[54] in Information Retrieval
[Public Access to SEC's EDGAR database]
daemon@ATHENA.MIT.EDU (Tim McGovern)
Tue Jan 14 20:25:39 1992
Date: Tue, 14 Jan 92 20:27:34 EST
From: tjm@Eagle.MIT.EDU (Tim McGovern)
To: elibdev@MIT.EDU
------- Forwarded Message
Date: Tue, 14 Jan 1992 15:41:27 CST
Reply-To: Public-Access Computer Systems Forum <PACS-L%UHUPVM1.BITNET@RICEVM1.RICE.EDU>
Sender: Public-Access Computer Systems Forum <PACS-L%UHUPVM1.BITNET@RICEVM1.RICE.EDU>
From: James P Love <LOVE%PUCC.BITNET@RICEVM1.RICE.EDU>
Subject: Public Access to SEC's EDGAR database
To: Multiple recipients of list PACS-L <PACS-L@UHUPVM1.MIT.EDU>
Please respond directly to the author, not PACS-L. Thanks, Dana
----------------------------Original message----------------------------
TO: Persons interested in SEC information
RE: Public Access to the SEC's new EDGAR system
The SEC will soon require corporations to file SEC public
disclosure reports electronically. The reports will be stored in
the SEC's new Electronic Data Gathering, Analysis and Retrieval
System (EDGAR). The SEC is spending more than $60 million to
develop EDGAR. The system will allow about 650 SEC employees to
have online access to all SEC filings, and to search and analyze
filings in a number of new ways.
The SEC plans to limit public access to this database to use of
terminals in SEC reading rooms in New York, Chicago and
Washington, DC.
The following letter to the SEC and Representative Markey (D-MA)
asks that the public, which paid for EDGAR, be allowed to
purchase online access to this information and that the SEC take
other steps that broaden public access to the EDGAR database.
If you are interested in adding your name to this letter, please
mail, fax or email your permission, plus the following
information:
Name:
Title: (optional)
Affiliation:
Address:
Telephone: (for verification)
Email address: (optional)
to:
James Love voice: 609-683-0534
Center for Study of fax: 202-234-5176
Responsive Law bitnet: love@pucc
P.O. Box 19367 internet: love@pucc.princeton.edu
Washington, DC 20036
Thank you.
=================================================================
Draft letter to SEC and Rep Markey Regarding
Public Access to SEC's EDGAR Database
- draft January 13, 1992 -
February XX, 1992
Richard C. Breeden
Chairman, Securities and Exchange
Commission
450 Fifth Street
Washington, DC 20549
Representative Edward J. Markey
Chairman, Subcommittee on
Telecommunications and Finance,
Committee on Energy and Commerce
U.S. House of Representatives
Washington, DC 20515
RE: Public Access to EDGAR data
Dear Sirs:
We are writing to express our distress that the public will have
only limited access to the SEC's new Electronic Data Gathering,
Analysis and Retrieval (EDGAR) system. The following comments
highlight our concerns about the SEC's proposal.
1. Citizens should be able to search EDGAR online from remote
locations.
The current SEC plan would provide online search and retrieval of
SEC filings to about 650 SEC employees. Public access to EDGAR
is limited to use of terminals in reading rooms in three cities:
Chicago, New York, and Washington, DC. This limited access is
inadequate and will not benefit most shareholders and taxpayers.
The public should have the right to subscribe to online access to
EDGAR from remote locations. For most subscribers, the cost of
the subscription should be based on the incremental cost of
providing such access.
2. The SEC should exercise greater control over the EDGAR
database.
The present EDGAR contract will significantly diminish SEC
control over one of the world's most important and valuable
financial databases.
For example, under the present SEC plan, the official government
record of the transactions will be in microfiche. The machine
readable copy of the EDGAR database will be stored on computers
owned by Mead Data Central, and the government will have only
limited rights to access its own database.
According to the SEC staff, the machine readable copy of the
EDGAR database will not be available under the Freedom of
Information Act. Mead will be required to sell magnetic tapes of
transactions from the current day, but it will have no obligation
to provide records of cumulative transactions, and it will not be
required to maintain an inventory of back files.
Before the SEC can provide the public online access to the EDGAR
system or produce new electronic information products or
services, it must gain permission from Mead Data Central. Since
Mead itself plans to sell SEC information to the public, it will
have little incentive to cooperate in efforts to expand public
access to the data directly from the government.
The SEC should revise the EDGAR contract to ensure that the
government receives a current and complete copy of all filings in
machine readable form, and that electronic versions of public
records received and stored in the EDGAR system are available
through FOIA.
3. The SEC should sell CD-ROM products that meet the needs of
libraries, journalists, economists and other researchers.
