Reduced Communications Costs Through Centralized Management of Multiplex Systems

LCD-80-53: Published: May 14, 1980. Publicly Released: May 14, 1980.

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The Government's use of multiplex communications technology and the potential for increased exploitation of the technology to reduce long-distance communications costs are described. Long-distance and local communications services are used by the Government to process administrative data between user locations, to make computer inquiries, and to make high-speed bulk transfers of data between user locations. Significant savings and improved service can be achieved through centralized use of multiplex systems to satisfy Government communications requirements. Multiplexing, a technique whereby electronic devices at each end of a single circuit simultaneously transmit a number of messages, eliminates the need for numerous individual long-distance circuits between terminal points. The Department of Defense (DOD) and several civil agencies have developed multiplex systems, but not on a centralized Government-wide basis. If two Federal agencies could agree to share their multiplex systems under either joint or single management, the opportunities for economic benefits should increase. If all Federal agencies could agree, the opportunities for economic benefits should be maximized.

Annual cost savings information on the 643 DOD operational multiplex systems is no longer maintained. An annual savings of over $1.2 million has been achieved by three of the 240 existing civil multiplex systems agencies. Potential cost savings from centralized Government-wide development of miltiplex systems cannot be estimated. However, GAO believes that about 7,650 of the 8,500 individual circuits operating directly between 39 geographic locations are candidates for multiplexing. The potential cost savings was demonstrated by creating theoretical multiplex systems in place of existing individual circuits between Washington, D.C., and five metropolitan areas. An analysis showed that 105 high speed circuits had potential for multiplexing which could reduce annual costs 42.2 percent. For the 293 low- and medium-speed circuits with the potential for multiplexing, a net savings of 68.8 percent could be achieved. Multiplex devices are manufactured in fixed capacities, so users often acquire more capacity than they need. The cost effectiveness of existing multiplex systems could be improved if the unused capacity of one user's system is made available to other users. As a result of a GAO 1973 report on multiplexing, DOD and the General Services Administration (GSA) executed an agreement for joint use and sharing of a multiplex system. GSA has not yet forwarded a civil agency requirement to DOD. Of the 78 spare DOD channels linking Washington, D.C., and four geographic areas, 46 could be used to satisfy civil agency requirements at a net savings of 53.7 percent.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Director, Office of Management and Budget, in coordination with the National Telecommunications and Information Administration, GSA, DOD, and other Federal agencies, should develop a policy, organizational structure, and implementing regulations to ensure that the Government is achieving the maximum benefits from multiplexing. The policy should require the use of multiplexing where economically and operationally feasible on a Government-wide basis. A single entity should be assigned responsibility for developing and managing multiplex systems for the entire Government. This entity must have the authority, necessary information, and adequate resources to fulfill the Government-wide management function envisioned. The implementing regulations should be designed to require compliance with the policy and to provide procedures that will ensure maximum benefits to the Government from multiplex technology.

    Agency Affected: Executive Office of the President: Office of Management and Budget


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