5.
Achieving Fair and Open Access to PSI for Maximum Returns1

Michael Nicholson

PSI Alliance, United Kingdom


The PSI Alliance is an association of private sector PSI reusers, located primarily in Europe. My own knowledge is of the situation in the United Kingdom.


Public sector information is an enormously underexploited market throughout Europe. In general, innovative PSI reuse is being driven by small companies. In the United Kingdom it is relatively easy to communicate with PSI holders, but in other countries this is not always the case. In all countries the reactions from PSI holders to proposals for reuse vary from holder to holder.


For example, the Environment Agency in the United Kingdom has stated that while it could create a list of the agency’s PSI and make it available to potential users, such a move would cost money which may be better used in flood defenses. “Would you prefer data or flooding?” is the question they asked. Other PSI discussions have run into the issue of public safety and security. For instance, the Coal Authority holds information on underground workings—undoubtedly PSI—which could be made available to the public. If this were done, however, hundreds of thousands of homeowners might be appalled to discover that there are mines some 500 feet below their houses. They would assume the worst, despite being entirely secure in most cases.


Many PSI holders are simply unaware of the reuse opportunity. Some PSI holders do little to encourage reuse; others positively obstruct it. They either consider PSI to be “their” data, the “citizens’ data,” or anyone else’s data except the private sector’s (“All they will do is profit from it”). Some PSI holders see making the data available as a low priority; others see it as vitally important; and still others want to exploit the PSI themselves. In the United Kingdom, for example, the focus in the areas of geospatial and meteorological data is on revenue protection rather than value maximization. This creates substantial barriers to reuse. Essentially, instead of the tap being turned full on, it is half off. There are also some well-placed and powerful civil servants in charge of organizations that are considered to be national treasures who see no reason to change the status quo. This is an issue that all too often can be dealt with only by the politicians, but it is not a vote-winner and so does not attract their attention. Parts of the U.K. and French establishments are beginning to consider these issues in greater depth, and it will be interesting to see the outcome.


Despite the laggards, some PSI holders are exemplars and actively seek partners for PSI reuse. Entrepreneurs are thus sometimes welcomed and sometimes resisted. Remember, however, that if there is only one obstacle left, this will still prevent PSI from being reused. So in order to increase the value of PSI, all material barriers must be removed. I would suggest that whatever reuse policies are adopted, they must be straightforward. Complex policies will not work.

1

Based on a presentation found at http://www.oecd.org/dataoecd/12/52/40064545.pdf



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5. Achieving Fair and Open Access to PSI for Maximum Returns1 Michael Nicholson PSI Alliance, United Kingdom The PSI Alliance is an association of private sector PSI reusers, located primarily in Europe. My own knowledge is of the situation in the United Kingdom. Public sector information is an enormously underexploited market throughout Europe. In general, innovative PSI reuse is being driven by small companies. In the United Kingdom it is relatively easy to communicate with PSI holders, but in other countries this is not always the case. In all countries the reactions from PSI holders to proposals for reuse vary from holder to holder. For example, the Environment Agency in the United Kingdom has stated that while it could create a list of the agency’s PSI and make it available to potential users, such a move would cost money which may be better used in flood defenses. “Would you prefer data or flooding?” is the question they asked. Other PSI discussions have run into the issue of public safety and security. For instance, the Coal Authority holds information on underground workings—undoubtedly PSI—which could be made available to the public. If this were done, however, hundreds of thousands of homeowners might be appalled to discover that there are mines some 500 feet below their houses. They would assume the worst, despite being entirely secure in most cases. Many PSI holders are simply unaware of the reuse opportunity. Some PSI holders do little to encourage reuse; others positively obstruct it. They either consider PSI to be “their” data, the “citizens’ data,” or anyone else’s data except the private sector’s (“All they will do is profit from it”). Some PSI holders see making the data available as a low priority; others see it as vitally important; and still others want to exploit the PSI themselves. In the United Kingdom, for example, the focus in the areas of geospatial and meteorological data is on revenue protection rather than value maximization. This creates substantial barriers to reuse. Essentially, instead of the tap being turned full on, it is half off. There are also some well-placed and powerful civil servants in charge of organizations that are considered to be national treasures who see no reason to change the status quo. This is an issue that all too often can be dealt with only by the politicians, but it is not a vote-winner and so does not attract their attention. Parts of the U.K. and French establishments are beginning to consider these issues in greater depth, and it will be interesting to see the outcome. Despite the laggards, some PSI holders are exemplars and actively seek partners for PSI reuse. Entrepreneurs are thus sometimes welcomed and sometimes resisted. Remember, however, that if there is only one obstacle left, this will still prevent PSI from being reused. So in order to increase the value of PSI, all material barriers must be removed. I would suggest that whatever reuse policies are adopted, they must be straightforward. Complex policies will not work. 1 Based on a presentation found at http://www.oecd.org/dataoecd/12/52/40064545.pdf 17

