See also M. Boiteaux (1956), "Sur la gestion des Monopoles Publics astreints a l'equilibre budgetaire," Econometrica (Jan. 24): 22-40, and W.J. Baumol and D.F. Bradford (1970), "Optimal Departures from Marginal Cost Pricing," Am. Econ. Rev., 60 (June):265-283.


A zero price might seem too low to some; however, it is the contributions of this community that actually create the value in the first place. An instructive analogy is consumer banking: depositors with sufficiently large balances receive "free" checking from banks; the quid pro quo is that the bank has the use of their money. Similarly, the database provider could give free access to contributors, with the quid pro quo being the contributions themselves. It also should be noted that if the data were not supplied free, it is almost certain that some public-spirited scientist with spare server capacity would have a graduate student maintain an FTP or WWW site with the data on it for free downloading for interested colleagues.


The OMB Circular A-130 policy regarding federal government information dissemination practices was codified in the Paperwork Reduction Act of 1995, P.L. 104-13, which amended 44 U.S.C. Chapter 35, effective October 1, 1995.


The original reference for this finding is Gerald Faulhaber (1975), "Cross Subsidization: Pricing in Public Enterprises," Am. Econ. Rev., 65:966-977. Later references, among many others, are J.C. Panzar and R.D. Willig (1977), "Free Entry and the Sustainability of Natural Monopoly," Bell J. Econ., 8 (Spring): 1-22, and W.J. Baumol (1977), "On the Proper Cost Tests for Natural Monopoly in a Multiproduct Industry," Am. Econ. Rev., 67 (December):809-822.


The current situation on the North Atlantic route is that there is virtually no congestion for placing telephone calls from Europe to the United States, but serious congestion for Internet traffic. The conclusion from this evidence is clear: there is plenty of capacity in the physical transmission facilities, but too little of that capacity is devoted to the Internet. The simple (but expensive) solution for the researcher in Europe is to place a modem telephone call to the U.S. computer, or vice versa, and conduct the research via direct connection.


There are, of course, a wide variety of engineering and queuing-theory solutions, priority schemes, compression methods, and so forth. All such methods either reduce the capacity required or seek to allocate scarce capacity during congestion to more valued uses. Ultimately, however, capacity is finite, and congestion may still occur, but at higher load levels.


For a discussion of the economics of network pricing, see Hal Varian and Jeff MacKie-Mason (1995), "Pricing the Internet," in B. Kahin and J. Keller, eds., Public Access to the Internet, MIT Press, Cambridge, Mass.; Hal Varian and Jeff MacKie-Mason (1995), "Pricing Congestible Network Resources," Advances in the Fundamentals of Networking, IEEE Journal on Selected Areas in Communications, and Gerald R. Faulhaber (1992), "Pricing Internet: The Efficient Subsidy," in B. Kahin, ed., Building Information Infrastructure, McGraw-Hill, New York.


Another possibility for dealing with congestion is to offer a lower subscription charge to users who are willing to postpone their use to off-peak times. Currently, Lexis/Nexis offers universities a low subscription charge but denies access during peak times.


By "adding value" in this case is meant any transformation of the data beyond that necessary for scientific research that increases the value of the information for some or all potential users of the data.

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