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4 Legal, Social, Policy, and Economic Framework A frame work of laws, policies, principles, and practices governs the activities of each of the three sectors involved in the weather enterprise. Differences in these practices and a lack of understanding of the practices of the other sectors can create barriers to collaboration. This chapter describes legal, social, economic, and data policy issues that affect the public, private, and academic sectors and their implications for creating partnerships. LEGAL OVERVIEW National Weather Service The law governing the National Weather Service (NWS) directs it to collect meteorological data, provide meteorological forecasts, and produce a range of meteorological services. It also obliges the agency to make the information it collects and generates generally available to the public. Statutory Authority The principal statutory authority governing the NWS is the National Weather Service Organic Act of 1890,1 currently codified as amended in 15 U.S.C. § 313: 1 Act of October 1, 1890, Session I, ch. 1266, 26 Stat. 653-55.
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The Secretary of Commerce shall have charge of forecasting of weather, the issue of storm warnings, the display of weather and flood signals for the benefit of agriculture, commerce, and navigation, the gauging and reporting of rivers, the maintenance and operation of seacoast telegraph lines and the collection and transmission of marine intelligence for the benefit of commerce and navigation, the reporting of temperature and rain-fall conditions for the cotton interests, the display of frost and cold-wave signals, the distribution of meteorological information in the interests of agriculture and commerce, and the taking of such meteorological observations as may be necessary to establish and record the climatic conditions of the United States, or as are essential for the proper execution of the foregoing duties. Under the statute, the NWS is charged to collect data on weather and climate, to provide forecasts and warnings of severe weather in order to protect life and property, and to create and disseminate forecasts and other weather information for the benefit of a wide range of weather-sensitive businesses and activities. Although the NWS has traditionally regarded public safety as its most crucial mission, the text of the Organic Act gives it broader responsibility. As well as charging the NWS to gather weather and climate data and issue weather forecasts and warnings, the law directs the NWS to collect and publicly distribute weather information useful to sectors of the nation’s agriculture, communications, commerce, and navigation interests. In addition to the Organic Act, Congress has enacted several statutes that require the NWS to engage in specific meteorological tasks in cooperation with other government agencies and lay out the services to be provided by the NWS forecast offices.2 As an executive agency within the Department of Commerce, the NWS is also subject to laws applying to federal agencies generally. In particular, the Paperwork Reduction Act, as amended in 1995, requires each agency to 2 See, for example, 42 U.S.C. § 8910 (acid precipitation database) and 49 U.S.C. 44720 (collection and processing of aviation-related meteorological data). The NWS cooperates with the National Climatic Data Center, which archives NWS data under the Federal Records Act (44 U.S.C. Chapter 31) and provides it to users. Additionally, the Weather Service Modernization Act, October 29, 1992, Public Law 102-567, Title VII, 106 Stat. 4303, limits the Secretary of Commerce’s discretion in restructuring the NWS. The act requires that the Secretary certify that no degradation in weather service will result from closing, consolidating, automating, or relocating any NWS field office. Regulations promulgated under the Weather Service Modernization Act list the basic weather services provided by local field offices: “(a) surface observations, (b) upper air observations, (c) radar observations, (d) public forecasts, statements, and warnings, (e) aviation forecasts, statements, and warnings, (f) marine forecasts, statements, and warnings, (g) hydrologic forecasts and warnings, (h) fire weather forecasts and warnings, (i) agricultural forecasts and advisories, (j) NOAA weather radio broadcasts, (k) climatological services, (l) emergency management support, [and] (m) special products and service programs” (15 C.F.R. § 946.4).
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“improve the integrity, quality, and utility of information to all users within and outside the agency, including capabilities for ensuring dissemination of public information, public access to government information, and protections for privacy and security.”3 Section 3206(d) of the act provides: With respect to information dissemination, each agency shall— ensure that the public has timely and equitable access to the agency’s public information, including ensuring such access through— encouraging a diversity of public and private sources for information based on government public information; in cases in which the agency provides public information maintained in electronic format, providing timely and equitable access to the underlying data (in whole or in part); and agency dissemination of public information in an efficient, effective, and economical manner; regularly solicit and consider public input on the agency’s information dissemination activities; provide adequate notice when initiating, substantially modifying, or terminating significant information dissemination products; and not, except where specifically authorized by statute— establish an exclusive, restricted, or other distribution arrangement that interferes with timely and equitable availability of public information to the public; restrict or regulate the use, resale, or redissemination of public information by the public; charge fees or royalties for resale or redissemination of public information; or establish user fees for public information that exceed the cost of dissemination. As required by the act, the White House Office of Management and Budget (OMB) issued Circular A-130, most recently revised in December 2000, which instructs executive agencies on their responsibilities under the statute.4 The circular emphasizes the statute’s prohibition on restrictive or exclusive information dissemination arrangements. It also directs agencies to make their information available to the public in useful form and through multiple outlets. In particular, it recommends that, where feasible, agencies disseminate information to the public in electronic form over the Internet. The Government Paperwork Elimination Act further emphasizes this point and requires government agencies to move from paper-based systems and transactions to on-line interactions with users by 2003.5 3 See 44 U.S.C. § 3506(b)(1)(c). 4 65 Federal Register 77677, December 12, 2000. 5 44 U.S.C 3504.
