Remotely Sensed Data From Space:

Distribution, Pricing, and Applications

July 1992

NTIS order #PB93-176964
—————.—. .

Earth Observation Systems Advisory Panel

Rodney Nichols, Chair

New York Academy of Sciences

James G. Anderson

Professor

Department of Chemistry

Harvard University

Cambridge, MA

D. James Baker

Director

Joint oceanographic Institutions, Inc.

Washington, DC

William Brown

President

ERIM Corporation

Ann Arbor, MI

Ronald Brunner

Center for Space and Geosciences Policy

University of Colorado

Boulder, CO

Joanne Gabrynowicz

Associate Professor

Department of Space Studies

University of North Dakota

Grand Forks, ND

Alexander F.H. Goetz

Director

Center for the Study of Earth from Space

University of Colorado

Boulder, CO

David Goodenough

Chief Research Scientist

Pacific Forestry Center

Forestry Canada

Victoria, BC

Donald Latham

Corporate Director

Loral Corporation

Reston, VA

Cecil E. Leith

Physicist

Lawrence Livermore National Laboratory

Livermore, CA

New York, NY

John H. McElroy

Dean of Engineering

The University of Texas at Arlington

Arlington, TX

Molly McCauley

Fellow

Resources for the Future

Washington, DC

Earl Merritt

Vice President, Research

Earthsat Corporation

Rockville, MD

Alan Miller

. Director

The Center for Global Change

University of Maryland

College Park, MD

Raymond E. Miller

Professor

Department of Computer Science

University of Maryland

College Park, MD

Kenneth Pederson

Research Professor of International Affairs

School of Foreign Service

Georgetown University

Washington, DC

David T. Sandwell

Geological Resources Division

Scripps Institute of Oceanography

La Jolla, CA

Dorm Walklet

President

Terramar Corporation

Mountainview, CA

Albert Wheelon

consultant

Los Angeles, CA

NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by tbc advisory panel members.

?he pad does

oOC bowever, ntxessardy approve, disapprove, or endorse this background paper. O’IA assumes full rcspoosibil.ity for the background paper

and the accuracy of its conttnts.

. . . ill
OTA Project Staff-Remotely Sensed Data:

Distribution, Pricing, and Applications

Lionel S. Johns, Assistant Director, OTA

Energy, Materials, and International Security Division

Alan Shaw, International Security and Commerce Program Manager

Ray A. Williamson, Project Director

Stephen N. Wooley

Contractors

Deborah Shapley

Madeline Gross

Administrative Staff

Jacqueline R. Boykin

Louise Staley
Workshop on Remotely Sensed Data:

Distribution, Pricing, and Applications

David Moore, Chair

Principal Analyst

Natural Resources and Commerce Unit

Congressional Budget Office

Washington, DC

Edward H. Backus

Director

Regional Conservation Analysis Program

Conservation International

Washington, DC

William Brown

President

ERIM Corporation

Ann Arbor, MI

Richard DalBello

Director, Commercial Communications

and Remote Sensing Division

NASA Office of Commercial Space

Washington, DC

John E. Estes

Chairman

Department of Geography

University of California

Santa Barbara CA

Kass Green

President

Pacific Meridian Resources

Emeryville, CA

Kenneth D. Hadeen

Director

NOAA, National Climatic Data Center

U.S. Department of Commerce

Asheville, NC

David Julyan

The Plimsoll Group

Great Falls, VA

Molly McCauley

Fellow

Resources for the Future

Washington, DC

Richard Mroczynski

Director, External Affairs

EOSAT Corp.

Lanham, Maryland

Scott Pac e

Deputy Director

Office of Space Commerce

U.S. Department of Commerce

Washington, DC

Alfredo Prelat

Texaco Exploration and Production Division

Houston, TX

Lisa Shaffer

Deputy Director

Modeling, Data and Information Systems

Program Office

Earth Sciences and Applications Division

National Aeronautics and Space Administration

Washington, DC

Stephen L. Sperry

Marketing Manager

ERDAS, Inc.

Atlanta, GA

Peter Thacher

World Resources Institute

Washington, DC

NOTE: OTA appreciates the valuable assistat=e and thoughtful critique pmvidcd by the workshop participants. The views expressed in this OTA

background paper, however, are the sole responsibility of the Office of Technology Ascssmcnt. Participation in the workshop does not imply

endorsement of the background paper.

v
Acknowledgments

This background paper has benefited from the advice of individuals from the government and the private

sector. OTA especially would like to thank the following individuals for their assistance and support. The

views expressed in this paper, however, are the sole responsibility of the Office Of Technology Assessment

Steven Harper

Government Affairs Analyst

EOSAT

Lanham, MD

Keith Lyon

SeaStar Program Manager

Orbital Sciences Corporation

Chantilly, VA

Milton C. Trichel

Research Scientist

ERIM Corporation

Arlington, VA

Allen H. Watkins

Chief

National Mapping Division

U.S. Geological Survey

Reston, VA

Matthew Willard

President

Colorado Technologies

Ouray, co

.

vi
Contents

Page

Part I: Introduction, Background, and Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .................”.”””””””””. .“ooc””.”. 2

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

PartII:Workshop Summary ““”””””””””””””””””””””””””””””” ● “””””””””””*”””””-.’...”. 1 1

Appendix A: Proposed Policy for Handling Remotely Sensed Data . . . . . . . . . . . . . . . . . . . . . . . . 18

Appendix B: Office of Management and Budget Circular A-130 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Boxes

Box Page

A. A Land Remote Sensing Satellite System . . . . . . . . . . . . . . . . . . . . . . . . . . .................”~” 2

B. A Selection of Goals Identified by the Workshop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

C. The SeaStar Satellite System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................”’ 13

Tables

Table Page

l. Summary of Landsat Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2.Operational and Proposal Earth Remote Sensing Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3. Potential Commercial Applications for Selected and Reposed EOS Instruments . . . . . . . . . . . 9
—. . . . —.—-—

Part I: Introduction, Background, and Findings

This year Congress faces important decisions about the

future course of the Landsat land remote sensing satellite

program and the experiment with commercialization that

began in 1984. A consensus is emerging within the

government that Landsat 7 will be funded and managed

by the public sector.l While giving greater assurance that

Landsat data will continue to be available for scientists

and other users of the&@ returning Landsat operations

to the public sector creates a new set of problems.

Among these problems, the immediate question facing

Congress is what policies to set for distributing and

pricing Landsat data Existing distribution and pricing

policies are governed by the Land Remote Sensing

Commercialization Act of 1984 (Public Law 98-365) and

a contract between the U.S. Government and the private

firm EOSAT. This contract gives EOSAT the right to set

prices on data from Landsats 1-6, but establishes no data

rights for Landsat 7.

Two bills now before Congress, H.R. 36142 and S.

2297, would transfer responsibility for managing and

funding the Landsat program, beginning with Landsat 7,3

jointly to the Department of Defense (DoD) and the

National Aeronautics and Space Administration(NASA)

from the National Oceanic and Atmospheric Administration (NOAA). However, the two bills differ in how they

would handle pricing issues. S. 2297 would price the sale

of all Landsat data at the cost of fufilling the user’s order.

H.R. 3614 allows for a two-tier pricing system in which

Federal Government users would be charged the cost of

fulfiling an agency’s order and for-profit firms would be

charged market prices.

How the United States chooses to address the issues of

pricing and distributing Landsat data will prove important

not only for land remote sensing, but also for the immense

amount of data that the Federal Government intends to

gather about the atmosphere, land, and oceans using

NASA’s Earth Observing System.

Users of Landsat data expect the data to find increased

use among government agencies for a variety of beneficial

applications, including environmental monitoring, surface change detection and evaluation of resources. Many

hope the data will also be the basis for a diverse and

profitable U.S. industry, which enhances and sells data

products to a range of users in the United States and

abroad. Policies adopted to govern the pricing and

distribution of Landsat data will affect:

●

●

●

●

●

●

●

●

how much data are available, for which applications;

how the ultimate costs of providing land remote

sensing data are divided between the public and

private sectors;

how the public costs and benefits of remotely sensed

data mre divided among federal agencies;

the extent to which private firms using Landsat data

benefit from the system

the competitive prospects of foreign systems, and the

term.s and conditions under which similar data

produced by foreign systems are available to U.S.

public and private sectors;

the prospect of future U.S privatelyfinanced and operated systems intended to seine “niche” markets;

the pace of technological improvement in geographic information systems and the character of

new applications; and

technological development of future Landsat-type .

satellites.

This short background paper summarizes the discussion concerning data pricing and distribution from a

one-day workshop convened by OTA on May 20, 1992.

It does not discuss the broader policy issues regarding

commercialization of land remote sensing and the benefits and drawbacks of the decision to assign responsibility

for the operation of Landsat 7 to DoD and NASA.

The workshop, which included data users from government, universities, the private sector, and nongovernmental organizations, registered a notable degree

of consensus about the future level of prices for data

relative to existing prices: lower data prices would

stimulate data use. At the same time, several workshop

participants noted that compared to the costs of gathering

the necessary data from other sources, Landsat data are a

bargain. Participants reached much less agreement on the

proposed two-tier system where for-profit buyers are

charged a higher price than government users, Most

workshop participants, however, agreed that existing

law-which mandates that all earth imaging data gathered

from orbit, from any U.S. source, public or private, must

I For a detailed summary of * Cvalts ad knlcs related to the Land@ comrncrciakmion dccisio~ see U.S. Congress, OfiIce of Technology

&scssmmL Remote Sem”ng and the Private Sector, OTA-ISC-TM-20 (w@@WL m: Us. @v ammatt Printing Office, April 1984).

2 Passed by the House of Representatives, June 9, 1992.

3 Amording to Busb Admimstration plans, DoD would procure the satellite and NASA would manage its operation and data distribution. The two

congressional bills would codify this amangement.

–l–
2 ● Remotely Sensed Data From Space: Distribution, Pricing, and Applications

Box A—A Land Remote Sensing Satellite System

A land remote sensing satellite system consists of five major components, each of which is critical to producing

useful data

1. Sensors: Optical systems gather light in various spectral (color) bands from Earth’s surface and focus it on

photosensitive surfaces that convert the light to digital electrical impulses that can be transmitted to Earth

electronically. Landsats 4 and 5 collect light m seven spectral bands, ranging from the blue to the infrared.

The thematic mapper sensor is capable of distinguishing objects as small as 30 meters across. Landsat 6,

which will be launched in 1993, will also carry a higher resolution sensor, able to distinguish objects only

15 meters across.

