# Presentation: 677781

## Borders in Cyberspace:Conflicting Government Information Policies and Their Impacts on International Meteorology

- Peter Weiss
- U.S. National Weather Service

## U.S. Public Information Policy

- “...government information is a valuable national resource, and [] the economic benefits to society are maximized when government information is available in a timely and equitable manner to all.”
- From OMB Circular No. A-130

***“******Open and Unrestricted Access to Public Information”***

## US Information Dissemination Principles (from OMB Circular No. A-130)

- Federal agencies should:
- Actively disseminate all public information;
- Without restrictions or conditions;
- At no more than the cost of dissemination;
- While taking advantage of private, academic and other channels of dissemination;
- And using best available technologies, e.g. internet, WWW, satellite downcast, etc.

## Government Information and the Economy

- Taxpayer-funded government information – from corporate data from the Securities and Exchange Commission to patent data from the Patent and Trademark office - is contributing to the spectacular growth in the information retrieval and database industries:
*From a $4 billion industry in 1994 to an expected $10 billion industry in 2002.*
*From 900 database vendors in 1991 to 2400 vendors in 1999.*

## Weather and the Economy

- Economic Decisions are based on NWS data and products
- Significant Economic Benefits to the Nation from Open and Unrestricted Data Policy
*“**Weather impacts $2.2 Trillion [per year] of our economy” – Dean John Dutton, Penn State University*
*Commercial meteorology industry - $500M per year*
*Growing weather risk management industry approaching $8 Billion per year – Weather Risk Management Association*

## U.S. Market for Private Weather Services

- Total US: $430 million

- Source: 1999 private survey

## The U.S. Public/Private Partnership

- Academic/Research
*Creates the research and models to advance the science*
- Government
*Freely available data including satellite & radar*
*General forecasts and warnings for all*
- Private Companies
*Commercial Meteorology*
*Weather Risk Management*
- Media
*65% Television*
*17% Radio*
*8% NOAA Weather Radio*

## Economics of Information

- Information is not a normal good in the economic sense, and basic economic laws of supply and demand work differently in the information world:
*Dependence on a medium*
*High fixed costs, low reproduction costs (easy and cheap to copy)*
*Non-rival and non-excludable = “public good”*
*High price elasticity of demand*
*Time dependent*
*Barriers to entry*
- This results in failed attempts at government commercialisation.

## Recent Economic Studies

- PIRA International (for the EC, on the potential of European public sector information)
- Netherlands Economics Institute (for the Dutch Ministry of the Interior, on the prosperity effects of open access policy)
- Dutch Federal Geographic Data Committee (on the economic benefits of open access policy for geographic information
- Maurer (Impact of database protection legislation)
- Zillman and Freebairn (Economics of meteorological information)
- WRMA/PricewaterhouseCoopers (Weather risk management market)

## The Potential of European Public Sector Informationby PIRA International

- This gap between the USA and the European Union offers opportunities and challenges for European companies and for their governments.

|  | EU | US |
| --- | --- | --- |
| Investment Value in PSI | 9.5 billion Euro/year | 19 billion Euro/year |
| Economic Value | 68 billion Euro/year | 750 billion Euro/year |

## The Potential of European Public Sector Informationby PIRA International

- The US public sector information market place is up to five times the size of the EU market.
- Charging for public sector information may be counter-productive, even from the short term perspective of raising direct revenue for government agencies.
- The fledgling EU market would not even have to double in size for governments to more than recoup in extra tax receipts what they would lose by ceasing to charge for public sector information.

## The Potential of European Public Sector Informationby PIRA International

- Governments make two kinds of financial gain when they drop charges:
*Higher indirect tax revenue from higher sales of the products that incorporate the public sector information*
*Higher income tax revenue and lower social security payments if there are net gains in employment*
- Governments should make public sector information available in digital form at no more that the cost of dissemination.

## Commercial Meteorology in the US and Europe

|  | United States (1) | Europe (2) |
| --- | --- | --- |
| Gross Receipts | $ 400-700 million | $ 30-50 million |
| Number of Firms | 400 | 30 |
| Number of Employees | 4000 | 300 |

- Sources: Commercial Weather Services Association (1) and Meteoconsult (2)

- Since the size of the US and EU economies are approximately the same, there is no reason for the European market not to grow to US size with accompanying revenue generation and job growth. Restrictive government information policies stand in the way.

