Foreign Relations of the United States, 1969–1976, Volume E–3, Documents on Global Issues, 1973–1976

102. Memorandum From the Executive Director of the Domestic Council and Assistant to the President for Domestic Affairs (Cole) to President Ford¹ ²

Washington, January 9, 1975

SUBJECT:

• Office of Telecommunications Policy Organization

Although I understand you have already made a tentative decision to remove OTP from the Executive Office for budgetary reasons, this is a particularly thorny problem and I urge you to consider the attached memorandum carefully before reaching a final decision.

Attachment
Memorandum From the Acting Director of the Office of Telecommunications Policy (Eger) to the Executive Director of the Domestic Council and Assistant to the President for Domestic Affairs (Cole)

Washington, January 8, 1975

SUBJECT:

• OTP’s Placement in the Executive Office.

In the face of a suggestion that most of OTP’s functions be moved to the Department of Commerce, you have requested that we explain why OTP should remain intact within the Executive Office. There are four principal reasons:

1) telecommunications authority is tied closely to Presidential responsibilities for national security;

2) conflicting demands for telecommunications capability within the Federal Government require resolution at the Executive Office level;

3) effective implementation of policy depends on the authority and visibility that are conferred by Executive Office status; and

4) telecommunications is increasingly important to our society, and requires direct Presidential involvement.

The Executive Branch’s capability for telecommunications management, coordination, and policy formulation has been studied almost continuously for nearly three decades (see Tab A). These studies resulted in consistent recommendations to establish in the Executive Office an organization with the stature, authority, and resources to provide a focal point for policy development. Recommendations to delegate the President’s telecommunications authority to Commerce were rejected and OTP was created.

Under Reorganization Plan No. 1 of 1970 and Executive Order 11556 (see Tab B), OTP performs two essential functions, which would be, in effect, lost to the President if OTP were fragmented:

1) serves as advisor and spokesman on communications policy, covering a wide range of domestic, international, Government, and private sector issues; thereby facilitating Presidential direction of communications policy and systems use.

2) formulates policies and coordinates cost-effective operations for Government communications systems, including assigning and managing frequencies used by Federal agencies, exercising the President’s statutory responsibilities (Communications Act and Comsat Act), and providing policy direction for the National Communications System and emergency communications.

OTP is not a narrow, operational office placed in the Executive Office to serve as a spokesman for some special interest. Rather than being a “narrow” concern, telecommunications touches all other Government and private sector activities and represents some 5 percent of GNP and $10 billion in Federal expenditures in FY 1974. If OTP is “operational,” it is only in some aspects of its frequency assignment function, which would not be transferred under the Commerce option. Moreover, OTP serves as spokesman for no “special interest.” In its policy-making function, OTP serves as spokesman for and represents the interest of the President. It was intended to perform this role and has performed it, often with the direct participation of the President, key White House aides, and Cabinet officers, in such issues requiring Presidential attention as the structure of the domestic and international communications satellite industry, cable television policy, broadcast license renewal policy, communications-computer privacy matters, use of telecommunications for national security purposes, and international communications capability. In short, OTP is a vital instrument of Presidential leadership in a critically important field, in which the only other comprehensive governmental expertise is to be found in an independent regulatory agency not subject to Presidential direction. Whether the Commerce option is viewed simply as the fragmentation of OTP functions or is considered the first step of a plan to remove OTP completely from the Executive Office, the four reasons for OTP’s placement in the Executive Office summarized above and discussed below must be given heavy weight.

• First, telecommunications is imbued with Presidential responsibilities for national security. The Communications Act vests in the President broad authority over telecommunications in times of war or national emergency, and reserves to him the responsibility for assigning radio frequencies for Federal Government use—of which the largest single use is for national security and defense purposes. Because of constitutional responsibilities for foreign policy and national security, which require rapid, reliable and secure communications for the direction of U.S. activities on a world-wide basis, the President must have (and always has had since World War II) a close, high-level advisor on telecommunications. This requirement would not disappear if the Commerce option were chosen, and the remnant of OTP retained in the Executive Office could not meet this need adequately.