2. Spacecraft and Transmitters: The spacecraft provides a stabilized platform and power for the sensors and

their optics, the receiving and transmitting antennas, and the associated electronics necessary to control the

spacecraft and to deliver data to Earth Some remote sensing spacecraft may also carry tape recorders to

store data until the spacecraft is within sight of a receiving station.

3. Receiving Station and Other Communication Components: A ground station may receive data in digital

form directly from the satellite as it passes overhead, or, if the satellite is not in a position to communicate

with the ground station, through a system equivalent to NASA’s Tracking and Data Relay Satellite System

(TDRSS). In the latter case, data arc passed from the remote sensing satellite to a communication satellite

m geosynchronous orbit and then retransmitted to a ground facility. From the ground facility, the data arc

then passed directly to a processing laboratory.

4. Data Processing Facilities: Before the raw data can be converted into photographic images or computer

tapes capable of being analyzed by the end user, they must be processed to remove geometric and other

distortions inevitably introduced by the sensors. Data that have only had these distortions removed are

generally referred to as unenhanced data. For remote sensing applications, large amounts of data

manipulation are usually required

5. Interpretation of the Data: After the unenhanced data are processed and converted to computer tapes or

photographs, they must be interpreted to provide information for the end user. Part of the interpretation

process may involve merging or layering sets of data, usually done with computer image processing

programs. A variety of advanced techniques are available to turn remotely sensed data into new products

for different users.

SOURCE: U.S. COG Office of Technology Aaxsmc@ 1992.

be sold on a nondiscriminatory basis4--could be liberalized to allow private satellite system owners to set their BACKGROUND

own price structures. They also generally agreed that The united States initiated the Landsat program in

means should be found to make Landsat data available 1969 as a research activity. NASA launched Landsat 1 in

more cheaply to the academic community, which will use 1972.5 Data from the Landsat system (box A) soon proved

the data to conduct scientific research or to train students capable of serving a wide variety of government and

in data techniques. private sector needs for spatial information about the land

surface and coastal areas (table 1). NASA designed, built,

This paper is the first publication of an assessment of

and operated Landsats 1-3. The perceived potential

Earth observation systems requested by the House

economic value of Landsat imagery led the Carter

Administration to consider commercial operation of the

Committee on Science, Space, and Technology; the system During the late 1970s it began a process of

Senate Committee on Commerce, science, and Transpor- transferring control of Landsat operations and data

tation; the House and Senate Appropriations Subcommit- distribution from NASA to the private sector. The first

tees on Veterans Affairs, Housing and Urban Develop step in the transition gave operational control of the

ment, and Independent Agencies; and the House Perma- Landsat system to NOAA in 1981, because of NOAA’s

nent Select Committee on Intelligence. OTA will issue a extensive experience in operating remote sensing sateldetailed report on data issues in 1993. lites for weather and climate observations. Landsat 4 was

4 $ ~~ ~ ‘‘no*- qtory basis” means Without prcfcrcnu, bus, or any other spccxal arrangement. . . rcgardmg dd.mry, fortna~ f~,

or tcchmcal consldcrahons wluch would favor one buyer or class of buyers over moth=. “ Public h+W 98-365, S=. 104 (3)(AH15 USC WV.

s Irutdy called the Earth Resources Technology Satellk NASA changed Its name to Landsat m 1975.

6 Landsats 4 and 5 were dcsgned and budt by NASA but operated by NOAA.
Remotely Sensed Data From Space: Distribution, Pricing, and Applications ● 3

Table l-Summary of Landsat Applications

A.

B.

c.

Agriculture D.

Crop inventory

Irrigated crop inventory

Noxious weeds assessment

Crop yield prediction

Grove surveys

Assessment of flood damage

Disease/drought monitoring E.

Forestry and rangeland

Productivity assessment

Identification of crops, timber and range

Forest habitat assessment

Wildlife range assessment

Fire potential/damage assessment

Land resource management

Land cover inventory

Comprehensive planning

Corridor analysis

Facility siting

Flood plain delineation

Solid waste management

Lake shore management

SOURCE: OHim of Tachrmiogy Asaesarnew 1992.

Fish and wildlife F.

Wildlife habitat inventory

Wetlands location, monitoring, and

analysis

Vegetation classification

Precipitation/snow pack monitoring

salt exposure

Environmental management

Water quality assessment and planning

Environmental and pollution analysis

Coastal zone management

Surface mine inventory and monitoring G

Wetlands mapping

Lake water quality

Shoreline delineation

Oil and gas iease sales

Resource inventory

Dredge and fill permits

Marsh salinization H.

Water resources

Planning and management

Surface water inventory

Flood control and damage assessment

Snow/lee cover monitoring

irrigation demand estimates

Monitor runoff and pollutlon

Water circulation, turbidity, and sediment

Lake eutrophication survey

Soil salinity

Ground water Location

Geological mapping

Lineament mapping

Mapping/identification of rock types

Mineral surveys

Siting/surveying for public/private

facilities

Radioactive waste storage

Land use and planning

Growth trends and analysis

Land use planning

Cartography

Assess land capabilities

launched in 1982; Landsat 56 became operational in

1984. 7

In late 1983, the Reagan Administration took steps to

transfer Landsat 4 and 5 operations to private hands

because it did not want to continue public funding for the

system. A few proponents of commercialization expected

that industry could soon build a sufficient data market to

support a land remote sensing system.8 Soon thereafter,

Congress began consideration of the Land Remote

Sensing Commercialization Act of 1984, which was

intended to provide legislative authority for the transfer

process. Public Law 98-365 was signed into law on July

17, 1984. During deliberations over the Landsat Act, the

Administration issued a request for proposal (RFP) for

industry to operate Landsat and any follow-on satellite

system. After competitive bidding,9 NOAA transferred

control of operations and marketing of data to EOSAT in

1985.10 At present, EOSAT operates Landsats 4 and 5

under contract to the Department of Commerce,ll and

manages distribution and sales of data from Landsats 1-5.

EOSAT will operate Landsat 6 at its expense.12

Although EOSAT and its primary competitor, 13 SPOT

Image, S.& which markets data from the French (SPOT)

satellite system have developed a market for unenhanced

data14 by the late 1980s, EOSAT'S yearly sales income

was apparently not suffficient to enable it to finance future

satellites. Although the Federal Government has provided

most of the funding for Landsat 6, and had initially agreed

to subsidize a substantial portion of Landsat 7, in the late

1980s it withdrew its support for Landsat 7. The Landsat

program was in danger of failing.

Hence, in 1991 Congress, the National Space Council,

NASA, NOAA, and DoD reviewed their options for

continuing the LandSat program. Policymakers reached

sM- 4 ~ 5 were designed ad built by NASA lmt O-d by NOM

8Howcvcr, moat analysts wem Cxtrcmcly pcAtnistic about such prospects. see Us. congreSa, caqpeuional Budget Office, Encouraging Private

lnvesrnwu in Space ~“es (waahlgtm DC: Us. Govanmait mOfWe, Feb. 1991), ~ 3.

9 Seven firms rcapondcd to the W, from which two were selected for funk ncgotMon9-E OSAT and Kod.a4Fairchild. After a series of

ncgotiatim during which the gov~t changed the ground rules of the RFP, Kodak -OU4 leaving EOS~ to negotiate with the Dcpamnezit

of Comtnenx.

10 EOS~ ~CwMshed as a joint v~ by RCA (now ~ of ~) and Hu@cs Aircmft (now part of Ou3ual Motors) for this puIpOSC.

II S~W~~ ~~ ~k~~ ~ve f~~~t~~~q -on w a-~plete ~wmSystan. EOSAT M taken -t~to~-

tWO sltldh~ idOttg, in OfdCI to -tilkl COKtdXtUity Of @a delivcq Wtti Land@ 6 is OpCr$ttiOXUd.

12 ~~t 6 is scaulc.d for launch in 1993.

13 ~~ou@ for ~me appllatio~ EOSAT ~d S~T ~ge, SA., ~mpc fm cum-, tic~~KU ~ wlCICtldy difft3CIlt tbt by SCI’VC

different customer needs. For some applications, for example, where both high spatial resolution (SPOT’s strength) and high spectral resolution

(L.am!sat’s strcugth) arc needed, cu.stomezs use both to produce a find image containing much more information than either alone - display.

14 Untiud && ~ve &n subj~~ oI@ to ~C sptd dgCOmCt3icC-Ons necessary to use them.
4 ● Remotely Sensed Data From Space: Distribution, Pricing, and Applications

the conclusion that maintaining continuity15 of the Landsat

program important to the national interest.16 They also

wished to provide in some form for the continued

commercialization of land remote sensing from space.

The argument for continuing to acquire Landsat-type data

for use by government agencies was strengthened by the

observation that these data could be a major contributor

to understanding and monitoring the effects of global

change. 17 For this application, especially, continuity of the

data stream is very important. The usefulness of the

Landsat program received further impetus from the

Persian Gulf War, when DoD made extensive use of

Landsat and SPOT imagery to create maps of the region

to support operations by the U.S.-led multinational force. 18

Afterward, LandSat and SPOT images were used to

evaluate the environmental consequences of the War.19Thc

rapid growth of the geographic information systems (GIS)

industry supports continuation of the Landsat program

because these systems have facilitated growth of the

value-added industry (firms that process and add interpretive information to Landsat data). The ease with which it

is possible to incorporate other spatial information with

remotely sensed data20 has led to a broadly diversified

market for these data and has significantly increased their

market potential

The government has three broad options for continuing

to provide data compatible with data collected by

Landsats 1-5, each of which has numerous possible

variations of detail. It could:

1. Release an RFP requiring the provision of data of

specified character, quality, and amount over a

specified number of years, leaving the satellite

system design, ownership, and operation to private

industry. Under this option, the government would

purchase data for its needs as a commodity, much

like the arrangement NASA has with Orbital

Sciences Corporation (OSC) for the purchase of

ocean color data from the SeaWiFS sensor aboard

the SeaStar satellite.21 The selected firm would then

be free to offer data to other customers on mutually

agreeable terms.

2.

3.

Release an RFP requiring the provision of a

satellite system for government operation with

specifications designed to meet specified data

requirements. Under this arrangement, the government would reclaim responsibility for providing a

satellite system and operating it.

Release an RFP requiring the provision of a

satellite system designed to meet the government’s

data requirements. Release a second RFP for a

private firm to operate the government’s system.

This arrangement is similar to the current one with

EOSAT.