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SOCIOECONOMIC EFFECTS OF PSI ON DIGITAL NETWORKS 18 Small companies report problems with unfair competition arising from poorly defined reuse policies. Some PSI holders that exploit their own data create so many restrictions to protect their own activities that the private sector ends up attempting to develop its own data as an alternative. Apart from the duplicated investment, the risk in this situation is that the PSI holder will then loosen its restrictions, undercutting the private sector’s investment and making it potentially worthless. While Dr. Fornefeld claimed that high prices for PSI were a result of overestimating the value of data, that is not necessarily correct. In my experience, prices can be high simply because those who set them are risk averse and have no competition in a market with no pricing comparisons. There is a reluctance to experiment with the market and to drop prices when there is no competition. There needs to be a mechanism for countries to define what information must be collected as PSI. It is clearly not acceptable for the public bodies creating PSI to themselves determine what data to collect. Rather, the state has to decide what it needs to own and collect as part of the national information infrastructure and then to decide on its policy for wider distribution. Whatever the state decides to own itself should be very easily accessible. The question should also be asked whether the private sector should be collecting any of this data instead. The prime minister speaks enthusiastically about how the use of technology has grown in the United Kingdom. It is certainly true that, over the last ten years, software, hardware, bandwidth, and other technologies have improved immeasurably. It is also remarkable what has been achieved with the digitization of public resources. Ten years ago, user skill levels were a real constraint, but today the majority of people can use a computer and the Internet. So the constraints of user skills and technical delivery are no longer the key issues. As these problems have been solved, the most important constraint has instead become access to information. Whatever the costs of limiting access to PSI at present, they can only grow. These costs of limiting access to PSI fall into three categories. First, there are direct and indirect costs to the public sector, which are generally not measured. If efficiency improved in the public sector by only 1 percent as a result of free or improved access to the geospatial element of PSI (e.g., in the United Kingdom, the Ordnance Survey or the Met Office), the sum saved would be the equivalent of eight times the cost to the state of collecting the data in the first place. Second, there are costs to the private sector, both direct—excessive time spent negotiating, managing, and complying with licenses or additional costs collecting data that should be openly available—and indirect, such as the loss of opportunity. Finally, the economic cost to the citizen when knowledge is available, but inaccessible, cannot be overlooked. For instance, in the United Kingdom and France public bodies have created excellent maps, but their license terms do not always allow the ready use of these maps, such as making them available on the Internet. Job opportunities are lost, higher taxes may result, and there is less choice. If U.K. citizens were offered a choice between a continuation of the current situation (cost and restrictive licensing) and one where their taxes would be increased by £1.25 but they had free access to Ordnance Survey maps on the Internet, would they not reach in their pockets for the £1.25?

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DISCUSSION BY WORKSHOP PARTICIPANTS PARTICIPANT: I would like to focus a bit more on the importance of digital networks and the characteristics of digital information in this context. One thing that this discussion so far has not alluded to, much less talked about in any serious way, is the power of networks and network effects that arises from putting information freely online to perhaps a billion Internet users. If you have free information online that is accessible to each person with access to the Internet, one has the potential of a billion entrepreneurs who can take that information and recombine it with other information to create new knowledge and new products and services that are not possible if there are barriers to that knowledge in the form of either a high price of access or reuse restrictions. One of the fundamental aspects of digital information is that it can be reconfigured and combined with other information to make new information in ways that cannot be anticipated. So the potential always exists of serendipitous results that whoever may be providing the information online cannot fully anticipate. Therefore, in terms of the costs associated with these business models, there may be a tremendous amount of lost opportunity costs that are very difficult to measure and largely hidden but that are related to the fact that there is a great amount of potential social and economic value from the reuse of that information in many unanticipated ways. I would also like to note that we are flooded with a deluge of information, and a resulting characteristic of digital information on networks is that if one is to make optimum use of it, one needs to do that by automated means. This is because people cannot possibly find, sift through, and process the information themselves. The future of value creation online, therefore, is to handle that information automatically with various kinds of new software tools that are able to extract and recombine the data and information, creating new knowledge and new value from existing information automatically rather than through human intervention. Both the costs and, in particular, the legal restrictions on reuse are a complete barrier to machine-automated value creation from existing information online. This could certainly be a problem for the policy community with regard to the economic exploitation of information online. PARTICIPANT: I think the 2007 Power of Information report in the United Kingdom really has some very good examples of the big potential of networks, of new uses, and of matching up information. PARTICIPANT: I would like to get back to something that Michael Nicholson raised very eloquently about the funding problem, since funding is one of the keys. You pointed out that we should develop some clear ideas about what the role of government is in general and then within defined areas, such as mapping, weather information, and the like, to be clear that these are a part of public tasks. Then it is necessary to organize the funding in such a way that those particular roles of government are accomplished well. I would like to get more opinions about that, however, because it was an issue when we were writing the policy principles for public sector information. In fact, there initially was a paragraph about this, but some of the drafters felt it was straying into areas of 19

