Public Sector Information as a Source of Growth and …

     Public Sector Information as a Source of Growth and
             Development of Information Society
                     in the Czech Republic
                   Dagmar VRÁNOVÁ (mailto: vranova@epma.cz)
          EPMA ­ Agentura pro evropske projekty & management (www.epma.cz)
                   Czech PSI Watch Initiative (www.czechpsi.info)



1.     Public Sector Information issue in Europe
   1.1. Basic principles of re-use of Public Sector Information in EU
Public authorities are remarkable producers of considerable amounts of many kinds of
information. In the nineties of the last century European Union was already aware of the fact,
that this information contains a huge wealth that could contribute to creation of new services.
Our era is called "the information age", the society bears adjective "information" and the
economic progress is related to the ability to use information and transform it into knowledge.
Every country spends considerable resources for collection, recording, archiving and
publishing information that public sector institutions need for their activities. However,
information produced by public sector could be used also as a "raw material" for other
producers ­ mostly commercial services providers ­ that add their own value and offer
services demanded by users. This ability of re-use of information became important due to
extended digitalization of information content, development of data transmissions,
telecommunication and internet applications. Therefore, European Commission considers
Public Sector Information (PSI) as a key element of information society building. The idea of
"re-use" has become a base for release of European Directive that should establish at least
basic rules for re-use and commercial exploitation of PSI in all Member States of EU. The
European Parliament adopted the Directive No. 2003/98/EC on re-use of public sector
information in 2003. All Member States were obliged to transpose it into their national legal
system until July 2005.

   1.2. Why is access to public sector information important for businesses?
Content ­ especially digitalised­ is an excellent source for next re-use by commercial as well
as non-profit sector. There are many possibilities for new value added services creation being
opened. Information that public sector needs for the proper fulfilment of its tasks, could be a
good source for other information products. For example:
    - Commercial courts register companies and enter records into Commercial register.
        By the law, the deed (in these days mostly database) must be available for public.
        These basic records about companies can be a good source for other services ­
        business and credit information, rating etc.
    - The task of publicly funded hydro meteorological institute is to monitor the weather
        and prepare weather forecasts. Re-users can use meteorological data for commercial
        services, like weather forecast for mobile phones, risk management in insurance
        industry etc.

It is not the basic duty of public administration to ensure those specified services, but it is an
attractive opportunity for new kinds of business. We could follow a range of positive impacts
results from the facilitation of commercial exploitation of PSI as better user requirement
meeting or arising of new companies.
                                                        4 - 5 June 2007, Potsdam, International Symposium
           "Public Data on the Private Market - New Regulations on the Re-Use of Public Sector Information"

   1.3. Support of re-use of PSI from European Commission
To overcome the barriers that limit the re-use of PSI, the European Commission has defined a
set of actions to support activities aimed to wider exploitation of PSI. From many programs
the eContent and eContent plus are the most relevant. Project as ePSInet, ePSIGate, MEPSIR,
ePSIPlus and many others were realized within this framework.
EPMA experts were participating in these projects through its cofounder BMI Association as
members of international consortia representing the Czech Republic.

2.     State-of-the-art in the Czech Republic
    2.1. Transcription of Directive 98/2003/EC into the Czech legal system
All stakeholders of Public Sector Information, especially companies doing business in
information industry, were impatiently expecting outcomes of legislation process concerning
transposition of Re-use Directive and its adoption to Czech law during the 2005.
By that time, the existing situation in the Czech Republic looked as follows: the ACCESS to
PSI was in favourable state but RE-USE of PSI needed more questions and disputes. The
citizen's (as well as legal entity's) right on information produced by public sector was
covered by Act No. 106/1999 on Free Access to Information. This act guarantees one of the
basic rights of democratic governance and society.
The government and its responsible body ­ Ministry of Informatics of the Czech
Rep.(www.micr.cz) - decided to transpose the Directive 2003/98/EC in a way of amendment
of existing act - Act No. 106/1999 Coll. on Free Access to Information - instead of preparing
and passing a quite new law (this process was expected to be unrealizable in allowed time).
After lengthy legislative process, the Act was definitely approved on 27 February 2006 as the
Act No. 61/2006 Coll. and came into force on 23 March 2006. Despite of 7 months delay of
the transposition the Czech Republic belongs to the better-assessed countries, because several
MS have not finished the transposition to this day.


