POLITICS AND ECONOMICS OF INTERNATIONAL TRANSFER OF INFORMATION
by Roger K. Summit, Ph.D Director, Information Systems Lockheed Palo Alto Research Laboratory
Paper Presented at the Special Libraries Association Conference June 11, 1979 Honolulu, Hawaii
(Copies of the paper are available from: Information Systems, 52-80/201 Lockheed Palo Alto Res. Lab. 3251 Hanover Street Palo Alto, CA 94304
POLITICS AND ECONOMICS OF INTERNATIONAL TRANSFER OF INFORMATION Today there exists a strong information services industry consisting of database producers, telecommunications organizations and information retrieval service vendors.
In each of these areas there are two important
issues: •
What are the respective roles of government and private industry?
•
What are the international considerations in the provision of database services?
Without attempting resolution, I would like to provide a brief perspective on these issues and to describe two current situations relating to telecommunications and database development which illustrate some basic problems. History The community of information users owes an enormous debt to the several farsighted government agencies who in the early 1960s developed and sponsored the development of computer-based photo composition systems for the publication of secondary (abstracting and indexing) publications. Notable in such efforts were National Aeronautics and Space Administration (NASA); the U.S. Atomic Energy Commission (AEC); the National Science Foundation (NSF); U.S. Office of Education (OE); National Library of Medicine (NLM); National Technical Information Service (NTIS); and the National Agricultural Library (NAL) ,. to name a few.
In the early days
the economics of these activities were questionable, but the dedication and perseverance of the government officials and their private industry contractors were unceasing in their efforts to make our valuable information resource more readily accessible.
The politics in those days seemed
secondary to the mission. Twenty years and many millions of dollars later, both the politics and economics of international information transfer have changed significantly.
Key developments leading to these changes include the following:
•
Development of national and international telecommunications networks
•
Entry of commercial or private sector companies into database publication
•
Emergence of the online information retrieval services industry
•
Revolution in size and cost of electronic data processing equipment
Each of these developments has been a necessary step in the continuing evolution of the post-industrial, information-based society. We are today, however, at the crossroads. Over the next few years our actions and choices will largely decide the issues of government in the marketplace and transborder information services raised earlier in the paper. Although time does not permit an analysis of all possible models, let us examine two: the first in the area of international database development, and the second in the area of telecommunications services. International Database Development Much concern has been expressed over the apparently wasteful duplication of indexing and abstracting that occurs among various countries. An obvious solution would appear to be international cooperation. Unfortunately as we shall see, international cooperation all too frequently implies a political rather than an economic basis for decision making, with the users' interests being served only to the extent to which they are consistent with political objectives. An analysis of three models of international cooperation is provided in a recent Journal of Documentation article
which discusses the following systems:
•
International Nuclear Information System (INIS)
•
International System for the Agricultural Sciences and Technology (AGRIS)
•
Aquatic Sciences and Fisheries Information System (ASFIS)
We will consider the AGRIS and the ASFIS models.
It is observed that the
NAL's AGRICOLA database covers only about 50% of available world literature. Furthermore, there was substantial duplication among the then existing leasing agricultural databases - NAL and Commonwealth Agricultural Bureaux (CAB).
One possibility could be to set up an international organization
wherein each participating country bears the cost of providing its input and the costs (and benefits) of exploiting the world file according to its own policies and rules. Such a formula was indeed worked out under the
(1) H. East of University College, London, in Journal of Documentation Vol. 34, No. 4, December 1978, pp 311-323, "The Development of Internationally Managed Information Systems and Their Prospects"
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auspices of the Food and Agricultural Organization of the United Nations (FAO) along lines similar to that previously developed by the International Nuclear Information System (INIS).
The result was AGRINDEX.
The question
is whether this cooperative international effort solved the problems outlined in its enactment study, or even resulted in improved access to the world's agricultural literature. An independent evaluation of AGRIS was organized by UNESCO in 1977 whose appraisal recognized that after three years of operation AGRIS had to be judged on its potential rather than its achievement. Production during the three-year period amounted to a machinereadable bibliography of approximately 200,000 citations with fairly shallow indexing and no abstracts.
