This message (attached) was on govdoc-l and I thought everyone
should be aware of these developments. Please forgive any duplication.
Laura Orr
Reference
email: laura.orr@yale.edu
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From: Clyde Hordusky <chordusk@slonet.ohio.gov>
Subject: (Fwd) Charging for Federal Information on
To: Multiple recipients of list GOVDOC-L <GOVDOC-L%PSUVM.bitnet@YaleVM.CIS.Yale.Edu>
Folks,
This just came over the SDC-list and I thought you would be interested in
reading it.
Clyde Hordusky
State Library of Ohio
65 S. Front Street
Columbus OH 43215-4163
Phone: 614-644-6952
Fax: 614-644-7004 or 614-752-9178
************************** Original Message *************************
From: ANNETTE WATTERS <AWATTERS@ALSTON.CBA.UA.EDU>
Date: Fri, 30 Aug 1996 08:12:08 CDT
To: Multiple recipients of list SDC-L <SDC-L@PSUVM.PSU.EDU>
Subject: (Fwd) Charging for Federal Information on
Reply-To: ANNETTE WATTERS <AWATTERS@ALSTON.CBA.UA.EDU>
Forwarded message:
From: "Deborah Hamilton" <ALSTON1/DHAMILTO>
To: awatters, krivers, spark, ctrent, aijaz
Date: Fri, 30 Aug 1996 08:05:38 CDT
Subject: Charging for Federal Information on the Internet
From: John Knapp <knapp@virginia.edu>
Subject: Charging for Federal Information on the Internet
Copies to: spare@guvax.acc.georgetown.edu
Dear AUBER Friends:
I received the following newsletter from Ed Spar, Excecutive Director of
COPAFS. The topic, charging for federal information on the Internet, is
so important that I wanted to share it with you.
Please send me your comments and carbon them to Ed Spar at
spare@guvax.georgetown.edu
John Knapp
As Yogi said, "If you come to the fork in the road, take it."
Edward J. Spar, Executive Director
Council of Professional Associations on Federal Statistics
But with a new twist. To charge, or not to charge? (on the
Internet), that's the question. If you speak to the folks at
the Bureau of Labor Statistics (BLS), they will tell you that
they have no intention of charging for data disseminated via
its Internet site. Indeed, BLS even has a free data by FAX
system. At the other end of the spectrum, the Census Bureau.
It has announced that its Internet site will come with a
price tag ranging from $150 annually for a single user, up to
$1,500 for an account with over 200 users. These charges are
for basic report retrieving services. More sophisticated
services down the line will probably have other charges
associated with them.
There is a host of issues associated with these differences
in policy. I'm sure there are other questions, but here is a
good start:
1. How do agencies comply with federal constraints
which allow for charging no higher than the cost of
dissemination?
2. Can you compete in this environment without
copyright protection?
3. Will charging disenfranchise segments of the user
community?
4. Given the need for book-keeping, bad debts, etc., is
charging worth it at the end of the day?
Federal Constraints
OMB Circular A-130 states:
Agencies shall set user charges for information
dissemination products at a level sufficient to recover
the cost of dissemination but no higher. They shall
exclude from calculation of the charges costs associated
with original collection and processing of information.
The Paperwork Reduction Act (PRA) of 1995 states:
With respect to information dissemination, each agency
shall not, except where specifically authorized by
statute, establish user fees for public information that
exceed the cost of dissemination.
Language from the House Bill for the PRA (H.R. 830) states:
The government should not treat its information
dissemination activities as general revenue sources. It
is the policy of H.R. 830 that the government should not
make a profit by selling public information collected
and compiled at taxpayer expense to the American public.
Costs of data creation, collection, processing, and
similar functions are not recoverable from the public
user. Typically, these costs would be incurred by the
government, whether or not the information is
disseminated to the public.
How Do Agencies Comply
Agencies that wish to charge may use the concept of "value-
added" as a rationale for user fees. I question whether
this makes any sense. As soon as you create a table in a
manner that makes the data more meaningful, you've added
value to the basic bits and bytes. Another argument the
agencies could use is that there is an ongoing cost to
maintain the system which should be borne by the users.
