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Remotely Sensed Data From Space: Distribution, Pricing, and Applications July 1992 NTIS order #PB93-176964
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.. Earth Observation Systems Advisory Panel Rodney Nichols, Chair New York Academy of Sciences James G. Anderson Professor Department of Chemistry Harvard University Cambridge, MA D. James Baker Director Joint oceanographic Institutions, Inc. Washington, DC William Brown President ERIM Corporation Ann Arbor, MI Ronald Brunner Center for Space and Geosciences Policy University of Colorado Boulder, CO Joanne Gabrynowicz Associate Professo r Department of Space Studies University of North Dakota Grand Forks, ND Alexander F.H. Goetz Director Center for the Study of Earth from Space University of Colorado Boulder, CO David Goodenough Chief Research Scientist Pacific Forestry Center Forestry Canada Victoria, BC Donald Latham Corporate Director Loral Corporation Reston, VA Cecil E. Leith Physicist Lawrence Livermore National Laboratory Livermore, CA New York, NY John H. McElroy Dean of Engineering The University of Texas at Arlington Arlington, TX Molly McCauley Fellow Resources for the Future Washington, DC Earl Merritt Vice President, Research Earthsat Corporation Rockville, MD Alan Miller Director The Center for Global Change University of Maryland College Park, MD Raymond E. Miller Professor Department of Computer Science University of Maryland College Park, MD Kenneth Pederson Research Professor of International Affairs School of Foreign Service Georgetown University Washington, DC David T. Sandwell Geological Resources Division Scripps Institute of Oceanography La Jolla, CA Dorm Walklet President Terramar Corporation Mountainview, CA Albert Wheelon consultant Los Angeles, CA NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by tbc advisory panel members. ?he pad does oOC bowever, ntxessardy approve, disapprove, or endorse this background paper. OIA assumes full rcspoosibil.ity for the background paper and the accuracy of its conttnts. ill
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OTA Project Staff-Remotely Sensed Data: Distribution, Pricing, and Applications Lionel S. Johns, Assistant Director, OTA Energy, Materials, and International Security Division Alan Shaw, International Security and Commerce Program Manager Ray A. Williamson, Project Director Stephen N. Wooley Contractors Deborah Shapley Madeline Gross Administrative Staff Jacqueline R. Boykin Louise Staley
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Workshop on Remotely Sensed Data: Distribution, Pricing, and Applications David Moore, Chair Principal Analyst Natural Resources and Commerce Unit Congressional Budget Office Washington, DC Edward H. Backus Director Regional Conservation Analysis Program Conservation International Washington, DC William Brown President ERIM Corporation Ann Arbor, MI Richard DalBello Director, Commercial Communications and Remote Sensing Division NASA Office of Commercial Space Washington, DC John E. Estes Ch airman Department of Geography University of California Santa Barbara CA Kass Green President Pacific Meridian Resources Emeryville, CA Kenneth D. Hadeen Director NOAA, National Climatic Data Center U.S. Department of Commerce Asheville, NC David Julyan The Plimsoll Group Great Falls, VA Molly McCauley Fellow Resources for the Future Washington, DC Richard Mroczynski Director, External Affairs EOSAT Corp. Lanham, Maryland Scott Pac e Deputy Director Office of Space Commerce U.S. Department of Commerce Washington, DC Alfredo Prelat Texaco Exploration and Production Division Houston, TX Lisa Shaffer Deputy Director Modeling, Data and Information Systems Program Office Earth Sciences and Applications Division National Aeronautics and Space Administration Washington, DC Stephen L. Sperry Marketing Manager ERDAS, Inc. Atlanta, GA Peter Thacher World Resources Institute Washington, DC NOTE: OTA appreciates the valuable assistat=e and thoughtful critique pmvidcd by the workshop participants. The views expressed in this OTA background paper, however, are the sole responsibility of the Office of Technology Ascssmcnt. Participation in the workshop does not imply endorsement of the background paper. v
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Acknowledgments This background paper has benefited from the advice of individuals from the government and the private sector. OTA especially would like to thank the following individuals for their assistance and support. The views expressed in this paper, however, are the sole responsibility of the Office Of Technology Assessment Steven Harper Gov ernment Affairs Analyst EOSAT Lanham, MD Keith Lyon SeaStar Program Manager Orbital Sciences C orporation Chantilly, VA Milton C. Trichel Research Scientist ERIM Corporation Arlington, VA Allen H. Watkins Chief National Mapping Division U.S. Geological Survey Reston, VA Matthew Willard President Colorado Technologies Ouray, co vi
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Contents Page Part I: Introduction, Background, and Findings . . . . . . . . . . 1 BACKGROUND . . . . . . . .. ................... .ooc.. 2 FINDINGS . . . . . . . . . . . . . . . . . . . 6 PartII:Workshop Summary l *-..... 1 1 Appendix A: Proposed Policy for Handling Remotely Sensed Data . . . . . . 18 Appendix B: Office of Management and Budget Circular A-130 . . . . . . 20 Boxes Box Page A. A Land Remote Sensing Satellite System . . . . . . .................~ 2 B. A Selection of Goals Identified by the Workshop . . . . . . . . . 12 C. The SeaStar Satellite System . . . . . . . . . ................ 13 Tables Table Page l. Summary of Landsat Operations . . . . . . . . . . . . . . 3 2.Operational and Proposal Earth Remote Sensing Satellites . . . . . . . . 5 3. Potential Commercial Applications for Selected and Reposed EOS Instruments . . 9
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. .- Part I: Introduction, Background, and Findings This year Congress faces important decisions about the future course of the Landsat land remote sensing satellite program and the experiment with commercialization that began in 1984. A consensus is emerging within the government that Landsat 7 will be funded and managed by the public sector. l While giving greater assurance that Landsat data will continue to be available for scientists and other users of the&@ returning Landsat operations to the public sector creates a new set of problems. Among these problems, the immediate question facing Congress is what policies to set for distributing and pricing Landsat data Existing distribution and pricing policies are governed by the Land Remote Sensing Commercialization Act of 1984 (Public Law 98-365) and a contract between the U.S. Government and the private firm EOSAT. This contract gives EOSAT the right to set prices on data from Landsats 1-6, but establishes no data rights for Landsat 7. Two bills now before Congress, H.R. 3614 2 and S. 2297, would transfer responsibility for managing and funding the Landsat program, beginning with Landsat 7, 3 jointly to the Department of Defense (DoD) and the National Aeronautics and Space Administration (NASA) from the National Oceanic and Atmospheric Administration (NOAA). However, the two bills differ in how they would handle pricing issues. S. 2297 would price the sale of all Landsat data at the cost of fufilling the users order. H.R. 3614 allows for a two-tier pricing system in which Federal Gov ernment users would be charged the cost of fulfiling an agencys order and for-profit firms would be charged market prices. How the United States chooses to address the issues of pricing and distributing Landsat data will prove important not only for land remote sensing, but also for the immense amount of data that the Federal Government