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SOCIOECONOMIC EFFECTS OF PSI ON DIGITAL NETWORKS 20 telling governments what they should do. So it was very hard to write this in a way that one did not get into a philosophical debate about what governments should or should not be doing. It is a pity in some ways—and I think this is an essential point—which is why we had it in some of the earlier drafts. This debate is not just about access and use, but it is essential to think about what happens if data are given away or sold at very low, marginal cost. What are the incentives then, and how can one structure a system that produces good quality data and then distributes them in a timely fashion if suddenly part of the revenue stream that supported this function is cut off? I would like to get the participants’ opinions about this. Is it really about going back to Parliament to debate this and getting them to fund the PSI activities out of a general purpose tax? Michael Nicholson said it would cost £1.25 per head in the United Kingdom to open up the data held by the Ordnance Survey. An interesting parallel is that in France President Sarkozy launched a debate in January 2008 about how to fund public sector TV. He said that he thought it should not be funded by advertising—which means that now the public sector TV and radio probably have to find about €1.2 billion a year in new revenues, which they did not have to find before because they were supporting part of their activities with advertising. Maybe advertising is something to consider because the BBC is going down the track of thinking more about advertising revenue as well as having a license fee. Is the solution for maintaining the production and dissemination of PSI licensing fees, advertising, or general tax revenues? PARTICIPANT: In Finland there is a historical burden in the funding model for public sector organizations. It used to be that if you were a public sector organization, a good way to get a project growing steadily and get more staff was if you could invent more public tasks for yourself. But then, in the 1980s or 1990s, there was a trend toward the philosophy that these public sector organizations should earn their living by selling their services, including public sector information, and quite a lot of liberty was given to these public sector organizations to define their own public sector pricing policies. So in Finland we now have a terrible mess of pricing policies, different public sector organizations charging different kinds of fees and with different policies. Now that the EU PSI directive has come into force and there is some political pressure for changing the system, our Finance Ministry is, or seems to be, quite reluctant to touch this mess because their first question has been: What would be the increase in revenue or public good that we would gain from unifying these pricing policies? If you cannot calculate it or if you say that it is, for instance, €50 million a year, we will not touch it because this is a too small an issue for an organization as important as the Finance Ministry. So this is a problem: How to convince the Finance Ministry to interfere with the independence of our public sector organizations and to also risk upsetting the precarious situation that has been created by giving all these public sector organizations such broad discretion to define their own pricing policies. I do not have a solution, but rather, I am raising the issue. PARTICIPANT: I do not have a solution, either. I think it is absolutely right that in the United Kingdom there has been a huge amount of thought given to this, but part of the problem is that the thinking has not been translated into action. What I would say is

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ACHIEVING FAIR AND OPEN ACCESS TO PSI 21 that my rather rudimentary examination of the accounts of some of these trading funds in the United Kingdom suggests that the actual costs of licensing, pricing, and managing the PSI is far higher than one would normally expect. I was very interested to see that when there were some changes made in this regard in Australia, the actual cost of distribution went down when the process became simplified. PARTICIPANT: Actually, there is very little hard statistical evidence to back up this assertion. PARTICIPANT: Well, there is absolute evidence that in the United Kingdom the cost of the organizations would go down if licensing were not a factor. I think there is a much bigger issue though about what they should be doing in the first place. It is a very awkward question. But in a sense I think we have to find a way in the United Kingdom of making sure that there is a way of getting to the answer without asking the people who are providing the data. It has to be something where instead of asking the last executioner if abolishing capital punishment is a good idea or not, you actually find some better way of establishing what governments should be collecting for their own needs. PARTICIPANT: May I just follow up on the Australian experience? We do not actually have any statistics, and we have not in fact moved to a simplified licensing regime yet. But one of the studies that I was involved in, the Queensland government’s stage two report on the government information licensing framework, actually looked specifically at this licensing issue and at the complexities of traditional licensing. One of the participants in that study was a long-term government lawyer who had assisted in doing the simplified version of the government licenses about ten years ago, so he really knew the whole history. It is obvious: You must have something that is standardized and readily available so that you are not having to actually negotiate and draft a license on every occasion of access of this sort or where reuse is required. Without standard licenses it going to be a very expensive process. What we have been looking at, although it has not yet been implemented, is beginning some projects that adopt what we call “open content licensing.” There is a lot of support in Australia at the state and federal levels for this approach. We scoured the world for the best practice we could find. We are aware of the OPSI click-use license. What we would prefer, however, is an approach where the licensing terms are made available with the information product as it is made available. So in Australia we have a preference for something like the Creative Commons license. Now what we use might not be precisely the Creative Commons license that is used elsewhere, and if so we might have to reinvent something that essentially does the same thing as Creative Commons. So the default position in Australia now is to use the Creative Commons attribution license and maybe, in some situations, the Creative Commons attribution and non-commercial use license. If we find that there are difficulties with that, we will probably draft a specific Creative Commons-like government license. But we want something that is interoperable within the federal government system. We are a country of only 20 million people. We cannot reinvent the wheel every time we look around, which is the tendency. So we want something that will operate not only throughout all the