   2.2. Freedom of Information Act ­ Pro and Con
However, what is the real impact of Free Access to Information Act on those, who want to
use PSI as a raw material for their business activities? How the act works in practice? It seems
that practice processes of public sector bodies have not changed considerably. The most of
public content holders publish information produced by them now on web pages most often.
However, they do not deal with other services that the re-users would need. Especially
distribution services enabled by ICTs lag. The opinion that business based on PSI is
unwelcome, even immoral is still fixed in the minds of many public bodies. Well,
businesspersons (considered them as speculators) take data produced for money from
taxpayers and therefore available for all, create some information service and then they sell it
for money! They are not aware, that just the creation of new information services tradable on
the market is much desired. The value added services provision is a driver of information
industry development.

The opinion on re-use of PSI is not very positive neither among lawmakers. Amendment of
Free Access to Information Act was put through the Parliament very hard. Arguments that
freedom on information is enough guaranteed already and no changes in legal rules are
needed were very frequent. Many members of the Czech Parliament consider the business
based on PSI as unwelcome. This was the reason why only basic and general regulations from
European Directive were put into the Czech law.


© EPMA ­ European Projects & Management Agency                                                           2
                                                        4 - 5 June 2007, Potsdam, International Symposium
           "Public Data on the Private Market - New Regulations on the Re-Use of Public Sector Information"


As ,,Pro" of amended Free Access to Information Act we can consider the fact that the Czech
Republic formally transposed the European Directive into the Czech legal system, fulfilled its
duty and avoided the impending sanction.

To ,,Cons", however, we can add the fact that the access to information is still more relevant
then re-use. The citizen's right on (unrepeated) gaining the information is more valuable the
businessperson's right on repeated gaining for commercial purposes. There are no regulation
concerning the right on repeating access and mass downloading with support of technological
developed distribution ways. No licenses are solved; the pricing is defined only generally.

   2.3. Competence of public administration bodies for free access to and re-
           use of information
The Ministry of Informatics established on 1 January 2003 was the national public
administrative body competent for PSI. The new government that arose from parliament
election in June 2006 decided however that Ministry if Informatics will be abolished and its
competences will be divided among other ministries. Agenda concerning eGovernment,
Public administration information systems as well as Public Sector Information are under the
competence of Ministry of Interior (www.mvcr.cz) now.

   2.4. Czech PSI Watch Initiative
The Czech PSI WATCH Initiative started in summer 2005, when the process of transposition
of ,,re-use Directive" became more intensive and the close cooperation between all
stakeholders was necessary. Founders of the Initiative - EPMA (non-profit sector),
Ministry of Informatics (public sector) and CEKIA (private sector) encouraged other
stakeholders to join and support the Initiative.

Main objectives of the Czech PSI Watch Initiative were as follows:

1. To encourage the discussion: To assist working discussions and cooperation between
   different groups of stakeholders and users in the area of PSI

2. To organize seminars: After the overall screening of national providers of PSI, the
   initiative will organize awareness rising seminars as well as professional workshops,
   based on national understanding of PSI Directive and on European experiences as well.

3. To promote knowledge: Being organized by three kinds of partners (public, business,
   non-profit), it will gather and promote knowledge from official governmental decisions
   and relations, from business practice and from international project experiences, as
   EPSINet, MEPSIR etc.



3.     Information services based on re-use of PSI in the CR
   3.1. PSI re-use industry in the Czech Republic - global picture
Information industry based on PSI exploitation is developing quite successfully in the Czech
Republic, in spite of the fact that commercial re-users have to overcome many obstacles ­
both objective (legal) and subjective (caused by reluctant attitude of civil servants).




