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Suggested Citation:"PRIVATE-SECTOR VIEWS." National Research Council. 2001. Resolving Conflicts Arising from the Privatization of Environmental Data. Washington, DC: The National Academies Press. doi: 10.17226/10237.
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Suggested Citation:"PRIVATE-SECTOR VIEWS." National Research Council. 2001. Resolving Conflicts Arising from the Privatization of Environmental Data. Washington, DC: The National Academies Press. doi: 10.17226/10237.
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Page 20
Suggested Citation:"PRIVATE-SECTOR VIEWS." National Research Council. 2001. Resolving Conflicts Arising from the Privatization of Environmental Data. Washington, DC: The National Academies Press. doi: 10.17226/10237.
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Page 21
Suggested Citation:"PRIVATE-SECTOR VIEWS." National Research Council. 2001. Resolving Conflicts Arising from the Privatization of Environmental Data. Washington, DC: The National Academies Press. doi: 10.17226/10237.
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Page 22

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STAKEHOLDER VIEWPOINTS 19 • Traditional fair use exceptions (see Appendix B) would be limited, and therefore customary scientific practices (e.g., use of published information for research and education) would be inhibited. • Excessive terms of protection (e.g., 15 years, renewable with every substantial update, in Europe) would inhibit use of new data and dramatically slow the advancement of science.e Responsible scientists do not support piracy of databases. Nevertheless, changes to existing legislation concerning intellectual property must be crafted with great care. Otherwise they may upset the balances associated with copyright and fair use that have been developed both within the United States and internationally over many decades. Such balances are central to the whole enterprise of scientific research, and any change could have far-reaching and incalculable unintended consequences. a <http://www.whitehouse.gov/omb/circulars/a130/a130.html>. In practice, most researchers obtain government data at the marginal cost of reproduction. b <http://www.globalchange.gov/policies/dmwg/dmwg-gcp.html>. c For example, see Earth Observation Data Policy and Europe, at <http:// www.geog.ucl.ac.uk/eopole/>, and Scientific Access to Data and Information, at <http:// www.codata.org/codata/data_access/index.html>. d Directive 96/9/EC of the European Parliament and the Council of the European Union, on the legal protection of databases, Strasbourg, March 11, 1996. e NRC, 1997, Bits of Power: Issues in Global Access to Scientific Data, National Academy Press, Washington, D.C., 235 pp.; NRC, 1999, A Question of Balance: Private Rights and the Public Interest in Scientific and Technical Databases, National Academy Press, Washington, D.C., 142 pp. PRIVATE-SECTOR VIEWS The goal of private-sector organizations is to sell information products or services on an ongoing basis in a commercial market. Their rewards are primarily monetary, but scientists within commercial companies may also share the same motivations and rewards of academic scientists (e.g., prestige, reputation). Likewise, many companies are motivated in part by considerations of public good, although such motivations may not be encouraged by the commercial reward system unless they can be achieved without reducing shareholder profits. For the private sector the revenue obtained from selling the product or service must be sufficient to at least cover the costs of generating it

STAKEHOLDER VIEWPOINTS 20 and in the long run provide a reasonable rate of return on invested capital.5 Competition based on satisfying customer needs at an acceptable price is the mode of operation. Depending on customer need, a commercial vendor may operate an end-to-end information system or may specialize in a particular part of the information system. Under appropriate conditions, vertical integration, in which the same enterprise exercises control over all the steps from the raw material to the final product, can provide many advantages, such as exclusive rights to all data products and their subsequent uses. Such integration is particularly important when the product is something intangible like information. In a competitive environment it is in the interest of the private sector to treat sources and techniques as commercial secrets. The customer base for commercial data, services, and products is broad and includes entities in both the public sector (e.g., government, inter- and nongovernmental organizations, public administration, education, and research) and the private sector (e.g., agriculture, fishing, forestry, energy, natural resources, infrastructure, transportation, communications, financial, and services industries). Government agencies (especially federal agencies) are currently the primary customers6 as well as sources of data. Indeed, it is difficult to generate an adequate revenue stream from many environmental markets unless the government pays for data collection. In the view of many private-sector organizations, once the government has developed and demonstrated the technology for collecting data, it should allow the private sector to develop applications and to market them to the public (see Box 2.2). Private-sector organizations are well placed to provide products and services that are tuned to the needs of specific paying customers because they are usually highly specialized, use sophisticated market research tools, and are responsive to the price signals provided by the market. Many of these products build upon government data (e.g., a commercial weather 5A motivation of Orbital Sciences for entering a public-private partnership with NASA was to become a player in the Earth observations industry. SOURCE: Briefing to the committee by S.Kempler, Manager, Goddard Space Flight Center Distributed Active Archive Center, on March 20, 2000. 6In Europe the public sector accounted for 75 percent of the market for commercial data and 59 percent of the market for commercial value-added products in 1997. SOURCE: ESYS Limited, 1997, European EO Industry and Market: 1998 Snapshot— Final Report, Prepared for the European Commission, Guildord, United Kingdom, 82 pp.