Each of these arrangements has benefits and drawbacks

relating to cost, technical risks, potential for furthering the

commercialization of data acquired from space, and

amount of government involvement and control. The

. . Administration, with the support of Congress, has chosen

the second option, in part because it seemed to promise

the least risk for maintaining continuity of the provision

of data compatible with previously acquired LandSat data.

It is not necessarily the choice that would promise the

greatest involvement of private industry, except as

providers of the satellite system under contract to the U.S.

Government Discussion and analysis of the benefits and

drawbacks of these options is well beyond the scope of

this background paper, however, the choice of Option 2

for providing Landsat-type data necessitates a decision

regarding data pricing and distribution policies. Option 1,

in contrast, would not; with the exception of the contract

price for delivery to government, pricing of data would be

determinedly the market This background paper takes as

a given that the government will proceed with a variant of

Option 2 If it were to choose a different option, for

example, for a future LandSat 8, other data pricing and

distribution policies would likely be possible.

In addition to the large user community within the

federal government, the number of existing and potential

users of remotely sensed data is also large: farmers

planting or besting crops, cities and states monitoring “

15 As & ~cOmmittcc on scicsE, SpacG and Technology Report to accompany H-R 3614 poiafa out (pp. 32-3), the tam ‘continu.i ty” canbc

used in m I-t three different waya: 1) continuity of the Landsat program 2) comimlityofthedata strcmmfrom thehlxisat aatcllitc$ and 3) Contimlity

of data foxrnlw scale, and spccual mspon8c. Ihelatteris eapecwyimpmtam toeartilsckuisu aumptmg“ to study globld change.

16 ~ C Ommittoc has decided that Om of b bill’s pridpal goals ahould be to “alhancc * me of LandSat data for public - applications. ”

Report of b House Committee on ~, SpacG aud Technology to accompany H..R 3614, May 28, 1992, p. 43.

17 J. Ro~ et & “what Does kxmtc Scnaing Do for Bcology?” fiOiO~, VOL z No. 6, 1991, pp. 1918-21; U.S. ExccutI‘Ve Ofncc of tk

Preaidcalt! Offkc of Scielxe and Tccbnology Policy, Committee on Earth Sciences. Our Changing Planet: A US Straiegyfor Global Change Research.

A Report by the Committee on Earth Sciences to Accompany the US. President’s Fiscal Year 1990 Budget (WashingtorL DC: Office of Science and

Technology Policy, 1989).

la ()~ “dxtasaiona with Defense Mapping Agency peraorma see also Ian Parka, “Spacecraft in the B*.” Spuce, April-May 1S92, pp. 35-37.

19 N~o~ &p@ic Society, Committee for Rcscamh and ~]01’tltiOIL “hvironmmti Conscquu— of the Gulf War 19901991,’ Research

and Expioran”on, Vol. 7 (special issue), 1991.

20 s~ ~ -S~~~q ow*p ~UCS~* on soils, hydrology, and CCOIOgy.

21 under this arrangaIUn4 OSC agreed to provide data of spccif%xl quality, forrnaL and spatial and spccfral covcsage for a spccifkd price, whkh

allowed the fm to secure additional private f-.
—. .

Remotely Sensed Data From Space: Distribution, Pricing, and Applications ● 5

water tables or planning sewage treatment, environmental

firms monitoring land use. Even McDonald’s Corp. uses

Landsat data to study suburban growth to find locations

for new franchises. Private firms have created a growing

market for information created from Landsat and other

data by enhancing images for specific users.

Finally, land remote sensing has become an international activity. During the lifetimes of Landsats 6 and 7,

foreign earth observing systems, including Canada’s

Radarsat, France’s SPOT, the European Space Agency’s

ERS-1, Japan’s JERS-1, and Russia’s ALMAZ are

expected to contribute to a growing global market for

remotely sensed earth images collected from space (table

2). Hence, while these systems, which provide data from

different regions of the electromagnetic spectrum at

different spatial resolutions, broaden the overall market

for remotely sensed data they also provide increased

international competition to the United States in an arena

it once monopolized.z

FINDINGS

Finding 1: Landsat data may generate sufficient

public benefit to justify continuation of the program even if costs of design, construction, and

launch of the spacecraft are not recovered by the “

revenues generated by data sales.

It was clear from the workshop that the social value of

Landsat data is potentially immense:

23 they can be used

for a number of socially beneficial applications, from

management of domestic resources to plannin g for

sustainable development. The pricing policy selected

should thus include as a goal, fostering the social benefits

provided by applications of the data while also nurturing

the growth of a U.S.-based, value-added industry.

Finding 2: The prices charged for imagery collected

from space are pivotal in deciding who will have

access to this information source and on what

terms. Therefore, data pricing policy is a key factor

in how widely remotely sensed data are applied by

the public and private sectors.

The Landsat system is a publicly funded U.S. monopoly with benefits that seine both public and private

interests. Under existing policy, codified in the Landsat

Act of 1984 (P.L. 98-365), data from the Landsat system

are sold by the system operator (EOSAT). The system

operator sets data prices, which are intended to enable an

operating company to earn a profit after subtracting

system operating, marketing, and distribution costs from

gross sales. By mandating nondiscriminatory access to

Landsat data the Landsat Act of 1984 essentially

mandated a single price for the same data for all Landsat

data customers. Experts disagree on what kind of pricing

policy is fair and will best nurture the industry’s growth

while serving the government’s needs. However, they

generally agree that if the public sector pays for satellites

and their operation, government and many not-for-profit

users should pay much lower prices than currently

charged.

Some argue for a two-tier, or more generally a

multiple-tier, pricing structure that makes data available

for federal government use at the cost of fulfilling a user

request, and allows the data distributor to charge market

rates to all other users. H.R. 3614 permits, but does not

mandate, a two-tier pricing structure (appendix A).24

A two-tier pricing structure might also make it possible

to reach agreement with EOSAT over changes to the

existing contract between the Federal Government and

EOSAT. H.R 3614 requires the Landsat Program Management (DoD and NASA) to negotiate with EOSAT to

secure modified terms for pricing, distribution, acquisition, archiving, and access to data from Landsats 1-6. In

particular, it instructs the Landsat program Management

to seek agreement that EOSAT would provide unenhanced data to “the United States and its affiliated users

at the cost of fulfilling user requests, on the condition that

such data is used solely for noncommercial purposes.

Most researchers and some value-added firms contend

that data should be sold at the cost of fulfilling the order.

They argue that such a price structure would allow

broader use of the data, and uphold a principle that these

data, acquired by government satellite systems and paid

for through taxes, are a public good. S. 2297, which is

under consideration by the Senate, generally adopts this

view.~

= U.S. CO-mice of Technology ~ international Cooperation and Comperinon in Civilian Space Activities, OZA-ISC-239

(wash@’tom DC: Us. Oovenxmnt Printing Off.@, July 1985), ch 7.

~ A CO~SIOd Budget Of6= MSC=X1- in~PO@ options for mcmrag@ *ate inv= in remote SuAsing, suggests an

exam.mmon of the social value of IAndsat is~~b<-~al-* ~le of wcrmncns in funding such satellites. See Congrcssionat Budget

office, Op. CIL. footnote 8.

~ “~c CO- finds that--to incrcas’c he value of the Ian&at prQgram to the Axnaica.rt Pubtic, Landsat data should be made available to United

states Governmc nt agencies, to global change researchers, and to other rcsearckrs who arc financially supported by the united states OoV crmncr.w at

the cost of fulfllhng w requests. ’ ‘—Sec. 2. (12) Findings.

~ “me COqTCSS f@ Uld declares @-to maximize the value of Federal satellite land remote sensing programs to the American public, data

generated from all hod remote scnsmg satellites fimdcd by the United States Govcrnmc nt should be made available to usexs at prices tit do not exceed

the margmal cost of fflhng a spccflc user request. ’ S. 2297, “Land Remote Sensing Policy Act of 1992,” Sec. 101 (8).
●

Table 2-Operational and Proposed Earth Remote Sensing Satellites

satellite LANDSAT 5 LANDSAT 6 SPOT 3-4 MOS 1,16 JERS-1 ALMAZ-1 ERS 1-2’ RADARSAT

Owner

Repeat Coverage

Launch Date

Blue

Spectral Coverage

(microns)

Resolution

Swath Width

Green

Spectral Coverage

Resolution

Swath Width

Red

Spectral Coverage

Resolution

Swath Width

Near-Infrared

Spectral Coverage

Resolution

Swath Width

Mid-lnfrared

Spectral Coverage

Resolution

Swath Width

Thermal Infrared

Spectral Coverage

Resolution

Swath Width

Microwave

Frequency

Resolution .

Swath Width

Panchromatic

Resolution

Swath Width

Us.

18 days

1905

Us.

18 days

1993

France Japan

26 days 17 days

(3) 1994, (4) 1998 1967; 1990

NA

NA

NA

NA

NA

NA

NA NA NA

NA

NA NA NA

NA

1.58-1.75 l.6-l.71/2.01-

2.4

18 m x 24 m

75 km

NA

10.4-12.5

120 m

185 km

6.0-7 .010.5-12.5

2.7 km

IWO km

NA NA NA

NA NA NA NA NA NA

a ERS-2 WiII m~ t~ Gb&l ozone M~itofig Experi~nt, which VW have some capabilities in the ultravblet to visible regions of the spectrum. Actual coverage is not Yet known.

SOURCE: NASA, MaPeat Maket Review, 1992; M&Id Space hddry &rwry, I&year CX#oo&, Euroconault, 1991.
.

Remotely Sensed Data From Space: Distribution, Pricing, and Applications ● 7

Although the workshop reached no consensus regarding which policy would best serve the public interest, the

discussion did lead to the following insights:

●

●

●

●

Most workshop participants agreed that lower prices

would result in wider use of data.26 A single low

price might encourage market growth, especially

among users already familiar with the applications of

Landsat imagery. A low price would be unlikely to

reduce costs associated with the collection, processing, distribution, maintenance, and archiving of

data.27

Two-tier pricing would allow for smaller overall

losses (some cost recovery) by charging profitmaking enterprises prices that reflect the cost of

operating the system. It would thus spur the government to continue the the experiement in commercialization by supporting the development of a commercial

market for unenhanced data.

Two-tier pricing would allow for greater cost recovery in the face of small or diminished demand.

However, it might depress demand compared to low,

single-tier prices.

Two-tier pricing could be harder to administer and

difficult to enforce because it would discriminate on

the basis of client type rather than service or product.

