9
New Institutions
9.1 INTRODUCTION
This chapter presents interventions, strategies, and models for new institutions that could make licensing a more powerful and attractive tool for government agencies, commercial firms, and other affected stakeholders.1 The institutions we propose follow naturally from the problems, experiences, and analyses presented in earlier chapters. The vignettes between these earlier chapters provide glimpses of how future operational environments might better serve the needs of the broadest range of stakeholders in geographic data and services.
In what follows, the committee does not try to present detailed blueprints for any specific program. Instead, we describe a range of generic options. For now, community debate should focus on which options deserve to be pursued. Once these decisions have been made, detailed design will be needed to make the new institution maximally useful and to ensure that it balances the interests of all parties affected by licensing of geographic data and services to and from government.
The chapter is in three sections. The first focuses on the need for standard-form licensing agreements and new institutions for coordinating government acquisitions. The second explores the related concepts of a national commons and marketplace for geographic information. The third
section discusses how the commons and marketplace might evolve to benefit all stakeholders.
In contrast with the preceding chapter, the implementation of most of the ideas in this chapter will take time. Building new mechanisms and institutions to make licensing more productive will require sustained initiatives by federal, state, and local agencies, and, in many cases, the private sector.2
9.2 STRUCTURAL INTERVENTIONS
9.2.1 Standard Licenses and Form Agreements
Geographic data contracts come in a diverse range of styles and levels of complexity. Contracts for large transactions often are negotiated “from scratch.” Contracts for small transactions often use idiosyncratic “form contracts” that differ from vendor to vendor. Greater standardization could lead to reduced uncertainty in procurement, lower negotiation costs, and probably increased numbers of licenses. At a minimum, it may be feasible to standardize straightforward provisions covering liability, indemnity, attribution, jurisdiction, and choice of law.
Some standardization will emerge naturally as parties gain experience in contracting.3 Agencies, trade associations, and public interest groups can accelerate this process by creating recommended contracts and compiling online or printed form books. Some steps already have been taken in this direction4 and further progress is likely.
Standard language and (eventually) standard form licenses are key to many of the recommendations contained in this report. Relative to the amount of time and effort that industry expends each year in negotiating
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Some actions, including the development of model licensing agreements, could evolve more rapidly. |
3 |
This is not quite as easy as it sounds. Some vendors keep contracts secret in hopes of gaining a competitive advantage. Nonetheless, disclosure normally should be a matter of enlightened self-interest, and the potential benefits to the industry far outweigh competitive advantage in most cases. |
4 |
For example, the U.S. Geological Survey (USGS) has recently circulated a proposed Model Contract for “Purchase of Satellite Data.” Public Technologies, Inc., also promotes standard contracts through its “best practices” program for local governments, and the Open Data Consortium has released a model data distribution policy (see <http://www.opendataconsortium.org>). |
and interpreting contracts, the required investment is likely to be modest. Immediate and long-term benefits include
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Reduced Negotiation Costs. One witness reported being able to jumpstart stalled negotiations by adopting old licensing language.5 Widespread dissemination of standard language and licenses would similarly reduce the time and expense needed to reach agreement.
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Reduced Uncertainty. Contracts are often ambiguous. If the drafters’ intent is not obvious, often, as a last resort, judges will interpret the contract and supply meaning. Form language accelerates this process because it facilitates the development of commonly accepted interpretations. It also lets courts revisit, and resolve, points of ambiguity. In addition, standard contracts provide familiarity and certainty. Corporate counsel are more apt to approve license terms that have withstood the test of time and litigation.
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Improved Market Efficiency. Reduced negotiation costs and well-defined terms make markets more efficient. Form contracts advance these goals.
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Increased Automation. Standardized contracts lower the cost and complexity of computerization. Good form contracts are an important precondition for advanced data brokerages, business-to-business systems, and online markets.
Best-business-practice contracts eventually will find their way into the government geographic data market. Agencies can accelerate the process by encouraging organizations involved in geographic data transactions to develop, recommend, and publicize high-quality clauses and form agreements.
Recommendation: Agencies, trade associations, and public interest groups should exercise leadership in promoting standard clauses and form licenses throughout the geographic data community.
