Savings From More Economical Use of Communication Facilities Between Alaska and the United States Mainland

B-139011: Published: Aug 30, 1967. Publicly Released: Aug 30, 1967.

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GAO reviewed the use of submarine cable and microwave communication facilities leased by the Alaska Communication System (ACS), focusing on whether ACS was using these communication facilities in the most economical manner.

GAO noted that: (1) the ACS was aware as early as January 1961 that a microwave facility which served Alaska was more economical to use than the cable facility; (2) savings could have been attained by using the cable facility in a different manner and, at the same time, by making greater use of a microwave facility which also served Alaska; (3) GAO's review indicated that savings of about $3.9 million could have been realized had the ACS taken action in a more timely manner after it first became aware the microwave was less expensive than the cable; (4) it appears that the procedures were ineffective to bring about prompt consideration and resolution of significant problems recognized at the Air Force command level where management guidance from higher commands was required; (5) GAO found procedures did not exist at the time of its review to ensure prompt consideration and resolution of the management problems discussed in its report; (6) on May 26, 1965, after GAO's inquiries, ACS proposed certain circuit rearrangements, including the transfer of 10 public telephone circuits from the cable facility to the microwave facility in exchange for 10 private telephone circuits, thereby reducing the number of public telephone circuits in the cable from 36 to 26; (7) before approving the proposed action, headquarters, Air Force Communications Service, examined the government's obligations and commitments under the cable lease and determined that the government was not obliged to maintain any public telephone circuits in the cable facility; (8) the Air Force also determined that the action proposed by ACS was in accordance with terms of the cable lease; (9) effective August 1, 1966, the cable facility was leased at a flat rate of $1.6 million a year for all 51 circuits, regardless of the extent or type of use; and (10) the new lease payment represents a reduction of about $1.9 million a year compared with cable lease payments for fiscal year 1965.

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