## Research on the size of the Weather Risk Management Industryby WRMA and PricewaterhouseCoopers

- Weather Risk Management industry is booming in the United States: almost $ **7.3 billion** in contract value in the last 3 years
- The European market is very small: $ **1****20.3 million**** **in the last 3 years
- A significant contributor to these disparities is the difference in information policies between Europe and the United States.

## Impact on Weather Risk Management

- 15 Gigabites of _all_ U.S. historical observations since 1948 on CD-Rom for $ 4290 from NCDC
- vs.
- Price quote of over $1.5 million for historical data from _one_ European country
- DWD price quote of DM 4000 for historical record of _one_ station

## Cost Recovery in Europe Not Successful

- UK Meteorological Office
*50% of total revenue comes from Ministry of Defence*
*Revenue from data sales not significant*
- British Ordnance Survey
*10% of total revenues comes from HM Treasury*
*Only 32% of total revenues comes from sales to the private sector. The other 68% comes from mandatory use of data by utilities and sale to government entities.*
- Deutscher Wetterdienst
*Only 1% of operating costs is covered by data sales*

## The Economics of Meteorological Information by Zillman and Freebairn

-  Direct government funding and free provision to all are favoured with their contribution to national welfare maximized at the point where marginal benefits equal marginal costs.
- “Private and Mixed Goods” (i.e. “value added”) meteorological services are most economically produced and provided through market forces.

## WMO Resolution 40 in Practice

- Some European Meteorological Services are not meeting their international commitments:
*There has been a reduced amount of “essential” data exchanged through the WMO.*
*Data is being withheld from international data archives.*
*The research and education communities are either not getting data or being charged. *
- The concept of restricting access to meteorological data is spreading worldwide, partially due to unsubstantiated reports of successes amongst European meteorological services.
- Unilateral interpretations of WMO Resolution 40 are being made, going beyond what was agreed.

## ECOMET, established 1995, fixes prices on meteorological data and products sold by European meteorological services. 20 European countries.
Acts as clearinghouse.  Whichever meteorological service sells European data to a customer, revenues are distributed yearly by ECOMET, based on amount sold from each country and its price.
ECOMET has not substantially increased the amount of revenues during its first three years of operations.
ECOMET received a “comfort letter” from the Directorate-General for Competition on 21 October 1999 based on the following factors: equal treatment for all customers, individual freedom of members, no cross-subsidization, existence of an arbitration procedure.
Individual service providers in Europe have concerns about discriminatory practices, ease of access, and reasonable pricing of data.

- Acts as clearinghouse.  Whichever meteorological service sells European data to a customer, revenues are distributed yearly by ECOMET, based on amount sold from each country and its price.
- ECOMET has not substantially increased the amount of revenues during its first three years of operations.
- ECOMET received a “comfort letter” from the Directorate-General for Competition on 21 October 1999 based on the following factors: equal treatment for all customers, individual freedom of members, no cross-subsidization, existence of an arbitration procedure.
- Individual service providers in Europe have concerns about discriminatory practices, ease of access, and reasonable pricing of data.

**ECOMET’s Role in Commercialization of Meteorological Data and Products**

## Size of NMSs in Europe vs. US

| Country | Employees | Inhabitants (mln) | Size (sq. km) | 1 Employee/ inhabitants | 1 Employee/ area (sq. km) |
| --- | --- | --- | --- | --- | --- |
| United States | 4000 | 280 | 9,629,091 | 70,000 | 2,407 |
| France | 3500 | 59.5 | 547,030 | 17,000 | 156 |
| Germany | 2800 | 83 | 357,021 | 29,643 | 128 |
| UK | 2100 | 59.5 | 244,820 | 28,333 | 117 |
| Sweden | 550 | 9 | 449,964 | 16,364 | 818 |
| Denmark | 400 | 5 | 43,094 | 12,500 | 108 |
| Finland | 550 | 5 | 337,030 | 9,091 | 613 |
| Netherlands | 500 | 16 | 41,526 | 32,000 | 83 |
| Belgium | 200 | 10 | 30,510 | 50,000 | 153 |
| Spain | 1500 | 40 | 504,782 | 26,667 | 337 |
| Norway | 500 | 4.5 | 324,220 | 9,000 | 648 |

## Summary and Conclusions

- In Europe, there is little commercial meteorology or weather risk management activity because most European governments do not have open access policies resulting in data not being readily, economically and efficiently available.
- Since the size of the US and EU economies are approximately the same, there is no reason for the European market not to grow to US size with the accompanying revenue generation and job growth
- A significant contributor to the disparities in weather risk management activity is the difference in information policies between Europe and the United States.