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The 1991 Policy Statement In 1989 the National Oceanic and Atmospheric Administration (NOAA) published a new draft policy statement outlining the respective roles of the NWS and the private weather industry and requested public comment.6 In January of 1991, after receiving and responding to comments received from the private weather industry, the World Meteorological Organization (WMO), libraries, researchers, and members of the general public, NOAA issued a revised policy statement entitled “The National Weather Service and the Private Weather Industry: A Public-Private Partnership” (see Chapter 3).7 The policy purports to govern the NWS, but does not apply to any other division of NOAA. Although NOAA could revise or rescind the policy using the same notice and comment procedure it used to adopt it, it has not sought to do so. Nor has it publicly clarified the extent to which the policy may have been modified, narrowed, or superseded by subsequent laws, regulations, or administrative policies. A number of disputes have arisen as to the policy’s meaning and legal effect. As discussed in Chapter 3 and Appendix B, the language is worded so broadly that it may be interpreted in many ways. However, the public-private partnership policy must be interpreted in the context of statutes, executive orders, and agency policies governing the NWS. Statutes take precedence over executive orders and agency regulations and policies. Similarly, policies set at higher levels of government (e.g., OMB) take precedence over policies set by hierarchical inferiors. Finally, the latest agency policy or executive order takes precedence over earlier policies. Thus, any interpretation of the partnership policy that obliges the NWS to cease providing weather services if private businesses wish to offer them would be inconsistent with the NWS’s responsibilities under the Organic Act and its obligations under the Paperwork Reduction Act, OMB Circular A-130, and the Government Paperwork Elimination Act. To be consistent with federal law, the policy must be interpreted more narrowly. Potential solutions for resolving the ambiguity in the policy are discussed in Chapter 6. Liability As long as weather cannot be predicted with 100% accuracy, liability will be an issue for all sectors that provide weather information to the public. Inaccurate, inadequate, or delayed weather information can result in financial or bodily harm, sometimes triggering lawsuits. Although the 6 54 Federal Register 52839, December 22, 1989. 7 56 Federal Register 1984, January 18, 1991.
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government does not always win weather-related court cases, most claims against the federal government and some claims against state governments are resolved in favor of the government on the basis of immunity.8 Private sector forecasters have no such immunity and may be liable for damages if it can be proven that the forecast was not made in good faith, was not made using reasonable care, or was made with intent to deceive. Weather companies protect themselves by writing contracts that limit their liability to clients and by purchasing liability insurance. Most weather companies carry general liability insurance, which covers injuries on company property, and many also carry errors and omissions insurance, which covers actual and alleged defects in the work of the meteorological staff.9 Insurance is needed regardless of whose information is being delivered—the federal government’s or the company’s. Because the amount and terms of insurance are adjusted to the types of claims one would expect given the market and customer using the information, liability is not a barrier to private sector provision of weather services. Federal Technology Transfer Law Divisions of NOAA that conduct or fund research are subject to federal laws promoting the transfer of federally sponsored or developed technology to the private sector. The 1980 Bayh-Dole Act,10 the 1980 Stevenson-Wydler Technology Innovation Act,11 and a series of recent amendments12 direct federal agencies to enter into cooperative research and development agreements, set standards for licensing of federal government patents, and facilitate private sector and university patenting of inventions developed through federally sponsored or collaborative research.13 These legal instru- 8 R. Klein and R.A. Pielke, Jr., 2002, Bad weather? Then sue the weatherman! A review of legal liability for predictions and forecasts, Parts I and II, Bulletin of the American Meteorological Society, in press. 9 M.R. Smith, 2002, Five myths of commercial meteorology, Bulletin of the American Meteorological Society, v. 83, p. 993-996. 10 Public Law 96-517, Section 6(a), 94 Stat. 3019 (1980), codified as amended at 35 U.S.C. §§ 200-212. 11 Public Law 96-480, 94 Stat. 2311-2320 (1980), codified as amended at 15 U.S.C. §§ 3701-3714. 12 See National Technology Transfer and Advancement Act, Public Law 104-113, 4-6, 110 Stat. 775, 1995; National Competitiveness Technology Transfer Act, Public Law 101-189, 103 Stat. 1352, 1674-1679, 1989; Federal Technology Transfer Act, Public Law 99-502, 100 Stat. 1785, 1986; National Cooperative Research Act, Public Law 98-462, Sec. 2, 98 Stat. 1815, 1984, codified as amended at 15 U.S.C. §§ 4301-4305. 13 R. Eisenberg, 1996, Public research and private development: Patents and technology transfer in government-sponsored research, Virginia Law Review, v. 82, p. 1663-1667.
