PARTICIPANT: I would like to follow up. I do not think we should leave the impression that the U.S. federal government is monolithic in its policy and that everything is free and rosy. What I mean is that OMB Circular A-130 actually puts an upper bound for pricing at the incremental1 cost of the information management system. So it actually can exceed the marginal2 cost and often does. There is a lot of data and information sold at much more than the marginal cost of fulfilling the user request or the dissemination.

So not everything is free online, and there is quite a bit of information that is sold. Even at NOAA, the National Climatic Data Center, for example, which has all the retrospective archived climate data, charges fairly high fees for accessing those data. In fact, it funds about 30 percent of its annual operations through those sales, although I think the money actually goes to the treasury.

Until recently, Landsat images were $500 each, which was quite expensive. Even though it was substantially less than the French SPOT image, it was still a lot for an individual scene. So there is a large variance in the pricing of PSI in the federal government, even if the information is in the public domain.

I also should point out there is one exception to the public domain exclusion for federal government information from the Copyright Act, and that is in the National Institute of Standards and Technology. The Standard Reference Data Center has a legislative exemption from the exclusion and can copyright its standard reference data publications, and that may be the only exception to that in the federal government. I suppose that if someone were to not honor the copyright, they would not be sued by NIST, but nonetheless it does have a copyright in those publications.

So I just wanted to clarify that it is a very big system, and all the agencies really operate individually. There is an overall policy, and I think marginal cost pricing is the preferred option, but it can go up to incremental costs.

PARTICIPANT: I have one question, or actually a thought, after hearing these presentations. I was quite attracted to this methodology that I, in my mind, called deprivation method, in which you go to people and ask them, If we take oxygen away from you, how much would you pay to get it back? We hear this being applied to public sector information. I was just wondering, before I heard the last presentation by John Houghton, that since we are counting on information products or services that we already have, if we were to take those away, how much would we pay for getting them back? However, for the externalities and the innovation component, can you really go to end users and ask them how much they would pay for products which they do not have yet?


In incremental cost pricing, “The price to secondary users is set so that revenues cover the cost to provide this incremental use, including recompiling the data, perhaps maintaining a computer site for downloading, purchasing CD-ROM blanks, recording the data, shipping to the user, and customer support, but not including the costs for the core service.” National Research Council. 1997. Bits of Power: Issues in Global Access to Scientific Data, National Academy Press, pp. 125-126.


In marginal cost pricing, “The cost to secondary users is set at the marginal cost of a specific unit sent to the user, including the cost of the CD-ROM blanks and postage and shipping. This price is lower than the incremental cost price, as long as the cost of output per unit declines when volume increases.” Id. at p. 126.

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