Previously Published in Marketing Government Geographic Information: Issues and Guidelines Ed. William Bamberger and Nora Sherwood Bryan. URISA: Washington, D.C. (1993). Reprinted by permission.
1. INTRODUCTION
Questions regarding the commercialization of government data are gaining prominence in public sector policy information discussions. Historically, freedom of information acts (FOIAs) have required governments to provide copies of "public records" free of charge or at the marginal cost of duplication in order to assure open and democratic government. The debate is growing as to whether this policy should be reconsidered. The pricing and selling of data is becoming an issue of increasing significance particularly because of the growth of geographic information systems (GIS) and other computerized databases.
Building a GIS or any database is a time-consuming and expensive process. Government agencies are often the only entities with the legal and financial ability to gather the information necessary to build these large databases. Although a government agency must be able to justify the costs of gathering information and building a database on the basis of increasing efficiency in their delivery of public services, some agencies are discovering that their information also has value to others.
Agencies are receiving requests under FOIAs that have nothing to do with furthering democracy and everything to do with requesters profiting from the use of information assets developed at taxpayer expense. Thus, governments find themselves in the midst of a controversy over whether to provide information for little or no cost under open records laws or to try to utilize their information assets to fund maintenance and development of their information systems. Government agencies are increasingly looking at whether and under what circumstances they should support legislation permitting cost recovery through the sale of government information.
This paper seeks to explore the arguments that are commonly raised in favor of and against allowing governments to sell databases and other public information at greater than marginal costs. The conclusion reached is that in some circumstances governments should be allowed to sell information products to recover the costs of building and maintaining databases.
2. SUMMARY OF ARGUMENTS
The arguments advanced on either side of the question of whether governments should be allowed to sell public information can generally be categorized under the themes of 1) the purpose and fundamental nature of open records laws and 2) who should benefit from government's efforts to collect and organize information. The argument in support of permitting state and local governmental entities to recoup some of their investment in technology by charging market fees addresses these issues in the following way:
The arguments in support of providing information for little or no cost can be summarized under these same two themes, viewed from a different perspective:
Elaboration on these points is provided below as well as some comparisons with what is happening in and outside the U.S. context.
3. AN ARGUMENT IN SUPPORT OF ALLOWING SALE OF GOVERNMENT INFORMATION PRODUCTS
3.1 The Purpose and Fundamental Nature of Open Records Laws
The general premise and purpose of open records laws is so that citizens can be informed of the actions of government officials and employees to hold them accountable. Under FOIAs citizens may investigate the activities of their government "even though such examination may cause inconvenience or embarrassment" (Vermont Statutes, title 1, Ch. 5, [[section]]315). Proponents of governments providing information free or at cost, argue that access to government information is a right not a privilege, and such policies are essential to democracy. Even under moderate scrutiny, this argument does not hold up. Prior to the passage of FOIA at the national level in 1966 (5 U.S.C. [[section]]552) and similar acts at the state level, the public's ability to pry into government files was by no means a given, yet our democracy had existed for almost 200 years. Access to government information is a right created by statute. A fortiori it can be changed by statute.
The existence of FOIAs is by no means a global phenomenon in all democracies. There are numerous examples where democracies have flourished without FOIAs and have continued to flourish even when governments charge for access to certain information. In the U.S., even though each state has an open records law of some sort, legislation varies greatly in scope and content. In Canada, the federal government and some, but not all, provinces have a FOIA. Few European countries have a right of access to governmental information either expressly or by historical precedence.
Supporters of unlimited access argue that making people pay for government information will interfere with access and be detrimental to democracy. However, the requests for which state and local agencies are seeking exemption from open records laws appear to have little to do with democracy. Firms in the information industry seek to obtain government databases under FOIAs for little or no cost to save the expense of collecting the information themselves or buying it in the private sector.
A handful of U.S. states have amended their legislation to address the issue of sale of government information. FOIA is no longer sacrosanct, if it ever was. The political climate is receptive to the idea of placing the burden, in the form of a user charge, on those who stand to gain the most. In Arizona and Oklahoma, agencies are allowed to charge market rates if the information is requested for a commercial purpose. Kentucky exempts a database or GIS from the requirement of public disclosure, if such disclosure is for a commercial purpose. Iowa permits a government body to restrict access or use of a geographic database except under terms and conditions acceptable to the government body. Maine can release GIS data, subject to licensing agreements and can levy "appropriate charges" for the use of GIS services. In Minnesota and parts of Tennessee and Oregon a "reasonable fee" can be charged for information with commercial value. Colorado has legislation that specifically authorizes the fee for computer output to be based on a portion of the costs associated with building and maintaining the information system. If there is one theme that is repeated in this legislation it is the desire to charge more to those who stand to make a profit from the government's investment. There has not yet been a successful challenge that such legislation violates a fundamental right.