intends to gather about the atmosphere, land, and oceans using NASAs Earth Observing System. Users of Landsat data expect the data to find increased use among government agencies for a variety of beneficial applications, including environmental monitoring, surface change detection and evaluation of resources. Many hope the data will also be the basis for a diverse and profitable U.S. industry, which enhances and sells data products to a range of users in the United States and abroad. Policies adopted to govern the pricing and distribution of Landsat data will affect: l l l l l l l l how much data are available, for which applications; how the ultimate costs of providing land remote sensing data are divided between the public and private sectors; how the public costs and benefits of remotely sensed data mre divided among federal agencies; the extent to which private firms using Landsat data benefit from the system the competitive prospects of foreign systems, and the term.s and conditions under which similar data produced by foreign systems are available to U.S. public and private sectors; the prospect of future U.S privately financed and operated systems intended to seine niche markets; the pace of technological improvement in geographic information systems and the character of new applications; and technological development of future Landsat-type satellites. This short background paper summarizes the discussion concernin g data pricing and distribution from a one-day workshop convened by OTA on May 20, 1992. It does not discuss the broader policy issues regarding commercialization of land remote sensing and the benefits and drawbacks of the decision to assign responsibility for the operation of Landsat 7 to DoD and NASA. The workshop, which included data users from government, universities, the private sector, and nongovernmental org anizations, registered a notable degree of consensus about the future level of prices for data relative to existing prices: lower data prices would stimulate data use. At the same time, several workshop participants noted that compared to the costs of gathering the necessary data from other sources, Landsat data are a bargain. Participants reached much less agreement on the proposed two-tier system where for-profit buyers are charged a higher price than government users, Most workshop participants, however, agreed that existing law-which mandates that all earth imaging data gathered from orbit, from any U.S. source, public or private, must I For a detailed summary of Cvalts ad knlcs related to the Land@ comrncrciakmion dccisio~ see U.S. Congress, OfiIce of Technology &scssmmL Remote Semng and the Private Sector, OTA-ISC-TM-20 (w@@WL m: Us. @v ammatt Printing Office, April 1984). 2 Passed by the House of Representatives, June 9, 1992. 3 Amording to Busb Admims tration plans, DoD would procure the satellite and NASA would manage its operation and data distribution. The two congressional bills would codify this amangement. l
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2 l Remotely Sensed Data From Space: Distribution, Pricing, and Applications Box AA Land Remote Sensing Satellite System A land remote sensing satellite system consists of five major components, each of which is critical to producing useful data 1. Sensors: Optical systems gather light in various spectral (color) bands from Earths surface and focus it on photosensitive surfaces that convert the light to digital electrical impulses that can be transmitted to Earth electronically. Landsats 4 and 5 collect light m seven spectral bands, ranging from the blue to the infrared. The thematic mapper sensor is capable of distinguishing objects as small as 30 meters across. Landsat 6, which will be launched in 1993, will also carry a higher resolution sensor, able to distinguish objects only 15 meters across. 2. Spacecraft and Transmitters: The spacecraft provides a stabilized platform and power for the sensors and their optics, the receiving and transmitting antennas, and the associated electronics necessary to control the spacecraft and to deliver data to Earth Some remote sensing spacecraft may also carry tape recorders to store data until the spacecraft is within sight of a receiving station. 3. Receiving Station and Other Commun ication Components: A ground station may receive data in digital form directly from the satellite as it passes overhead, or, if the satellite is not in a position to communicate with the ground station, through a system equivalent to NASAs Tracking and Data Relay Satellite System (TDRSS). In the latter case, data arc passed from the remote sensing satellite to a communication satellite m geosynchronous orbit and then retransmitted to a ground facility. From the ground facility, the data arc then passed directly to a processing laboratory. 4. Data Processing Facilities: Before the raw data can be converted into photographic images or computer tapes capable of being analyzed by the end user, they must be processed to remove geometric and other distortions inevitably introduced by the sensors. Data that have only had these distortions removed are generally referred to as unenhanced data. For remote sensing applications, large amounts of data manipulation are usually required 5. Interpretation of the Data: After the unenhanced data are processed and converted to computer tapes or photographs, they must be interpreted to provide information for the end user. Part of the interpretation process may involve merging or layering sets of data, usually done with computer image processing programs. A variety of advanced techniques are available to turn remotely sensed data into new products for different users. SOURCE: U.S. COG Office of Technology Aaxsmc@ 1992. be sold on a nondis criminatory basis 4 --could be liberalized to allow private satellite system owners to set their BACKGROUND own price structures. They also generally agreed that The united States initiated the Landsat program in means should be found to make Landsat data available 1969 as a research activity. NASA launched Landsat 1 in more cheaply to the academic community, which will use 1972. 5 Data from the Landsat system (box A) soon proved the data to conduct scientific research or to train students capable of serving a wide variety of government and in data techniques. private sector needs for spatial inf ormation about the land surface and coastal areas (table 1). NASA designed, built, This paper is the first publication of an assessment of and operated Landsats 1-3. The perceived potential Earth observation systems requested by the House economic value of Landsat imagery led the Carter Administration to consider commercial operation of the Committee on Science, Space, and Technology; the system During the late 1970s it began a process of Senate Committee on Commerce, science, and Transportransferring control of Landsat operations and data tation; the House and Senate Appropriations Subcommitdistribution from NASA to the private sector. The first tees on Veterans Affairs, Housing and Urban Develop step in the transition gave operational control of the ment, and Independent Agencies; and the House PermaLandsat system to NOAA in 1981, because of NOAAs nent Select Committee on Intelligence. OTA will issue a extensive experience in operating remote sensing sateldetailed report on data issues in 1993. lites for weather and climate observations. Landsat 4 was 4 $ ~~ ~ no*q tory basis means Without prcfcrcnu, bus, or any other spccxal arrangement. rcgardmg dd.mry, fortna~ f~, or tcchmcal consldcrahons wluch would favor one buyer or class of buyers over moth=. Public h+W 98-365, S=. 104 (3)(AH15 USC WV. s Irutdy called the Earth Resources Technology Satellk NASA changed Its name to Landsat m 1975. 6 Landsats 4 and 5 were dcsgned and budt by NASA but operated by NOAA.