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ments are also employed by universities creating spinoff companies. Such spinoffs have been successful in achieving a major government goal of commercializing federally funded research results for the public’s benefit.14 However, they also create the potential for changing the motivations of research universities and for creating real or perceived financial conflicts of interest (Appendix B). Perceptions that research is directed by profit motives rather than the pursuit of knowledge could diminish public trust in research. Transferring technology to the private sector creates the potential for conflicts of interest, and universities and government agencies have developed best practices and guidelines for dealing with them. NOAA does not have agency-specific guidelines on avoiding conflicts of interest, but follows government-wide rules of ethics and Department of Commerce guidelines.15 Guidelines developed by the National Institutes of Health and the National Science Foundation require investigators to disclose significant financial interests that would reasonably appear to be affected by the research they propose.16 Their host institutions are required to maintain an appropriate conflict-of-interest policy, determine whether a conflict of interest exists, and protect the funding agency from bias due to conflicts of interest. A 1998 General Accounting Office report found that the 10 major research universities examined had all established policies and procedures for meeting federal requirements on avoiding conflicts of interest.17 ECONOMIC CONTEXT In seeking to define public versus private roles, economists tend to think in terms of which outcome would be most efficient. In many cases, it is more efficient for private sector companies than government agencies to 14 Presentation to the committee by James Severson, president, Cornell Research Foundation, Inc., February 20, 2002. At least two-thirds of inventions are created using federal research dollars. Before the Bayh-Dole Act was passed in 1980, only 4% of inventions were licensed. Today 33% of inventions are licensed. In 2001, 450 companies were formed, nearly double the number formed just five years earlier. Statistics on invention disclosures, patent applications, licenses and options completed, and new companies formed can be found at <http://www.autm.net/surveys/2000/summarynoe.pdf>. 15 For example, the Department of Commerce issued a memo in May 2000 prohibiting NWS employees from investing in weather futures or weather derivatives. 16 National Institutes of Health, 1995, Objectivity in research, NIH Guide, v. 24, July 14, 42 pp., <http://grants.nih.gov/grants/guide/notice-files/not95-179.html>; National Science Foundation, 2002, Grant Policy Manual, NSF 02-151, Arlington, Va., section 510, <http://www.nsf.gov/pubs/2002/nsf02151/gpm02_151.pdf>. 17 General Accounting Office, 1998, Technology Transfer: Administration of the BayhDole Act by Research Universities, GAO/RCED-98-126, Washington, D.C., 83 pp.
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provide services. The private sector is more likely to be responsive to specific individual customer needs and it is less burdened with bureaucracy. Transferring services to the private sector also frees up resources for activities that can be carried out only by government agencies, such as those promoting the health and safety of the public. Consequently, U.S. policy is to privatize government functions when possible.18 However, not all government functions can be privatized because of their cost structure and/or public good properties.19 The collection and distribution of weather information fall into this category. Scientific information, such as weather information (including forecasts), has properties that make it a public good. First, scientific practices require that data be open to scrutiny to everyone willing to pay the incremental cost of distribution. Thus, the production of scientific information should be nonexclusionary. Second, scientific information is nonrivalrous because providing the information to one party does not diminish the information available to another party. By definition, a public good is both nonexclusionary and nonrivalrous; thus, weather information is a public good. The public-good aspect of weather information makes it difficult, if not impossible, for commercial companies to provide the information efficiently.20 The second reason the NWS must continue to collect weather data concerns the cost structure of weather data. The incremental cost of distributing a copy of the information is typically very small, sometimes even negligible, compared to the initial cost of collecting and synthesizing the data and producing an information product. The NWS budget for collecting weather data is $88 million in fiscal year 2003,21 whereas the cost of dissemination, especially over the Internet, is negligible. The high cost of 18 For example, appropriations language commonly directs agencies to privatize specialized services (NOAA) or data collection (National Aeronautics and Space Administration). See conference report on H.R. 4635, Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 2001, House of Representatives, 106th Congress, 2nd Session, October 18, 2000; H.R. 1553, National Weather Service and Related Agencies Authorization Act of 1999, Senate, 106th Congress, 1st Session. 19 These issues are discussed in greater detail in National Research Council, 2001, Resolving Conflicts Arising from the Privatization of Environmental Data, National Academy Press, Washington, D.C., 99 pp. 20 Private markets have failed demonstrably to provide public meteorological services. See J.W. Freebairn and J.W. Zillman, 2002, Funding meteorological services, in Meteorological Applications—2002 Papers, J.E. Thornes, ed., The Royal Meteorological Society, London, v. 9, pp. 45-54. 21 FY 2003 President’s Budget for NWS Systems. The budget includes NEXRAD and Automated Surface Observing System (ASOS) operations and maintenance, marine observations, radiosonde and upper-air observations, Cooperative Observer Network, lightning data purchase, and aircraft observations, but excludes satellite data.