© EPMA ­ European Projects & Management Agency                                                           3
                                                        4 - 5 June 2007, Potsdam, International Symposium
           "Public Data on the Private Market - New Regulations on the Re-Use of Public Sector Information"

There are some difficulties to find out the market share of companies doing business in the
PSI re-use sector. We can follow two basic lines in these activities:
   "Reference" function (for the purpose of internal control processes, data quality
   management etc.), which is provided mostly in banks, insurance companies and
   commercial companies, in the industry in general. These organizations use PSI in internal
   information systems and do not sell it to third parties.
   "Raw material" function (for the purpose of value added services production and sale on
   the market), which is related to the information content industry. Re-users exploit PSI to
   create new products and services and sell them on the market

It is therefore very hard to estimate the number of companies exploiting PSI in the first or the
second way. We can only derive it from some partial information.

Tab 1. Number of companies providing commercial added-value services based on PSI in the
Czech Republic.
Kind of information         Number of entities involved     Total revenues (i.e. not only
                            into the re-use business (est.) from PSI re-use) (est.)
                                                            mil. CZK        mil. EUR
Business information        50                                  1 300              46
Geographic information      35                                  3 600             128
Meteorological information 12                                     900              32
Legal information           10                                    370              13
Transport information       10                                    280              10
Social information          8                                     150               5
Miscellaneous               20                                    200               7
Source: EPMA estimation in 2007, own research of D. Vranova

   3.2. Types of Public Content Holders and PSI re-users
We can separate the Public Content Holders (PCH) in the Czech Republic into several
categories:
    "Enlightened" institutions, that provide information for all, free of charge or under clear
    pricing conditions. Distribution ways are easy available.
    Agreeable (quite good) and Shutting eyes institutions, that provide PSI with some
    limitation, but in fact they do not prevent further re-use actions with information. They are
    able to agree with individual re-users or they "close eyes" on occasional violation of
    restricting rules.
    "Cur dogs" - institutions that provide information, but do not support its further re-use.
    They impose restrictive conditions and it is nearly impossible to agree with them on
    different operation. By attempts of circumvention, they interpose very strongly.
    Institutions that consider PSI provision as a ,,necessary evil". Because they do not want
    to come into conflict with the law, they provide information in some of the not very user
    friendly form.
    ,,Impregnable castles" - institutions, that refuse under different pretences the provision
    of information they produced. Some of them refuse it only for commercial exploitation;
    some of them refuse it completely.

Note: No commercial organization has taken courage to legal dispute so far. This is a
difference against the situation in solicitation of citizen's right on the free access to
information. In this area, several legal disputes have come through already.



© EPMA ­ European Projects & Management Agency                                                           4
                                                        4 - 5 June 2007, Potsdam, International Symposium
           "Public Data on the Private Market - New Regulations on the Re-Use of Public Sector Information"

Similarly, re-users can be divided into several categories, too.

   "Extra class" - re-user, which has gained exclusive position in the past and became a sole
   (monopoly) information provider in particular area. This re-user has no interest to change
   the state-of-the-art, because he would miss its competitive advantage.
   "Good boys" - re-users, which have agreed with PCH on particular (not exclusive)
   conditions and are glad that they succeeded in it. Even if they are not satisfied absolutely,
   they better do not urge for a change.
   "Gamblers" - re-users that have no agreement with PCH, but in spite of it they gain the
   information they need. However, it is not possible without occasional violation of rules.
   They do not urge for a change because they are glad that such a behavior is tolerated.
   They are aware the risk of applying of sanctions.
   "Knights (Don Quijote?)" - re-users that would exploit PSI fairly and transparently.
   They have for example good business idea, but gaining of raw material is difficult for
   them. They urge for establishment of single rules for PSI providing, clear license and
   price conditions.