As an example of the difficulty of enforcement, some

researchers in universities or nonprofit organizations

who might be entitled to lower prices for data used

in research also consult for commercial interests.

Similarly, some for-profit, value-added firms frequently work under contract with federal state, and

local governments. Firms may also conduct rerearch, the results of which are published in publicly

available journals.

Under current Administration plans, data from LandSat

7 will be publicly owned data the distribution of which

will be governed by OMB Circular A-130. This circular

sets pricing for other Federal Government data products

such as census data, economic statistics, and governmentcreated software (appendix B) “so as to recover costs of

disseminating the products or services through user

charges. ” Circular A-130 is flexible enough to allow for

two-tier pricing.

Finding 3: Changing the existing policy of nondiscriminatory access to data from privately funded

satellite systems to a policy that allows owners to

determine their own pricing policies may encourage growth of private satellite systems. However, in

view of the continued importance of the “open

skies” principle to the U.S. use of space and to

foreign policy, nondiscriminatory access to data

from publicly funded satellite systems should be

retained.

Existing law requires that all data from all U.S. land

remote sensing systems be sold to all purchasers, U.S. or

foreign, on a nondiscriminatory basis, in part to allay fears

among some countries that other countries would seek to

use these superior information sources to gain economic

advantage. 28 Some U.S. data users also express concern

that allowing companies to follow sales policies giving

exclusive access to data might trigger retaliatory restrictions on important data acquired from space by other

countries.

Nevertheless, proponents of private remote sensing

systems have complained that this policy impedes entry

of privately financed U.S. remote sensing systems into the

market for unenhanced data. For example, potential

private satellite systems could, perhaps, fill a market

niche for specialized products. However, if the system

owners were prevented from charging higher prices for,

say, mom timely or even exclusive access to data, they

would lose their market advantage and their ability to

service the market niche.

Proponents of private systems suggest that as the

number of international sources of earth-imaging data

grow, the fears of countries concerning exclusive access

and resource exploitation would likely diminish. Indeed

many argue that global competition in remotely sensed

data is already sufficient to allow the United States to

relax previous restrictions. Hence, in order to encourage

operation of private remote sensing systems, recent

Administration proposals, H.R 3614, and S. 2297 would

allow pricing and access discrimination for data acquired

by privately funded systems. All however, would retain

the nondiscriminatory policy for Landsat 7 and other

publicly funded systems on grounds that the policy

supports the full and open exchange of information that

has been a cornerstone of U.S. policy for space and

international environmental research.29

The opportunity to use Landsat imagery to help

developing countries manage their own resources is an

important opportunity for the United States in the

post-Cold War world. Continued provision of Landsat

imagery by the U.S. government for the development of

local and regional economies could also help undercut
8 l Remotely Sensed Data From Space: Distribution, Pricing, and Applications

criticism of any move to allow discriminatory data

distribution for privately funded satellite systems.

Finding 4: The experiment to commercialize the

Landsat system has been only partially successful

EOSAT has streamlined the operations and data

distribution system, and achieved sufficient income

to support its efforts without government support.

However, revenues from data sales do not appear

sufficient to enable a system operator to finance the

entire Landsat system for many years.

when the Landsat Commercialization Act of 1984 was

passed proponents argued that the best way to create a

strong market for remotely sensed data was to transfer the

operation of the Landsat system and the marketing

function to the private sector. At recent congressional

hearings some members of Congress have called commercialization a failure.30

EOSAT has apparently lowered the costs of collecting

data from the satellite and putting scenes into usable

form.31 Yet EOSAT has been faced with operating and

marketing data from a system that was designed to meet

government requirements rather than the marketplace.

Hence this experiment does not provide the most effective

test of the Commercial prospects for unenhanced remotely

sensed data What the United States has tested since

EOSAT’S formation is not whether private management

can work in general, but whether a private system

operator with a single pricing policy is anymore effective

than the public system operator that predated EOSAT.

Landsat 6 will cost the U.S. Government about $220

million data sales, even if all customers were charged the

single price of $4,400 per digital Thematic Mapper

(TM)32 image, would not reccover these costs over 5 years

of operation. DoD and NASA have estimated that

procuring, launchings and operating Landsat 7 for 5 years,

and constructing a large, new data processing facility, will

cost about $880 million.33 However, if the costs of a

different satellite system could be reduced sufficiently, a .

private firm might be able to establish a viable business

selling unenhanced data.34 A few firms, for example, have

developed preliminary designs for small lightweight

satellites that show “ in eventually reducing the

costs of the system? experts nevertheless remain

doubtful that even with the likely future system cost

reductions, sufficient market for unenhanced data would

develop to support a commercial satellite system within

the next decade.36

Finding 5: The pricing and distribution policies

arrived at now for U.S. earth-sensing activity will

set precedents for NASA’s planned Earth Observing System (EOS).

Although the-decision before this Congress concerns

the pricing and distribution policy for Landsats 1-6 and

Landsat 7, the debate over LandSat data has parallels for

other publicly funded remote seining systems that will

generate data with economic value. EOS sensors are

experimental and will require considerable effort to

evaluate before the full commercial potential of the data

can be assessed yet several of these sensors will collect

data having economic potential (table 3).37 The pricing

policies for EOS and Landsat should be consistent, since

the data will be used by many of the same institutions and

the issues of public versus private good are the same in

both cases.

Finding 6: Stability and continuity in the acquisition

of data over time and enhanced customer access to

data will contribute to the further development of

the data market.. Aggressive, innovative marketing

will also be important.

Commercial and other users, in order to plan for the

orderly development of their businesses or long-term

research, need to know that the satellite system will

provide continuous data for a specified period of time.

Researchers, particularly those interested in global

change, need data sets that are consistent, can be cross

referenced and reflect repeated observations of various

phenomena (e.g., land change) over time. Failure to

provide such data sets will be detrimental to our

understanding of global change and to other environmental research It will also be detrimental to the

30sWancnta of Sumtoxs GoIe and Presak, Saiacc Cornsnittcc on commerce, SciuEe, and TmnspOmdoQ Subcornmi ace on Scimcc, Tccbnology

and Spacq Hcaringon S. 229’7, the hnd htc Sensing Policy Act of 1992, May 6,1992. Also see testimony of David Thibaui L John R. JcasaL ad

Cbarlottc Btack Elk at tk m_.

31 m-BwMJ@ OEi% op. at-, footnote 8.

32= -insuumalton tk?hndsat satellite. It carxics seven spectral buts with aground rcsolutionof 30rncters (except fortbc thexmd ixhrcd

ban& which posscSSc3 a resolution of 120 !nctcrs). on~6. ~ ~~TII* _wiu ~co~oct data iII a p anchmmatic baud of 15

nMms.

33 a~Plan for b LandSat PrognmL Mar. 20, 1992, Aaacbmcnt 1.

34s= -Gp=t H* ~~=t ~~Ra”ew (s- SpaCC Center, Mississippi: mlfipacc Remote knsing center, 1~), for a deti~

review of the market potential for remotely sensed data suitable for gemming maps, as well as the characteristics of foreign remote sensing systems.

35 A fi~ ~fl ~ ~s -~~t W ~~s & b~~lts ~d drawbacks of using innovative small remote sensing satellites.

36 C-=ts of ~~rcview~ on ~ f~( ~.

37 For ~=ple, ASTER (provided by Japan), S=WFS. md MoD~.
..—..—. . ——. .—

.

Remotely Sensed Data From Space: Distribution, Pricing, and Applications ● 9

Table 3--Potential Commercial Applications for Selected

and Proposed EOS Instruments

Potential Commercial use

continued development of the U.S. value-added industry.

Previous, inconsistent support for Landsat has hurt

market development.

Those entrusted with marketing unenhanced remotely

sensed data have an important role in defining new

applications and products. SPOT Image corporation, for

example, has developed an entire series of image maps

and ‘theme” maps that have proved popular with certain

customers .38 The entry of SPOT Image into the marketplace has helped to stimulate the overall market for

remotely sensed data. EOSAT now offers TM digital data

on small 8 mm ‘‘Exabyte’ cartridges, which promise to

make the storage and handling of Landsat data more

efficient.

Finding 7: A worldwide, “value-added” industry,

closely tied to the application of geographic information systems (GIS), is now evolving, offering

enhanced imagery and other information products

for specific users and applications.

The value-added, geographic information services

industry may top $2 billion in yearly sales by 1993.39

Unlike 1985, when EOSAT was formed the United States

appears to be on the verge of having a U.S.-based,

internationally competitive GIS industry, supported in

part by remotely sensed data aquired from space. This is

a result of the simultaneous growth of GIS sales and

computing technologies. These technologies have the

unique advantage of being able to handle data in many

different formats and integrate them into usable files.

Products include maps, inventories of crops, forests, and

other renewable resources, and assessments of urban

growth, cultural resources and nonrenewable resources.

The growth of the GIS industry will be aided by the

extensive archives of unenhanced Landsat data, which

now includes some 210,000 multispectral TM scenes

(maintained at the U.S.G.S. EROS Data Center, Sioux

Falls, SD).

It is important to differentiate between sales of

value-added information and unenhanced data. Because

value-added firms can add so much extra value to

imagery, the former will always outstrip the latter in terms

of gross sales and tax revenues returned to the U.S.

treasury, just as the return from applications of commercial communications satellites far outstrips the market for

the satellites themselves. 40 Hence, if the value-added

industry grows sufficiently strong, the return of indirect

revenues in the form of taxes could outsweigh the direct

return of income from unenhanced data sales.

A key factor driving the evolution of the market is the

importance of timely data to many different users, such as

farmers making weekly decisions on when to plant crops.

Another key factor is the evolution of technology, in

which the price of hardware and software for manipulating earth-sensing data has dropped dramatically so that

small groups and even private individuals can use it. The

38 KPMG peat Manvi& op. cit., footnote ~, p. 11.

39 ~x fiw ~l~d~ ~] GIS app~~tjo~, not o~y ~SC tit usc “GIS IUDO@y Markets and Sal.scd@pOrtUDitiCS, imagCS 1991, ” hXD SpllCC.

Daratcck Cambndgc, IvL% 1991.

40 Note, however, tit cOmZDIUdGltiOZl$ ~e~~s tie commcrciallyviable rathcrquickly because they were introduced into a vibrant international

telccommummhons market.
.

10 ● Remotely Sensed Data From Space: Distribution, Pricing, and Applications

small user, whether a New England coastal environmental

institute 41 or a southwestern Indian tribe concerned with

forest management,42 represents an enormous potential

market, which is now largely untapped Value-added

firms are well positioned to reach this market.