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collecting weather data fosters the creation of monopolies. Yet even if a private sector monopoly were created, it could not recover all of the costs of developing and operating the instruments, as experience in Europe shows.22 Consequently, the NWS is and must be the primary collector of weather data in the United States, although private sector companies supplement the national network with additional instruments. In contrast, the cost characteristics are different for value-added products, and it is easy to exclude certain groups from using them. For example, site-specific short-term forecasts for spraying and field operations can be restricted to a paying farmer or consortium of farmers.23 As a result, there is greater potential for competition and profit in the creation of value-added products and services tailored to particular customers. Individual firms will retain some degree of monopoly, so a perfectly competitive market will not be achieved. Similarly, public sector organizations producing value-added products are subject to inefficiencies due to incentives based on factors other than user demand, such as congressional direction, internal rivalries, and lack of direct connection between costs and new projects.24 Society must thus make case-by-case judgments of which sector(s) should create value-added products. In some cases (e.g., the high cost of commercial services excludes some consumers), the public may be best served if the public sector provides the value-added service. In 2000 a team of economists writing for the Computer & Communications Industry Association proposed criteria for determining which on-line and informational activities should be undertaken by the government and which should be undertaken by the private sector (Box 4.1). The economists divided activities into three categories: (1) those that the government should perform (green light), (2) those that the government should be cautious about undertaking (yellow light), and (3) those that should generally be carried out by the private sector (red light).25 The report concludes that the NWS has struck the right balance by carrying out clearly governmental functions, such as providing the official weather warnings and watches, while enabling a vigorous private sector by making data widely available 22 P. Weiss, 2002, Borders in Cyberspace, 19 pp., <ftp://ftp.cordis.lu/pub/econtent/docs/peter_weiss.pdf>. 23 Such products can have social benefits, even though they are not a public good in the economic sense. For example, the use of short-term forecasts for spraying operations can reduce the amount of fertilizer or pesticide applied, producing both cost savings for the farmer and benefits to the environment and public health. 24 Dysfunctional incentives are discussed in C. Wolf, Jr., 1988, Markets or Governments: Choosing Between Imperfect Alternatives, MIT Press, Cambridge, Mass., 220 pp. 25 J.E. Stiglitz, P.R. Orszag, and J.M. Orszag, 2000, The role of government in a Digital Age, a report commissioned by the Computer & Communications Industry Association, 154 pp.
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BOX 4.1 Principles for On-line and Informational Government Activity “Green Light” Activities Providing public data and information is a proper government role. Improving the efficiency with which governmental services are provided is a proper government role. The support of basic research is a proper government role. “Yellow Light” Activities The government should exercise caution in adding specialized value to public data and information. The government should provide private goods, even if private sector firms are not providing them, only under limited circumstances. The government should provide a service on-line only if private provision with regulation or appropriate taxation would not be more efficient. The government should ensure that mechanisms exist to protect privacy, security, and consumer protection on-line. The government should promote network externalities only with great deliberation and care. The government should be allowed to maintain proprietary information or exercise rights under patents and/or copyrights only under special conditions (including national security). “Red Light” Activities The government should exercise substantial caution in entering markets in which private sector firms are active. The government (including government corporations) should generally not aim to maximize net revenues or take actions that would reduce competition. The government should only be allowed to provide goods or services for which appropriate privacy and conflict-of-interest protections have been erected. SOURCE: J.E. Stiglitz, P.R. Orszag, and J.M. Orszag, 2000, The role of government in a digital age, A report commissioned by the Computer & Communications Industry Association, 154 pp. and by refraining from certain activities. These principles have been cited widely,26 but the committee finds that they are too general to provide much help in determining which sector should undertake a particular task. Their 26 The report generated several news stories and can be found on the web sites of numerous government agencies, scientific organizations, information societies, and economics departments.