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Remotely Sensed Data From Space: Distribution, Pricing, and Applications l 3 Table l-Summary of Landsat Applications A. B. c. Agriculture D. Crop inventory Irrigated crop inventory Noxious weeds assessment Crop yield prediction Grove surveys Assessment of flood damage Disease/drought monitoring E. Forestry and rangeland Productivity assessment Identification of crops, timber and range Forest habitat assessment Wildlife range assessment Fire potential/damage assessment Land resource management Land cover inventory Comprehensive planning Corridor analysis Facility siting Flood plain delineation Solid waste management Lake shore management SOURCE: OHim of Tachrmiogy Asaesarnew 1992. Fish and wildlife F. Wildlife habitat inventory Wetlands location, monitoring, and analysis Vegetation classification Precipitation/snow pack monitoring salt exposure Environmental management Water quality assessment and planning Environmental and pollution analysis Coastal zone management Surface mine inventory and monitoring G Wetlands mapping Lake water quality Shoreline delineation Oil and gas iease sales Resource inventory Dredge and fill permits Marsh salinization H. Water resources Planning and management Surface water inventory Flood control and damage assessment Snow/lee cover monitoring irrigation demand estimates Monitor runoff and pollutlon Water circulation, turbidity, and sediment Lake eutrophication survey Soil salinity Ground water Location Geological mapping Li neament mapping Mapping/identification of rock types Mineral surveys Siting/surveying for public/private facilities Radioactive waste storage Land use and planning Growth trends and analysis Land use planning Cartography Assess land capabilities launched in 1982; Landsat 5 6 became operational in 1984. 7 In late 1983, the Reagan Administration took steps to transfer Landsat 4 and 5 operations to private hands because it did not want to continue public funding for the system. A few proponents of commercialization expected that industry could soon build a sufficient data market to support a land remote sensing system. 8 Soon thereafter, Congress began consideration of the Land Remote Sensing Commercialization Act of 1984, which was intended to provide legislative authority for the transfer process. Public Law 98-365 was signed into law on July 17, 1984. During deliberations over the Landsat Act, the Administration issued a request for proposal (RFP) for industry to operate Landsat and any follow-on satellite system. After competitive bidding, 9 NOAA transferred control of operations and marketing of data to EOSAT in 1985. 10 At present, EOSAT operates Landsats 4 and 5 under contract to the Department of Commerce, ll and manages distribution and sales of data from Landsats 1-5. EOSAT will operate Landsat 6 at its expense. 12 Although EOSAT and its primary competitor, 13 SPOT Image, S.& which markets data from the French (SPOT) satellite system have developed a market for unenhanced data 14 by the late 1980s, EOSAT'S yearly sales income was apparently not suffficient to enable it to finance future satellites. Although the Federal Government has provided most of the funding for Landsat 6, and had initially agreed to subsidize a substantial portion of Landsat 7, in the late 1980s it withdrew its support for Landsat 7. The Landsat program was in danger of failing. Hence, in 1991 Congress, the National Space Council, NASA, NOAA, and DoD reviewed their options for continuing the LandSat program. Policymakers reached s M4 ~ 5 were designed ad built by NASA lmt O-d by NOM 8H owcvcr, moat analysts wem Cxtrcmcly pcAtnistic about such prospects. see Us. congreSa, c aqpeuional Budget Office, Encouraging Private lnvesrnwu in Space ~es (waahlgtm DC: Us. Govanmait m OfWe, Feb. 1991), ~ 3. 9 Seven firms rcapondcd to the W, from which two were selected for funk ncgotMon9-E OSAT and Kod.a4Fairchild. After a series of ncgotiatim during which the gov ~t changed the ground rules of the RFP, Kodak OU4 leaving EOS~ to negotiate with the Dcpamnezit of Comtnenx. 10 EOS~ ~ CwMshed as a joint v~ by RCA (now ~ of ~) and Hu@cs Aircmft (now part of Ou3ual Motors) for this puIpOSC. II S~W~ ~ ~~ ~k~~ ~ve f~~ ~t ~~ ~q -on w a~plete ~wm Systan. EOSAT M taken -t ~ to ~ tWO sltldh~ idOttg, in OfdCI to -tilkl COKtdXtUity Of @a delivcq Wtti Land@ 6 is OpCr$ttiOXUd. 12 ~~t 6 is scaulc.d for launch in 1993. 13 ~~ou@ for ~me appllatio~ EOSAT ~d S~T ~ge, SA., ~mpc fm cum-, tic ~ ~ KU ~ wlCICtldy difft3CIlt tbt by SCIVC different customer needs. For some applications, for example, where both high spatial resolution (SPOTs strength) and high spectral resolution (L.am!sats strcugth) arc needed, cu.stomezs use both to produce a find image containing much more informa tion than either alone display. 14 Untiud && ~ve &n subj~~ oI@ to ~C sptd d gCOmCt3ic COns necessary to use them.
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4 l Remotely Sensed Data From Space: Distribution, Pricing, and Applications the conclusion that maintaining continuity 15 of the Landsat program important to the national interest. 16 They also wished to provide in some form for the continued commercialization of land remote sensing from space. The argument for continuing to acquire Landsat-type data for use by gov ernment agencies was strengthened by the observation that these data could be a major contributor to understanding and monitoring the effects of global change. 17 For this application, especially, continuity of the data stream is very important. The usefulness of the Landsat program received further impetus from the Persian Gulf War, when DoD made extensive use of Landsat and SPOT imagery to create maps of the region to support operations by the U.S.-led multinational force. 18 Afterward, LandSat and SPOT images were used to evaluate the en vironmental consequences of the War. 19 Thc rapid growth of the geographic information systems (GIS) industry supports continuation of the Landsat program because these systems have facilitated growth of the value-added industry (firms that process and add interpretive information to Landsat data). The ease with which it is possible to incorporate other spatial information with remotely sensed data 20 has led to a broadly diversified market for these data and has significantly increased their market potential The government has three broad options for continuing to provide data compatible with data collected by Landsats 1-5, each of which has numerous possible variations of detail. It could: 1. Release an RFP requiring the provision of data of specified character, quality, and amount over a specified number of years, leaving the satellite system design, ownership, and operation to private industry. Under this option, the government would purchase data for its needs as a commodity, much like the arrangement NASA has with Orbital Sciences Corporation (OSC) for the purchase of ocean color data from the SeaWiFS sensor aboard the SeaStar satellite. 21 The selected firm would then be free to offer data to other customers on mutually agreeable terms. 2. 3. Release an RFP requiring the provision of a satellite system for government operation with specifications designed to meet specified data requirements. Under this arrangement, the government would reclaim responsibility for providing a satellite system and operating it. Release an RFP requiring the provision of a satellite system designed to meet the governments data requirements. Release a second RFP for a private firm to operate the governments system. This arrangement is similar to the current one with EOSAT. Each of these arrangements has benefits and drawbacks relating to cost, technical risks, potential for furthering the commercialization of data acquired from space, and amount of government involvement and control. The Administration, with the support of Congress, has chosen the second option, in part because it seemed to promise the least risk for maintaining continuity of the provision of data compatible with previously acquired LandSat data. It is not necessarily the choice that would promise the greatest involvement of private industry, except as providers of the satellite system under contract to the U.S. Government Discussion and analysis of the benefits and drawbacks of these options is well beyond the scope of this background paper, however, the choice of Option 2 for providing Landsat-type data necessitates a decision regarding data pricing and distribution policies. Option 1, in contrast, would not; with the exception of the contract price for delivery to government, pricing of data would be determinedly the market This background paper takes as a given that the gov ernment will proceed with a variant of Option 2 If it were to choose a different option, for example, for a future LandSat 8, other data pricing and distribution policies would likely be possible. In addition to the large user community within the federal government, the number of existing and potential users of remotely sensed data is also large: farmers planting or besting crops, cities and states monitoring 15 As & ~ c Ommittcc on scicsE, SpacG and Technology Report to accompany H-R 3614 poiafa out (pp. 32-3), the tam continu.i ty canbc used in m I-t three different waya: 1) continuity of the Landsat program 2) comimlityofthedata strcmmfrom thehlxisat aatcllitc$ and 3) Contimlity of data foxrnlw scale, and spccual mspon8c. Ihelatteris eapecwyimpmtam toeartilsckuisu aumptmg to study globld change. 16 ~ C Ommittoc has decided that Om of b bills pridpal goals ahould be to alhancc me of LandSat data for public applications. Report of b House Committee on ~ SpacG aud Technology to accompany H..R 3614, May 28, 1992, p. 43. 17 J. Ro~ et & what Does kxmtc Scnaing Do for Bcology? fiOiO~, VOL z No. 6, 1991, pp. 1918-21; U.S. ExccutI Ve Ofncc of tk Preaidcalt! Offkc of Scielxe and Tccbnology Policy, Committee on Earth Sciences. Our Changing Planet: A US Straiegyfor Global Change Research. A Report by the Committee on Earth Sciences to Accompany the US. Presidents Fiscal Year 1990 Budget (WashingtorL DC: Office of Science and Technology Policy, 1989). la ()~ dxtasaiona with Defense Mapping Agency peraorma see also Ian Parka, Spacecraft in the B*. Spuce, April-May 1S92, pp. 35-37. 19 N~o~ &p@ic Society, Committee for Rcscamh and ~]01tltiOIL hvironmmti Conscquu of the Gulf War 19901991, Research and Expioranon, Vol. 7 (special issue), 1991. 20 s~ ~ -S ~~~q ow*p ~UCS ~ on soils, hydrology, and CCOIOgy. 21 under this arrangaIUn4 OSC agreed to provide data of spccif%xl quality, forrnaL and spatial and spccfral covcsage for a spccifkd price, whkh allowed the fm to secure additional private f-.
