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Resolving Conflicts Arising from the Privatization of Environmental Data (2001)

Chapter: COMMERCIALIZATION AND PRIVATIZATION

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Suggested Citation:"COMMERCIALIZATION AND PRIVATIZATION." 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 5
Suggested Citation:"COMMERCIALIZATION AND PRIVATIZATION." 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 6

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EXECUTIVE SUMMARY 5 COMMERCIALIZATION AND PRIVATIZATION The terms “commercialization” and “privatization” are commonly used interchangeably, yet they mean different things and have different implications for public-purpose information systems. Commercialization is defined in this report to mean the financial exploitation of government data, whereas privatization refers to the transfer of government functions to the private sector. In the United States, public laws providing for unrestricted, affordable access to government data permit the coexistence of commercial exploitation of government data with public-sector uses, such as scientific research. As a result, commercialization maximizes the use and thus the value of data to all users. The same is not true in countries that exercise intellectual property rights over government data and thus limit the extent to which government-collected data can be used, even in international collaborations. By making it more difficult to integrate global datasets and share knowledge, such a commercialization policy will fail to achieve the maximum benefits provided by international collaboration and the scientific endeavor. Privatization is not without risk to the public because it involves discontinuing government functions with proven value in favor of private-sector services for which benefits may never accrue. The risks are greatest in data collection because of the potential for price increases that disrupt scientific practices or gaps in the long-term record of environmental change. Nevertheless, under certain conditions, the collection of data and/or generation of data products can be transferred beneficially from the government to the private sector. In fact, by failing to do so, the full public benefit may not be achieved. Decisions concerning which functions should be public and which ones should be private must be made case by case. Most decisions will involve the transfer of government functions to the private sector, but some will concern re- entry of the government as a supplier. Recommendation. Before transferring government data collection and product development to private-sector organizations, the U.S. government should ensure that the following conditions will be satisfied: (1) avoidance of market conditions that give any firms significant monopoly power; (2) preservation of full and open access to core data products; (3) assurance that a supply of high-quality infor

EXECUTIVE SUMMARY 6 mation will continue to exist; and (4) minimized disruption to ongoing uses and applications.

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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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