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application to specific cases (e.g., example 1 [ultraviolet index], Appendix D) would be subject to interpretation and become a new source of conflict. BOX 4.2 Roles of the Sectors in Collecting Environmental Data and Developing Products The NRC report Resolving Conflicts Arising from the Privatization of Environmental Data presents the rationale for public funding of data collection and analysis, and for public, academic and private sector distribution of value-added products from information systems that are intended to serve the public. These arguments, which are based on economic and policy considerations, are summarized below. Public Funding of Data Collection and Analysis The total cost of the information system is dominated by the costs of making the observations and assembling, validating, and synthesizing them into dependable, scientifically valid, well-documented products. The cost of making and distributing additional copies of each core product is negligible compared to the cost of generating the master copy. This implies that the average cost per copy decreases as the total number of copies increases (the phenomena of “declining average costs”). The core products (the limited number of synthesized products that serve a wide group of users, and have been quality controlled, calibrated, and validated according to accepted scientific standards) of a public-purpose information system are intended to help establish facts for all. It is highly undesirable for society that their use for public purposes be encumbered by intellectual property rights. The social return generated from use of the data and analysis products of public-purpose information systems may dwarf private returns. In the presence of declining average costs, homogeneous product markets (i.e., those in which the products desired by customers are identical and price is On the other hand, the principles laid out in a recent National Research Council (NRC) report may be useful for determining which sector(s) should collect and analyze data and produce value-added products (Box 4.2). According to these principles, the practice of collecting and analyzing weather data using taxpayer funds makes sense because weather observations— particularly satellite observations—are expensive to collect, but inexpensive to disseminate, especially over the Internet (items 1 and 2). Second, it is essential that the core analysis products (e.g., models, forecasts, warnings) be made available at low cost and without restrictions to everyone (item 3). Burdensome restrictions would make it difficult and/or expensive for the other sectors to use or add value to these products and models or to contribute their own improvements to the analysis process. The NWS disseminates its data and products on a full and open basis, thereby ensuring that
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the only avenue for commercial competition) tend to become monopolized. In particular, it is difficult for a commercial company to recover the cost of generating core products without imposing restrictions on their re-use and resale. Monopolization typically reduces the total number of sales compared to what would be socially desirable, and thus leads to a reduction in social welfare. Commercializing Value-Added Products Value-added products may be distributed in a differentiated products market (i.e., several firms produce similar but distinct products) for which the prospects for rigorous competition are likely to be better. Multiple firms competing in a market are also more likely to create products that meet customer demands for quality and timeliness. The community of end users of the core products and their derivatives is diverse. A flexible, extensive system for distributing that information is essential for maximizing the societal benefit of the information system. For some communities of end users, competing commercial enterprises that add value to the core products and other sources of information are likely to flourish. Public-sector distribution of value-added products is appropriate when the application is directly related to performance of the agency mission. The scientific research community may choose to distribute their own value-added products paid for out of research funds. These products are likely to spawn additional specialized products, some of which may open new markets for commercial application. SOURCE: National Research Council, 2001, Resolving Conflicts Arising from the Privatization of Environmental Data, National Academy Press, Washington, D.C., 99 pp. all citizens have access to information vital for the protection of life and property. If such information were sold by private vendors, it is unlikely that everyone would choose to buy it, putting a substantial fraction of the population at risk. In addition, the vendor would not capture in its revenues all the value that weather and climate information has for society (item 4). In contrast, it is desirable to have public, private, and academic entities create and distribute value-added weather and climate products (Box 4.2). The market for such products is large and differentiated, thus permitting competition among several organizations (item 7). The markets for forecasts on broadcast news hours or for agriculture forecasts are examples of differentiated products markets. Moreover, the customer groups that use weather and climate information are diverse and new customer groups are continually being added as forecast accuracy and reliability improve (item 8). Meeting all their needs requires multiple avenues to innovative products from all three sectors (items 9, 10, and 11). The NWS creates specialized