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. Remotely Sensed Data From Space: Distribution, Pricing, and Applications l 5 water tables or pl anning sewage treatment, environmental firms monitoring land use. Even McDonalds Corp. uses Landsat data to study suburban growth to find locations for new franchises. Private firms have created a growing market for information created from Landsat and other data by enhancing images for specific users. Finally, land remote sensing has become an international activity. During the lifetimes of Landsats 6 and 7, foreign earth observing systems, including Canadas Radarsat, Frances SPOT, the European Space Agencys ERS-1, Japans JERS-1, and Russias ALMAZ are expected to contribute to a growing global market for remotely sensed earth images collected from space (table 2). Hence, while these systems, which provide data from different regions of the electromagnetic spectrum at different spatial resolutions, broaden the overall market for remotely sensed data they also provide increased international competition to the United States in an arena it once monopolized. z FINDINGS Finding 1: Landsat data may generate sufficient public benefit to justify continuation of the program even if costs of design, construction, and launch of the spacecraft are not recovered by the revenues generated by data sales. It was clear from the workshop that the social value of Landsat data is potentially immense: 23 they can be used for a number of socially beneficial applications, from management of domestic res ources to plannin g for sustainable development. The pricing policy selected should thus include as a goal, fostering the social benefits provided by applications of the data while also nurturing the growth of a U.S.-based, value-added industry. Finding 2: The prices charged for imagery collected from space are pivotal in deciding who will have access to this information source and on what terms. Therefore, data pricing policy is a key factor in how widely remotely sensed data are applied by the public and private sectors. The Landsat system is a publicly funded U.S. monopoly with benefits that seine both public and private interests. Under existing policy, codified in the Landsat Act of 1984 (P.L. 98-365), data from the Landsat system are sold by the system operator (EOSAT). The system operator sets data prices, which are intended to enable an operating company to earn a profit after subtracting system operating, marketing, and distribution costs from gross sales. By mandating nondiscriminatory access to Landsat data the Landsat Act of 1984 essentially mandated a single price for the same data for all Landsat data customers. Experts disagree on what kind of pricing policy is fair and will best nurture the industrys growth while serving the governments needs. However, they generally agree that if the public sector pays for satellites and their operation, government and many not-for-profit users should pay much lower prices than currently charged. Some argue for a two-tier, or more generally a multiple-tier, pricing structure that makes data available for federal government use at the cost of fulfilling a user request, and allows the data distributor to charge market rates to all other users. H.R. 3614 permits, but does not mandate, a two-tier pricing structure (appendix A). 24 A two-tier pricing structure might also make it possible to reach agreement with EOSAT over changes to the existing contract between the Federal Government and EOSAT. H.R 3614 requires the Landsat Program Management (DoD and NASA) to negotiate with EOSAT to secure modified terms for pricing, distribution, acquisition, archiving, and access to data from Landsats 1-6. In particular, it instructs the Landsat program Management to seek agreement that EOSAT would provide unenhanced data to the United States and its affiliated users at the cost of fulfilling user requests, on the condition that such data is used solely for noncommercial purposes. Most researchers and some value-added firms contend that data should be sold at the cost of fulfilling the order. They argue that such a price structure would allow broader use of the data, and uphold a principle that these data, acquired by government satellite systems and paid for through taxes, are a public good. S. 2297, which is under consideration by the Senate, generally adopts this view.~ = U S COmice of Technology ~ international Cooperation and Comperinon in Civilian Space Activities, OZA-ISC-239 (wash@tom DC: Us. Oovenxmnt Printing Off.@, July 1985), ch 7. ~ A CO~SIOd Budget Of6= MSC=X1in ~ PO@ options for mcmrag@ *ate inv= in remote SuAsing, suggests an exam.mmon of the social value of IAndsat is ~~ b<~al* ~le of w crmncns in funding such satellites. See Congrcssionat Budget office, Op. CIL. footnote 8. ~ ~c COfinds that--to incrcasc he value of the Ian&at prQgram to the Axnaica.rt Pubtic, Landsat data should be made available to United states Governmc nt agencies, to global change researchers, and to other rcsearckrs who arc financially supported by the united states OoV crmncr.w at the cost of fulfllhng w requests. Sec. 2. (12) Findings. ~ me COqTCSS f@ Uld declares @-to maximize the value of Federal satellite land remote sensing programs to the American public, data generated from all hod remote scnsmg satellites fimdcd by the United States Govcrnmc nt should be made available to usexs at prices tit do not exceed the margmal cost of fflhng a spccflc user request. S. 2297, Land Remote Sensing Policy Act of 1992, Sec. 101 (8).
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l Table 2-Operational and Proposed Earth Remote Sensing Satellites satellite LANDSAT 5 LANDSAT 6 SPOT 3-4 MOS 1,16 JERS-1 ALMAZ-1 ERS 1-2 RADARSAT Owner Repeat Coverage Launch Date Blue Spectral Coverage (microns) Resolution Swath Width Green Spectral Coverage Resolution Swath Width Red Spectral Coverage Resolution Swath Width Near-Infrared Spectral Coverage Resolution Swath Width Mid-lnfrared Spectral Coverage Resolution Swath Width Thermal Infrared Spectral Coverage Resolution Swath Width Microwave Frequency Resolution Swath Width Panchromatic Resolution Swath Width Us. 18 days 1905 Us. 18 days 1993 France Japan 26 days 17 days (3) 1994, (4) 1998 1967; 1990 NA NA NA NA NA NA NA NA NA NA NA NA NA NA 1.58-1.75 l.6-l.71/2.012.4 18 m x 24 m 75 km NA 10.4-12.5 120 m 185 km 6.0-7 .010.5-12.5 2.7 km IWO km NA NA NA NA NA NA NA NA NA a ERS-2 WiII m~ t~ Gb&l ozone M~itofig Experi~nt, which VW have some capabilities in the ultravblet to visible regions of the spectrum. Actual coverage is not Yet known. SOURCE: NASA, MaPeat Maket Review, 1992; M&Id Space hddry &rwry, I&year CX#oo&, Euroconault, 1991.