Canada's federal Access to Information Act became law on July 1, 1983. Manitoba, New Brunswick, Newfoundland, Nova Scotia, Ontario, and Quebec have FOI legislation in effect. Saskatchewan and British Columbia have acts that have not yet been proclaimed in force, but will be soon. FOI is a non-issue when it comes to sale of government information in Canada. First, all of the acts contain an exemption for information, the disclosure of which would prejudice the commercial position of the government. The acts also contain a second important exemption. Information that is published, or will soon be published is deemed already available to the public. Thus, a requester must obtain it from the published source. That could be a private or public "publisher" of data or on-line services. This second exemption seems to be quintessentially logical. If the purpose of a FOIA is to allow access to government records, making it applicable to information that is publicly available is redundant.
The Canadian federal and provincial governments have actively been pursuing a cost-recovery strategy through database dissemination. In October 1991, the Federal Treasury Board, through the Interdepartmental Working Group on Database Industry Support (IWGDIS) issued a "Quick Primer" and a "Guide for Government Managers" on Disseminating Database Information. A portion of the policy framework set out in these publications is as follows:
. . . ongoing provision of information is expensive and should be undertaken only when:
(1) there is a clear duty to inform
(2) users are willing to pay for the information
The full costs of providing information to satisfy proprietary interests of individuals should not be borne (i.e., subsidized) by taxpayers at large; where appropriate, external user fees and charges should be applied for provision of information and related services.
This new directive strives towards cost recovery up to, but not more than, 100 percent.
Unlike the U.S. and Canada, legislative recognition of a right to access government information is more the exception than the rule in Europe. The longest history of a FOIA probably belongs to Sweden where free access to public documents was instituted in 1766.[1] However, as of 1992, only four European Community (EC) countries have enacted general access to information laws comparable to the U.S. FOIA: Denmark, Greece, France and the Netherlands.[2]
In all of these countries FOI legislation is not seen to be an impediment to democracy nor in conflict with the pursuit of a cost recovery strategy. In fact Sweden, which has the earliest history of open access also has fees for information on the higher end.[3] Some countries, notably the U.K. and the Nordic countries are facing strong mandates for cost recovery from their governments. Ordnance Survey (mapping) in the U.K. recovered 68 percent of its full economic costs in 1991/92[4] . The long-term goal is 100 percent.[5] Nowhere has an active effort of cost recovery seemed to affect the democratic process.
Discussions of open records laws also often overlook two subtle, but extremely important issues. One is whether FOI legislation should be interpreted in a strict and traditional sense allowing an inquiring citizen to obtain a requested document or whether FOI encompasses the right "to demand specific information services or to roam the document archives of public authorities."[6] A contrast sometimes made is between information and information products. Should the right of access include the ability to manipulate data into entirely new documents or the right to obtain an entire database and the software to access it? These are questions which will only be answered by the policy-makers. However, if the purpose of FOIA is to have access to information relied upon by decision-makers, it can hardly be said that an entirely new document could have formed the basis of an earlier decision (although it might be argued that it should have). Furthermore, obtaining data for commercial purposes has nothing to do with holding government accountable.
The second often overlooked issue is the distinction between the right of access to public records and the right to receive a copy of information. If the concern is with citizens being able to inquire into government business, access to government digital information can be provided without permitting the downloading of a database. For example, research services have databases that, for a fee, authorized users can browse but cannot duplicate. In like manner, governments could provide free access to their databases via a terminal at city hall and in libraries, without allowing duplication of their database. A fee could be charged to outside users for connection and on-line time. An additional charge would apply to those who chose to obtain the hard copy result of their search, similar to on-line research services.
Finally, proponents of free government data argue that the prohibition against the federal government obtaining a copyright provides support for the proposition that public records should be in the public domain. The U.S. federal position of prohibiting copyright of government-authored works appears to be unique in the world. Although the prohibition is statutory and could be changed with legislation, that appears very unlikely. The copyright bar, along with the U.S. government's official policy of open access to government records and the right to obtain copies for no more then the cost of duplication, leads, unavoidably, to an environment antithetical to cost recovery. Interestingly, the prohibition against the U.S. claiming copyright in its own works applies only in the U.S. and not when U.S. works are exported. More importantly, state and local governments are able claim copyright protection for their own works. States can and have taken different approaches to seeking copyright protection for their proprietary information. What is shared by many states and all other national and provincial governments, except the U.S. federal government, is a cost-recovery policy that includes the active use of copyright to protect government-owned intellectual property.
