Pricing models for disclosure of public sector information

The following post is an excerpt from my thesis entitled Linked open data for public sector information.
The disclosure of information might be a subject to charge. However, conditioning access to public sector information by prices may constitute a fundamental barrier.
The models for pricing public sector information may be divided into three groups. The first model sees public bodies act as private companies and tries to recover their costs incurred from information production. If public bodies charge only to recover the cost of information provision, they use the marginal cost model. To adopt the third model is to cease charging altogether and not require users of information to pay any price.

Cost recovery model

Public sector institutions are usually free to recoup some costs by charging users that access their information [1, p. 11]. When they employ the cost recovery pricing, they essentially behave the same way as for-profit companies.
Aside from the benefit of public bodies being able to sustain themselves, this model introduces a number of challenges. First, it is discriminative for those that cannot afford to pay for the access to information of their interest. For example, full cost recovery may have an adverse effect on small and medium-sized enterprises that do not have the necessary resources to obtain the information they need in order to pursue their business plan. Second, a large part of consumers of public sector infomation is constituted by other public sector bodies. If full cost recovery is demanded from public bodies, it reduces public sector information to an instrument of reallocation of the public funding.

Marginal cost model

Marginal cost pricing recoups only the costs of information provision. It is derived from the marginal cost of distribution, that reflects the cost of provision of one further unit. This pricing model is recommended by the EU directive on the re-use of public sector information [2]. If public bodies adopt the marginal cost pricing model and start charging less for their information, they might see a surge of interest for the information that might lead to a greater total income than in the cases when the bodies employ full cost recovery model. The use of the Web brings this pricing model close to the model that applies no prices, because on the Web the marginal cost of distribution covering the reproduction of information is essentially zero.

Open access model

In the open access model public body does not require a payment for provisioning of information to the public. This approach entails a significant reduction of friction and administrative overhead associated with each individual transaction of public sector information. It is a non-discriminative model, since it makes access to information to be independent on user’s budget.
A common argument for no pricing is that public sector information had been already paid for from the tax revenue and thus there should not be any additional charges [3, p. 55]. Pricing for information is seen as inconsistent with the established way of funding of public sector bodies. Public sector should not run business, and some contend that civil service is too inflexible to do so [4].
Several alternative models to recover partial costs were proposed to substitute for the direct cost recovery. For example, one model suggested imposing a levy on requests for updates of public data, such as in business registers [1, p. 27].

References

1. VICKERY, Graham. Review of the recent developments on PSI re-use and related market developments [online]. Final version. Paris, 2011 [cit. 2012-04-19]. Available from WWW: http://ec.europa.eu/information_society/policy/psi/docs/pdfs/report/psi_final_version_formatted.docx
2. EU. Directive 2003/98/EC of the European Parliament and of the Council of 17 November 2003 on the re-use of public sector information. Official Journal of the European Union. 2003, vol. 46, L 345, p. 90 — 96. Also available from WWW: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:345:0090:0096:EN:PDF. ISSN 1725-2555.
3. Beyond access: open government data & the right to (re)use public information [online]. Access Info Europe, Open Knowledge Foundation, January 7^th, 2011 [cit. 2012-04-15]. Available from WWW: http://www.access-info.org/documents/Access_Docs/Advancing/Beyond_Access_7_January_2011_web.pdf
4. ARTHUR, Charles; CROSS, Michael. Give us back our crown jewels. Guardian [online]. March 9^th, 2006 [cit. 2012-03-09]. Available from WWW: "http://www.guardian.co.uk/technology/2006/mar/09/education.epublic