[1243] in Public-Access_Computer_Systems_Forum
COST OF GATEWAY/WINDO
daemon@ATHENA.MIT.EDU (LOVE%TEMPLEVM.BITNET@mitvma.mit.ed)
Thu Sep 17 17:35:06 1992
Date: Thu, 17 Sep 1992 16:27:56 CDT
Reply-To: Public-Access Computer Systems Forum <PACS-L%UHUPVM1.BITNET@mitvma.mit.edu>
From: LOVE%TEMPLEVM.BITNET@mitvma.mit.edu
To: Multiple recipients of list PACS-L <PACS-L%UHUPVM1.BITNET@mitvma.mit.edu>
----------------------------Original message----------------------------
The cost of the GATEWAY/WINDO
James Love, Director
Taxpayer Assets Project
Center for Study of Responsive Law
12 Church Road
Ardmore, PA 19003
voice: 215/658-0880
internet: love@essential.org
September 15, 1992
Opponents of the Gateway/WINDO legislation, including the
Office of Budget and Management (OMB) and several commercial data
vendors, have attempted to delay passage of this long overdue
legislation by raising unfounded fears that the program will be
too expensive to fund. Since neither the Congress nor the
executive branch have offered much in terms of an economic
analysis of the program, nagging questions about the costs of the
program are still a barrier to the passage of the Gateway/WINDO
legislation.
Among the reasons why the cost data have been difficult to
pin down are that federal agencies have done little in terms of
providing online access. GPO, for example, has yet to obtain its
own access to the Internet. It is, however, possible to put
these issues into perspective.
First of all, the Gateway/WINDO is primarily a "sales"
program. That is, for most users, the Gateway/WINDO service will
be priced at the "incremental cost" of providing the service.
With the exception of whatever start-up costs are funded through
appropriations, the sales program is expected to pay for itself.
Many data users, myself included, are willing and able to
pay fees equal to the cost of providing public access to EDGAR,
House LEGIS, the Department of Justice JURIS system, and other
federal information systems. As long as prices are limited to
dissemination costs, the service will be a bargain, particularly
when compared to the hefty fees charged by commercial services
such as LEXIS or Dialog.
Remember, several existing federal online services already
pay for themselves through user fees, such as the Department of
Commerce's Economic Bulletin Board (EBB) or the National Library
of Medicine's (NLM) MEDLARS program. Indeed, there is evidence
that the fees charged by NLM far exceed those necessary to pay
for dissemination costs. According to NLM officials, the online
sales program for MEDLARS generates more than $11 million in
annual revenue, with a staff of only 7 or 8. The real challenge
for the Gateway/WINDO sales program is not to generate enough
income to pay its own way, but rather to prevent GPO from making
large profits on the service. [Indeed, one of the most important
features of the Gateway/WINDO legislation is that it limits GPO's
prices to incremental cost of dissemination.]
The Gateway/WINDO will incur costs in providing free access
to the 1,400 member federal Depository Library Program (DLP), but
the costs doing so have been vastly overstated. Let's look at
the four cost categories -- data processing, telecommunications,
support and library terminals and workstations.
a) Data Charges.
All available evidence suggests that there are enormous
economies of scale in providing online access to information.
The most important costs of online information systems are the
costs of storing the data and developing the software for data
retrieval. The incremental costs of adding new users to existing
systems is often trivial. For example:
- the Department of Commerce EBB has a budget of about
$150,000, but it was able to double the system's
capacity for just a few thousand dollars.
- The SEC's new EDGAR system, which will cost about $90
million to develop, will serve 650 SEC terminals. In
1989 the EDGAR contractor said that additional computer
and telecommunications hardware equal to less than 5
percent of the project's cost could more than quadruple
the number of connected users.
- Last year NLM officials claimed they could quadruple
the number of users connected to MEDLARS for a one time
capital expenditure equal to about one third of current
annual revenues.
As the prices for computer hardware fall the costs of
expanded access to existing information systems becomes even more
attractive.
The costs of expanded access to these databases should not
be solely attributed to the DLP program. The "sales" program
should bear the initial costs of providing public access to
databases and information systems. The costs of providing DLP
access should be based upon the costs of "riding" the "sales"
program. Thus, while the DLP may be an important user of some
government databases, particularly in the start-up of the
Gateway/WINDO, much of the data processing costs can be assigned
to the "sales" program, and thus recovered from data users
through fees.
b). Telecommunications fees.
Congress will require GPO to provide access to the
Gateway/WINDO through the National Research and Education Network
(NREN) and other computer networks. Depository libraries with
connections to NREN will not have to pay other telecommunications
costs for access to the Gateway/WINDO. Since Congress has
already appropriated funds for the development of the NREN, it
would be inappropriate to count these costs twice in determining
the costs of the Gateway/WINDO.
Today vendors such as LEXIS, Dialog, and Dow Jones use the
NREN to provide online to their commercial services. The
Gateway/WINDO will be one of several research services available
through NREN.
c). Support costs.
Some federal agencies, such as the Library of Congress
(LOC), have asserted that it will be costly to provide service to
the DLP, due to high costs of user support. In fact, the reverse
is likely to be true. Since the services that are available
through the Gateway/WINDO will also be available through the
sales program, agencies will most likely benefit from the
training that DLP staff will provide to the public.
The best illustration of the role of the DLP staff is found
in the area of legal databases. Two commercial vendors, LEXIS
and the WESTLAW, provide nearly free access to their online
services to many law libraries. In turn, the law libraries use
their own staff to train students to use the LEXIS and WESTLAW
services. These students often become paying customers of LEXIS
and WESTLAW upon graduation. LEXIS and WESTLAW benefit greatly
from the support services provided by these library staff. Since
the Gateway/WINDO service will be available through the "sales"
program, agencies can anticipate similar benefits. The DLP will
act as an unofficial training program for many users, who will
then become customers of the sales program.
d) Costs of Terminals and Workstations.
Some agency studies have suggested it will be costly to
provide terminals and workstations in the DLP. Examples of this
are studies of the SEC's EDGAR system and the PTO's Automated
Patent System, as reported by the House Subcommittee on
Government Information in 1989. In fact, libraries will buy
their own terminals and workstations. Indeed, these are exactly
the types of expenses for which that the libraries have
historically paid. For example, libraries pay for the costs of
book shelves for books and microfiche readers for microfiche.
Studies which assume these costs are borne by agencies or GPO are
simply wrong.