• Second, the need for objectivity, independence, and high-level authority in resolving conflicts for frequency use among Federal agencies justifies OTP’s placement in the Executive Office. The radio spectrum is a limited resource, provided as a “free good” worth billions of dollars, which, like dollars, must be allocated among Federal agencies that have burgeoning needs for frequencies. This allocations process not only provides the President a mechanism for oversight and direction of the Executive Branch, it requires Presidential status so that allocation decisions will be accepted and directives followed, and that the interests of all Federal agencies will be considered. While OTP, like OMB, could perform the allocations function outside the Executive Office, it could not perform it as efficiently or effectively.

  While many frequency assignment questions have been resolved within an interdepartmental committee, this is due in large part to the fact that an Executive Office entity chairs the committee and makes non-appealable decisions on assignment questions. If OTP did not exist or were severely impaired, the committee’s recommendations would be appealed routinely to the White House staff, which would have little basis on which to resolve often acute and substantial conflicts. The unacceptability of Commerce as the location for OTP functions was noted by the Secretary of Defense, responding to a 1969 proposal to place the President’s communications authority in Commerce. He stated that the only acceptable location for such authority was in the Executive Office. This view applies to more than frequency assignments.

• Third, OTP’s Executive Office location is essential to achieving compliance with policy directives regarding the planning, coordination, and management of the Government’s vast and often duplicative telecommunications systems. These directives are often aimed at eliminating unnecessary systems and promoting shared use, and hence are at odds with the parochial interests of affected agencies. It is unlikely that Commerce or any other Department could obtain voluntary compliance from other Federal agencies to such policies or directives. Either a statutory base of operational authority or continuous Executive Office involvement would be necessary for effective exercise of the OTP coordination and planning functions. Its position in the Executive Office gives OTP a basis for influencing Federal telecommunications without direct operational involvement. Similarly, the Federal frequency assignment function and the Federal telecommunications coordination and planning function are complementary, and should be exercised by one entity to derive the full effectiveness of each. Control over the radio frequency spectrum can and should be used to support efforts to reduce the proliferation of systems and to encourage the most cost-effective developments.
• Fourth, OTP’s status as an Executive Office entity provides the most effective instrument for Presidential leadership in the telecommunication field. The economic and societal impact of all forms of electronic communication, including new technologies such as cable and satellite communications and computer teleprocessing, is growing rapidly. This reason alone brings telecommunications policy making within the Presidential sphere. Moreover, such issues as privacy of communications, pay TV, cable and satellite communications, public broadcasting, regulatory reform of the FCC, and the increased role of competition in the regulated communications industries are becoming increasingly important items on the congressional and the national agendas. The need for Presidential initiatives is clear, and OTP has already provided the President with sound policy recommendations on many of these issues. To the extent that there have been past lapses in OTP’s performance of its role as advisor to and spokesman for the President, they are correctable with improved White House OTP coordination, including placing the OTP Director on the Domestic Council.

Despite the fact that Commerce already has some limited capability in telecommunications, it is largely technical in nature and exists primarily to support OPT. Commerce has provided adequate support to OTP in its frequency assignment role. Commerce’s support of OTP policy-making, however, has been inadequate and, consequently, has been the object of OMB recommendations to reorganize and reduce this support function. In light of this record of experience, the transfer of OTP’s policy development and advisory role to Commerce would be highly controversial in the Congress and the Federal establishment. Even if fragmenting OTP by retaining only a small staff in the Executive Office to assign radio frequencies avoided a legislative battle, it would be self-defeating for the President to divest himself of a direct policy role in telecommunications. More likely this move would be perceived as the first step to abolish OTP without legislative authority. All that the Commerce option would achieve would be a reduction of some Executive Office staff, and this at the price of an extended battle and a severe diminution of effective policy making capability.

1. Source: Ford Library, Presidential Handwriting File, Subject File, Box 14, Office of Telecommunications Policy. No classification marking. On January 17, the White House announced cancellation of plans to remove Office of Telecommunications Policy functions to the Department of Commerce (, January 18, 1975, p. 60).
2. Cole urged Ford to reconsider plans to remove the Office of Telecommunications Policy from the Executive Office.