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value-added services relevant to its mission (e.g., fire weather and aviation products). The private sector conducts market research and develops tailored solutions for specific clients (e.g., snow forecasts for individual ski resorts, hourly updates of hurricane landfall predictions for a specific power plant). And the academic sector creates value-added products for research and education purposes (e.g., numerical prediction of local weather). DATA POLICY As noted in Chapter 2, different sectors of the weather enterprise require sometimes conflicting data policies. U.S. law27 requires the NWS to make its data, forecasts, and standard information products available to all on a full and open basis. The widespread availability of NWS weather data and forecasts ensures their widest use in warning systems that are vital to the public’s safety and well-being (see Box 1.1). The open data policy is also essential for the health of the academic sector, which must be able to scrutinize the data and methods by which they were collected, test the models, and contribute its own improvements to the weather enterprise.28 Value-added providers in all sectors, who rely on low-cost data as a basis for their information products, also benefit from full and open access to government data. Indeed, the relatively small size of the value-added community in Europe suggests that charging high prices for the underlying data would make value-added work too expensive to undertake.29 Although the U.S. government does not hold intellectual property rights, other organizations exert copyright, patents, and other forms of intellectual property protections in order to control access to data and information products.30 As a result, raw data collected by private sector companies, state agencies, or academic institutions funded in part by commercial companies may be subject to high prices and/or restrictions on use. These 27 OMB Circular A-130, 65 Federal Register 77677, December 12, 2000. 28 National Research Council, 2001, Resolving Conflicts Arising from the Privatization of Environmental Data, National Academy Press, Washington, D.C., 99 pp. 29 The notion that the benefits to the treasury that accrue from corporate and individual taxes from value-added activities stimulated by open-access policies far exceed any revenues that might be generated through cost recovery policies is discussed in P. Weiss, 2002, Borders in Cyberspace, 19 pp., <ftp://ftp.cordis.lu/pub/econtent/docs/peter_weiss.pdf>. Based on U.S. success in creating an information industry, the European Union is now considering a more open data policy. See Public Sector Information: A Key Resource for Europe, 1998, Green Paper on Public Sector Information in the Information Society, European Commission Report COM(1998)585, Luxembourg, 28 pp. 30 National Research Council, 1997, Bits of Power: Issues in Global Access to Scientific Data, National Academy Press, Washington, D.C., 235 pp.; National Research Council,
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include Doppler radars operated by television stations, mesonets such as those deployed by transportation departments to monitor road conditions, and micronets such as those used to monitor growing conditions in a particular field.31 Such supplements to the national observation network are very useful, but if the data cannot be used for other applications, their value to the weather enterprise as a whole is limited. The World Meteorological Organization has a two-tiered approach to disseminating data collected by member government agencies. Under the provisions of WMO Resolution 40, a defined set of basic data and products that are necessary for the protection of life and property are distributed on a full and open basis.32 The remaining data may be subject to restrictions to prevent their use for commercial purposes outside the receiving country without the agreement of the originating member. Until the resolution was passed, countries had been withholding data to prevent private sector companies (largely in the United States) from selling weather products within the country that collected the data. Because companies were able to obtain the data at low cost through the NWS, their products could be sold for less than comparable products created by privatized weather agencies, which had to recoup data collection costs. Conditions more favorable to European companies were created in 1999, when the European Commission approved a legal framework (ECOMET) for providing access to basic meteorological data and products for commercial applications.33 However, neither agreement has been formally evaluated to determine its impact on data access. Although national governments collect and disseminate most weather and climate data, value-added products are created by the public, private, and academic sectors. Most data products generated with private money are intended to be sold, and access is controlled to permit the company to earn a return on its investment. Of course, some samples are given away 2000, The Digital Dilemma: Intellectual Property in the Information Age, National Academy Press, Washington, D.C., 340 pp.; National Research Council, 2001, Resolving ConflictsArising from the Privatization of Environmental Data, National Academy Press, Washington, D.C., 99 pp. 31 Examples include the Oklahoma Mesonet <http://okmesonet.ocs.ou.edu/>, MesoWest <http://www.jmet.utah.edu/jhorel/html/mesonet/info.html>, and the Little Washita Micronet <http://www.nps.ars.usda.gov/projects/projects.htm?accn_no=401626>. 32 The international convention is “free and unrestricted.” This term is fully equivalent to “full and open” used in this report. WMO Resolution 40 is described in WMO, 1996, Exchanging Meteorological Data: Guidelines on Relationships in Commercial Meteorological Activities, WMO Policy and Practice, WMO No. 837, Geneva, 24 pp. 33 ECOMET is an economic interest grouping of 20 national meteorological services in Europe and Turkey. See <http://www.meteo.be/ECOMET>.
