[euopendata] Study says charge for public data...

Sat Jan 15 11:14:25 UTC 2011

All good points being made.  I see it as a simple case of classic market
intervention.  If you want to stimulate economic growth, in this case the
re-use of data, the best approach is to make the 'raw material' free,
minimising barriers to entry.  Once you have a sizable market, you might
then choose to re-introduce pricing, i.e. to withdraw the subsidy.  The less
data that is made free, the smaller the intervention and the slower the
development of any resulting market.

Tim Manning  

-----Original Message-----
From: euopendata-bounces at lists.okfn.org
[mailto:euopendata-bounces at lists.okfn.org] On Behalf Of Peter Krantz
Sent: 15 January 2011 10:03
To: James McKinney; euopendata
Subject: Re: [euopendata] Study says charge for public data...

On Thu, Jan 13, 2011 at 22:40, James McKinney <oxford.tuxedo at gmail.com>
wrote:
>
> I agree there is no need. But if a government chooses to have NC 
> restrictions in order to generate revenue from commercial use, then, 
> assuming it is at all successful in generating revenue, I have yet to 
> hear a compelling argument that it should stop doing so.
>

Let's try a pure financial perspecive.

1. Misconception of "revenue"

It depends on how you calculate/define "revenue". I did a case here in
Sweden where I looked at the swedish weather data that only is accessible
under commercial terms. The agency responsible (SMHI) has some 200 M Sek in
annual revenue from selling data. It is of course a valid question where
that money should come from if data was provided free? [1]

When you look at where the revenue comes from (the first line
customers) I found that 71% is from _other government organizations_.
So the actual revenue from a pan-government perspective is 58 M instead of
200 M. From this you can also remove any profit made (in this case 9 M Sek).
Of these 49M I have reason to believe (because there is not enough
information) that a large part come from commercial data companies that in
turn resells data (with very little added value) to other government
agencies. So the figure is well below 49M. A similar scenario is for geodata
where our agency states in their annual report that a majority of the
revenue comes from other government agencies.

2. Transaction costs between agencies

It is very likely that transaction costs between agencies could be
considered "waste" from a lean production perspecive. They cost money for
tax payers and provide no tangible benefit.

3. Reduced capability to provide efficient services for other agencies.

Now, if you take an outside-in perspective it is interesting to talk to
those who _didn't buy data_. I have heard of several project proposals in
the public sector that weren't started because _data would be too expensive
to buy to fit in the budget_. Thus, the second-line effect of agencies not
buying data is that there are projects with a percieved value to society
that aren't materialized because a different agency is financed with fees
for data. What is the inefficiency cost of not running these projects?

4. Unfair competition scenarios

If an agency starts adding value by refining raw data it collects I would
argue that the public sector is in competition with the private sector (a
common scenario I am sure). The advantages of having direct free access to
the raw data and being a government agency with reduced financial risk makes
it difficult to compete for a startup with an innovative use of technology.
If a majority of the customers are from thepublic sector their are more
likely to buy from another agency.

5. Reduced efficiency in the private sector

Weather data is a key component to regulate energy use in buildings (e.g.
planned heating etc). What is the cost of having fewer buildings install
data driven systems? It is likely that a lower price of this type of
equipment due to reduced pricing of weather data could lead to a large
decrease in energy use covering the remainder of the initial perceived
revenue.

The benefit of data appears when it is used. I printed that and put it on my
wall.

Regards,

Peter

[1]: http://www.opengov.se/blogg/2009/vem-betalar-data/ (only in swedish
unfortunately. pls use google translate)

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