9.2.2 Coordinating Government Acquisitions
Licensing can facilitate coordination of geographic data procurement by government agencies in two ways. First, agencies can agree to coordinate their acquisitions under multiagency, or umbrella, licenses. Second, government can create institutions that achieve coordination “automatically.” Automation and market signals hold great promise for improving large-scale coordination within and among federal, state, and local government levels.6
9.2.2.1 Multiagency Licenses
Individual agencies have a strong incentive to participate in licensing arrangements that cut across traditional agency functions. In most cases, the rewards are bulk discounts and shared transaction costs. Nonetheless, the practicality of this model depends on the facts of each case. For example, the benefits of collaboration, although strong, are sometimes dismissed on grounds that an agency’s needs are “unique.” Coordination also may be too costly for small transactions or may become increasingly difficult as the number of agencies grows. In general, agencies face four options when considering procurement under license:
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Individual Procurement. This option is sometimes rational, particularly for small, one-off acquisitions when individual agencies find it prohibitively expensive to (a) anticipate all future uses throughout government, (b) identify each user, (c) determine the needs and preferences of these users, and (d) negotiate and administer a governmentwide contract. Although agencies have a built-in incentive to discount or ignore benefits that accrue to other agencies or parties, they should work to overcome this bias where appropriate to support broader government goals.
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Click-wrap or Shrink-wrap Licenses. Mass-market, low-cost data products are the strongest candidates for uncoordinated procurement. Such products typically are bundled with shrink-wrap or click-wrap licenses that limit the customer’s right to use and redistribute data.7 Although agencies could theoretically band
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Multiagency and automated procurement by purchase, as opposed to licensing, may result in some or many of the same benefits. |
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The enforceability of these clauses is unclear (see Chapter 5, Section 5.3.1). |
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together to obtain better terms, the required transaction costs likely would exceed any benefits,8 particularly when an agency’s mission limits data usage to internal use.
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Uplift Licenses. Transaction costs can be high when individual negotiation is required. However, the incremental expense of negotiating uplift rights for the potential benefit of other agencies on the same or similar terms is usually low. Government has made progress in using uplift rights to achieve coordination across agencies.9
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Coordinated Acquisitions. Consortia of interested government entities—sometimes known as cooperative funding partnerships—may be organized to bargain with vendors.10 Because consortia are voluntary, members can walk away at any time, making most consortia highly responsive to member needs. Assuming that the needs of members are not too diverse, consortia often can be unified sufficiently to be effective negotiators.
Most federal agencies take an approach in which a single “lead agency” represents multiple users across multiple agencies. This hierarchical strategy has benefits and costs compared to consortia. On the benefits side, vesting discretion in a lead agency minimizes the need for ongoing interagency meetings and interactions. Furthermore, lead agencies typically possess above-average technology and licensing expertise and will acquire additional expertise by negotiating on behalf of others.11 On
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Transaction costs include, but are not limited to, time spent on interagency meetings, negotiations with vendors, review by government lawyers, and the logistics of copying and distributing data to any employee who requests it. |
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See, for example, USGS Policy 01-NMD001 (April 2001) (“Procurement contracts should also contain terms to allow additional rights to be purchased”). The National Oceanic and Atmospheric Administration (NOAA) has been particularly active in organizing uplift rights around specific projects and geographic areas (e.g., the NOAA/Intermap Santa Cruz/San Mateo County digital elevation model license that provided uplift rights for the Federal Emergency Management Agency (FEMA), USGS, and a private partner). The National Geospatial-Intelligence Agency (NGA) also uses uplift rights in contracts. |
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See Chapter 4. |
11 |
For example, NGA has acquired licenses for various commercial street-centerline and fire station files on behalf of the federal government (although the license does not permit use by the U.S. Census Bureau). Similarly, USGS established a program for government acquisition of Landsat and Systeme Probatoire |
the cost side, lead agencies tend to be less sensitive and less knowledgeable of the explicit needs of interested users across the agencies they represent. This lack of knowledge may limit the lead agency’s ability to negotiate win-win agreements with vendors. Presumably, a lead agency also may be tempted to place its own needs ahead of others. Testimony from the USGS to the committee acknowledged both the weaknesses and potential of the lead-agency approach:
Even with the existence of a centralized procurement mechanism [for satellite images…it was still very difficult to truly represent a single unified voice on behalf of the government during negotiations with SPOT Image Corporation. If the federal agencies could have unified their unique data requirements and associated funding into a single negotiation with SPOT, the government would have been in a much better position to negotiate licensing terms.
