Foreign Relations of the United States, 1969–1976, Volume XXXV, National Security Policy, 1973–1976

180. National Security Decision Memorandum 338¹

Washington, September 1, 1976.

TO

• The Secretary of Defense
• The Director, Office of Telecommunications Policy

SUBJECT

• Further Improvements in Telecommunications Security

The President has reviewed the status of measures to protect government telephone communications in the Washington, D.C., New York City, and San Francisco areas taken in response to NSDM 266,² NSDM 296,³ and other directives. He directs that actions now underway to move critical circuits from microwave to cable in the New York City and San Francisco locations be given high priority and that development of Protected Radio Modulation (PRM) techniques for earliest possible application in known threat areas be expedited.

The President is concerned about possible damage to the national security and the economy from continuing Soviet intercept of critical non-government communications, including government defense contractors and certain other key institutions in the private sector. The President further recognizes that U.S. citizens and institutions should have a reasonable expectation of privacy from foreign or domestic intercept when using the public telephone system. The President has therefore decided that communication security should be extended to government defense contractors dealing in classified or sensitive information at the earliest possible time. He has also directed that planning be undertaken to meet the longer-term need to protect other key institutions in the private sector, and, ultimately, to provide a reasonable expectation of privacy for all users of public telecommunications. Implementation of these longer-term plans will be dependent upon further Presidential review.

Toward these objectives, the President desires that action be taken by the Secretary of Defense to accomplish the following:

1. Immediate steps should be taken to reduce vulnerability to Soviet intercept of private line communications of government contractors dealing in classified or sensitive information. Action should be taken as soon as possible to move circuits of critical government defense contractors from microwave to cable in confirmed threat areas. This action should be accomplished without further disclosure of Soviet intercept operations. Procedures for moving circuits should be modeled after procedures used to implement NSDM 266. The Department of Defense shall cover the cost of moving and securing these circuits. Only those circuits on carriers offering alternate cable routing shall be moved. Selection and priority of circuits to be moved shall be established by DOD based on sensitivity of classified contracts and intelligence information on Soviet intercept operations.

2. In order to preserve an option to initiate jamming⁴ quickly, action should be taken to develop contingency plans, procure necessary equipment and acquire necessary real estate locations to allow jamming on short notice of [3½ lines not declassified]

The President further directs the Director of the Office of Telecommunications Policy, with the participation and assistance of DOD and NSA, to prepare a detailed Action Plan setting forth the actions and schedule milestones necessary to achieve a wide degree of protection for private sector microwave communications. The Plan should identify needed policy and regulatory decisions, describe in detail the roles of industry and government, including management and funding considerations, and integrate the schedule for these actions with the technical development milestones.

This Plan should be divided into two distinct phases. Phase I shall at the earliest possible date provide for protection of those microwave radio links in Washington, D.C., New York City, and San Francisco which are most vulnerable to exploitation by the Soviet Union, with extension to the complete Washington, New York, and San Francisco Protected Communications Zones (PCZs) as soon thereafter as feasible. Phase II shall provide for longer-term protection of domestic microwave communications on a nationwide basis. Protection shall be accomplished without excessive government intrusion into the private sector. The approach to securing microwave communications against interception in Phase II should be to encourage the commercial telecommunications carriers to provide protected service offerings with the costs of protection borne by the users. The government role should be oriented towards establishing policy, regulations, and standards, as well as developing basic technology as a stimulant to the commercial sector. The approach to securing the PCZ microwave links in Phase I shall be consistent with a smooth transition to broader application in Phase II. The Plan should consider all of the technical solutions for reducing foreign or domestic microwave intercept defined by the Washington, D.C., PCZ Implementation Plan being prepared by the Department of Defense.

The Action Plan should be based on the fundamental objective of protecting the privacy of all users of public telecommunications, as well as satisfying specific needs of the government. It should include a full statement of the legal, political, economic and social basis for this objective and should present in detail the related policy, regulatory and legislative actions which must be taken by various government agencies to achieve the desired protection. The Action Plan should also provide a strategy and detailed plan for public explanation of government actions for both Phases I and II. The Action Plan should be submitted for consideration by the President no later than 30 November 1976.

Brent Scowcroft

1. Source: Ford Library, NSC Institutional Files (H-Files), Box 67, NSDM 338 (1). Top Secret; Sensitive. Copies were sent to Kissinger, Bush, and Allen.
2. NSDM 266 is Document 176.
3. NSDM 296 is Document 177.
4. On November 2, Bush sent a memorandum to Scowcroft expressing concern that “jamming or other electronic retaliation against Soviet installations in the United States” could “cause an escalation of Soviet reaction which would severely impact on U.S. intelligence operations both in the Soviet Union and perhaps elsewhere in the world. Because of this potential impact, I request that any decision to undertake any of the considered options be made only after full consultation with the Intelligence Community.” Scowcroft responded in a November 6 memorandum to Bush: “no decision will be made in this area without consultation with those concerned with the problem.” Bush’s and Scowcroft’s memoranda are ibid., NSDM 338 (2).