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. Remotely Sensed Data From Space: Distribution, Pricing, and Applications l 7 Although the workshop reached no consensus regarding which policy would best serve the public interest, the discussion did lead to the following insights: l l l l Most workshop participants agreed that lower prices would result in wider use of data. 26 A single low price might encourage market growth, especially among users already f amiliar with the applications of Landsat imagery. A low price would be unlikely to reduce costs associated with the collection, processing, distribution, maintenance, and archiving of data. 27 Two-tier pricing would allow for smaller overall losses (some cost recovery) by charging profitmaking enterprises prices that reflect the cost of operating the system. It would thus spur the government to continue the the experiement in commercialization by supporting the development of a commercial market for unenhanced data. Two-tier pricing would allow for greater cost recovery in the face of small or diminished demand. However, it might depress demand compared to low, single-tier prices. Two-tier pricing could be harder to administer and difficult to enforce because it would discriminate on the basis of client type rather than service or product. As an example of the difficulty of enforcement, some researchers in universities or nonprofit organizations who might be entitled to lower prices for data used in research also consult for commercial interests. Similarly, some for-profit, value-added firms frequently work under contract with federal state, and local gov ernments. Firms may also conduct rerearch, the results of which are published in publicly available journals. Under current Administration plans, data from LandSat 7 will be publicly owned data the distribution of which will be governed by OMB Circular A-130. This circular sets pricing for other Federal Government data products such as census data, economic statistics, and governmentcreated software (appendix B) so as to recover costs of disseminating the products or services through user charges. Circular A-130 is flexible enough to allow for two-tier pricing. Finding 3: Changing the existing policy of nondiscriminatory access to data from privately funded satellite systems to a policy that allows owners to determine their own pricing policies may encourage growth of private satellite systems. However, in view of the continued importance of the open skies principle to the U.S. use of space and to foreign policy, nondiscriminatory access to data from publicly funded satellite systems should be retained. Existing law requires that all data from all U.S. land remote sensing systems be sold to all purchasers, U.S. or foreign, on a nondis criminatory basis, in part to allay fears among some countries that other countries would seek to use these superior information sources to gain economic advantage. 28 Some U.S. data users also express concern that allowing companies to follow sales policies giving exclusive access to data might trigger retaliatory restrictions on important data acquired from space by other countries. Nevertheless, proponents of private remote sensing systems have complained that this policy impedes entry of privately financed U.S. remote sensing systems into the market for unenhanced data. For example, potential private satellite systems could, perhaps, fill a market niche for specialized products. However, if the system owners were prevented from charging higher prices for, say, mom timely or even exclusive access to data, they would lose their market advantage and their ability to service the market niche. Proponents of private systems suggest that as the number of international sources of earth-imaging data grow, the fears of countries concerning exclusive access and resource exploitation would likely diminish. Indeed many argue that global competition in remotely sensed data is already sufficient to allow the United States to relax previous restrictions. Hence, in order to encourage operation of private remote sensing systems, recent Administration proposals, H.R 3614, and S. 2297 would allow pricing and access dis crimination for data acquired by privately funded systems. All however, would retain the nondiscrimin atory policy for Landsat 7 and other publicly funded systems on grounds that the policy supports the full and open exchange of information that has been a cornerstone of U.S. policy for space and international environmental research. 29 The opportunity to use Landsat imagery to help developing countries manage their own resources is an important opportunity for the United States in the post-Cold War world. Continued provision of Landsat imagery by the U.S. government for the development of local and regional economies could also help undercut
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8 l Remotely Sensed Data From Space: Distribution, Pricing, and Applications criticism of any move to allow discriminato ry data distribution for privately funded satellite systems. Finding 4: The experiment to commercialize the Landsat system has been only partially successful EOSAT has streamlined the operations and data distribution system, and achieved sufficient income to support its efforts without government support. However, revenues from data sales do not appear sufficient to enable a system operator to finance the entire Landsat system for many years. when the Landsat Commercialization Act of 1984 was passed proponents argued that the best way to create a strong market for remotely sensed data was to transfer the operation of the Landsat system and the marketing function to the private sector. At recent congressional hearings some members of Congress have called commercialization a failure. 30 EOSAT has apparently lowered the costs of collecting data from the satellite and putting scenes into usable form. 31 Yet EOSAT has been faced with operating and marketing data from a system that was designed to meet government req uirements rather than the marketplace. Hence this experiment does not provide the most effective test of the Comm ercial prospects for unenhanced remotely sensed data What the United States has tested since EOSATS formation is not whether private management can work in general, but whether a private system operator with a single pricing policy is anymore effective than the public system operator that predated EOSAT. Landsat 6 will cost the U.S. Gov ernment about $220 million data sales, even if all customers were charged the single price of $4,400 per digital Thematic Mapper (TM) 32 image, would not reccover these costs over 5 years of operation. DoD and NASA have estimated that procuring, launchings and operating Landsat 7 for 5 years, and constructing a large, new data processing facility, will cost about $880 million. 33 However, if the costs of a different satellite system could be reduced sufficiently, a private firm might be able to establish a viable business selling unenhanced data. 34 A few firms, for example, have developed preliminary designs for small lightweight satellites that show in eventually reducing the costs of the system? experts nevertheless remain doubtful that even with the likely future system cost reductions, sufficient market for unenhanced data would develop to support a commercial satellite system within the next decade. 36 Finding 5: The pricing and distribution policies arrived at now for U.S. earth-sensing activity will set precedents for NASAs planned Earth Observing System (EOS). Although the-decision before this Congress concerns the pricing and distribution policy for Landsats 1-6 and Landsat 7, the debate over LandSat data has parallels for other publicly funded remote seining systems that will generate data with economic value. EOS sensors are experimental and will require considerable effort to evaluate before the full commercial potential of the data can be assessed yet several of these sensors will collect data having economic potential (table 3). 37 The pricing policies for EOS and Landsat should be consistent, since the data will be used by many of the same institutions and the issues of public versus private good are the same in both cases. Finding 6: Stability and continuity in the acquisition of data over time and enhanced customer access to data will contribute to the further development of the data market.. Aggressive, innovative marketing will also be important. Commerci al and other users, in order to plan for the orderly development of their businesses or long-term research, need to know that the satellite system will provide continuous data for a specified period of time. Researchers, particularly those interested in global change, need data sets that are consistent, can be cross referenced and reflect repeated observations of various phenomena (e.g., land change) over time. Failure to provide such data sets will be detrimental to our understanding of global change and to other environmental research It will also be detrimental to the 30s Wancnta of Sumtoxs GoIe and Presak, Saiacc Cornsnittcc on commerce, SciuEe, and T mnspOmdoQ Subcornmi ace on Scimcc, Tccbnology and Spacq Hcaringon S. 229, the hnd htc Sensing Policy Act of 1992, May 6,1992. Also see testimony of David Thibaui L John R. JcasaL ad Cbarlottc Btack Elk at tk m _. 31 mBwMJ@ OEi% op. at-, footnote 8. 32= insuumalton tk?hndsat satellite. It carxics seven spectral buts with aground rcsolutionof 30rncters (except fortbc thexmd ixhrcd ban& which posscSSc3 a resolution of 120 !nctcrs). on ~ 6. ~ ~~ TII* wiu ~ co~oct data iII a p anchmmatic baud of 15 nMms. 33 a~ Plan for b LandSat PrognmL Mar. 20, 1992, Aaacbmcnt 1. 34s= -G p=t H* ~~=t ~~ Raew (sSpaCC Center, Mississippi: mlfipacc Remote knsing center, 1~), for a deti~ review of the market potential for remotely sensed data suitable for gemming maps, as well as the characteristics of foreign remote sensing systems. 35 A fi~ ~fl ~ ~s -~~t W ~~s & b~~lts ~d drawbacks of using innovative small remote sensing satellites. 36 C-=ts of ~~ rcview~ on ~ f~( ~. 37 For ~=ple, ASTER (provided by Japan), S=WFS. md MoD~.
