Telecommunications expenses constitute a small fraction (about 2%) of the monies paid out by the transportation industry; however, the role of telecommunications is vital in providing for safe and efficient operation. This report describes the way that telecommunications are used in the transportation industry by sectors, including pipelines, railroads, motor trucking, aviation, and urban transportation. Proposals for increased use of telecommunications are also examined and evaluated. The conclusions of the report are that there are several significant new applications for telecommunications to support transportation activities, but that the importance of telecommunications in terms of fraction of transportation expenses will not dramatically increase. Economically justified proposals for new applications will require an investment of about $3 billion over the next 20 years. This is less than the expected investment in current technology over the same period. The justifications for increased use of telecommunications are reduction in personnel needed to operate systems, by use of communications in automation; reductions in the need for equipment, primarily vehicles, through more efficient management of assets; and substitution of telecommunications investment for investment in construction to increase capacity of highways, railways, and airways. The authors find that such a substitution will usually result in a savings of scarce material resources without the environmental and social distribution that would result from the construction.