Services
Act of 1949 which established the General Services Administration and
gave to it broad procurement authorities to exercise on behalf of the
entire Government. It is provided in that Act that nothing in the Act
shall impair or affect any authority of the CIA among many other listed
agencies. The Code citation to the exemption for CIA is 40 USC 474.
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