There are a number of CD-ROM products the SEC could easily make
available to the public from the EDGAR database. For example,
many libraries want to buy CD-ROM versions of annual reports and
10-K filings. CD-ROM versions of these information products are
far more useful than microfiche or paper products, since they
allow the user to use software to search the information on the
basis of particular characteristics. There is also a
considerable need for CD-ROM products that provide time-series of
corporate earnings and balance sheet information. These products
currently are available from commercial vendors, but at prices as
high as $20,000 per year, which many libraries and researchers
cannot afford.
The SEC should develop an ongoing mechanism to allow the public
to identify information products and services that are based upon
the EDGAR database.
4. EDGAR information should be made available through the
federal Depository Library Program.
The federal Depository Library Program is designated to promote
universal access to federal government information. The SEC
should participate in this important program, which began in 1857
and currently involves more than 1,400 libraries nationwide.
Among the Massachusetts depository libraries are the American
Antiquarian Society Library, which was designated by a special
act of Congress in 1814, the New Bedford Free Public Library,
which was designated in 1858, the Worcester and Boston Public
Libraries, designated in 1859, and Harvard College, designated in
1860. Today Massachusetts has 33 depository libraries providing
free access to federal information (see attached list), and there
remain six vacancies (each Congressional district is entitled to
designate two), including two vacancies in the 7th District.
5. The information in EDGAR is collected by at taxpayers
expense to inform the public. We should not have to pay
commercial firms to receive something that has already been
paid for once through taxes.
As citizens, we want the government to use efficient and useful
technology to serve the public. Under the EDGAR system,
corporations will file SEC documents in digital form, creating a
useful and valuable database. The SEC and Congress cannot
justify a system that makes information available to citizens
only in three reading rooms, or in paper copies of microfiche
records. Taxpayers deserve more for their $60 million investment
in EDGAR.
Sincerely:
Individuals signing this letter will include:
Patricia Glass Schuman, President, American Library Association;
Arthur Curley, Director, Boston Public Library; Andy Scott,
Executive Director, Investigative Reporters and Editors (IRE);
Howard C. Weaver, Editor, Anchorage Daily News; Paul Nussbaum,
Deputy Foreign Editor, Philadelphia Inquirer; Jack Lail, Metro
Editor, The Knoxville News-Sentinel; Eliot Marshall, reporter,
Science Magazine; Penny Loeb, reporter, New York Newsday; John
Judis, Author; Mitchell Kapor, President, Electronic Frontiers
Foundation; Marc Rotenberg, Director, Washington Office,
Computer Professionals for Social Responsibility; Bruce Morton,
Assistant Dean for Public Services, Montana State University
Libraries; Sandra McAninch, Head, Government Publications/Maps
Department, University of Kentucky Libraries; Judith Rowe,
Princeton University Computing Center; Paul Starr, Professor,
Princeton University; James K. Galbraith, Professor, LJB School
of Public Affairs, University of Texas at Austin; Ross Cheit,
Professor, Brown University; Rino Aldrighetti, Executive
Director, National Family Farm Coalition; Daphne Wyscham,
Managing Editor, Greenpeace Magazine; Jerry Berman, ACLU; James
Love, Director, Taxpayer Assets Project.
===============================================================
NOTES ON PRIVATE SECTOR PRICES FOR
SEC INFORMATION
1. Online Charges
DIALOG
per per
hour record
SEC Online $84.00 $1 (per
(10k, 10Q, Proxy and page)
Annual Report)
Also on DIALOG
Disclosure Database 45.00 $20.00
Disclosure/Spectrum
Ownership 60.00 25.00
Insider Trading Monitor 84.00 .75
M & A filings 84.00 3.00
Mead Data Central LEXIS/NEXIS
This service is available for a fee of $125 per month, plus
a connect charge of $39 an hour, plus a charge of 2.5 cents
per line of data plus search charges which range from $6 to
$51 per search. Search charges for SEC documents are based
upon the type of document. Search charges for 10K, 10Q, 20S
and proxy statements are $15 per filing. The search charge
for an annual report is $28. (Search charges are in
addition to monthly subscription, connect time and data
charges.)
2. CD-ROM prices
McGraw Hill:
COMPUSTAT PC Plus $18,000
Historical information from
income and balance sheet reports
for 7200 companies.
COMPUSTAT Corporate Text $9,000
Text of Annual Reports, 10K, 10Q
and Proxy Statements for 3,200 firms
3. Microfiche
Q-Data Corporation
SEC-FILE:
Wall Street: Current Year $9,450
Annual Reports, 10-K, Proxy, 10-Q,
8-K, 10-K and 10-Q exhibits for
approximately 11,500 firms
Backfiles: (coverage varies by $64,500
document)
================================================================
NOTE ON CONTROL OF THE EDGAR DATABASE
The EDGAR contractors will receive electronic records of SEC
filings and then create microfiche records, which will be the
official government record of the filing. Citizens who write the
SEC for copies of a filing will receive a paper copy of the
microfiche record.
Electronic versions of the filings will be sold to the public by
Mead Data Central and other commercial vendors. Mead is required
to offer a limited number of bulk data sales at regulated prices.