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..... . Remotely Sensed Data From Space: Distribution, Pricing, and Applications l 9 Table 3--Potential Commercial Applications for Selected and Proposed EOS Instruments Potential Commercial use continued development of the U.S. value-added industry. Previous, inconsistent support for Landsat has hurt market development. Those entrusted with marketing unenhanced remotely sensed data have an important role in defining new applications and products. SPOT Image corporation, for example, has developed an entire series of image maps and theme maps that have proved popular with certain customers .38 The entry of SPOT Image into the marketplace has helped to stimulate the overall market for remotely sensed data. EOSAT now offers TM digital data on small 8 mm Exabyte cartridges, which promise to make the storage and handling of Landsat data more efficient. Finding 7: A worldwide, value-added industry, closely tied to the application of geographic information systems (GIS), is now evolving, offering enhanced imagery and other information products for specific users and applications. The value-added, geographic information services industry may top $2 billion in yearly sales by 1993. 39 Unlike 1985, when EOSAT was formed the United States appears to be on the verge of having a U.S.-based, internationally competitive GIS industry, supported in part by remotely sensed data aquired from space. This is a result of the simultaneous growth of GIS sales and computing technologies. These technologies have the unique advantage of being able to handle data in many different formats and integrate them into usable files. Products include maps, inventories of crops, forests, and other renewable resources, and assessments of urban growth, cultural resources and nonren ewable resources. The growth of the GIS industry will be aided by the extensive archives of unenhanced Landsat data, which now includes some 210,000 multispectral TM scenes (maintained at the U.S.G.S. EROS Data Center, Sioux Falls, SD). It is important to differentiate between sales of value-added information and unenhanced data. Because value-added firms can add so much extra value to imagery, the former will always outstrip the latter in terms of gross sales and tax revenues returned to the U.S. treasury, just as the return from applications of commercial communications satellites far outstrips the market for the satellites themselves. 40 Hence, if the value-added industry grows sufficiently strong, the return of indirect revenues in the form of taxes could outsweigh the direct return of income from unenhanced data sales. A key factor driving the evolution of the market is the importance of timely data to many different users, such as farmers making weekly decisions on when to plant crops. Another key factor is the evolution of technology, in which the price of hardware and software for manipulating earth-sensing data has dropped dramatically so that small groups and even private individuals can use it. The 38 KPMG peat Manvi& op. cit., footnote ~, p. 11. 39 ~x fiw ~l~d~ ~] GIS app~~tjo~, not o~y ~SC tit usc IUDO@y Sal.scd imagCS hXD SpllCC. GIS Markets and @pOrtUDitiCS, 1991, Daratcck Cambndgc, IvL% 1991. mmcrciallyviable rathcrquickly 40 Note, however, tit cOmZDIUdGltiOZl$ ~e~~s tie co because they were introduced into a vibrant international telccommummhons market.
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. 10 l Remotely Sensed Data From Space: Distribution, Pricing, and Applications small user, whether a New England coastal environmental institute 41 or a southwestern Indian tribe concerned with forest management, 42 represents an enormous potential market, which is now largely untapped Value-added firms are well positioned to reach this market. Finding 8: Congress may wish to consider alternative means of commercializing the space remote sensing industry. Some workshop participants suggested alternative means of commercialization to the present operating structure, which, they said, could build on the lessons of the EOSAT experiment. They argue that while EOS~ has thus far not succeeded in commercialization as envisioned in the mid-1980s, other approaches to commercialization may work such as offering incentives to cut costs and finding ways to be more responsive to users. Pricing policy will nevertheless be a key determinant of failure or success. In the future, for a Landsat 8, for example, the government may wish to promote the commercialization of land remote sensing by adopting Option 1 of the previous section in which the gov ernment issues an RFP asking for the provision of specified quantities of remotely sensed land data Some participants worried that the present plan to put NASA back in charge of managing data distribution from Landsat 7 may halt the trend towards commercialization and hinder the growth of this new industry. Others felt that any emphasis on the commercialization of unenhanced data was misplaced that the value-added sector was the most important Commercial area to protect. Finally, a few workshop participants questioned the fundamental concept of turning over publicly funded assets to a single private operator and giving it exclusive rights to distribute publicly funded data. One participant suggested that the governm ent might consider allowing several private firms to collect unenhanced data and sell a variety of products from them in much the same way that the weather satellites now distribute unenhanced data to a variety of firms that add value to the data Finding 9: Academic institutions can play an important role in broadening the market for remotely sensed data by developing new applications and by training graduates who will make careers using the data in government private industry, nonprofit groups, and international institutions. Participants agreed that the U.S. academic research community has the potential to uncover new uses for remotely sensed data 43 Some suggested that to facilitate academic use of LandSat images, the gov ernment could set prices of present and/or archived data at the cost of fulfilling a users order, or subsidize purchases by giving researchers data grants to support purchases at the market price. 44 For many academic users, archived data could be sufficient for research and to train graduate students, because these uses generally do not require time-critical data 45 41 ~~~~ ~~ csatellite Imagay Aids Analysis of Rare Coastal h)systuns, Geo Info Sysmns, VOL 2, No. 8, June 1992, pp. 56-59. 42 R@ we ~ s~~ Btiw, wfl~ ~ for New hkXiCOS Native Amaican Lands, Geo @fO Sysfems, VOL 2, No. 8, J1992, pp. 3443. 43 ~v~e ~ ~ -t fi d~elqing napph~ons. ID dditioQ SOIIE ~blkh mscarch results in the open literature. one reviewer suggested Ihat pIiVatC fiIIIIS skwld ahO fCCCiVC diSCOUIltS fOr COIKhlCt.@ bOnS fkk ttSGMCh. u ~=~y, Eos~ offt. ~~ -Id rcs~&rs *Ut $1 million in data grants to facilitate purchases of thematic mapper data. 4s ~ ~~m su=est~ ho~v~, -t &UUISC & univ~itia do a lot of vahn?-added work on La.ndsat dam they should not be allowed to acquire current da@ wkh would gwe them a competitive advantage over private f-.
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Part II: Workshop Summary WORKSHOP SUMMARY Participants comments revolved around five major topics affecting data pricing and distribution: (1) (2) (3) (4) (5) Federal government needs and low, cost-of-service pricing; The relationship between LandSat commercialization and two-tier, or multiple-tier, pricing; The chances for developing an internationally competitive U.S.-based industry in space-based earth imaging; and Foreign policy, and price and distribution policies to support open-skies policy. Academic research and instructional needs. 1. Federal Government Needs and Low, Cost-ofService Pricing The Federal Government considers the provision of earth imagery an important public service. Since NASA launched the first Landsat satellite in 1972, users have applied its data to a wide variety of problems, including natural and cultural resource management, agriculture, land use planning, mapping, and resource exploitation (table 1). In the 1970s and early 1980s, U.S. users received data either directly from the satellite at no cost or at very low cost from NASA or the USGS EROS Data Center. 46 NASA charged foreign ground stations an access fee of $200,000 per year to collect data directly from the satellite as it passed over. 47 In 1982, because of the commercialization process, NOAA began to raise prices of Landsat data in anticipation of a transfer to the private sector. By 1985, it was charging users $4,400 (in 1985 dollars) per digital Thematic Mapper (TM) scene (up from $2,000 in 1982); this was NOAAs estimate of the market price of the data. When EOSAT assumed control of data sales in 1985, it initially lowered the price for a TM scene to $3,300, but over time has raised the price again to $4,400 (in 1992 dollars) to keep up with its costs of operations. A wide variety of users have complained since data prices were raised arguing that higher prices inhibit use of the data for research and other activities supporting the public good. 48 The governments case for low prices for data from Landsats 6 and 7 is strengthened by increasing evidence of global change. Scientists will need a large number of Landsat scenes to track the various elements of global change; the existing price structure would make assembling those data sets extremely expensive, over and above paying for the satellite system in orbit. Use of data from both Landsat 6 and 7 would be a key element of any U.S. gov ernment plan to assert international leadership on global en vironmental issues. Currently we have no institution taking its global change responsibilities seriously said one participant. However, if the federal establishment steps up to its responsibilities, Landsat dat a --distributed to international org anizations and Cooperating foreign government~would be a major part of the effort. DoD shares an interest with NASA and other federal agencies in the lowest-possible data prices. Its experience in using Landsat (and SPOT) data in the Persian Gulf War convinced DoD that Landsat was an important unclassified military resource. 49 As Defense Intelligence Agency official Brian Gordon noted in a 1991 Congressional Hearing: Certainly DoD would be using Landsat and Spot [imagery]. We recognize that its very important to get a wide area of coverage over our areas of interest, and well use everything we can get our hands on--any and all imagery data-bec ause of the very, very strong technical tradeoffs between resolution and a broad area of Coverage. 50 Landsat's usefulness for national security purposes seems to argue for distribution of Landsat data to the military at a low price as a public good. Entities other than federal agencies also argue for low data prices. Since the discovery of the Antarctic ozone hole in 1987, there has been a marked growth in demand for remotely sensed data that bear on aspects of global ~ prior to 1982, wti ~4 ~ ~~ O @ avmle mnlwtxal sensor (MSS) irnagca, which have a rcaohtion of go IrEters. 47 EOSM now a fCC Of ~,~ ~ ~ see us. congress, Ho= of ~ ~ ThcLandsarProgram: Management, Funding, and Policy Deci.rion.r, Hearing before the Committu on Sci~ Space, ad Technology, Nov. 26, 1991, Sect. IV: Solicited Cornmcn ts on H.IL 3614; U.S. congress, Senate, Hearing before the Senate Cornmittce on Cornmerc e, Scicnm, and Transportation May 6, 1992. 49 ~D -t $5.$6 fion on LandSat and SPOT imagciy for W firsi~ G~ Wa. SO B~ ~rdo~ s~~ent ~ Sci~~lc, ~~, ~ comtn~l~ Apph~tiotls Of the Lmdsat Pm- a Joint Hearing before the Committee on Science, Space, and Technology, and the Permanent Select Cornmmce on Intelligence of the U.S. House of Representatives, June 26, 1991 (Washmgtom DC: U.S. Government Priming Ofllce, 1991), p. 28.