Finding 8: Congress may wish to consider alternative

means of commercializing the space remote sensing

industry.

Some workshop participants suggested alternative

means of commercialization to the present operating

structure, which, they said, could build on the lessons of

the EOSAT experiment. They argue that while EOS~

has thus far not succeeded in commercialization as

envisioned in the mid-1980s, other approaches to commercialization may work such as offering incentives to

cut costs and finding ways to be more responsive to users.

Pricing policy will nevertheless be a key determinant of

failure or success.

In the future, for a Landsat 8, for example, the

government may wish to promote the commercialization

of land remote sensing by adopting Option 1 of the

previous section in which the government issues an RFP

asking for the provision of specified quantities of

remotely sensed land data Some participants worried that

the present plan to put NASA back in charge of managing

data distribution from Landsat 7 may halt the trend

towards commercialization and hinder the growth of this

new industry. Others felt that any emphasis on the

commercialization of unenhanced data was misplaced

that the value-added sector was the most important

Commercial area to protect.

Finally, a few workshop participants questioned the

fundamental concept of turning over publicly funded

assets to a single private operator and giving it exclusive

rights to distribute publicly funded data. One participant

suggested that the government might consider allowing

several private firms to collect unenhanced data and sell

a variety of products from them in much the same way that

the weather satellites now distribute unenhanced data to

a variety of firms that add value to the data

Finding 9: Academic institutions can play an important role in broadening the market for remotely

sensed data by developing new applications and by

training graduates who will make careers using the

data in government private industry, nonprofit

groups, and international institutions.

Participants agreed that the U.S. academic research

community has the potential to uncover new uses for

remotely sensed data43 Some suggested that to facilitate

academic use of LandSat images, the government could

set prices of present and/or archived data at the cost of

fulfilling a user’s order, or subsidize purchases by giving

researchers data grants to support purchases at the

“market price.”44 For many academic users, archived

data could be sufficient for research and to train graduate

students, because these uses generally do not require

time-critical data45

41 ~~~~~~c-“satellite Imagay Aids Analysis of Rare Coastal h)systuns, “ Geo Info Sysmns, VOL 2, No. 8, June 1992,

pp. 56-59.

42 R@ we ~s~~ Btiw, “wfl~ ~for New hkXiCO’S Native Amaican Lands,” Geo @fO Sysfems, VOL 2, No. 8, J- 1992,

pp. 3443.

43 ~v~e~~-tfi d~elqing n- apph~ons. ID dditioQ SOIIE ~blkh mscarch results in the open literature. one reviewer suggested

Ihat pIiVatC fiIIIIS skwld ahO fCCCiVC diSCOUIltS fOr COIKhlCt.@ bOnS fkk ttSGMCh.

u ~=~y, Eos~ off- t. ~~ -Idrcs~&rs *Ut $1 million in data grants to facilitate purchases of thematic mapper data.

4s ~ ~~m su=est~ ho~v~, -t &UUISC & univ~itia do a lot of vahn?-added work on La.ndsat dam they should not be allowed to acquire

current da@ wkh would gwe them a competitive advantage over private f-.
Part II: Workshop Summary

WORKSHOP SUMMARY

Participant’s comments revolved around five major

topics affecting data pricing and distribution:

(1)

(2)

(3)

(4)

(5)

Federal government needs and low, cost-of-service

pricing;

The relationship between LandSat commercialization and two-tier, or multiple-tier, pricing;

The chances for developing an internationally

competitive U.S.-based industry in space-based

earth imaging; and

Foreign policy, and price and distribution policies

to support “open-skies” policy.

Academic research and instructional needs.

1. Federal Government Needs and Low, Cost-ofService Pricing

The Federal Government considers the provision of

earth imagery an important public service. Since NASA

launched the first Landsat satellite in 1972, users have

applied its data to a wide variety of problems, including

natural and cultural resource management, agriculture,

land use planning, mapping, and resource exploitation

(table 1). In the 1970s and early 1980s, U.S. users

received data either directly from the satellite at no cost or

at very low cost from NASA or the USGS EROS Data

Center.46 NASA charged foreign ground stations an

access fee of $200,000 per year to collect data directly

from the satellite as it passed over.47

In 1982, because of the commercialization process,

NOAA began to raise prices of Landsat data in anticipation of a transfer to the private sector. By 1985, it was

charging users $4,400 (in 1985 dollars) per digital

Thematic Mapper (TM) scene (up from $2,000 in 1982);

this was NOAA’s estimate of the market price of the data.

When EOSAT assumed control of data sales in 1985, it

initially lowered the price for a TM scene to $3,300, but

over time has raised the price again to $4,400 (in 1992

dollars) to keep up with its costs of operations.

A wide variety of users have complained since data

prices were raised arguing that higher prices inhibit use

of the data for research and other activities supporting the

public good.48 The government’s case for low prices for

data from Landsats 6 and 7 is strengthened by increasing

evidence of global change. Scientists will need a large

number of Landsat scenes to track the various elements of

global change; the existing price structure would make

assembling those data sets extremely expensive, over and

above paying for the satellite system in orbit. Use of data

from both Landsat 6 and 7 would be a key element of any

U.S. government plan to assert international leadership on

global environmental issues. Currently “we have no

institution taking its global change responsibilities seriously” said one participant. However, if the “federal

establishment steps up to its responsibilities, ” Landsat

dat a--distributed to international organizations and Cooperating foreign government~would be a major part of

the effort.

DoD shares an interest with NASA and other federal

agencies in the lowest-possible data prices. Its experience

in using Landsat (and SPOT) data in the Persian Gulf War

convinced DoD that Landsat was an important unclassified military resource. 49 As Defense Intelligence Agency

official Brian Gordon noted in a 1991 Congressional

Hearing:

Certainly DoD would be using Landsat and Spot

[imagery]. We recognize that it’s very important to

get a wide area of coverage over our areas of interest,

and we’ll use everything we can get our hands

on--any and all imagery data-because of the very,

very strong technical tradeoffs between resolution

and a broad area of Coverage.50

Landsat's usefulness for national security purposes seems

to argue for distribution of Landsat data to the military at

a low price as a public good.

Entities other than federal agencies also argue for low

data prices. Since the discovery of the Antarctic ozone

hole in 1987, there has been a marked growth in demand

for remotely sensed data that bear on aspects of global

~ prior to 1982, wti~4~~~* O@ *avmle -mnlwtx’al sensor (MSS) irnagca, which have a rcaohtion of go

IrEters.

47 EOSM now _ a fCC Of ~,~~~

* see us. congress, Ho= of ~“ ~ ThcLandsarProgram: Management, Funding, and Policy Deci.rion.r, Hearing before the Committu

on Sci~ Space, ad Technology, Nov. 26, 1991, Sect. IV: “Solicited Cornmcn ts on H.IL 3614; U.S. congress, Senate, Hearing before the Senate

Cornmittce on Cornmerc e, Scicnm, and Transportation May 6, 1992.

49 ~D -t $5.$6 fion on LandSat and SPOT imagciy for W firsi~ G~ Wa.

SO B~ ~rdo~ s~~ent ~ ‘‘Sci~~lc, ~~,~comtn~l~ Apph~tiotls Of the Lmdsat Pm-” a Joint Hearing before the Committee

on Science, Space, and Technology, and the Permanent Select Cornmmce on Intelligence of the U.S. House of Representatives, June 26, 1991

(Washmgtom DC: U.S. Government Priming Ofllce, 1991), p. 28.

–11 -
12 l Remotely Sensed Data From Space: Distribution, Pricing, and Applications

change. These include requests from foreign government

agencies and public interest nonprofit groups, both of

which contend they should have the data at a low,

cost-of-service price. Representatives of conservation and

internati onal groups at the workshop pointed at that

Landsat data are an important tool for managing and

monitoring development. They endorsed a single-tier

pricing policy in which data are priced at the marginal cost

of fulfilling a user request. Alternatively, they favored a

two-tier policy in which groups such as theirs can obtain

data at the lower (i.e., first-tier) price.

The issue of data pricing is at the intersection of several

competing and unresolved national goals (box B). If the

Congress were to resolve that a single price, set as low as

possible, be charged to all users, it would uphold a

longstanding commitment to a principle of broad access

to data it acquires at public expense for the public good

Examples include weather, census, and economic data

Proponents of low data prices argue that such prices

would assist governments, private groups, and individuals in the study of global change.

The Administration’s present management plan for

Landsat 7, and both House and Senate bills, recognize

commercialization of unenhanced data as a policy goal.

However, some workshop participants, especially those

from private industry, contended that the NASA management plan for Landsat 7 goes beyond the appropriate role

of the public sector and is “a gigantic step in the wrong

direction in terms of the future of this technology.” They

argued that leaving the distribution of unenhanced data in

government hands would in effect stifle the evolution of

a viable commercial industry. Several of them suggested

that commercialization could work if the system were

designed as a commercial system from the start Pricing

would then be an integral part of the system design.

Orbital Sciences Corporation’s Seastar satellite, which

carries the Seawifs sensor, provides one example of how

this could work (box. C).

Other participants disagreed with the entire thrust

toward commercialization, contending that a single-tier,

low price would most effectively stimulate the value-

-added industry. One participant noted that the government had successfully developed new products that are

finding new markets, citing as an example the U.S.

“Census Bureau’s TIGER files.

OMB Circular A-130 (appendix B) governs the pricing

of publicly owned data, such as that acquired from

Landsat 7. The general debate over A-130 has revealed

conflicts between users of inexpensive government data

and those who would supply competing data products.

Thus, the debate over the pricing of Landsat data exists

Box B-A Selection of Goals Identified

by the Workshop

l Maximizing access to data by all users, as a

pure public good;

.

l Ensuring maximum data access by government users;

l Spurring research:

l Partial or full cost recovery for Landsat system

investment;

l Meeting foreign policy goals, including ‘open

skies; ‘‘

l Maintaining data control for national security

purposes;

l Fostering U.S. industrial competitiveness;

l Fostering development of the value-added

industrial and

l Fostering development of greater private investment in supply of unenhanced data.

SOURCE: (Mix of Tcchwlogy Awewmu& 1992.

within a larger context, in which government-created data

and information can affect the marketplace.