   3.3. Barriers of development of re-use industry in the Czech Republic

(a) Clauses of prohibition of re-use PSI
Some public institutions are explicitly prohibiting the re-use and especially commercial
exploitation of PSI that they provide according to the Free access to information Act.
Information published e.g. via web site are followed by announcement, that only personal
usage of information is permitted and that it is prohibited to process it and disseminate to
others. Somewhere only the commercial usage is prohibited. Those institutions probably are
not even aware of the fact, that they interpose and make barriers against European trends of
re-use of PSI supported and encouraged by EC.

(b) Unclear formulation
By the way, it is not quite clear what the ,,commercial purposes" are? Is it a usage of PSI for
reference function or for raw material function? And what is the manner of proper asking for
approval? What should the re-users achieve permission for the downloading of bigger volume
of data? If the commercial re-user adds its own value to the service offered on the market, is it
possible to separate the part of price relating to own value added and the part relating to the
data?

(c) Protection of investment of private organization
Unclearness around the long-term strategy of public sector in the Czech Republic concerning
the future development of digital services is also a significant barrier for more dynamic
development of commercial services based on PSI. Private companies therefore consider very
carefully their own investment in value added information services. If it is not clear whether
public sector would invest public money in the same services, business sector will always
hesitate. No private company can win over the state in the long-term horizon. We can use as
an example the case with a private company, which invested significant private finances into
collection of company's reports, their scanning and further processing. After offering the
same service free of charge by the state body (by the way supported by the investment of
hundreds millions of Czech crowns from the state budget) the private investment was wasted
for the most part.




© EPMA ­ European Projects & Management Agency                                                           5
                                                        4 - 5 June 2007, Potsdam, International Symposium
           "Public Data on the Private Market - New Regulations on the Re-Use of Public Sector Information"

(d) Missing of catalogue of public available sources dedicated for re-use
No existence of complex and comprehensive catalogue of information assets available for re-
use looks also as a certain issue in the Czech Republic. It seems to be very useful to have such
a list containing information sources available for re-use, Public Content Holders and terms
under that it is possible to exploit and re-use it.

(e) Missing of standards for data description and communication
Different public institutions ­ PCH ­ have not agreed on standards so far. Some re-users
demand especially communication and distribution standards.

(f) Missing of central point for complaints and enquiry center
Alonside with the extending interest in re-use of PSI the number of conflicts, collisions and
uncertainty during its exploitation is increasing. Commercial re-users requests for PSI were
refused in several cases; inadequate prices were established or other barriers and obstacles
occurred. There is a lack of independent body established in the Czech Republic to review
and judge such a process. No central point exists for collection and aggregation of questions,
comments and claims.

    3.4. Requirements of commercial sector for PSI as a row material for re-use
Commercial sector has quite exact vision what types of information would they need for value
added information services creating. They also know very well what the ways of distribution
should be. Their opinion was summarized and expressed in the document published in 2006
in the frame of the Czech PSI Watch initiative. PSI should be correct and right, updated,
easily available, provided in the form convenient for next processing, keeping the data
exchange and communication standards. PSI should be provided by clear and equal rules, to
obtain the permission, licences should be easy and quick available. PSI should be provided
free of charge or for modest fees.

4.     Conclusions
It is positive that along the years the attitude of particular public bodies to PSI exploiting and
re-use is changing. Step by step (also under the pressure of European Commission) providing
of PSI is not considering anytime and anywhere as a negative or even immoral activity.
Attitude of some public bodies gives an evidence of slow change of the culture. Those
,,enlightened" institutions do not regret a fictive ,,economic loss" that according to some
PCHs was caused by free provision of PSI, but on the contrary, they support everyone who
exploits, re-uses and disseminates PSI further. The benefit is also a direct saving of public
funds, because investment in these services demanded by users on the marketplace flows from
private sector.
The task of public sector is not to provide users by the whole range of value added
services and earn money from selling them for fees. This is exactly the role of
commercial (or non-profit) sector. Barriers and unclear issues that obstruct this process
should be therefore removed as soon as possible. Only that spirit is the right on the way
to information society.




© EPMA ­ European Projects & Management Agency                                                           6