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12 l Remotely Sensed Data From Space: Distribution, Pricing, and Applications change. These include requests from foreign government agencies and public interest nonprofit groups, both of which contend they should have the data at a low, cost-of-service price. Representatives of conservation and onal groups at the workshop pointed at that internati Landsat data are an important tool for managing and monitoring development. They endorsed a single-tier pricing policy in which data are priced at the marginal cost of fulfilling a user request. Alternatively, they favored a two-tier policy in which groups such as theirs can obtain data at the lower (i.e., first-tier) price. The issue of data pricing is at the intersection of several competing and unresolved national goals (box B). If the Congress were to resolve that a single price, set as low as possible, be charged to all users, it would uphold a longstanding commitment to a principle of broad access to data it acquires at public expense for the public good Examples include weather, census, and economic data Proponents of low data prices argue that such prices would assist governments, private groups, and individuals in the study of global change. The Administrations present management plan for Landsat 7, and both House and Senate bills, recognize commercialization of unenhanced data as a policy goal. However, some workshop participants, especially those from private industry, contended that the NASA management plan for Landsat 7 goes beyond the appropriate role of the public sector and is a gigantic step in the wrong direction in terms of the future of this technology. They argued that leaving the distribution of unenhanced data in government hands would in effect stifle the evolution of a viable commercial industry. Several of them suggested that commercialization could work if the system were designed as a commercial system from the start Pricing would then be an integral part of the system design. Orbital Sciences Corporations Seastar satellite, which carries the Seawifs sensor, provides one example of how this could work (box. C). Other participants disagreed with the entire thrust toward commercialization, contending that a single-tier, low price would most effectively stimulate the value-added industry. One participant noted that the government had successfully developed new products that are finding new markets, citing as an example the U.S. Census Bureaus TIGER files. OMB Circular A-130 (appendix B) governs the pricing of publicly owned data, such as that acquired from Landsat 7. The general debate over A-130 has revealed conflicts between users of inexpensive government data and those who would supply competing data products. Thus, the debate over the pricing of Landsat data exists Box B-A Selection of Goals Identified by the Workshop l Maximizing access to data by all users, as a pure public good; l Ensuring maximum data access by government users; l Spurring research: l Partial or full cost recovery for Landsat system investment; l Meeting foreign policy goals, including open skies; l Maintaining data control for national security purposes; l Fostering U.S. industrial competitiveness; l Fostering development of the value-added industrial and l Fostering development of greater private investment in supply of unenhanced data. SOURCE: (Mix of Tcchwlogy Awewmu& 1992. within a larger context, in which government-created data and information can affect the marketplace. 2. The Relationship Between Commercialization and Two-Tier, or Multiple-Tier, Pricing The United States is m a period of transition, participants agreed between the second phasea ttempted commertialization --of the Landsat program and an undefined future. In the first stage of Landsats history in the 1970s and early 1980s, the system and its data were ent monopoly. In those early days, NASA a U.S. governm viewed development and testing of the sensors and operation of the system more as an exploratory research and development. (R&D) activity than as a routine operational service. Data were used primarily by federal agencies and a small group of researchers. A value-added industry gradually developed to support government applications and to assist extractive industries such as oil gas, and minerals. Under these circumstances, most policymakers agreed that a federal agency (first NASA and then NOAA) should operate the system archive and distribute data, and encourage research and federal agency use through uniform, cost-of-service pricing. As use of these data by private industry grew, some analysts suggested that the Landsat system could eventually become self-supporting by marketing unenhanced data to a wider range of users. As a result, beginning with passage of the LandSat Commercialization Act of 1984 51 the United States began an experiment designed to encourage the growth of a private earth-sensing industry 51 The Reagan Mxmxus tration had initiated the process of transfer by issuing an Executive order in late 1983.
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Remotely Sensed Data From Space: Distribution, Pricing, and Applications l 13 in the United States that would eventually enable the marketplace to pay for the satellite system, including launch, and the marketing of Landsat data The implicit goal of commercialization was to create a new industry that would offset the costs of Landsat launch and operation to the Federal Government, and pay for future satellites in the Landsat series. Some workshop participants commended the progress EOSAT has made towards the goal of commercialization. Several noted that EOSAT had created a worldwide marketing system for LandSat imagery, which, although underutilized is a prerequisite for market growth. However, EOSAT had not been aggressive enough in marketing, some said. Opinions differed on whether EOSATs distribution and pricing policy had hindered EOSAT's growth. One participant pointed out that the prerequisite for market growth is identifying existing products or services that can be improved by using Landsat imagery, which leads to lower data prices and an increase in demand for imagery. An aggressive marketing system would then help in identifying new products. 52 Most participants agreed that the circums tances of 1992 are very different from those of 1986, when EOSAT assumed control of data distribution. Today a growing value-added industry is developing new products and markets and cheaper, user-friendly technology. In addition, other countries (table 2) are providing remotely sensed data The idea of moving to a two-tier or multiple-tier pricing structure arose in order to preserve part of the commercialization process begun in 1984 and to avoid outright termination of the existing contract with EOSAT, which would likely be required in order to implement other 53 In theory it could allow a proposed pricing structures. private operator to earn a profit by selling higher-priced data while also supplying data to government users at cost-of-service prices. Alternatively, it would allow a government-operated system to offset some of the costs of building, launching, and operating a satellite system. Some workshop participants expressed concern about the workability of a two-tier arrangement, others insisted that a multi-tier pricing system would be practical. There appeared to be differences in perspective between those participants for whom charging prices according to market demand is the key to profitability and a viable business, and participants who are managers in the federal sector. One federal manager at the workshop contended that dual-tier pricing would be an administrative nightmare. In rebuttal, a participant from the private sector Box CThe SeaStar Satellite System The commercial market for remotely sensed data has not grown as fast as early predictions once heralded The data remain too expensive for many of the smaller users such as farmers and the fishing industry. In the future, the Federal Governm ent may purchase quantities of data from private systems, allowing these firms to earn a profit marketing data to other users. The Federal Government and the Orbital Sciences Corporation (OSC) have recently entered into an experimental data purchase agreement that may provide valuable lessons for possible future agreements of a similar character. The Sea Wide Field of view Sensor (SeaWiFS) is a multi-band (8) imager that operates in the very near infrared portion of the spectrum SeaWiFS will be used to observe chlorophyll, dissolved organic matter, and pigment concentrations in the ocean. The sensor will contribute to monitoring and understanding the health of the ocean and concentration of life forms in the ocean. Data will have significant commercial potential for fishing, ship routing, and aquaculture, and will be important for ding the effects of changing ocean content understan and temperatures on the health of aquatic plants and animals. Under the arrangement with NASA, the companys SeaStar satellite will collect ocean color data for primary users (including NASA), who then have the option to sell both unenhanced and enhanced data to other users. NASA has agreed to purchase $43.5 million of data from Orbital Sciences. This arrangement allowed OSC to seek private financing for design and construction of the satellite. OSC has developed a virtually identical sensor for the EOS-Color satellite, one of the Earth Probes included under the vast umbrella of EOS. EOSColor, to be launched in 1998, will measure oceanic biomass and productivity. said that offering different prices is not a problem. It is in the noise of running a business. He noted that many businesses charge different prices for different types of service. However, another participant noted that discriminating according to product or service is very different from discrimin ating according to type of client, adding, Only a monopoly can afford to discrimina te according S2 ~ ~ct for telm-~mtion ~-c= ~m ~u~t~ ~vid~ ~ iIISUUCUVC exxople of ~ pOCCSS. men z~k CO121111U12iClUiOIl SUVkt3 were umoduccd m the 1 %0s, they entered a telecommunications market that was already wckstablishcd. Commnnkimons by satellite soon became much cheaper than by copper undcrsa cable. HencR satellite communications quickly gained market share and forced the cost of international CQmm unications scmiccs down See HICC of Technology Asscssmcxx op. cit., foomote 22, ch 6. 3 TC~ the contract with EOSAT could cost the govcrnm cnt millions of dollars and jeopardize data distribution from LandSat 6.