Federal agencies are considering initiatives that would extend multiagency procurement coordination to larger scales.12 The extent to which governmentwide consortia can be simultaneously manageable and responsive is unclear.
9.2.2.2 Markets and Automation
Cooperation among government agencies acquiring licensed geographic data need not involve coordinated negotiations. An alternative is to cooperate in creating institutions that reduce the costs that each agency
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Pour l’Observation de la Terre (SPOT) data in 1986. The acquisition licenses ranged from single-agency contracts to governmentwide contracts. Although the licenses were optional, more than 30 federal agencies have acquired over $42 million worth of images through the USGS program. Paperwork was reduced to a single purchase order. In 2001, USGS acquired full ownership of all Landsat data, which can now be shared without limitation. SPOT data are still distributed under the original arrangement. |
incurs in acquiring data.13 We discuss two prominent candidates: data brokerages and business-to-government networks, and suggest a potentially cost-effective interim compromise (a standard license provision search capability):
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Data Brokerages. Government employees cannot take advantage of previously acquired government data (including uplift rights) unless they know about them and the details of limitations on use. During the 1990s, USGS launched an online “Data Brokerage” with which federal employees could search for previously licensed data. USGS ultimately abandoned the site because it was rarely used. In addition, the cost and complexity of tracking multiple, nonstandard license terms were prohibitive.
Nevertheless, the USGS’s initiative may have been ahead of its time. The basic concept is sound and could yield substantial savings for the federal government, assuming that at least some previously licensed data are relevant to current needs and the limitations on use are not onerous to understand or meet. Data brokerages will become increasingly feasible if government and industry start to use standardized licenses.
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Business-to-Government. USGS’s data brokerage system would have required government employees to point and click their way through on-screen licenses. In principle, computers can do this job quicker and more efficiently. Many commercial companies already use business-to-business (B2B) systems to eliminate this work-load. In a typical system, employees report their needs to a computer that aggregates companywide demand, procures bids, “negotiates” contracts, and pays invoices. B2B is particularly important in manufacturing (automobiles, aerospace) and retail industries (warehouse stores) where companies need to manage just-in-time inventory. Business-to-government (B2G) data licensing systems eventually could accomplish similar coordination of standard data acquisitions from competing vendors at significant savings.
The delivery of geographic data and services through B2G systems will be increasingly important in the long run. There are already a number of B2B and B2G Web mapping services delivering standardized location services such as geocoding, route
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mapping, address validation, localized weather, traffic reporting, and property risk assessment.14 Predictably, standard interfaces and protocols, along with uniform licensing forms, are emerging to reduce the cost and complexity of syndicating these services. These types of online services hold significant potential for many public-sector organizations and smaller commercial companies that cannot afford the upfront costs of hiring staff and acquiring hardware, software, and data to deploy their own service.
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Standard License Provision Search Capability. A compromise between data brokerages and B2G might be to develop and support a standard license provision search capability for geographic data.15 Each time a government agency licenses data from a vendor allowing limited use by others or acquires uplift rights from a vendor, the agency would post the specific license terms (ideally reduced to a uniform code) and related metadata on its Web site.16 In most cases, commercial search engines (e.g., Google) would digest the posting within days, eliminating the need for a central index. Thereafter, other government users could find licensed geographic data that meet their needs by using standard text Web searches. By taking advantage of commercial search engines that search for license provisions and metadata in standard forms, agencies could build a continually updated inventory of previously licensed data at little or no cost to themselves. This could also lower the cost of acquiring additional rights or data.
A standard license provision search capability would not support B2G-style automated procurement. However, it would be much simpler to build. Furthermore—and unlike B2G—small
14 |
See, for example, <http://www.mapquest.com/solutions/product.adp>; <http://www.microsoft.com/mappoint/webservice/default.mspx>; <http://www.meteorologix.com/industry/homeland.cfm>; <http://www.questerra.com/platform/index.html>; <http://www.esri.com/software/arcwebservices/about/overview>. |
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For example, the Creative Commons project supports the automated generation of standard license provisions, the posting of licenses with the digital work product, and promotes ease of Web search in support of open access sharing and use. If desired, a similar online licensing support approach and search capability might be developed for support of more restrictive licensing terms in the use of geographic data. Creative Commons concepts are described at <http://www.creativecommons.org>. |
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Alternatively or additionally, the vendor could post this information on its Web site. |
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vendors could participate immediately. Finally, the capability would provide a useful stepping-stone to B2G.
