21 November 2013
Authors:
Federico Morando, Raimondo Iemma, Simone Basso

The paper is available in PDF version.

The new European public sector information directive, released in June 2013, makes “marginal cost” the default charge for government data. How to implement this principle? A consultation has been issued.

This article provides a brief review of the public sector information pricing issues. It then discusses the terms under which the ongoing consultation on the implementation guidelines of the PSI directive addresses pricing. In particular, this article discusses the calculation criteria for marginal costs.

Broadly speaking, the new European prescriptions concerning PSI charging may seem to be the result of an act of balance between the need of a wider and easier circulation of information, and the current budget constraints of public agencies. In practice, the radical option of marginal - and de facto zero - cost, attractive as it may be on paper, might be nothing more than a formal default option.
In several cases, a public administration might decide not to charge at all. This is indeed what has happened for all datasets made available through open-government data portals, even before the amended directive was issued. This approach may be appealing for PSBs also because, where charges are made, they have to be calculated following “objective, transparent and verifiable criteria” and doing so may involve some intricacies (and related costs).

Conversely, when it decides to charge, a public administration is always allowed to recoup the marginal cost of reproduction, provision and dissemination. But it is complex to define this kind of cost, especially for internet-based services, and it is even harder to design charging policies based on it; in fact, the questions and (in particular) the answers of the PSI consultation on charging indirectly lead the responder to reason in terms of the average incremental cost of allowing re-use, instead of the marginal cost of reproduction, provision and dissemination. Unfortunately, as discussed in the article section about the economics of PSI charging, it is marginal-cost pricing (or zero pricing) that is expected to lead to economically efficient results (while aiming at the recoupment of the average incremental cost of allowing re-use may lead to excessive fees).

Finally, under the current rules, it seems quite easy to take advantage of the allowed exceptions, especially for public agencies who so far relied on income deriving from PSI dissemination. Not by chance, databases with higher potential for commercial re-use are arguably held by those agencies, and feed mature re-use markets that usually hold strong barriers to entry.