First, this cost is to some degree offset by the reduction in
cost to produce publications. Second, as implied in H.R.
830 above, the systems developed for the Internet, along with
ongoing updates and maintenance would probably have been
developed for agency use to begin with. Therefore, the
charges should not be passed along to the users.
The National Technical Information Service (NTIS) gets around
these constraints by selling other agency's data and tacking
on what are essentially shipping and handling charges. These
obviously include the cost of keeping NTIS alive. Perhaps to
get around A-130 and the PRA the federal statistical agencies
could consider using NTIS as their central Internet site, but
I haven't a clue if this is legal.
Can you compete without copyright protection?
As most of you know, I spent a good deal of my career
updating and then selling demographic and socio-economic
databases. These databases were based upon data disseminated
by the federal statistical agencies. However, even if I did
not "add value" I could (as many did) simply download the
data bases once, and resell the information at a price
cheaper than the one charged by an agency. In the past
that's how some companies got started. Once the company
includes additional values such as lifestyles, geographic
clustering, etc. without appreciably increasing costs, then
it makes little sense to pay an agency for less information.
All this may change if we ever see public/private sector
partnerships, but these kinds of arrangements are still on
the horizon.
To compound the issue, when an agency charges, it will be in
competition with itself. The White House Home Page now
makes two "Federal Statistics Briefing Rooms" available for
free: The Economic Statistics and the Social Statistical
Briefing Rooms. Will a fee-charging agency only put free
data on these Briefing Rooms? Will that diminish the value
of the Briefing Room reports? Does anyone believe that all
this could be coordinated in the first place?
Will charging disenfranchise segments of the user community?
First, what do we mean by the word "user?" Certainly there
is no one community of users. Instead, we're dealing with a
two dimensional set. On one axis we have the types of users:
governmental policy makers, university researchers, marketing
and sales executives, students, and the general public
unaffiliated with any organization. On the other axis we
have levels of sophistication, ranging from those who still
require books produced by government printing offices or the
private sector publishers, to the latest World Wide Web
screen reading, CD-ROM writing technical experts. It is
important to note that one's level of expertise is not
necessarily correlated to the type of user, except in one
important aspect. There's a good chance that for an
unaffiliated user, that person who is not part of government
or a university or business, but is attempting to retrieve
information on their own, there is a reasonably high
correlation between technical sophistication and the ability
to pay. Will charging for information on the Internet simply
exacerbate this problem? If the philosophical essence of the
Internet is the "democritization of data", then charging runs
contrary to that philosophy. It's probably bad enough that
any decision to rely on the Internet for major data
dissemination will disenfranchise "modemless" users. It
would be even worse to price those on the margin off the
system.
Did I make a profit? It's up to my accountant.
I know, the government doesn't run its business that way (we
hope.) But seriously folks, can you see a federal
statistical agency hounding a high school student for his or
her overdue balance? "Ya late on ya data payment kid. Wid
da vig, ya owe us $1.26. Pay up by da end of da week or we
start breakin' ya function keys."
Anyone who has ever sold data knows about the need to service
the customer - it's always the "small customer" who asks the
most questions. Can you imagine any agency trying to service
2,000 users at $150 a pop? That will yield all of $300,000
and require half the Eighth Army to answer questions ranging
from "What's the difference between a median and an average"
to "Why didn't you use a Mahanalobis D-Square function in
this report?" The personnel overhead charges will eat you
alive, unless you hide them, which you can't, since you'll
need a building 75 stories high just to house the staff
needed to answer questions.
As you can see, each of the four questions discussed above
have many sub-questions associated with them. For the
federal statistical agencies, the basic issue is: how do you
continue to properly serve users in an era of declining
budgets? There are no easy answers. However, I doubt that
the answer will be found on the Web.
John L. Knapp, Research Director
Business and Economics Section
UVa Weldon Cooper Center for Public Service
804/982-5604 Fax 804/982-5536
e-mail: knapp@virginia.edu
Center Web page: http://www.virginia.edu/~cpserv
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