Recommendation: Agencies should continue to keep abreast of data brokerage and automated purchasing system developments that might help them coordinate data acquisitions from competing vendors.
9.3 TOWARD A NATIONAL COMMONS AND MARKETPLACE
Society benefits when its members can find and use desired existing resources and products. Facilitating the sharing of and trade in data through the development of an efficient and user-friendly system, including a well-organized commons connecting users and contributors and an efficient market connecting buyers and sellers, would be a valuable endeavor.17 Although no such online environment currently exists for geographic data, The National Map, Geospatial One-Stop, and the NSDI provide first steps.
In this section we describe a vision for a National Commons and Marketplace in Geographic Information.18 In a later section we suggest how the two might be integrated and operate seamlessly, and discuss options for who should develop and host them.
9.3.1 A National Commons in Geographic Information
Commercial, scientific, and nonprofit users rely heavily on public domain geographic information to create value-added resources. Such resources can be expanded by a National Commons in Geographic Information (hereinafter “National Commons”) that aids creation of public
domain resources and open access content and makes them readily accessible.19
The overarching goal of the National Commons is to create a broad and continually growing set of freely usable (i.e., no monetary charge for use) geographic data and products at local scales similar in effect to the public domain datasets and works created by federal agencies. To succeed, the commons could provide easy, effective, and integrated mechanisms that could, for example,
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enable any geographic dataset creator to construct a license that grants permission to use his or her data,
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enable novice creators to quickly generate accurate and substantive standardized metadata for a geographic data file,
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enable data contributors to take advantage of form liability disclaimers,
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embed identifiers automatically in any commons dataset so that any future user can link back and recover the detailed metadata and license conditions for the file,
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allow for deeper search capabilities of geographic data and metadata than are currently available, and
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provide a long-term archive for commons geographic datasets.
Initial components of a National Commons could be implemented almost immediately with minimal investment (e.g., the first three bulleted items might be implemented as extensions of Geospatial One-Stop and Creative Commons efforts), while the fully envisioned system appears achievable on the basis of existing knowledge.
Not all local governments, private citizens, or private companies will want to make any or all of their geographic datasets or products available in the National Commons. Nevertheless, more people will participate once a large, user-friendly capability is available. A simple user interface (see, e.g., Box 9-1) could facilitate this process.
Today’s geographic data users can assume that most U.S. federal geographic datasets are available with no intellectual property limitations attached to them;20 but this assumption is not valid for most other digital geographic information. A National Commons in Geographic Information could allow any data creator to quickly construct a comprehensive, standard, and yet flexible license granting others permission to use the
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See Chapter 1, Section 1.4, for definitions of public domain, open access content, and geographic information commons. |
20 |
See Chapter 5, Section 5.4. |
creator’s work. By analogy with the Creative Commons license process, creators might be offered license options to (1) allow public domain use for any purpose, (2) require attribution, (3) allow or disallow commercial uses, (4) allow or disallow modification of the work, and (5) allow modification as long as others use the identical license with their derivative works (commonly referred to as “share-alike” or “copyleft”). The commons license would also offer standard liability disclaimers—an important feature for utilitarian works such as geographic data upon which decisions are likely to be based.
Last, the commons license model21 gives value-adders the ability to charge for the service of transferring their work to others22 and a variety of support services.23 However, data contributors would receive no royalties or rents from others for use of their data.
Recommendation: The geographic data community should consider a National Commons in Geographic Information where citizens can post and acquire commons-licensed geographic data. The proposed facility would make it easier for geographic data creators (including local to federal agencies) to document, license, and deliver their datasets to a common shared pool, and also would help the broader
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The commons license model has objectives similar to those of licenses used in related open source and open access initiatives. Apache, Linux, Perl, and Sendmail are examples of widely used software developed through distributed contributors adhering to open source licenses. Examples of collaboratively produced open access information works may be found at The Directory of Open Access Journals (<http://www.doaj.org>), UNESCO Social Science Online Publications (<http://www.unesco.org/shs/shsdc/journals/shsjournals.html>), Wikipedia (<http://www.wikipedia.org>), the Open Textbook Project (<http://www.otp.inlimine.org>), and the Gutenberg Project (<http://www.gutenberg.net>). For a sampling of open source software and open access products directly germane to the geographic information community, consult <http://freeGIS.org>. The use and sharing expectations in most of these open collaborative efforts are defined by explicit licenses or published policies. |
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For example, charges are made for downloading the open source movie clips found at <http://nothingsostrange.com/open_source>. Those who pay the fee to download are free to use, copy, and disseminate the clips as well as use them in other commercial and noncommercial derivative creations, provided that attribution is given. |
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Redhat (<http://www.redhat.com>) is a corporation that generates income by delivering recommended open source software and providing professional services, technical support, and training in the use of such software. |
community to find, acquire, and use such data. Participation would be voluntary.