3.2 Who Should Benefit from Government's Efforts to Collect and Organize Information?
Often times the protection of the taxpayer is raised as an argument in support of free access to government data. That is, because the taxpayer paid for collection and development of the information in the first place it is an unfair, double burden to have to pay when requesting the information. However, a very basic argument refutes this line of reasoning. Simply because a resource is obtained through expenditure of public funds, does not mean it is available for the use of any taxpayer at no charge. None of us would think of walking into a government office to use a typewriter, simply because it was paid for with tax moneys. User fees are neither illegal nor uncommon in the public sector. For example, toll roads, park admission, or document certification are all forms of user fees.
The above argument for user fees, however, ignores the non-rival nature of computerized databases. Unlike the typewriter example above, the use of a database by one person in no way impinges on the ability of another person to use it at the same time. However, data is frequently treated as a commodity in the private market place. It gains value by not being freely available. There is no reason this could not also be true in the public sector.
Furthermore, the use of the databases often requires large capital resources in hardware and software. It is not the private citizen who is able to take advantage of free government databases but business firms. Some of these firms are not even located in the jurisdiction where the FOIA request is made and thus have paid no taxes whatsoever towards database development. Finally, firms should not be able to turn around and make copies for sale, undercutting the government price. Governments should be able to take advantage of the commercial value of their investment for the benefit of their taxpayers.
Additionally, the demand for government information puts a strain on government departments, distracting them from the tasks of government in order to respond to FOIA requests and misdirecting government resources to benefit a select group of users. Taxpayers, if asked, are unlikely to agree the private sector should be the beneficiaries of government investment. So long as a citizen still has access to information, most taxpayers might support user fees for copies. If a business wants an entire database, an extra fee would not be out of line. A differentiated fee structure could be put in place that provides for reduced or waived fees for the press or non-profit use.
By allowing governmental units to charge for government information, revenue is generated from those who profit from government services. Revenue collected from the sale of government information can be used to reduce the general tax burden or improve data base systems or services. A policy allowing cost recovery provides incentives to the government to provide the type and quality of information and services that the public wants. Bear in mind the lesson from Sweden and the U.K. While it is true they charged some of the higher prices for their information they also have the most advanced national digital basemap development.
Proponents of low-cost access to government information also contend that free and open access promotes innovation and growth in the information industry. It should be noted that economic rational has nothing to do with the original purposes of FOIAs. Open records laws originally were created to address the average citizen's mistrust of government. Even bearing this in mind, there is no evidence that supports the theory FOIAs have directly led to more private enterprise. The predominant U.S. position in database development and value-added products may just as likely be the result of technology push from industry and have little to do with FOIA. Hard research in this area would be extremely useful and interesting, but none yet exists.
What is evident is that open records laws prevent governments from entering into any private-public partnerships for database development. No private vendor is going to risk having their investment given away to their competitors under a FOIA request. The only successful models of public-private partnerships exist in jurisdictions that allow government to claim and commercially exploit a proprietary interest in databases.
4. CONCLUSIONS
Sale of government information and democracy are not incompatible. Globally, the U.S. federal position of not charging for information is unique. It is time to reexamine the policy of giving away taxpayer-financed information assets for free or at minimal cost. An information policy that allows a reasonable fee to be charged for copies of some public information, particularly entire databases, best serves the "public" interest. Access to public records at little or no cost for the purpose of holding governments accountable is not incompatible with such a policy. By permitting fees to be charged to those who directly benefit, governments actually have an incentive to improve services and become more cost-effective, while generating income that benefits the taxpayers in the jurisdiction, not just a few select users.
5. REFERENCES
1 Seipel, Peter, "Paper Laws in Transition", in From Data Protection to Knowledge Machines: The Study of
Law and Informatics, Seipel, P (ed.) Kluwer, Deventer; Netherlands, 1990, pp. 99- 134.
2 Burkert, Herbert "The Legal Framework of Public Sector Information: Recent Legal Policy Developments in the EC", p. 492, Government Publication Review, v. 19, pp. 483-496, Pegamon Press, 1993.
3 Interview in December, 1992, with Xavier Lopez. 1992, Fulbright Scholar studying the European GIS market.
4 Rhind, David, "War and Peace: GIS data as a Commodity" GIS World, November, 1992, p.37-39., p38).
5 Rhind, David "Data Access, Charging and Copyright and Their Implications for Geographical
Information Systems", p. 15, International Journal of Geographical Information Systems, v. 6, no. I, 1992, pp. 13-30.
6 Seipel, Peter, op. cit. n I ., p. 104.