Mr. ROBACK. And if it contains a statement which says that all problems have been resolved, does that have a concurrence at that point in time, before the President sees it, of the DTM?

Mr. HORWITZ. That is, all problems between agencies have been resolved?

Mr. ROBACK. Not problems of general policy.

Mr. HORWITZ. It may not be problems of general policy.

Mr. ROBACK. To the extent that DTM would give you overall direction of policy, then he might comment for the next year's version. In other words, he sees the finished product and he develops material for the next year's plan.

Mr. HORWITZ. That is exactly what he did last year. He had the plan, and when the approval came down, there were certain things that the DTM wanted specifically looked into and specific directions and specific achievements to be ground into the next version of the plan, and that is the way it was done.

Now, I do not know what his-he is now reviewing it, and what his final recommendations will be, I do not know.

Mr. ROBACK. Mr. O'Connell, in his final communication to this committee, which can be entered into the record, if there is no objection, said, among other things:

A review of NCS requirements and designs was made during fiscal year 1965, and coordinated with the Defense Communications Agency. This study identified certain problem areas. Further studies beyond the present capabilities of this office are needed.

Do you know anything about that, what those studies would be and why they do not have the capabilities?

General STARBIRD. He has a limited staff, and I might say a limited budget. Therefore, he has asked in the past for assistance from the Bureau of the Budget in funding and from the Department of Defense for funding of special studies. There is someone here who knows about most of those studies, Mr. Solomon, I think, if you want more detail, but that is the situation.

Mr. ROBACK. Can you enlighten us-I am asking you not to testify about what we should ask Mr. O'Connell, but I want to know what your understanding is of the studies that should be made that are not being made. Can Mr. Solomon enlighten us?

Mr. SOLOMON. I am not sure I understand the question, Mr. Roback, but in the guidance that was sent back last year there was a considerable amount of discussion in a multipage letter from Mr. O'Connell, and all those things have been undertaken and are all being incurred. this year in connection with studies that are being made on a current long-range plan.

Mr. ROBACK. This letter was dated May 26, and it is possible that something has developed since then. Can you supply us with a copy of the most recent annual version of the long-term plan for our examination?

Mr. HORWITZ. This is a little ticklish at the moment. Once it is finalized by the President I would have no hesitancy to do that. Mr. ROBACK. But at the proper time.

Mr. HORWITZ. But at the proper time we would be glad to.
Mr. ROBACK. At the proper time, we won't argue about that.

Mr. HORWITZ. I will be glad to furnish it for the perusal of the committee.

INTRAGOVERNMENTAL COMMITTEE ON INTERNATIONAL
TELECOMMUNICATIONS

Mr. ROBACK. Mr. Horwitz, tell us about the Intragovernmental Committee setup and the contract made with the Stanford Research Institute to study this problem for the Government. You were a mem ber of the committee?

Mr. HORWITZ. I was a member of the committee.

Mr. ROBACK. Tell us the purpose of it, the general membership, and what you tried to do.

Mr. HORWITZ. The purpose of the committee was to this committee first of all, was set up, I believe, at the request of the President under the joint chairmanship of Mr. O'Connell and the Chairman of the Federal Communications Commission, then Mr. Henry.

Various agencies were asked to submit, to designate, a member to sit with the committee. The Department of Defense was asked to have a member, the Department of State and the Department of Justice because we were primarily concerned with our international communi cations and the consideration of the problems that were involved.

Mr. O'Connell, Mr. Henry decided that a certain amount of inves tigative work had to be done to give us a complete picture, and a con tract was entered into with Stanford Research Institute to give us this complete picture. This was under the direction of General Blake who went with the institute for the purpose of conducting this study. Mr. ROBACK. General Blake, where is he from?

Mr. HORWITZ. He is a retired officer who used to be head of the National Security Agency, which was his terminal assignment befor he retired.

Mr. ROBACK. He was assigned or he took a consulting or specia assignment?

Mr. HORWITZ. He took a job with Stanford Research Institute They selected him for the study.

Mr. ROBACK. How much, for the record, was the total cost in round figures?