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(e.g., forecasts on web sites) to stimulate sales of other products. In contrast, the general practice in the academic meteorology community is open sharing of all data and products. Many scientists put weather products generated for scholarly or educational purposes on the web to ensure their widest distribution and/or to satisfy grant requirements. However, when academia works with the private sector, the resulting product may not end up in the public domain.34 For example, in the spring of 2002 the Department of Meteorology at the University of Oklahoma announced that it would limit access to real-time forecasts, which were developed with a combination of federal and private funds, to protect the interests of its private sector partners (Appendix B). Although this policy has been reconsidered, the example illustrates the difficulties of reconciling different data requirements.35 Similar difficulties arise from government-industry partnerships. A data policy has to be negotiated that permits commercial objectives to be achieved while producing the credible data that the public sector needs as well as satisfying laws and regulations governing public access to data and products.36 Satisfying both demands is difficult, which is one reason why there have been so few successful examples (see Chapter 3). Government-academic partnerships, on the other hand, are easier to create because both partners share the same philosophy toward data. The NRC report Resolving Conflicts Arising from the Privatization of Environmental Data outlines conditions under which the federal government could purchase environmental data from commercial vendors and privatize data collection and product development, while continuing to meet its public obligations (Box 4.3). Discontinuing government services in favor of private sector provision is commonly in the public interest, provided that competition leads to better products and services at lower prices. In such cases, government resources could be used to develop products (1) that benefit broad and diffuse groups of users, (2) that are considered too risky for the private sector to undertake, or (3) that would be too expensive to purchase from the private sector. A key conclusion of that report is that such decisions must be made on a case-by-case basis, using criteria such as those listed in Box 4.3, and they must be reevaluated as circumstances change (e.g., advances in science and technology, which in the weather 34 Academic researchers funded by industry are generally more willing to accept data restrictions. See H. Brooks and L.P. Randazzese, 1998, University-industry relations: The next four years and beyond, in Investing in Innovation: Creating a Research and Innovation Policy That Works, L.M. Branscomb and J.H. Keller, eds., MIT Press, Cambridge, Mass., pp. 361-399. 35 Information on the data policy of the Center for Analysis and Prediction of Storms is available at <http://www.caps.ou.edu/wx/>. 36 National Research Council, 2001, Resolving Conflicts Arising from the Privatization of Environmental Data, National Academy Press, Washington, D.C., 99 pp.
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BOX 4.3 Criteria for Purchasing Commercial Data and for Privatizing Government Data Collection and Product Development The NRC report Resolving Conflicts Arising from the Privatization of Environmental Data identifies criteria for ensuring that public needs continue to be met when the private sector contributes data to the national network or when the public interest would be served by transferring data collection or product development from the government to the private sector (privatization). These criteria, many of which overlap, are listed below. Supplementing the National Database with Commercial Data Circumstances under which data collected by commercial entities may be suitable for public-purpose information systems include the following: The data fulfill public sector needs. For example, data intended for scientific purposes must fulfill both immediate research objectives and long-term scientific goals. This in turn requires that the government acquire all the data rights (i.e., full and open access) within a specified period of time. The data are of suitable quality and have undergone credible calibration and validation techniques to assure they meet that quality. If the objectives include contributing to future research needs, full documentation is required. When the data are initially available for confidential scientific audit, the vendor must make a commitment to publish the full record of that audit when commercial reasons for confidentiality are no longer applicable. Because it takes several years to fully develop data products, there must be a reasonable prospect of a long-term supply of data. Privatizing Data Collection Transferring data collection from the government to the private sector may be in the public interest if all of the following conditions are fulfilled: A commercial capability for supplying the necessary data exists. The private sector is likely to provide a stable, long-term information supply. There is an effective process for conveying scientific or operational requirements to the private sector. The content and conditions of access to data sets (in particular, full and open access) would fulfill public sector needs. There is an established process for ensuring quality assurance and quality control of the commercial data. A substantial commercial market for the data exists that would not be compromised by the full and open access provided to the government and could reduce costs to the government. Privatizing Value-Added Products Criteria for the government to discontinue an existing product line in favor of its production by private entities include the following:
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There are no overriding considerations, such as health and safety, that require continuing government control. Government-funded functions (e.g., scientific research, education, government operations) would not suffer greatly from restricted access to the product. Private sector organizations are interested in taking over the function. The research and development underpinning the application is mature (i.e., there are no significant uncertainties surrounding the interpretation of the available data for the purpose at hand). A demonstrable market that supports vigorous competition exists or is at least plausible, thereby reducing the possibility of a private monopoly. This is particularly important when the government and its affiliates would be the major customers. Existing users would not be harmed significantly if product availability were interrupted. For example, gaps in the long-term climate record may prevent detection of rapid temperature changes, thereby hindering scientific research and environmental policy making. SOURCE: National Research Council, 2001, Resolving Conflicts Arising from the Privatization of Environmental Data, National Academy Press, Washington, D.C., 99 pp. enterprise are essentially continuous). Such criteria are especially important for making decisions on activities that are not obviously within the purview of either the federal government or the private sector. In the weather and climate enterprise, the criteria could be used to decide, for example, whether the NWS should provide weather services to a particular industry (e.g., agriculture) or for a specific application (e.g., fire hazard).37 The devil is in the details, so these decisions will have to be made by the stakeholders involved in the activity in question. PERCEPTIONS OF UNFAIRNESS A barrier to cooperation among the sectors that is commonly over-looked is the perception of what is fair to a particular party.38 For example, some in the private sector want the federal government to establish a “level playing field” in the market for weather services (Appendix D). In particular, 37 As a result of lobbying, the NWS no longer provides these services. See Chapter 1, “History of the NWS-Private Sector Partnership.” 38 The committee commissioned a paper on the issues of “fairness” in the context of government relations and services. The specific examples in Appendix E relate to government actions in the telecommunications field, but the principles illustrated are applicable to many of the issues that have arisen between the NWS and the private sector.
