The Commercial Use of Public Information (CUPI) market study

1. The Commercial Use of Public Information (CUPI) market study Antoinette GravesTeam Leader

2. OFT & PSI • In UK Office of Public Sector Information has responsibility for implementing Re-use Directive through UK Regulations (& IFTS) • OPSI has MoU with OFT regarding our enforcement of competition legislation • OFT market study looked at how well commercial supply of PSI working for consumers

3. Key messages • PSI valuable & vital input for businesses wanting to make new products/services • Improvements could be made to way PSI supplied leading to doubling value to UK economy to over £1bn per year

4. Most PSIHs are sole suppliers of PSI – where they also add value to PSI themselves could be in competition with businesses & have incentive to restrict access to PSI in its less refined form • Range of legislation & guidance should ensure access to ‘unrefined’ information is provided on an equal basis but lacks clarity & inadequately monitored

5. Definitions • Unrefined information: cannot be substituted directly, relates to PSIHs’ monopoly activities where competition unlikely • Refined information: PSIH has added value beyond what necessary to make useable (incl by itself), can be performed by private sector if had access to unrefined PSI

6. Supply of PSI • Income to PSIHs from supply of PSI is £400m • About three quarters of this to OS, Met Office, UKHO, HMLR & Companies Ho • 78% in analysed form: not raw, consultancy, information search or designs

7. Use of PSI • 50% income from businesses, 45% from other public sector bodies, 5% from public • Most businesses use PSI to produce value-added products • Half use it to produce business products, three in ten consumer products

8. Common Issues Over one third businesses reported problems, over two thirds were serious • Inadequate availability of unrefined PSI • Overly-restrictive contract terms • Inadequate quality of service • Unduly high prices

9. Unduly high prices • Costs not allocated between unrefined & refined PSI • Means PSIHs cannot ensure prices charged for both types PSI reflect relevant costs of their provision • Means that it’s not possible to determine that prices of unrefined PSI charged to businesses are same as those charged internally

10. Existing controls • Range of guidance documents from Treasury – do not require Trading Funds to distinguish between raw & value-added PSI • OPSI powers & resources extremely limited

11. Remedies to achieve equal access • Considered: • Divestment of refined PSI operations • Making unrefined PSI available at no charge • Building on existing regulatory framework

12. Need to ensure: • Businesses have access to PSI at earliest point in refinement useful to them • On equal basis to any refined information operations of PSIH

13. Improving accounting practices • Account separately for unrefined (monopoly) & refined PSI (competitive) • Allocate common costs to unrefined & refined PSI activities • Sophistication of cost allocation methods to reflect proportionality • Cost allocation, pricing decisions & unrefined/ refined split to be documented & available to OPSI

14. Improving pricing: unrefined PSI • Ceiling on unrefined PSI prices to be the full cost (including any required rate of return) • Unrefined PSI should be available to third parties and internally at the same price and on equal terms for comparable purposes • Where prices are at or below marginal costs, no need to allocate common costs, just consider marginal costs and articulate reasons for such a pricing policy

15. Improving pricing: refined PSI • Refined PSI products should be priced at no less than full cost recovery, incl any required rate of return and an appropriate share of any common costs.

16. Conclusion • Supply of PSI not working as well as it could • We know that PSIHs can do things differently because there are examples of best practice incl in separating unrefined & refined PSI • Benefit: doubling value PSI to £1bn pa