All other data services and prices will be unregulated. The
regulated services include:
1. Level I service will involve online access to three days of
back filings, plus overnight delivery of magnetic tapes of
all filings from the current day.
2. Level II service is overnight delivery of magnetic tapes of
eight subsets of SEC filings from the current day. Examples
of the SEC defined subsets are all 10-K and 10-Q reports,
all Securities Act of 1933 Registrations, and all Stock
Ownership Reports. Some subsets of filings are for
companies traded on different exchanges.
Mead Data Central is allowed to recover all its costs associated
with its Level I and Level II regulated services, plus a
reasonable profit.
The tapes sold under the regulated program only contain data from
the current day's filings. Mead is not required to keep an
inventory of back files. The SEC does not require Mead to sell
tapes of cumulative filings, which would be much cheaper and much
easier to use.
Mead can choose to sell historical records as an unregulated
service.
The federal government does not receive the Level I or Level II
service tapes. Mead is required to store an electronic version
of the filings on its own computers in Ohio and provide the SEC
staff and reading rooms with a LEXIS/NEXIS-type online full text
search and retrieval service. Mead is paid about $1.8 million
per year for this service, but retains full ownership of the
software needed for the search and retrieval service. The EDGAR
database will not be the full cumulative record of all SEC
filings. Mead will "manage" the database, regularly purging
records which are not a priority for the SEC staff.
Mead is required to maintain a machine readable copy of the
database in an escrow account, managed by a third party, which
will not be a federal agency. The federal government will have
access to these records in order to audit Mead's performance, but
cannot take possession unless Mead fails to live up to its
contract obligations or the contract is terminated.
The SEC has taken the position that the electronic versions of
EDGAR data which are stored on Mead's computers or held in escrow
will not be subject to FOIA.
The SEC is exploring methods of providing machine readable
records of the EDGAR filings to the National Archives. If this
happens, it will only involve older records. The SEC will have
to negotiate the terms of any such arrangement with Mead.
=================================================================
NOTE ON THE COST OF MAKING EDGAR AVAILABLE TO THE
DEPOSITORY LIBRARY PROGRAM.
In 1989 the EDGAR contractor submitted a deeply flawed analysis
to the House Subcommittee on Government Information regarding the
costs of providing online access to EDGAR to the Depository
Library Program. This analysis was based upon the erroneous
assumptions that the SEC would bear the costs of installing
terminals for libraries and that the SEC would pay the
telecommunications charges for 1.125 to 2.25 million hours of use
per year. In evaluating the true cost of library access to
EDGAR, the SEC should consider the following points:
i. Libraries bear the cost of purchasing microcomputers and
terminals to use online services and CD-ROM products.
ii. If the SEC uses GPO to procure its online version of EDGAR,
GPO will be legally responsible for the costs associated
with making the information available to depository
libraries.
iii. It is already possible to disseminate information at low
cost to many depository libraries through the Internet and
other computer networks, and the role of these networks is
rapidly expanding.
iv. The 1989 estimate of 1.125 to 2.25 million hours per year
was an absurdly high estimate for library use of EDGAR.
v. Regardless of demand for EDGAR through the Depository
Library program, the government can cap the amount it will
pay in telecommunications charges, at any level it wants.
High demand, however, is hardly an argument for providing
zero access.
vi. According to the 1989 study, the incremental costs of access
to EDGAR is surprisingly low. According to contractor's
analysis, the 1989 costs of computer hardware necessary for
the expanded access was less than $5 million, for a system
that could provide at least 2.25 million hours per year of
prime time access. Given the rate of change in computer
prices, these costs will have dropped by at least half.
Moreover, the contractor estimated the annual costs of
maintaining library access to EDGAR after start-up,
excluding telecommunications charges and the costs of remote
terminals, at $ 450,000 for Level I use (1.125 million
hours) and $ 600,000 for Level II use (2.25 million hours).
This is equivalent to 40 cents per hour for Level I use and
27 cents per hour for Level II use.
vii. Data users are currently paying hundreds of dollars per hour
for access to SEC information from commercial vendors.
These high commercial charges, rather than the relatively
minor cost of telecommunications, are the greatest economic
barriers to receiving SEC information.
More importantly, the 1989 study did not take into account any of
the revenues the SEC could receive from selling subscriptions to
use EDGAR. Clearly the revenue potential from the sale of EDGAR
is enormous. If the SEC charged $12 per hour for prime time
access to EDGAR, the rate currently charged by the Department of
Commerce's Economic Bulletin Board, it would annually generate
$13.5 million for Level I sales and $27 million for Level II
sales. These revenues would easily offset the costs of providing
public access to EDGAR.
=====================================================================
James P. Love, Director voice: 609-683-0534
Taxpayer Assets Project fax: 202-234-5176
7-Z Magie, Faculty Road bitnet: Love@pucc.bitnet
Princeton, NJ 08540 internet: Love@pucc.princeton.edu
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