STAKEHOLDER VIEWPOINTS 21 forecast), which usually have the advantage of being less expensive and more reliable than other sources of data, but the disadvantage of being available to competitors. A study commissioned by the Computer & Communications Industry Association suggested the following limits on U.S. government-provided online and information activities: • The government should exercise caution in adding specialized value to public data and information. • The government should provide private goods only under limited circumstances, even if private-sector firms are not providing them. • The government should provide a service online only when private provision with regulation or appropriate taxation would be less efficient. • The government should exercise substantial caution in entering markets in which private-sector firms are active. • The government should generally not aim to maximize net revenues or take actions that would reduce competition.7 7J.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, 154pp.

STAKEHOLDER VIEWPOINTS 22 BOX 2.2 DATA POLICIES RELEVANT TO COMMERCIAL ORGANIZATIONS A number of countries are seeking to develop a commercial remotesensing market. One means of doing so is to discourage unfair competition in the form of taxpayer-subsidized products developed by government agencies or scientists. The following U.S. policies discourage government competition with the private sector. • OMB Circular A-76 (1999).a The federal government should not start or carry on any activity to provide a commercial product or service if the product or service can be procured more economically from a commercial source. The policy does not apply to products or services in the public interest. • Commercial Space Act (1998).b NASA should purchase space science data and space-based and airborne Earth remote-sensing data from a commercial provider to the extent possible. • Land Remote Sensing Policy Act (1992).c Unenhanced Landsat-4 and -5 data should be made available to federal agencies and researchers at the cost of fulfilling user requests, and unenhanced Landsat-7 data should be provided to all users under the same terms for noncommercial purposes. The private sector should be allowed to compete for the distribution of unenhanced data and the development of value-added services, and is encouraged to develop the remote- sensing market. Efforts to promote the development of the information industry in general are also being carried out by changing intellectual property law. For example, the rapidly growing use of information technology in fields such as publishing and communications have led governments to consider legislation that will protect databases. The primary motivation and support for database legislation comes from commercial publishers and organizations that believe that their businesses may be placed in jeopardy as a consequence of the ease (a single keystroke) with which databases to which they have proprietary rights might be transferred against their wishes. In short, their concern is with widespread electronic piracy. The European Union has already enacted database legislation (see Box 2.1 for the scientific perspective). Similar legislative bills have been introduced in the United States, but none have passed to date. a<http://www.whitehouse.gov/omb/circulars/a076/a076.html>. b Public Law 105–303. cPublic Law 102–555.

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Reliable collections of science-based environmental information are vital for many groups of users and for a number of purposes. For example, electric utility companies predict demand during heat waves, structural engineers design buildings to withstand hurricanes and earthquakes, water managers monitor each winter's snow pack, and farmers plant and harvest crops based on daily weather predictions. Understanding the impact of human activities on climate, water, ecosystems, and species diversity, and assessing how natural systems may respond in the future are becoming increasingly important for public policy decisions.

Environmental information systems gather factual information, transform it into information products, and distribute the products to users. Typical uses of the information require long-term consistency; hence the operation of the information system requires a long-term commitment from an institution, agency, or corporation. The need to keep costs down provides a strong motivation for creating multipurpose information systems that satisfy scientific, commercial and operational requirements, rather than systems that address narrow objectives. Resolving Conflicts Arising from the Privatization of Environmental Data focuses on such shared systems.

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