By way of comparison, AGRICOLA during the same
period had produced nearly 500,000 citations. Furthermore, CAB has added nearly 400,000, the significant items of which contained complete and informative abstracts. Moreover, both AGRICOLA and CAB are offered on a worldwide basis by several online retrieval services; AGRIS is not. To summarize the result: duplication had not been eliminated, comprehensiveness had certainly not been achieved (at 200K for AGRIS vs. 500K and 400K for NAL and CAB respectively), and yet one more agricultural database of questionable need was introduced and is maintained under a political umbrella of protection. Of perhaps greater concern than the questionable use of public funds for the development of AGRIS, is one of the provisos in the development agreement which states that each contributing country may exploit the database according to its own policies and rules. Such a provision allows politics to over-ride both economic good sense and user interests, as has been the case with the Aquatic Sciences and Fisheries Abstracts (ASFA), the database of ASFIS.
Specifically, Lockheed has provided online retrieval services
to ASFA on a worldwide basis for several years under a contract with National Oceanic and Atmospheric Administration (NOAA).
Upon renewal of
this contract last fall we were surprised to see a provision requiring us to withdraw access to ASFA from our Canadian customers.
It seems that
a local Canadian retrieval service had prevailed on the Canadian Department of Fisheries to exclude U.S.-originated services in favor of its service. Although usage of this database is so small as to make the economics of even a worldwide offering questionable (and Canadian usage amounted to only 4-5 hours per month), we resisted out of deference to our Canadian customers. -3-
We were told that because of the self-determination provision in the international agreement, NOAA was forced to accede to the Canadian Department of Fisheries request, thus requiring us to withdraw Canadian access to this database.
Politics had prevailed at the expense of both economics
and the Canadian information user.
Ironically we have received several
requests from Canadian Department of Fisheries searchers to reinstate access to ASFA on DIALOG. If there are to be national and/or international political organizations involved in the compilation of secondary information, a better provision than allowing exclusive jurisdiction over internal dissemination would probably be agreement on an information users bill of rights. Such an agreement should guarantee unregulated access to the database irrespective of the national origin of the service provider. possible dissemination would be encouraged.
In this manner the widest
Furthermore, such a proviso
would prevent retrieval service agreements: from becoming patchworks of exclusionary provisions. The relatively limited dissemination of these costly resources attests to the restrictive practices of the political development organizations. Telecommunications Services Of the several telecommunications models, let us focus on two alternative approaches: •
TYMNET and TELENET
•
EURONET
The United States enjoys the only competitive, commercial sector telecommunications services in the world.
This came about through the Federal
Communications Commission's (FCC) recognition of "shared use" of American Telephone and Telegraph (ATT) lines. Through shared use, companies such as TYMNET and TELENET are able to purchase bulk quantities of broadband service at very cost effective rates. Using minicomputers as multiplexers, the broadband service is broken down into small packets of capacity which are resold to service vendors such as ourselves. This telecommunications service is available to any organization which will conform to the interface standards and can be offered to end users at rates as low as $5.00 per hour - independent of distance - anywhere in the U.S. TYMNET and TELENET have interconnected with various other countries to provide a truly -4-
international network of information services. The availability of low cost services has encouraged the development of innumerable computer services in the United States, and largely accounts for the early development and current leadership of the U.S. in database services. By any measure, both service supplier and service user have been well-served through this arrangement. Moreover, this governmental policy of encouraging competition in datacommunications has stimulated an exciting race among the competitors to provide better and cheaper services. Several years ago Mexico pioneered direct interconnection to TYMNET services, deciding it was more cost effective to purchase than to produce such services. The development of Mexican information services will be described by Rafael Rivera. The entrepreneurial flexibility offered by this policy has recently spawned two new organizations whose telecommunications services in the early 1980s will surpass anything that could have been imagined just a few years ago. The organizations are Satellite Business Systems (SBS), a conglomerate formed by IBM, COMSAT and Aetna Life Insurance; and COMTEN, a project within Xerox. The services in telecommunications anticipated from these companies stimulate information delivery companies to design next generation systems. Potential user companies such as Lockheed need not be concerned directly with the rates to be established as they can anticipate that the rates will be lower than today's rates for similar services (or they would not have been established), and that competition between these giants (including ATT which has its own offering) will insure customersensitive service and attractive rates. An alternative model is EURONET. The development of EURONET is technically analogous to that of TYMNET some six or seven years ago, but with important political and economic differences. Whereas TYMNET was developed as a data communications company using private capital, EURONET has been developed as a private agency using public funds from common market countries. TYMNET was established as a telecommunications company only whereas EURONET presently combines both telecommunications and information retrieval services.