Box 9-1
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9.3.2 A National Marketplace in Geographic Information
The Internet has enhanced the ability of commercial businesses, government, nonprofit organizations, and individuals to find geographic data that meet their needs. Commercial vendors make their data offerings known and available through corporate Web sites, online index sites, and portals. Yet, as discussed in previous chapters, the ability to find, assess, and acquire these data could be far more efficient—to the benefit of all. A national marketplace in geographic information would provide an online environment where any seller or licensor, no matter how small, could efficiently post its geographic data offerings in a searchable form using a menu of standard license choices and metadata reporting. Would-be customers could search through the thousands of data offerings, select the product that meets their technical and license condition needs, perform efficient comparison shopping, and buy or license the desired geographic data file within minutes of finding it.
In the simplest implementation of the marketplace, customers would obtain the data directly from the vendor after “clicking through” to contact its server. In more advanced implementations, the seller or licensor might define for each dataset or group of datasets a pricing formula that varies with differing standard license or sale conditions. Advanced systems could also provide automated financial transactions and product delivery. Sellers’ accounts could be automatically credited with funds from direct or downstream derivative product sales. Sellers could alter their geographic data offerings, descriptions, license conditions, and pricing formulas at any time.
Recommendation: The geographic data community should consider a national marketplace in geographic information where individuals can offer and acquire commercial geographic data. The proposed facility would make it easier for the geographic data community to offer, find, acquire, and use existing geographic data under license. Participation would be voluntary.
The marketplace vision assumes that even a small company whose core business does not involve selling geographic data can participate. Simple, user-friendly systems (see, e.g., Box 9-2) will be the key to extending the marketplace to the largest possible number of buyers and sellers. The immense variety of traded geographic data and services is dealt with in this marketplace vision by standardizing the documentation of such data and services and making that documentation searchable efficiently and effectively.
So far, we have discussed the commons and the marketplace as if they were separate institutions. In practice, the software and hardware needed to build both projects would be very similar. For this reason, it would make sense to pursue both concepts simultaneously—as a single facility or closely integrated facilities. Most consumers do not care whether they use “public domain,” “commons,” or “commercial” data, provided they are able to find information meeting their desired technical requirements, use conditions, and costs.
Box 9-2
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9.4 POLICY CHOICES
A properly designed and integrated online National Commons and Marketplace in Geographic Information (hereinafter, the National Commons and Marketplace) could make agency licensing more efficient, reduce wasteful duplication between agencies, accelerate the availability of local datasets in the public domain and commons, improve archiving of geographic data, increase the range of geographic data products available to consumers, and foster competition among private vendors. However, these outcomes are far from inevitable. Absent strong agency leadership, the institutions that actually emerge may offer fewer benefits.
A National Commons and Marketplace might be operated by government, the private sector, or through a division of responsibilities between them. Privately owned institutions pose significant antitrust concerns.
9.4.1 Government as Operator
The National Commons and Marketplace could be hosted and operated by government. A number of National Research Council (NRC) reports24
have emphasized government’s role in promoting high-quality, nationwide layers of “framework” geographic data to create a basic public domain resource to meet the needs of all levels of government and the commercial sector. Interrelated initiatives such as The National Map, the U.S. Census Bureau’s MAF/TIGER (Master Address File/Topologically Integrated Geographic Encoding and Referencing system) modernization, FEMA’s floodmap modernization program, NOAA’s Digital Coast program, Bureau of Land Management’s cadastral and resource mapping programs, and Geospatial One-Stop are helping to move framework layers toward national coverage. However, the overall NSDI and The National Map envisage a combination of basic uniform national (“blanket”) coverage and more patchy, varied-scale (“patchwork quilt”) coverage for local data.25 This national vision recognizes that the federal government cannot (and should not) provide more than a small percentage of the geographic data used by society.
