CFP'93 - Federal Information Policy

by James Love, Director

Taxpayer Assets Project

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Researchers of all types frequently need information collected from government agencies. Today those data are increasingly stored in computers, and sometimes only available in machine readable form. In some cases the use of computers has made access to information easier and cheaper than ever, while in other cases government agencies or commercial data vendors are extracting huge fees for access to public records.

Everyone of us has been repeatedly told that we are now living in "the information age." It's not that information has gained some new intrinsic value, but rather that there has been a revolution in the technologies that create, store, and manipulate data. Today it is possible to dial into digital databases on a dizzying array of topics, and retrieve and analyze data in ways that were unthinkable 15 years ago.

Access to these new information systems and databases is become the modern equivalent of a library card, but with important differences. The technology that makes it cheaper and faster to manage information resources is also changing the ways that information products and services are priced and rationed. Just as cable television has simultaneously expanded video services and eroded the universal nature of access to television programming, modern online services, CD-ROM products and other innovations are leading to a world where the gap between those who are informed and those who are not is rapidly being determined by an ability-to-pay criteria, rather than interest or enterprise.

The federal government is the world's most important producer of information on a surprisingly wide range of topics. Information on government policies and practices, official statistics, press releases, satellite images, maps, corporate activities, patents, and countless other items are stored in digital form on government information systems.

Under the Reagan and Bush administrations, access to many information systems has been severely restricted, in order to benefit a handful of commercial data vendors who charge hefty prices for access to databases that are created by government funds.

In other cases, federal agencies are charging fees for access to databases that are far above the costs of disseminating the information. This is a radical departure from the rules that have long been used to price information published in paper formats. For example, if agencies use the Government Printing Office (GPO) to publish a book or report, the agency pays for the first copy, and GPO can "ride" the order, and sell extra copies to the public in its sales program for 150 percent of the costs of disseminating the information. And, under the Freedom of Information Act (FOIA), citizens pay no more than the agencies' costs of finding and disseminating records. But agencies can get around the pricing rules at GPO and FOIA buy selling electronic products and services themselves or through the federal government's National Technical Information Service (NTIS), or by using private vendors to disseminate information.

The combination of Reagan/Bush privatization program and the increasing use of information as a source of government revenue, have created huge barriers for access to government information that is important for the research community, and it also raises important political concerns. As government information is increasingly priced according to willingness to pay criteria (as opposed to the costs of dissemination), the rationing of information leads to less accountability by government officials, and increases the power of economic groups that already control government policy making.

There is considerable optimism that the Clinton and Gore administration will abandon the many of the most pernicious policies of the Reagan and Bush administration, and encourage a new era of enhanced access to the federal information resources at affordable prices, but in many areas it will be difficult. The Reagan/Bush administrations saddled the federal government with many long term contracts with private companies giving them enormous control over publicly funded information systems and databases. Moreover, the crushing burden of federal debt has vastly increased pressures on agencies to cut back on programs and increase user fees for access to information resources. Thus, best intentions and heady optimism aside, there are large obstacles to policies that will truly realize the democratic and egalitarian visions that many have expressed regarding access to government information resources.

To understand how things could be, consider some of the electronic information products and services that are currently available to the public.

• The U.S. Code on CD-ROM. In December the Government Printing Office announced the sale of a new CD-ROM product that includes the entire 30,000 pages of the U.S. Code, a compilation of all federal laws in force as of January 1991, for just $30, complete with software.

• The National Trade Data Bank (NTDB) on CD-ROM. The Department of Commerce sells the entire National Trade Data Bank on CD-ROM for $35, including software. The CD-ROM product includes about 100,000 economic time series and documents, including such items as the entire CIA World Fact Book, foreign exchanges rates, trade flows, U.S. and foreign employment statistics, bond yields, and countless other items.

• The Economic Bulletin Board. The Department of Commerce's Economic Bulletin Board (EBB) is an online service that includes more than one thousand data files that can be downloaded directly to your personal computer for a modest fee - only $3 per hour after 6 pm and on weekends. The files on the EBB include historical time services as well as time-sensitive updates of important data. For example, the Department of the Treasury "posts" its daily treasury report every day on the EBB, listing the latest figure on the national debt, and when the Department of Commerce announces new statistics on the consumer price index or industrial production, the data are usually available on the EBB within 15 minutes of their public release.

These three are just a few of the hundreds of important and inexpensive information products and services that are now available directly from the federal government. But also consider the high prices the federal government charges for some of the following information products and services.

EPA Data. The Council on Economic Priorities (CEP) is a non-profit organization headquartered in New York that publishes regular research reports about corporate activities for the benefit of investors and consumers who want to patronize firms with sound track records on the environment and other social issues. In order to do that research, they need information from hundreds of federal databases, which is extremely expensive. For example CEP uses EPA's Resource Conservation and Recovery Information System (RCRIS) Extract tape, which is sold by NTIS, a federal agency, for $2,800 for a single copy or $5,560 for a subscription. NTIS sells the EPA's Facilities Index System (FINDS) File for $2,360, and the EPA's Civil Enforcement Docket, which fits on just two floppy disks, is priced at $360 - about the cost of a new color TV and VCR.