Mr. SOLOMON. Just under $1 million-I am sorry, half a million

excuse me.

Mr. HORWITZ. It was a half million, that is what I thought. I be lieve the Department of Defense executed that contract.

Mr. SOLOMON. They did.

Mr. HORWITZ. To have this done.

They prepared voluminous reports on all aspects of internationa communications that we have.

This committee, of course, was designed to see if we could come u with an overall Government policy on what we do about our interna tional communications.

Mr. ROBACK. What was your concern and what was the term o reference, what were you trying to find out?

Mr. HORWITZ. We were trying to find out whether we can improv the situation or to do the things, and what were the problems that wer coming up because there are a large number of problems that seeme

to be facing the industry, and the Government's interest in getting good communications, all kinds of problems, who does what, what is voice circuitry, what is data circuitry, and all of this thing, in light of the great developments that have taken place.

Mr. ROBACK. Was the angle of inquiry, so to speak, a question of whether these carriers should be merged in the international field?

Mr. HORWITZ. One of the questions was that this was an inquiry that was made to get various views as to whether the problem required a merger of one type or another, and whether the people should be allowed on a voluntary basis to see if they could make some sort of a rationalization out of the industry. This was the problem.

Mr. ROBACK. What was the upshot and consequence of this study as far as the committee was concerned?

Mr. HORWITZ. Let me ask.

Mr. SOLOMON. The results of the study, Mr. Roback, have been transmitted to the Congress in a report which you see here, copies of the Stanford Research Institute report, which have been supplied. I understand that this fall they plan to have hearings on this subject. Mr. ROBACK. You are referring to the committees

Mr. HORWITZ. Yes, Interstate and Foreign Commerce.

Mr. ROBACK (continuing). That have jurisdiction over the legis

lation.

Mr. HORWITZ. That have jurisdiction over this legislation.
Mr. ROBACK. So that the record shall be generally complete-
Mr. HORWITZ. Yes.

Mr. ROBACK (continuing). What was the essence of your recommendations to the Congress with regard to the status of the international carriers who are interested, you might say potential participants, in Government business?

Mr. HORWITZ. The gist of the recommendation was that under certain restrictions laid down in the statute, and in light of those restrictions, that there should be permissive legislation passed which would enable the carriers to conduct negotiations among themselves, which they cannot do now, to see whether a more rational system could be developed. This plan to be subject to approval, if they could come up with any such plan, to be subject to the approval of the Federal Communications Commission.

Mr. ROBACK. In other words, you were not as a committee for the Government making any recommendations as to the type of merger; as, for example, whether it should include or exclude Comsat or A.T. & T. or Western Union or whatever?

Mr. HORWITZ. No, sir. We were absolutely not attempting to define what the end product should look like, but what we thought is that we ought to take the restriction off of industry to see if industry could not come up with something.

Mr. ROBACK. There was an invitation to industry to see whether it could improve itself with relation to the provision, among other things, of Government services.

Mr. HORWITZ. This is right.

Mr. ROBACK. The chairman adds, and gain possible relief from the Antitrust Act. Is that an issue that is involved under the Communications Act?

Mr. HORWITZ. This is one of the issues that is involved which has to be considered.

But the point was that we believed, the more we listened, the more we looked at the studies that SRI gave us, the more we talked to industryand the more we talked to labor on these problems, and we held discussions with the heads of each of the carriers and with each of the affected unions, that this was a problem that basically the solution had to be proposed by the industry, but the Government had to have the last word on it.

Mr. ROBACK. Do you have any observations that you are willing to make for the record as to how you think the industry ought to be organized for efficient performance for the Government?

Mr. HORWITZ. At this time, at this point in time, I am not prepared to answer that question.

Mr. ROBACK. You have got some personal views, but you do not want necessarily to be on the record.

Mr. HORWITZ. I do not even think that my personal views, because I see that all of the various solutions that have been suggested present problems which are not resolved in my mind as satisfactory solutions. so I would like to see a specific, and in terms of those various issues. examine that specific. I have myself come to no conclusion of which direction we should go.