Most visions for expanding and maintaining the NSDI stress the need to capture or access detailed local information that is already being gathered for other purposes by state, local, private, and nonprofit entities. However, past federal appeals for data donations have not always been successful. Entities are reluctant to contribute significant resources to a system that does not directly promote their own missions or needs.
A National Commons and Marketplace could provide a powerful new vehicle for soliciting donations. Sellers who use the facility could reach more buyers. This in turn would make the data vendors’ existing products and services more valuable. In exchange for this service, agencies could adopt the following rule: Creators who post a data file for sale over the “marketplace component” must at the same time deposit a copy of the data file in escrow to the secured archives of the National Commons and Marketplace. Escrowed files become available after five years through a
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New Partnerships in Remote Sensing: Government, the Private Sector, and Earth Science Research, Washington, D.C., National Academies Press; NRC, 2003, Using Remote Sensing in State and Local Government: Information for Management and Decision Making, Washington, D.C., National Academies Press. |
commons license selected by the creator at the time of deposit or, if no commons license is generated, enter the public domain.26
This “timed donation strategy” is a natural extension to current USGS policies that use licensing to draw data into the public domain.27 Such a strategy could yield multiple benefits:
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Offering Voluntary Participation. Donations would be strictly voluntary. In practice, the decision to donate data would amount to a business judgment that access to the national marketplace was worth any eventual donation. This probably would happen fairly often; and because most geographic data tend to have a finite shelf life, the approach could promote the long-term expansion of the public domain and geographic information commons. No cash payment would be required, and the “data payment” would be years into the future.
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Changing Agency Culture. A timed donation strategy would give agencies an incentive to attract as many participants to the National Marketplace as possible. The resulting “culture shift” would foster greater sensitivity to commercial concerns and more coordination between the private and public sectors.
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Perception of Fairness. While often misplaced, a perception exists that it is unfair for private companies to freely and directly benefit from geographic data investments made by local, county, state, and federal agencies. Through a timed donation strategy, private
26 |
Five years seems to be reasonable given the shelf life of most commercial products, but the definitive number should be based on a detailed study of the market. |
27 |
See USGS Policy 01-NMD001 (April 2001), which states that agencies should “convert licensed data to the public domain data by negotiating termination dates for license restrictions. The appropriate termination date may vary depending on the specific data type.” See also the first two recommendations in National Satellite Land Remote Sensing Data Archive Advisory Committee, 2000, Access to Restricted Data: A White Paper, available at: <http://edc.usgs.gov/archive/nslrsda/advisory/RestrictedDataFinal.html> (“In order to fulfill its mission, the Archive may acquire restricted data as long as the restrictions expire in a specified, finite period of time” and “Accept restricted data into the Archive only with a sunset clause on every restriction; for example less than the 10-year limit exercised by Congress regarding Landsats 4 and 5 [Thematic Mapper] data. Restricted data subject to royalty arrangements should be avoided.”). |
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companies that build on the data investments of government agencies would eventually donate their data to the public.
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Improving Archiving. Currently, agencies find it difficult to track data worth archiving unless the private sector notifies them that data are about to be discarded.28 Timed donations can resolve the problem by making a copy archived with government available after a specified number of years or by making it easier to monitor data.
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Reinvigorating the Public Domain. A successful National Commons and Marketplace would reinvigorate the public domain by making geographic data easier to find, share, and exchange. Timed donations would increase the flow of formerly proprietary data into the public domain and commons.
Recommendation: The geographic data community should consider a system of “data donations” in which anyone who sells data using the National Marketplace in Geographic Information automatically agrees to donate their data to the commons after a commercially reasonable time, which we provisionally set at five years.
9.4.2 Private Sector as Operator
There are three generic structures that a privately operated facility could follow.
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Vendor-Operated Facility. An existing vendor could operate the National Commons and Marketplace as a sideline to its core business.29 The social value of such an enterprise would depend on its business model. Economic distortion (“deadweight loss”) is smaller for models that charge users a fixed, one-time fee for using some form of the National Marketplace. For this reason, business models based on (a) one-time fees set at levels that are
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reasonable for most that would want to participate, (b) advertising revenues, or (c) the requirement that users make reasonably priced upfront software purchases are usually benign. Inefficient markets that try to “steer” customers toward specific products, such as by favoring those products in site search algorithms, would need to be discouraged as well. Finally, a single vendor-owned National Commons and Marketplace would almost certainly raise significant antitrust issues.30
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Stand-alone For-profit Business. The National Commons and Marketplace could operate as a stand-alone business like CommerceOne, a private corporation. A stand-alone business model would be similar to the vendor-operated case, except that a neutral third party not offering data products itself would have no incentive to “steer” consumers toward certain products. The stand-alone business model would also alleviate—but not eliminate—possible antitrust concerns.31 Finally, a stand-alone marketplace is likely to garner consumer confidence much faster than a vendor-operator facility. This makes it potentially easier to build and reach critical mass.