This has caused a dilemma for CEP. While they want to use the most recent information available for their research, there are many datasets they cannot afford at all, and in other cases they cannot afford to buy recent updates of data, forcing them to use data that is, in some cases, years old. According to CEP researcher Ken Scott, the high cost of EPA data "hampers our ability to provide comprehensive up-to-date information that the public needs to make informed actions as investors or consumers. The RCRIS stuff alone would pay for a researcher for three months, quite a tradeoff when you are talking about a staff of three people."

Federal Bank Call Reports. The Federal Reserve System sells data on magnetic tape which gives a wealth of information on banking operations. In light of the enormous cost of the collapse of the S&L industry and amid rumors of large problems in the commercial banking sector, Gregory Orman, then a Princeton senior, wanted to access to 40 quarters of the data to study the causes of bank failures. The National Technical Information Service (NTIS), a federal agency, quoted him a price of about $20,000 for the data, even though it would only cost a few hundred dollars to actually copy and ship the information. NTIS has about 60 customers for the bank call reports, mostly large banks and wall street concerns, who can pay these high charges, but academic and citizen group use of the information has largely evaporated ever since the government decided to market the data as a commodity.

Home Mortgage Disclosure Act (HMDA). The Federal Home Mortgage Disclosure Act (HMDA) requires lending institutions to disclose detailed information on all home mortgage lending activity, including information on the race, income and other characteristics of loan applications. This data is widely used by citizen groups and journalists to study racial discrimination in mortgage lending, but the federal government prices the data at $500 per reel of magnetic tape, making it too expensive for many citizens to use.

In these cases, not only does the government price the data so high that many academic, journalist, and citizen researchers cannot afford to use the information, but they only sell the data on magnetic tapes which require the use of expensive mainframe computers to use, even though the data would be much easier to use if it was available on CD-ROM or in other more convenient formats. These policies often have deliberate political motives. One official that I talked with at the Federal Reserve System was delighted that it was difficult to obtain the Federal Reserve's Bank Call reports, since it gave the Bush administration greater control over who was looking at banking polices.

As a result of these policies, many citizens and non-profit organizations cannot afford to monitor the actions of regulatory commissions, monitor congress, or analyze company records on worker safety or the environment.

Matters are frequently worse in those cases where the Reagan and Bush administrations implemented policies which "privatize" access to federal databases and information systems.

The SEC'S EDGAR System. The Securities and Exchange Commission's new Electronic Data Gathering, Analysis and Retrieval (EDGAR) system, is expected to become operational this spring. It will contain electronic copies of important corporate information, such as 10k reports, insider trading disclosure, and stock and bond prospectuses, which companies will be required to file with the government in electronic formats. The information, which is the world's most valuable source of information on corporate performance, is collected for the purpose of public disclosure. Under a contract given to Mead Data Central, the owner the commercial online services LEXIS/NEXIS, the data will be stored on computers owned by the private contractor, with extremely limited public access. Individual access will be limited to use of public terminals in a handful of public reading rooms. All other "dissemination" of the data will be in "bulk" formats, consisting of sales of filings from the current day, without access to historical data, at costs ranging from $30,000 to $500,000 per year, depending upon the level of service. Meanwhile the SEC contractor will sell the same information through its LEXIS service at fees as high as $340 per hour. The SEC's EDGAR system will cost the taxpayers about $100 million to develop, including $13.5 million to Mead, but it will primarily benefit large commercial vendors, rather than the public which underwrites the system's cost.

JURIS. The Department of Justice JURIS system contains about 50 gigabytes of important legal information, including decisions by federal judges, presidential executive orders, regulations, laws, and the text of foreign treaties. Due to a questionable contract with WESTLAW, one of two commercial vendors who sell this information to individuals for high fees, the public cannot get access to the data, even though the government pays for its collection and the data primarily consists of public laws and rules that cannot be copyrighted.

LEGIS and SCORPIO. The legislative LEGIS system and the Library of Congress Scorpio systems contain vast information on legislation (full text of all bills plus summaries), the Congressional Record, Congressional Research Service issues briefs, bibliographic information, and other items. Right now citizens have to use commercial vendors, including one owned by the Washington Post, to receive access to this information electronically.

Today there are literally thousands of important federal information systems that are closed to the public or only available through commercial vendors - who buy the data from the government in digital form and then sell it back to the citizens who finance its collection.

In an effort to change this, a coalition of library, citizen, and journalist groups have asked the federal government to provide a much broader set of electronic publishing services. Among the most important is the proposal for a centralized one-stop-shopping gateway to federal information systems, that would provide easy to use access to a wide range of federal information systems and databases. Legislation to accomplish this was introduced last year. The House bill was the GPO Wide Information Network for Data Online (WINDO) and the Senate version was the GPO Gateway to Government. While the legislation failed to pass last year, there is considerable optimism that it will succeed this year, or simply be implemented by executive fiat by the Clinton/Gore Administration. The primary Senate sponsor for the legislation was Albert Gore, now the person spearheading technology and information policy for the new administration.

Despite early optimism, no one thinks things will be easy. Bitter struggles over the ownership and control of taxpayer funded databases and information systems are yet to be resolved, and only a well organized constituency of researchers will ensure that the public's information is truly public.

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