2. The Relationship Between Commercialization

and Two-Tier, or Multiple-Tier, Pricing

The United States is m a period of transition, participants agreed between the second phase—attempted

commertialization --of the Landsat program and an

undefined future. In the first stage of Landsat’s history in

the 1970s and early 1980s, the system and its data were

a U.S. government monopoly. In those early days, NASA

viewed development and testing of the sensors and

operation of the system more as an exploratory research

and development. (R&D) activity than as a routine

operational service. Data were used primarily by federal

agencies and a small group of researchers. A value-added

industry gradually developed to support government

applications and to assist extractive industries such as oil

gas, and minerals. Under these circumstances, most

policymakers agreed that a federal agency (first NASA

and then NOAA) should operate the system archive and

distribute data, and encourage research and federal agency

use through uniform, cost-of-service pricing.

As use of these data by private industry grew, some

analysts suggested that the Landsat system could eventually become self-supporting by marketing unenhanced

data to a wider range of users. As a result, beginning with

passage of the LandSat Commercialization Act of 198451

the United States began an experiment designed to

encourage the growth of a private earth-sensing industry

51 The Reagan Mxmxus tration had initiated the process of transfer by issuing an Executive order in late 1983.
Remotely Sensed Data From Space: Distribution, Pricing, and Applications ● 13

in the United States that would eventually enable the

marketplace to pay for the satellite system, including

launch, and the marketing of Landsat data The implicit

goal of commercialization was to create a new industry

that would offset the costs of Landsat launch and

operation to the Federal Government, and pay for future

satellites in the Landsat series.

Some workshop participants commended the progress

EOSAT has made towards the goal of commercialization.

Several noted that EOSAT had created “a worldwide

marketing system” for LandSat imagery, which, although

underutilized is a prerequisite for market growth. However, EOSAT had not been aggressive enough in marketing, some said. Opinions differed on whether EOSAT’s

distribution and pricing policy had hindered EOSAT's

growth. One participant pointed out that the prerequisite

for market growth is identifying existingproducts or

services that can be improved by using Landsat imagery,

which leads to lower data prices and an increase in

demand for imagery. An aggressive marketing system

would then help in identifying new products.52

Most participants agreed that the circumstances of

1992 are very different from those of 1986, when EOSAT

assumed control of data distribution. Today a growing

value-added industry is developing new products and

markets and cheaper, user-friendly technology. In addition, other countries (table 2) are providing remotely

sensed data

The idea of moving to a two-tier or multiple-tier pricing

structure arose in order to preserve part of the commercialization process begun in 1984 and to avoid outright

termination of the existing contract with EOSAT, which

would likely be required in order to implement other

53 In theory it could allow a proposed pricing structures.

private operator to earn a profit by selling higher-priced

data while also supplying data to government users at

cost-of-service prices. Alternatively, it would allow a

government-operated system to offset some of the costs

of building, launching, and operating a satellite system.

Some workshop participants expressed concern about

the workability of a two-tier arrangement, others insisted

that a multi-tier pricing system would be practical. There

appeared to be differences in perspective between those

participants for whom charging prices according to

market demand is the key to profitability and a viable

business, and participants who are managers in the federal

sector. One federal manager at the workshop contended

that dual-tier pricing would be “an administrative nightmare. ” In rebuttal, a participant from the private sector

Box C—The SeaStar Satellite System

The commercial market for remotely sensed data

has not grown as fast as early predictions once

heralded The data remain too expensive for many

of the smaller users such as farmers and the fishing

industry. In the future, the Federal Government may

purchase quantities of data from private systems,

allowing these firms to earn a profit marketing data

to other users. The Federal Government and the

Orbital Sciences Corporation (OSC) have recently

entered into an experimental data purchase agreement that may provide valuable lessons for possible

future agreements of a similar character.

The Sea Wide Field of view Sensor (SeaWiFS)

is a multi-band (8) imager that operates in the very

near infrared portion of the spectrum SeaWiFS will

be used to observe chlorophyll, dissolved organic

matter, and pigment concentrations in the ocean.

The sensor will contribute to monitoring and

understanding the health of the ocean and concentration of life forms in the ocean. Data will have

significant commercial potential for fishing, ship

routing, and aquaculture, and will be important for

understan ding the effects of changing ocean content

and temperatures on the health of aquatic plants and

animals.

Under the arrangement with NASA, the company’s SeaStar satellite will collect ocean color data

for primary users (including NASA), who then have

the option to sell both unenhanced and enhanced

data to other users. NASA has agreed to purchase

$43.5 million of data from Orbital Sciences. This

arrangement allowed OSC to seek private financing

for design and construction of the satellite. OSC has

developed a virtually identical sensor for the

EOS-Color satellite, one of the Earth Probes

included under the vast umbrella of EOS. EOSColor, to be launched in 1998, will measure oceanic

biomass and productivity.

said that offering different prices is “not a problem. It is

in the noise” of running a business. He noted that many

businesses charge different prices for different types of

service. However, another participant noted that discriminating according to product or service is very different

from discriminating according to type of client, adding,

“Only a monopoly can afford to discriminate according

S2 ~~ct for telm-~mtion ~-c= ~m ~u~t~ ~vid~ ~ iIISUUCUVC exxople of ~ pOCCSS. men z~k CO121111U12iClUiOIl SUVkt3

were umoduccd m the 1 %0s, they entered a telecommunications market that was already wckstablishcd. Commnnkimons by satellite soon became

much cheaper than by copper undcrsa cable. HencR satellite communications quickly gained market share and forced the cost of international

CQmm unications scmiccs down See HICC of Technology Asscssmcxx op. cit., foomote 22, ch 6.

‘

3 T’C~ the contract with EOSAT could cost the govcrnmcnt millions of dollars and jeopardize data distribution from LandSat 6.
14 ● Remotely Sensed Data From Space: Distribution, Pricing, and Application

to client type.” H.R. 3614 proposes to distinguish prices

on the basis of client type, rather than service delivered

The heart of the issue is whether any entity--a private

group like EOSAT or NASA for Landsat 7--can help

bring a new industry (for unenhanced data) into being

with a single-tier pricing policy. Several participants

argued that a larger market for Landsat data would

materialize only with a two-or multi-tier pricing system

and an organization devoted to building a market for

Unenhanced data According to this argument, low,

single-tier pricing will inhibit the ability of the system

operator (whether the government or the private sector) to

offset investment and operating costs. In addition, when

data are provided only at prices that reflect only the costs

of reproduction and distribution, no feedback is possible

between users of the data and suppliers regarding the

intrinsic value of the data compared to the system costs.

Such feedback is needed to guide future investment, such

as choice of spacecraft operating parameters, or the choice

of new sensors. In other words, users of data provided on

a single-tier, low-cost basis may undervalue the data. In

addition, there is the danger of encouraging the develop

ment of a larger bureaucracy for data distribution

purposes.

In sum, during this period of transition, when a major

U.S. market for Landsat imagery is still forming, proponents of two-tier or multi-tier pricing argued that this

policy may be the only way providers of uncaha.need earth

imagery can earn sufficient revenues to grow. In addition,

it was argued the perception of an unreliable federal or

private monopoly would discourage the growth of the

industry. Shifts in federal Landsat policy may have

already inhibited the growth of a U.S.-based industry.

Government-gathered meteorological data are-in some

sense analogous to LandSat data.54 Weather data are

essential to two federal government functions: civil

aviation safety and the armed forces. But satellite weather

data is now also down-linked at “spigots” around the

country, from which commercial users, such as television

news stations, can draw. These commercial users then

‘‘enhance” the weather da@ for example, to display it on

news broadcasts. Given the large number of commercial

users who can enhance and resell such public goods--i.e.,

weather or Landsat data-for profit, should not the

Federal Government charge a royalty for such commercial use, asked one workshop participant He suggested

that some of the value of unenhanced data could be

captured charging royalties and licenses on the use of

data. Under this approach, a value-added firm would pay

a royalty on its profit when it buys unenhanced data, adds

value to them, and resells them.

One participant offered an alternative to a single-tier

pricing policy, m the form of a hypothetical private firm

that would contract to distribute Landsat data using

two-tier pricing. Users entitled to data at the lowest, ‘Tier

One,” prices would be “all Federal Government users,

plus “authorized” academic, nonprofit research users.”

“Tier Two” users would be “everyone who is not a

member of Tier One. The firm would be free to establish

internal use and commercial resale fees, in the form of up

front payments or those made “downstream” for later or

repeated use. This was one of several suggestions for

meeting the needs for low-cost pricing for public service

uses of Landsat da@ and giving the managing entity

enough freedom with all other prices to develop the

industry.

Most participants agreed that the role of the Federal

Government during this period of transition is not well

defined and that different pricing policies can lead to

different outcomes in shaping the future of U.S. remote

sensing in the early 21st century.

The workshop discussed another suggestion for resolving the question of data pricing and retaining a private

sector supplier of unenhanced data If EOSAT or any

other commercial seller of unenhanced data were free to

improve its unenhanced data--i.e., allowed into the

“value added’ business--the seller would have an

additional market from which to recoup investment and

operating expenses. Several participants countered that

although existing law does not prohibit EOSAT from

entering the value-added business, such a step would give

it an unfair competitive advantage because of EOSAT’s

inside knowledge of demand based on requests for raw

data55 (this information is not available to value-added

firms). Yet if other firms were also given the right to

collect and distribute unenhanced data from the satellite,

EOSAT would lose this competitive advantage. To date,

EOSAT has chosen not to enter the value-added business.

3. Chances for Developing an Internationally

Competitive, U.S.-Based Industry

Most workshop Participants agreed that the goal of

commercialization is not presently being met through the

existing arrangement with EOSAT While participants

noted that the value-added markct is moving toward a

wider variety of products, and growing fast because of

smaller, cheaper, user-friendly technology, they differed

over which pricing policy would stimulate the market and

improve the chances of fully commercializing the provision of unenhanced data.

As mentioned some participants felt that continuing a

single-tier pricing policy at existing prices and service
Remotely Sensed Data From Space: Distribution, Pricing, and Applications . 15

would fail to encourage commercialization of the sale of

unenhanced data. ‘There is a bigger market so long as we

get better performance’ from suppliers, said one participant, apparently referring to more timely service and

better quality of data.

However, the private sector representatives at the

workshop did not agree regarding two-tier pricing. At

least one representative of a private firm argued that the

revenues would increase if prices were lowered more, or

kept at a relatively low rate. This participant noted that

when EOSAT offered special “sales” of data, the firm

had gone out and bought more data. For value-added

firms, data costs can be a key business expense; being able

to buy popular scenes (at lower cost) that can be utilized

in many projects gives them a price advantage over

value-added firms that cannot afford to maintain a library

of scenes. But this has a greater impact on which

value-added firms receive a contract and not whether a

client will undertake a project in the first place. Ultimately, it is the number of projects purchased that

influence data sales.

Private sector representatives differed in their outlook

for the future of the industry. Some were gloomy that the

Federa l Government would not understand how to nurture

a viable new segment of the U.S. economy. Participants

agreed however, that taken together, the Landsat system,

research community, and innovative private firms represent a potentially large national economic resource. One

participant offered the following view:

Remote sensing is part of the country’s strategy for

recovering world economic leadership, to make the

country more important and successful. How well

industry and government work together will determine whether a major U.S. industry comes into

being, and how successful it is internationally while

helping U.S. public and foreign-policy goals.

The health of the value-added industry is key both to

enhancing a new and potentially large element of the

economy and to building up a market for unenhanced

data. Spokesmen for the maturing-and growing—

industry of firms who “add value’ to unenhanced

Landsat data from EOSAT argue that the data and

techniques to enhance it amount to a “strategic technology” akin to the Nation’s former leadership m TVs and

VCRs. The vast majority of potential buyers of remotely

sensed data cannot use the unenhanced data that EOSAT

(and after 1997, NASA) offer. In this they are like the

average citizen who cannot use the raw data from a

weather satellite, but regularly watches the television

weather reports that display and interpret these raw data.

Even if a self-sustaining market for unenhanced data were

to develop, the value-added industry will still provide the

greatest return to the Nation’s tax base, because the value

added to the data will generally far exceed the original

cost of the data. A strong value-added industry would also

indirectly assist governmental uses for the data by

continuing its development of innovative ways of manipulating, displaying, and analyzing them and creating

low-cost computer hardware and software.

4. Foreign Policy and Data Price and

Distribution Policies

For the balance of the century, several participants

argued, Landsat could be an increasingly important

component of U.S. foreign policy. The United States, as

a good global citizen and leader, could exploit its past

investment m Landsat by offering imagery to foreign

gov ernments and international entities, such as the World

Bank, that need information about desertification, water

supply, patterns of settlement, wildlife habitat, forest

cover, and coastal issues. In the 1970s, through U.S. AID

and NASA, the United States mounted a major effort to

make Landsat imagery available to developing nations.

Thosc efforts often resulted in a beneficial transfer of

know-how and technology to these countries. However,

because they were not continued in the 1980s, the growth

in use of Landsat imagery has slowed considerably. Many

developing countries still lack supportive institutions and

appropriate training to make effective use of land remote

sensing data. Others are highly capable but often lack

funding to support extensive use of Landsat data.

To the extent the United States has an interest in

helping other nations learn more about their resources and

processes of change, it may have a strong interest in

providing data to some foreign governments at cost-ofservice prices. On the other hand, two participants

proposed that the U.S. foreign aid program be empowered

to subsidize friendly countries’ purchase of Landsat data

at whatever price is charged. U.S. foreign aid could also

be directed to help other nations build or maintain

downlink stations on their territory and assist indigenous

research using the data and value-added enhancement of

imagery.56 A fundamental problem with such ‘‘aid’ to

many developing countries, however, is the difficulty of

making such resources available through the foreign aid

budget, which has many other demands placed on it.

Foreign countries also use earth imagery to find out

information about their neighbors and adversaries. Some

participants noted that some governments would be

willing to pay extremely hi@ prices for scenes of

adjoining areas for purposes of national security. Such

uses of Landsat data may not qualify as a “public good”

by the standards of the U.S. foreign aid program. This

leads to the awkward conclusion that in a free market for

earth imaging information, some governments-perhaps

% Off& of T@uMio~ ASSCSSXIICng op. cit., foomOte 2.2, d. 7.
16 ● Remotely Sensed Data From Space: Distribution, Pricing, and Application

ones at war with their neighbors--would be in the same

price category as farmers or state governments, Le.,

“commercial” users paying the market or tier two, prices.57 Foreign companies would be expected to pay

market prices; they could be very large customers for

Landsat data m the future, as they already account for

about 25 percent of EOSAT sales.

The workshop did not resolve how a two-tier pricing

arrangement, if it were instituted would apply to foreign

users. Participants contended that the application of

mm-tier pricing to foreign users warrented careful study.

A related issue, barely discussed was the extent to which

the U.S. government should open its “black” systems in

remote sensing for public access and international use.

The Russian release of data from its synthetic aperture

radar system Almaz, could be an important precedent~

since the system offers an important new source of data

about the oceans, ice pack and land Surface.s8 Some asked

whether-with the Cold War over and the Russians

opening up formerly closed systems to public, international use--the United States should make some of its

now-classified systems publicly available as well? One

participant noted that the U.S. national security community is closely following the fate of EOSAT, the overall

commercialization process, and NASA’s Landsat 7 and

EOS programs, with an eye to what role its own classified

systems might play in the public market.59

Most legitimate foreign policy uses-such as helping

friendly governments or monitoring global changemight deserve a low, cost-of-service price for data.

However, the international market for Landsat imagery

offers the same problems as the domestic one: the smaller

value of unenhanced data versus a potentially large

market for value-added information.60 These problems

underscore the vital role of private value-added firms in

enhancing data and making it more useful. The workshop

did not resolve these issues, except to note that the French,

the European, Japanese, Russian, and Indian systems will

no doubt be joined by other earth-imaging systems. In

short, an international industry will grow, no matter what

the United States does with Landsat.

The workshop also explored the U.S. nondiscriminatory data distribution policy, which is codified in the

Landsat Act of 1984. When the Landsat Act was under

debate in Congress, several private entities, who wished

to launch and operate their own satellites, contended that

they should have the right to market data on whatever

terms would result m a profitable business. In their view,

the right to discriminate among services and, for exampie,

to offer exclusive rights to data to those who would pay

substantially more than the standard price for the privilege, was key to establishing a viable commercial

business. Others argued on the contrary, that the nature

of Landsat as a government-owned system required that

data sales adhere to the “open skies” principle originally

enunciated by Resident Eisenhower, and that data should

be offered on a nondiscriminatory basis to al potential

buyers. 61 These experts reasoned that a nondiscriminatory

policy would allay fears among the poor nations that the

United States or some other rich country would gain

important economic information about a poorer country,

itself without access to similar data. A nondiscriminatory

data policy would also underscore U.S. adherence to the

principle of the free flow of public information across

national boundaries.

The Administration has proposed changing the law

regarding nondiscriminatory data policy in order to

encourage private entry. 62 H.R. 3614 as passed by the

House of Representatives and S. 2297 also include a

provision that would void the nondiscriminatory provision for privately funded satellite systems. However, even

if changing this policy enhanced the chances of a private

firm launching its own satellite, the firm would still have

to compete with Landsat in marketing data. Therefore, the

data a private system supplied would have to hold

considerable additional or distinct value over Landsat

data in order to earn a Profit.63

Most workshop participants felt that, on the whole, the

nondiscriminatory policy has served this country and

users of remotely sensed data well, as it has not only made

data readily available (for a price) to all U.S. users, but has

helped stimulate the overseas market as well. U.S. policy

has set the standard for the world community. It was a

major factor in the French decision to establish the same

policy for data from SPOT However, with the entry of

SPOT and other satellite systems offering remotely

sensed data, some workshop participants felt that the

supply of data was sufficiently diverse and the market

sufficiently competitive that systems financed entirely

fl ontb Otk ha@ W united states govanmmf intenfema m export markets forotkrcmnmoditiea ofstmtegic value during ~ of war or vastly

he@emxl tmaions. It could do so for remotely sensed data as WCit.

~ The Eurqxan Spaa Agency’s ERS-1 satellite system and J~’S JERS-1 also carry synthetic qcrture radar systems. 59 ~ ~~~gm cOmmmity has a - of this~“ ~y,@*y With rCSpCCt to the USC of previously classified data for global

change rcaearch.

60 -e it ~ tie,f~ -k,tit p~to~p~ ‘e‘m hndsat data are used dimctiy for some applications, electronically processed digital data

pokntially carry much greater value.

61 ~= of T-logy ~msm~g op. & footnote 1, for a discussion of bnondhdmim tory policy and its relationship to the open skies policy.

62 Spce B~”nesS News, Apr. 13, 19~v P“ 5“

63 KpMG pa r6nvic~ op. cit., footnote 34, p. 11.
Remotely Sensed Data From Space: Distribution, Pricing, and Applications ● 17

with private investment capital could soon begin to offer

data that discriminated according to price or timing

without undercutting the foreign policy benefits of the

nondiscrimin atory policy for the Landsat system. Most

participants agreed that publicly funded systems should

retain the nondiscriminatory policy consistent with the

open skies principle.64

5. Academic Research and Instructional Needs

Many participants agreed that the U.S. academic

research community can contribute to the development of

public and private applications of earth sensing technology. Published research broadens remote sensing technology and applications. Students trained in college and

university programs form a cadre of experts needed by

gov ernment, private industry, nongovernmental organizations, and international institutions.

Several participants suggested strongly that academic

researchers should be able to purchase Landsat data on the

same terms as government users.65 Even participants who

advocated multiple-tier pricing agreed that university

researchers were performing a public service and therefore should be charged cheaper prices or proffered

subsidies to support purchases at higher prices. Participants from nonprofit conservation groups stated that the

costs of earth imagery for evaluating major environmental

problems such as African desertification or depletion of

Amazonian rain forests were a major part of their annual

budgets. They argued in favor of low data prices

During the 1980s when EOSAT came into operation,

federal support for applied research in the earth sciences

decreased as did support for new technology exploration

and demonstration. The problem the academic community is encountering, according to this argument, is not

that EOSAT’S prices are “too” high or unfair, but that

support for university research and teaching has declined.

Adherents of this view argue that a proper remedy, in this ,

case, may not be to force data prices lower, but for the

Federal Government to offset whatever price is charged--

and any price increases-by appropriate grant and contract research support.

Most academic researchers do not require data immediately after it is acquired so that charging of premiums for

rapidly filling orders is not an issue for them.66 A key

issue for academics, however, is the need for government

to maintain the quality of archived images,67 so that

historical data they need will remain useful in later years.

While university users were considered as legitimate

candidates for low prices, some of the workshop participants did not place state and local governments in this

category. They said state and local governments form a

major market for specialized value-added services, which

can be provided most efficiently by private firms.

However, participants recognized that cases might arise in

which state or local governments need Landsat or EOS

data to serve national purposes. In such cases the Federal

Government could award grants or offer other preferential

treatment to provide these data at a lower price.

@ H~ 3614, WMC dJowing a privatdy ftuldd SyStCfti tO Sd 1L5 OWII @CCSwitbh Administration policy, XCOdMCC wodd retain a

nondiscrlmmat Ory policy with respect to publicly funded systems.

ti Now tit~3614 would ~o~ s~~h low &~ ~~ for glow -em-~@ hox w~ ~ WV crxtment gmnt or contract.

6 As global change mscarch grows in unportance, many more academic users may require timely access to data in order to evaluate the utility of data

for studying cnvmxuncntal changes and for comdinating field campaigns for collcctmg in SIfU ti

s? Afc~vd photograptuc and dig~ Ixdsat unagcs arc maintamed at the EROS Data Cente.r in Sioux Falls. which is operated by the U.S. Geological

S1l.mcy.
Appendix A

Proposed Policy for Handling Remotely Sensed Data

S.2297 Land Remote Sensing Policy Act of 1992,

Section 202 Dissemination of Unenhanced Data.

(a) DISSEMINATION POLICY-The Administrator

and the Secretary of Defense shall implement a Landsat

data dissemination policy, defined in the plan required by

section 201(b)(3), that—

(1) ensures that existing Landsat data and future

unenhanced data acquired by the Landsat system are

routinely available to Earth and global change research

scientists at costs that do not exceed the marginal cost of

filling a specific user request;

(2) considers the reasonable and legitimate requirements of all segments of the satellite land remote sensing

user community for access to unenhanced Landsat data;

and

(3) ensures that copies of all unenhanced data acquired

by the Landsat system are provided to the Secretary of the

Interior for permanent preservation.

(b) AUTHORITY NOT AFFECTED—The provisions

of this section shall not affect the authority of the

Administrator and the Secretary of Defense to contract for

the dissemination of data acquired by the Landsat system,

so long as-

(1) the Federal Government retains ownership of all

unenhanced data acquired by the Landsat system;

(2) no exclusive marketing rights are extended to any

contractor.

(3) the Federal Government retains the right to set

pricing policy for unenhanced data; and

(4) all other requirements of this section are met.

Section 501. Nondiscriminatory Data

Availability.

(a) MAKING DATA AVAILABLE---Any Unenhanced

data generated by the Landsat system, or by any system

operator under the provisions of this Act, shall be made

available to all users on a nondiscriminatory basis in

accordance with the requirements of this Act.

(b) INFORMATION-The Administrator and the Secretary of Defense and any other system operator shall

make publicly available the prices, policies, procedures,

and other terms and conditions (but not necessarily the

names of buyers or their purchases) upon which the

operator will sell such data.

Section 502. Archiving of Data.

(a) PUBLIC INTEREST-It is in the public interest for

the Federal Government—

(1) to maintain an archive of land remote sensing data

for historical, scientific, and technical purposes, including

long-term global environmental monitoring;

(2) to control the content and scope of the archive; and

(3) to assure the quality, integrity, and continuity of the

archive.

H.3614 National Landsat Policy Act of 1992.

Section 203. Data Policy for Landsat 1

through 6.

(a) CONTRACT NEGOTIATIONS-Within 30 days

after the date of enactment of the National Landsat Policy

Act of 1992, the Landsat Program Management shall

enter into negotiations with the Landsat 6 contractor, with

respect to pricing, distribution, acquisition, archiving, and

access of Landsat 1 through 6 unenhanced data.

(b) CONSIDERATIONS-In carrying out negotiations under this section, the Landsat Program Management shaU-

(1) seek to ensure that such unenhanced data shall be

provided to the United States Government and its

affiliated users at the cost of fulfilling user requests, on the

condition that such unenhanced data is used solely for

noncommercial purposes;

(2) seek to ensure that instructional data sets, selected

from the Landsat data archives, will be made available to

educational institutions exclusively for noncommercial,

educational purposes at the cost of fulfilling user requests;

(3) seek to ensure that Landsat data users are able to

acquire unenhanced data contained in the collective

archives of foreign ground stations as easily and affordably as practicable;

(4) seek to ensure that the United States Government

and its affiliated users shall not be prohibited from

reproduction or dissemination of unenhanced data to

other agencies of the United States Government and other

affiliated users, as long as the unenhanced data will be

solely for noncommercial purposes;

(5) explore options, including the provision of vouchers and data grants, for providing unenhanced data to

nonprofit, public interest entities engaged in environmental research at the cost of fulfilling user requests, as

long as the unenhanced data will be used solely for

noncommercial purposes; and

(6) seek to ensure a viable role for the private sector in

the promotion and development of the commercial market

for unenhanced data from the Landsat system.

(c) FAILURE TO REACH AGREEMENT—If negotiations under subsection (a) have not, within 120 days

after the date of the enactment of the National Landsat

Policy Act of 1992, resulted in an agreement that

the Landsat Program Management determines generally

–18-
—..——

19 ● Remotely Sensed Data From Space: Distribution, Pricing, and Applications

achieves the goals stated in subsection (b)(1) through (4),

the Administrator and the Secretary of Defense shall,

within 30 days after the date of such determination, jointly

certify and report such determination to the Congress. The

report shall include a review of options for achieving, and

recommendations with respect to, such goals. The options

reviewed shall include--

(1) retaining the existing or modified contract with the

Landsat 6 contractor.

(2) the termination of existing contracts for the

exclusive marketing rights of Landsat unenhanced data;

and

(3) the establishment of an alternative private sector

mechanism for the marketing and commercial distribution of such data.

Section 204. Transfer of Landsat 6

Program Responsibilities.

The responsibilities of the Secretary of Commerce with

respect to Landsat 6 shall be transferred to the Landsat

Program Management, as agreed to between the Secretary

of Commerce, the Secretary of Defense, and the Administrator pursuant to section 201.

Section 205. Data Policy for Landsat 7.

(a) LANDSAT 7 DATA POLICY PLANS-The

Landsat Program Management, in consultation with the

Secretary and appropriate officers of other appropriate

United States GOVernment agencies, shall develop a

preliminary and a Final Landsat 7 Data Policy Plan in

accordance with subsections (b) and (c). The Preliminary

and Final Landsat 7 Data Policy Plans shall-

(1) define the roles and responsibilities of the various

public and private sector entities that would be involved

in the acquisition, processing, distribution, and archiving

of Landsat 7 data and in the operations of the Landsat 7

spacecraft;

(2) ensure timely and dependable delivery of unenhanced data to the full spectrum of civilian, national

security, commercial, and foreign users, and the National

Satellite Land Remote Sensing Data Archive;

(3) seek to ensure that unenhanced data shall be

provided to the United States Government and its

affiliated users at the cost of fulfilling user requests, on the

condition that such uunenhanced data is used solely for

noncommercial purposes;

(4) ensure that instructional data sets, selected from the

Landsat data archives, shall be made available to educational institutions exclusively for noncommercial, educational purposes at the cost of fulfilling user requests;

(5) ensure that the United States Government and its

affiliated users shall not be prohibited from reproduction

or dissemination of unenhanced data to other agencies of

the United States Government and other affiliated users,

as long as such unenhanced data is used solely for

noncommercial purposes;

(6) ensure that the proposed data distribution system

contributes to the commercialization goal for land remotesensing; and

(7) to the extent possible, ensure that the data distribution system for Landsat 7 is compatible with the Earth

Observing System Data and Information System.

(b) PRELIMINARY PLAN AND REPORT-Not later

than December 31, 1993, the Landsat Program Management shall develop and submit to the Congress a report

that contains a Preliminary Landsat 7 Data Policy Plan

and that addresses each of the issues identified in

subsection (a).

(C) FINAL PLAN AND REPORT-Not later than July

15, 1996, the Landsat Program Management shall develop and submit to the Congress a report that contains a

Final Landsat 7 Data Policy Plain In developing the report

and plan, the Landsat Program Management shall assess

the operational effectiveness of the data distribution

system and policies for Landsat 1 through 6, established

pursuant to section 203, in order to assist the Landsat

Program Management in determining what, if any,

modifications should be made in the preliminary Landsat

7 Data Policy Plan. The report shall address any such

modifications.
Appendix B

Office of Management and Budget Circular A-130

The Office of Management and Budget published

OMB circular A-130 in 1985 to establish a national policy

for the reproduction and distribution of information

collected or paid for by the federal government. A-130

can be applied to any federally collectcd data and

information, including those as diverse as census data and

images collected from space. In particular, distribution of

Landsat data and data from future Earth Observation

System satellites are governed by A-130.

Information is defined by A-130 as “any communication or reception of knowledge such as facts in various

forms and on any medium.” Information technology is

similarly defined as any hardware or software used in

connection with this information.

The circular establishes several ground rules for the

collection of information, two of which are important for

Landsat data. Firs&in an effort to “minimize the cost and

maximize the usefulness” of information collected by the

government, the anticipated public and private benefits

that can be derived from the information, insofar as they

can be calculated should “exceed the public and private

costs of the information." Second, “the open and

efficient exchange of information. . . fosters excellence in

scientific research and the effective use of Federal

research and development funds. ”

A-130 also sets policies for information management

Foremost for managing information similar to that from

Landsat are two policy statements included in the circular.

a)

b)

c)

in a manner that ensures that members of the public

. . . have a reasonable ability to acquire the information.

in a manner most cost effective for the government,

including placing maximum feasible reliance on the

private sector for the dissemination of the products

or services . . . and

so as to recover costs of disseminating the products

or services through user charges, where appropriate

. . . .

OMB Circular A-130 also stresses long-term strategic

planning by agencies for acquiring data and operating

information technology programs. It also encougages

timely acquisition of information and information technologies, and also dictates some specific agency requirements. Any data distribution plan must conform with the

requirements set forth by A-130, which will be revised in

1992.

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OTA Publications Containing Significant Analysis

of Remote Sensing from Space

. U.S. Congress, Office of Technology Assessment, Civilian Space Policy and Applications,

~-s~~l (Washington, DC: U.S. @Vernment Printing Office, August 1982).

. U.S. Congress, Office of Technology Assessment, Commercial Newsgathen”ng from Space,

UIA-ISC-TNWM) (Washington, DC: U.S. Government Printing OHice, May 1987).

. U.S. Congress, Office of Technology Assessment International Cooperation and Competition

in Civa”Zian Space MMies, 0’M-ISC-239 (Washington DC: U.S. Government Printing Office,

July 1985).

. U.S. Congress, Office of Technology ~sessmen~ “Remote Sensing and the Private Sector,

OTA-ISC-TM-239 (’Washington, DC: Us. Gov ernment Printing Office, April 1984).

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