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because the NWS is supported by tax revenues, it is said to have an “unfair competitive advantage” in the provision of services that the private sector would like to provide. On the other hand, taxpayers feel they have a right to receive services based on the tax-supported activities of the NWS as cheaply as possible. Therefore, the NWS should not be barred from providing such services if it can do so at an incremental cost lower than the private sector can. Understanding how perceptions of unfairness, whether justified or not, form can lower the barrier to the public-private partnership. A vocabulary and conceptual framework by which all parties can work on these problems is described below. This framework is discussed in depth in Appendix E. Positive theories of fairness and self-serving behavior attempt to describe and analyze what is, as contrasted to normative moral theories that prescribe what ought to be. Among the common patterns of behavior that have been identified by this research, four are of special relevance to the weather and climate enterprise. Status Quo Property Rights. A common notion is that one is entitled to something simply by virtue of having enjoyed it in the past. Status quo property rights are clearly in the minds of private sector weather service providers when they assert that the NWS should not provide any services that the private sector is already providing. Note that such status quo property rights are in conflict with the perceived rights of the taxpayers mentioned above. Perceived Contracts. Behavior may be perceived as unfair if a contract is seen to have been violated. The 1991 NWS public-private partnership policy states that the NWS “will not compete with the private sector when a service is currently provided or can be provided by commercial enterprises, unless otherwise directed by applicable law.” This policy is seen by some in the private sector as a “contract,” whatever its legal status actually is. In line with this perception, some of the services now provided by the NWS are seen by some parties as a “breach of contract.” Correspondingly, a change in the policy, without some kind of “compensation,” would also be perceived by some parties as a breach of contract. Cognitive Dissonance. Perceptions of unfairness are often exacerbated by misunderstanding the facts. This phenomenon has been studied extensively by social scientists, beginning with Leon Festinger’s seminal 1957 book, A Theory of Cognitive Dissonance.39 Festinger held that our minds hold simplified models of reality that we are reluctant to abandon. Evidence that 39 L. Festinger, 1957, A Theory of Cognitive Dissonance, Stanford University Press, Stanford, Calif., 291 pp.
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contradicts these models leads to “cognitive dissonance” and is rejected or ignored while we seek more evidence to support our cherished model.40 In his 1759 treatise, The Theory of Moral Sentiments, Adam Smith put it more harshly, “He is…bold who does not hesitate to pull off the veil of self-delusion which covers from his view the deformities of his own conduct.”41 Institutional Design. Research on the “positive theory of fairness” (especially in the regulatory arena) implies that policy makers who base their recommendations solely or primarily on principles of economic and scientific rationality, and give short shrift to concerns of unfairness, do so at their own peril. In particular, while the committee takes no position on the actual extent of cognitive dissonance, self-delusion, and self-serving behavior in the weather industry, the well-documented prevalence of these phenomena in human activities suggests the importance of creating institutions that minimize their effects. Designing institutions in which all participants feel they are being treated fairly is difficult and may be impossible, but some useful steps can be taken. For example, a thorough, transparent, and credible system of information dissemination can help minimize the associated costs of dysfunctional behaviors such as cognitive dissonance and self-serving denial. Suggestions for ensuring that NWS policies are sensitive to fairness issues are discussed in Chapter 6. CONCLUSIONS Legal, economic, and public policy arguments indicate that the NWS should continue to collect weather and climate data and to disseminate them on a full and open basis. It is economically efficient for the private sector to create value-added products from low-cost government data, but social benefits also arise from having universal access to certain value-added products created by the academic and public sectors (e.g., educational products, models, emergency preparedness tools). Which sector should create a particular value-added product must be decided on a case-by-case basis. Whatever decision is made must be perceived to be as fair as possible—within the constraints of federal laws, regulations, and policies— to all parties, or the public-private partnership will suffer. 40 Of course, other theories may explain “denial.” Prison inmates, for example, plead that they are innocent or that they have been unjustly incarcerated because of extenuating circumstances. Their behavior may simply reflect their belief that their protestations will shorten their sentences (Appendix E). 41 A. Smith, 1759, The Theory of Moral Sentiments, reprinted in 1976 by Liberty Classics, Indianapolis, p. 263.
Representative terms from entire chapter: