[geo-discuss] Fw: Defence Committee on Met Office (July 2006) - PSI commercialisati on in a sandbox

Sun Jul 30 16:56:33 UTC 2006

Please tell me off for forwarding email from EGIP here if it's getting
boring. I thought this one had a lot of interesting connection points.
It would be good to get to know Martin MALLIET, I think. 
I proposed a publicgeodata.org BOF for http://foss4g2006.org/ 
It might be worth trying to organise an 'Open Knowledge Forum' style
event in Brussels after EuroOSCON, too?

jo
----- Forwarded message from Martin MALLIET <mallietm at ngi.be> -----

Delivered-To: jo at vishnu.tridity.org
From: Martin MALLIET <mallietm at ngi.be>
To: EGIP <european-gi-policy at jrc.it>
Subject: Defence Committee on Met Office (July 2006) - PSI commercialisati
	on in a sandbox
Date: Fri, 28 Jul 2006 10:43:01 +0200

http://www.publications.parliament.uk/pa/cm200506/cmselect/cmdfence/823/823.
pdf
<http://www.publications.parliament.uk/pa/cm200506/cmselect/cmdfence/823/823
.pdf>  

Conclusion 3 (paragraph 19): "We (House of Commons Defence Committee) found
no suggestion that the Met Office's obligations to generate income and
pursue commercial opportunities had an adverse effect on its public service
role, or its service to the MoD and Armed Forces." 

Either they haven't been looking very seriously, or they have a peculiarly
narrow understanding of the Met Office's public service role, excluding such
things as the global exchange of weather data, on which the adverse effects
of government commercialisation are known since a long time: Weiss, Peter
N., "International Information Policy in Conflict: Open and Unrestricted
Access versus Government Commercialization," in "Borders in Cyberspace,"
Kahin and Nesson, eds., MIT Press 1997
(http://www7.nationalacademies.org/besr-publicprivate/International_Informat
ion_Policy.doc
<http://www7.nationalacademies.org/besr-publicprivate/International_Informat
ion_Policy.doc>  and
http://www.ofcm.gov/sai/proceedings/pdf/02_panel1_pt1-5.pdf
<http://www.ofcm.gov/sai/proceedings/pdf/02_panel1_pt1-5.pdf> ). 

Publishing conclusions that are so obviously WRONG can only be understood as
a FAILURE of democratic control. 

"True" commercial revenue is around £20,5m per year or 12,5% of total
turnover, but they (Met Office) recognise that they "need people who have a
very highly developed competence in that area [commercial] and they are not
typically to be found within the Civil Service". 

So they transformed themselves into a performance based Trading Fund in
1996, causing all sorts of serious trouble by making data and information
artificially scarce because they needed the commercial revenue, and ten
years later they're still not making more than £20,5m per year because they
are admittedly not very good at it! And what is the ONLY justification for
this, justification they repeat over and over again? A profit of about £4,5m
per year "offsetting the cost to the taxpayer"! £4,5m! Because £20,5m is
turnover, of which £16m are thus avoidable costs related to those commercial
activities. The other £145m of annual turnover are "competed inside
government (if you will)". 

So we have an annual £4,5m profit "offsetting the cost to the taxpayer" on
the one hand, and an incalculable deadweight loss of user value on the other
hand due to monopolistic government commercialisation making data and
information artificially scarce; a deadweight loss NOBODY even seems to care
about, not the Met Office, nor the Defence Committee. (The trouble caused by
government commercialisation within the WMO weather data exchange system may
actually cost lives in Bangladesh, Peter Weiss one day explained to me, and
I think James Boyle has more on it at
http://news.ft.com/cms/s/cd58c216-8663-11d9-8075-00000e2511c8.html
<http://news.ft.com/cms/s/cd58c216-8663-11d9-8075-00000e2511c8.html> .) 

Under 'private sector involvement' they (the Committee) examine the failure
of a commercial joint venture "to provide brokerage, data and services to
the global weather derivatives market", a market that "was considered to be
particularly attractive because of its success in the United States",
concluding that "the Met Office must do more to test the business case of
commercial ventures, and seek to bring greater business acumen into the
organisation"; but they are nowhere interested in understanding how this
market actually works, nor why it is so successful in the United States.
(Mind you, this is about a very specialised market of FINANCIAL derivatives
from weather forecasts, not about the WHOLE market of weather data.) 

When I wrote in an earlier message that "the detrimental effects of
monopolistic government commercialisation are generally not very well
understood", this appears to be a gross understatement: they are often not
even recognised at all (nowhere in 99 pages of evidence)! 

The general impression I get from this is that the Met Office Trading Fund
is actually more like a SANDBOX, a sandbox for civil servants and members of
Parliament alike to toy with the idea of "pursueing commercial
opportunities", while being totally unaware, as they express it themselves,
of its "adverse effects on the public service role" (the provision of
weather data and information as a public good), nor, as they admit it
themselves, very good at it. 

As I also wrote in an earlier message, something must be SERIOUSLY WRONG
when things can get so far out of line without the Treasury stepping in
(supposing the Treasury still has the essential task of guarding economic
orthodoxy). 

[You may wonder why I'm putting in all this effort to deconstruct
bureaucratic fallacies in the UK. The answer is simple: I've been doing this
for over 15 years now inside my own Belgian PSB, to no avail. Government
commercialisation of PSI in the UK is something like the "Shining Path" to
many PSBs in Europe. Whereas I KNOW that it is nothing else than TR, and has
never been anything else than TR for all those years. And this may very well
be the MAIN OBSTACLE for a campaign such as 'free our data': you can only
WIN by exposing very official policies, that have been conducted for many
years, as what they are, namely TR, exposing many people in the process,
people with influence, pride and EUR150.000 salaries. In 1999 (I think it
was), Geoffrey Robinson resigned as DG of OS after only one year in the job.
I never knew why: he never told me, and his friends said he didn't want to
make it public. I know how OS people saw it: captain abandoning ship. I tend
to think myself that he just came to the conclusion that he had made a
mistake when accepting the job, because he could not see himself managing a
Crown Copyright monopoly as a 600-pound gorilla dominating the market place,
in a sort of permanent and complicated struggle to maintain the balance
between all those antagonistic customers, antagonistic struggle that must
then be glossed over in an endless repetition of unconvincing public
performances by himself, when deep down he knew that it was just plain wrong
for government to go beyond the minimalistic approach towards the provision
of data and information as a public good.] 

PS: It doesn't look to me as if the story of weatherXchange was particularly
'scandalous'. The other 'partner' didn't invest any cash into the joint
venture, they just brought 'market expertise', of which one may wonder what
it was really worth, when the Met Office could so quickly learn how to do
without it. The investment of £1,5m into the joint venture they then decided
to write off, may even have been offset by the proceeds they didn't have to
share anymore with the other 'partner'. What it does show though is that
these 'joint ventures' or 'partner relationships', which play such an
important role in the commercial exploitation of a government monopoly on
PSI, are INEVITABLY MURKY, because the abuse of a DOMINANT POSITION in the
market can never lead to anything else but murky deals. 

-- 
Martin Malliet -  <mailto:mallietm at ngi.be> mailto:mallietm at ngi.be 
Financial Director - Institut Géographique National 
13 Abbaye de la Cambre - B-1000 Bruxelles (Belgium) 
Voice: +32-2-629 85 40 - Fax: +32-2-629 82 12 

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