As I have said, I myself have come to no conclusion that I would be willing to offer as a suggestion as this point in time.

RELATION OF FAA/COMSAT PLAN TO NSC

Mr. ROBACK. Now, under your directive or instruction you receive the NCS requirements, do you not?

Mr. HORWITZ. Yes.

Mr. ROBACK. That is to say, members of the NCS or the National Communications System have requirements, they state them to you The FAA, the Federal Aviation Agency is interested in air-ground communication for certain purposes. Does that come to you?

Mr. HORWITZ. Yes, that comes to us. It will come directly to the

manager.

Mr. ROBACK. Well, they have been dealing with Comsat. Comsa has put out a request for proposal. Have you passed on that? Mr. HORWITZ. No.

Mr. ROBACK. Why not?

Mr. HORWITZ. I cannot answer that because it has not been brough to my attention. Was it brought to your attention?

General STARBIRD. I know they have been conducting discussion I do not know the details of it. It has not been brought to us as requirement.

Mr. ROBACK. Well, the directive says that you shall receive require ments. Either that is not a requirement of the NCS or they are by passing you, one or the other.

Mr. HORWITZ. Well, it could be. I do not know whether the FA. requirement here is an NCS requirement because I do not know if thi part of the FAA system is within

Mr. ROBACK. In other words, this possibly could be likened to tactica communications.

Mr. HORWITZ. It might be.

Mr. ROBACK. And you would consider that as a part of the NCS; is that a possibility?

Mr. HORWITZ. That is correct, that is a possibility.

General STARBIRD. That is a possibility.

Mr. ROBACK. Has your office made any observations or rendered any judgment on the matter, General Starbird?

General STARBIRD. We have not rendered any judgment, so far as I know.

Mr. ROBACK. If you will check your records, if there is any correspondence that enlightens that issue, will you submit it?

General STARBIRD. Yes. I have a dim remembrance, but I cannot answer it, so I would like to supply it for the record.

(The following information was supplied for the record:)

1. On 18 January 1966 a representative of the Office of the Executive Agent noted in the Electronic News of 17 January an article concerning FAA interest in a UHF-satellite combination. It stated that both Comsat and NASA had been approached by the airlines for aid in developing such a satellite system. The staff member of the Executive Agent called the Office of the Manager, NCS, to determine whether the Manager's Office was coordinating this work. Staff contact was then made with FAA. In this connection, FAA pointed out:

a. That the communications were for air-ground-air use and not for fixed point-to-point.

b. They were replacing high frequency air-ground-air. At the time original recommendations were made concerning the composition of the NCS, these communications were excluded from the NCS.

c. The Administrator felt that he had authority under Section 307(b) of the Federal Aviation Act of 1958 (Public Law 85-726) to procure communications services to meet its operational requirements.

d. The DTM had been briefed on 22 December concerning this project, was in accord with the planned FAA actions, and considered this was not an NCS subsystem.

2. In view of the above facts, it was concluded that the requirement was not for NCS circuitry and, therefore, fell outside the delegation by the White House to arrange satellite communications service for the NCS.

USE OF ASSIGNMENT CLAUSE IN DOD/COMSAT CONTRACT

Mr. ROBACK. If the FCC decides that the Government cannot go through with a contract that it has made, what recourse is there to the Government?

Mr. HORWITZ. What do you mean, what recourse is there?

Mr. ROBACK. Well, you have made a contract with an agency, I mean a contractor, commercial contractor, and the FCC, another Government agency, regulatory commission, has come in and said, "You cannot move one shovel of earth or pass one bit of traffic unless you have a license or an authorization to do it, and we have not given you that authorization, and you have got to come in and show us why you ought to have that authorization."

Now, suppose and this is only a hypothetical-they say that Comsat cannot execute this contract. What recourse does the DCA or the Department of Defense have?

Mr. HORWITZ. Well, we have put into the contract, a matter which General Starbird addressed himself to, an assignability clause whereby this contract can be taken over by one of the authorized carriers in the event that it should ultimately be determined that Com