Whereas TYMNET was originally a domestic development, EURONET is
international in scope. Whereas TYMNET is interlinked with various international telecommunications networks and offers service to any host on the network, EURONET is reserved for use by host computers in sponsoring countries -5-
only.
Both offer low-cost, distance-independent service. The tele-
communications cost to the European users of a host service will be approximately $5.00/hour, approximately the same rate as the U.S. user enjoys.
The same European user has to pay $25-$30 per hour for tele-
communications to access a U.S. host thereby providing a $20-$25/hour advantage to the EURONET host service.
Strange as it may seem, the bulk
of this differential is not the result of overseas rates, but rather a surcharge imposed by the local country telephone company (PTT), a government agency. Let us examine EURONET's exclusionary policies. The motivation for restriction of host connections to sponsoring countries has been said to be the protection and the encouragement of an infant European information services industry.
Such a practive, however, may do little for the
industry and greatly disservice users.
In that only a few (sixteen) of
the hundred or so databases available from U.S. services will be offered, individuals who use the service will be forced to learn yet another retrieval language and contract with yet another organization. But what of the economics of EURONET?
It is possible that the low data
communications rates, and subsidized computer centers will divert a subficient number of users from existing services to make them financially unattractive to continue in Europe.
Should U.S. competition be removed,
by whatever means, there would probably be pressure to increase EURONET service charges in an effort to provide at least cost recovery to the several EURONET hosts. In summary then, we have a situation where political motivation has brought about a network of retrieval services paid for by and subsidized with public funds, containing too many suppliers and too few customers. With competitive free enterprise, those providing the most cost effective services (from the users viewpoint) would survive and the others would fail until a stable equilibrium of supply and demand was obtained.
As
currently situated, it will be interesting to observe what other props and artifacts are used to justify and maintain what is basically a politically as opposed to an economically-based enterprise.
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CONCLUSION The advanced state of telecommunications and computer-based information systems in this country are the direct result of a political and economic climate which stimulates entrepreneurship and encourages competition.
Free
enterprise, however, is fragile in the face of either government intervention or competition.
Be aware that governments are riot bound by anti-
trust regulation and are free to engage in restrictive practices which would send private entrepreneurs to prison.
We will do well to observe the European
developments closely for their success or failure may well indicate whether we can anticipate an environment which will be directed by economics, or controlled by politics during the information revolution of the 1980s.
We
should avoid being seduced by the short-term appeal of low, subsidized information service rates, with their incumbent political motivation. Hans Peter Gassmann, Head of OECD's Information, Computer and Communications (2) Policy Unit makes several important observations in a recent paper. He indicates that it is clear that telecommunications systems certainly raise productivity and thereby contribute to the economic growth of nations.
He suggests that development of telecommunications systems
should be among a nation's highest priorities, and may offer an alternative to achievement of growth through energy consumption.
Telecommunica-
tion based services thus come to be identified with the main stream of economic growth - productivity.
The question facing any government, how-
ever, is whether it should encourage the development of such systems by removing barriers and providing incentives to free enterprise, or rather should directly engage in the planning and operation of such systems. have before us models of both types.
(2)
We
The choice will be yours.
"Data Networks: New Information Infrastructure", Hans Peter Gassmann; OECD Observer, No. 95, November 1978, pp. 10-16
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