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SOCIOECONOMIC EFFECTS OF PSI ON DIGITAL NETWORKS 22 Australian states and territories, but that would be consistent with concepts and licensing practices internationally. So, basically, at this stage in Australia we are on the brink of some projects being implemented that would use such licenses. Although no study has been done to see whether it is actually cost effective, we know from practice that it is going to be more cost effective than what has prevailed to date. PARTICIPANT: In my presentation this afternoon I will touch upon Creative Commons licensing as well. I will give you an example of one Dutch agency using one, so I can explore that issue a bit more. PARTICIPANT: I have one suggestion for our Norwegian colleagues. It would be interesting to find out what the savings have been in the management of the geographical information (GI) in which all public bodies pooled their resources. Correct me if I am wrong, but my understanding is that because of the way that the GI is published, there is no license required between governments, and anybody in the public services can reuse the shared data and information. So it would be very interesting to find out what the management costs savings have been from both sides, that is, both from the geographical mapping agency and also from other government bodies that do not have to enter into any sort of licensing mechanisms. That could provide some hard evidence that could be used to change some of these policies for the better. PARTICIPANT: I wanted to speak about two things. The first is about Dr. Fornefeld’s presentation on the value chain of PSI, particularly the data producers and the service providers of meteorological or geospatial information with a natural monopoly. There is no debate about the fact that there is a public need for this type of information. It is because this information is important that it is created. The data producer needs to be publicly funded because the market itself will not be able to pay for satellites, and it will not be able to pay for the experts who are able to establish maps and cartographical data. We spoke about weather information, where there can be a question as to whether or not this is a natural monopoly, but in most cases there is a natural monopoly for the public sector to produce data and then to produce a service. We see that public services have a lot of difficulties in, for example, providing new distribution platforms for this information and new kinds of services and then coming up with innovations in the services to be provided with this information. I think there is value in distinguishing between data providers who are a natural monopoly—and who thus need public financing—and service providers. For service providers maybe there is not a natural monopoly. Perhaps public services should limit themselves to data production and provision and rely upon outside service providers who are able to do that work better. By this I do not mean that all the PSI produced should go to private organizations that will bring it to the commercial sector. Some of the information produced can be used directly from the source and not through service providers. My second point concerns financing. It is clear that somebody has to pay for the data. The question is, Does the taxpayer have to pay for the production of data? We say

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ACHIEVING FAIR AND OPEN ACCESS TO PSI 23 that the production itself costs a lot and brings little. Production of the data is the basis of everything, but when there are no sellers, nothing is done with the data. In itself the data brings only a little return. So it has to be paid for. Who will pay for it? Are the taxpayers going to pay for it, or are the users going to pay for it? In this debate I really have a lot of respect and admiration for the American approach. It is also clear, due to its historical heritage, that the United States is based on the circulation of information. That is not the case in Europe, at least up to now. So in Europe there is a debate: Who has to pay for the data? Is it the taxpayer, or is it the user? We heard this morning about the cost of the licensing, the cost to buyers for the distribution of the data. I really agree that this is a cost, but it also is a potential benefit because if the data are free there is no longer a link between the data provider and the service provider. Having a business relationship between the data provider and the service provider encourages both sides to provide something that is usable. Let me give you an example. If all the data are free, then the reusers have no leverage to ask the provider to improve the data. If the reuser partly finances the production of data, then the reuser has a right to say something to the producer of the data about the quality, because they are bearing part of the cost. This negotiation has a cost, but it is also a way to bring together the data producers and service providers so that they can work together.

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