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Nonprofit Organization. The public policy benefits of organizing the National Commons and Marketplace as a private nonprofit organization are similar to those offered by a stand-alone business. The main difference is that nonprofit status would reduce—but not eliminate32—the temptation to set high access fees. A nonprofit organization also would be significantly more transparent. The public interest benefits in supporting a public commons and a timed donation strategy might be the primary basis in qualifying
30 |
Because of “network externalities” (see Chapter 6), a successful National Commons and Marketplace would be near monopolist almost by definition. The controlling firm could potentially leverage this power to gain market dominance over data and software. |
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A stand-alone business could still possess monopoly power. Unlike a vendor-operator, however, it would not exploit this power to dominate other markets in which it operates. |
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Nonprofit status does not eliminate the danger of monopoly pricing. At a minimum, even nonprofit entities must break even over the long run. More fundamentally, management frequently is tempted to fund new projects and initiatives. The resulting expense tends to push most organizations toward profit-maximizing behavior. In addition, nonprofits may have incentives to divert what otherwise would be profits into perquisites for management. |
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for nonprofit legal status. All of these factors would reduce the potential for antitrust violations compared to a stand-alone business.
Given current budget pressures, agencies could decide to encourage development of a privately operated National Commons and Marketplace as the best available option. If so, agencies would still need to ensure that such a private facility served the nation’s geographic data needs. First, agencies would need to arrange for or accommodate virtual or physical integration between The National Map, Geospatial One-Stop, and related federal geographic data programs on the one hand, and the privately operated National Commons and Marketplace on the other. Second, agencies would need to ensure that a privately operated National Commons and Marketplace did not lead to significant antitrust and economic inefficiency problems. Finally, agencies would have to step in if the private sector failed to create the National Commons and Marketplace within a reasonable time frame so that government’s goals and mandates were not met.
9.4.3 Division of Responsibilities
To the typical person offering data through the envisioned National Commons and Marketplace—whether intending to sell data in the marketplace or dedicate them to the commons—the license and metadata creation processes would look and feel the same. Furthermore, data searches across the commons and marketplace would be seamless—in a typical search of the virtual facility, all datasets meeting the search conditions would be returned regardless of whether licensed under a market or an open access form of license. That said, it is technically possible for different entities to host and operate different components of the system. For example, the commons component might be hosted by government while the marketplace component was hosted by a nonprofit organization. Many alternative architectures are possible. In principle, numerous commercial and government services could offer competing browsers to search for data, support transactions, and deliver data over the National Commons and Marketplace.
9.5 SUMMARY
New institutions could make licensing a more powerful and attractive tool for government agencies, commercial firms, and other affected stakeholders. The possibilities include model licenses, multiagency licenses, automated search capabilities, and an integrated National Commons and Marketplace. Because geographic data sharing and exchange relationships are complex, fundamental improvements cannot be based on a single strategy or intervention. Rather, agencies must evaluate their mandates and missions and consult constituencies to identify strategies and interventions that, taken together, yield the greatest net benefits. These benefits should extend beyond the agency and their immediate stakeholders to embrace the broader public interest.
A well-organized geographic data commons connecting users and contributors and an efficient market connecting buyers and sellers could make agency licensing more efficient, reduce wasteful duplication between agencies, accelerate the availability of local datasets in the public domain and commons, improve archiving of geographic data, increase the range of geographic data products available to consumers, and foster competition among private vendors. Such a National Commons and Marketplace might be government-operated, vendor-operated, a stand-alone for-profit business, or a nonprofit organization. Major components also could be operated by different entities. Assessment of options should address and accommodate the interrelationships and interdependencies among technical, institutional, legal, and economic issues. Whatever the chosen path, strong agency leadership will be needed to ensure maximum benefits.
Recommendation: Federal agencies should investigate options for and encourage development of a National Commons and Marketplace in Geographic Information.