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14 l Remotely Sensed Data From Space: Distribution, Pricing, and Application to client type. H.R. 3614 proposes to distinguish prices on the basis of client type, rather than service delivered The heart of the issue is whether any entity--a private group like EOSAT or NASA for Landsat 7--can help bring a new industry (for unenhanced data) into being with a single-tier pricing policy. Several participants argued that a larger market for Landsat data would materialize only with a two-or multi-tier pricing system and an org anization devoted to building a market for Unenhanced data According to this argument, low, single-tier pricing will inhibit the ability of the system operator (whether the gov ernment or the private sector) to offset investment and operating costs. In addition, when data are provided only at prices that reflect only the costs of reproduction and distribution, no feedback is possible between users of the data and suppliers regarding the intrinsic value of the data compared to the system costs. Such feedback is needed to guide future investment, such as choice of spacecraft operating parameters, or the choice of new sensors. In other words, users of data provided on a single-tier, low-cost basis may undervalue the data. In addition, there is the danger of encouraging the develop ment of a larger bureaucracy for data distribution purposes. In sum, during this period of transition, when a major U.S. market for Landsat imagery is still forming, proponents of two-tier or multi-tier pricing argued that this policy may be the only way providers of uncaha.need earth imagery can earn sufficient revenues to grow. In addition, it was argued the perception of an unreliable federal or private monopoly would discourage the growth of the industry. Shifts in federal Landsat policy may have already inhibited the growth of a U.S.-based industry. Gov ernment-gathered meteorological data are-in some sense analogous to LandSat data. 54 Weather data are essential to two federal government functions: civil aviation safety and the armed forces. But satellite weather data is now also down-linked at spigots around the country, from which commercial users, such as television news stations, can draw. These commercial users then enhance the weather da@ for example, to display it on news broadcasts. Given the large number of commercial users who can enhance and resell such public goods--i.e., weather or Landsat data-for profit, should not the Federal Gov ernment charge a royalty for such commercial use, asked one workshop participant He suggested that some of the value of unenhanced data could be captured charging royalties and licenses on the use of data. Under this approach, a value-added firm would pay a royalty on its profit when it buys unenhanced data, adds value to them, and resells them. One participant offered an alternative to a single-tier pricing policy, m the form of a hypothetical private firm that would contract to distribute Landsat data using two-tier pricing. Users entitled to data at the lowest, Tier One, prices would be all Federal Gov ernment users, plus authorized academic, nonprofit research users. Tier Two users would be everyone who is not a member of Tier One. The firm would be free to establish internal use and commercial resale fees, in the form of up front payments or those made downstream for later or repeated use. This was one of several suggestions for meeting the needs for low-cost pricing for public service uses of Landsat da@ and giving the managing entity enough freedom with all other prices to develop the industry. Most participants agreed that the role of the Federal Government during this period of transition is not well defined and that differen t pricing policies can lead to different outcomes in shaping the future of U.S. remote sensing in the early 21st century. The workshop discussed another suggestion for resolving the question of data pricing and retaining a private sector supplier of unenhanced data If EOSAT or any other commercial seller of unenhanced data were free to improve its unenhanced data--i.e., allowed into the value added business--the seller would have an additional market from which to recoup investment and operating expenses. Several participants countered that although existing law does not prohibit EOSAT from entering the value-added business, such a step would give it an unfair competitive advantage because of EOSATs inside knowledge of demand based on requests for raw data 55 (this information is not available to value-added firms). Yet if other firms were also given the right to collect and distribute unenhanced data from the satellite, EOSAT would lose this competitive advantage. To date, EOSAT has chosen not to enter the value-added business. 3. Chances for Developing an Internationally Competitive, U.S.-Based Industry Most workshop Participants agreed that the goal of commercialization is not presently being met through the existing arrangement with EOSAT While participants noted that the value-added markct is moving toward a wider variety of products, and growing fast because of smaller, cheaper, user-friendly technology, they differed over which pricing policy would stimulate the market and improve the chances of fully commercializing the provision of unenhanced data. As mentioned some participants felt that continuing a single-tier pricing policy at existing prices and service
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Remotely Sensed Data From Space: Distribution, Pricing, and Applications 15 would fail to encourage commercialization of the sale of unenhanced data. There is a bigger market so long as we get better performance from suppliers, said one participant, apparently referring to more timely service and better quality of data. However, the private sector representatives at the workshop did not agree regarding two-tier pricing. At least one representative of a private firm argued that the revenues would increase if prices were lowered more, or kept at a relatively low rate. This participant noted that when EOSAT offered special sales of data, the firm had gone out and bought more data. For value-added firms, data costs can be a key business expense; being able to buy popular scenes (at lower cost) that can be utilized in many projects gives them a price advantage over value-added firms that cannot afford to maintain a library of scenes. But this has a greater impact on which value-added firms receive a contract and not whether a client will undertake a project in the first place. Ultimately, it is the number of projects purchased that influence data sales. Private sector representatives differed in their outlook for the future of the industry. Some were gloomy that the Federa l Government would not understand how to nurture a viable new segment of the U.S. economy. Participants agreed however, that taken together, the Landsat system, research community, and innovative private firms represent a potentially large national economic resource. One participant offered the following view: Remote sensing is part of the countrys strategy for recovering world economic leadership, to make the country more important and successful. How well industry and gov ernment work together will determine whether a major U.S. industry comes into being, and how successful it is internationally while helping U.S. public and foreign-policy goals. The health of the value-added industry is key both to enhancing a new and potentially large element of the economy and to building up a market for unenhanced data. Spokesmen for the maturing-and growing industry of firms who add value to unenhanced Landsat data from EOSAT argue that the data and techniques to enhance it amount to a strategic technology akin to the Nations former leadership m TVs and VCRs. The vast majority of potential buyers of remotely sensed data cannot use the unenhanced data that EOSAT (and after 1997, NASA) offer. In this they are like the average citizen who cannot use the raw data from a weather satellite, but regularly watches the television weather reports that display and interpret these raw data. Even if a self-sustaining market for unenhanced data were to develop, the value-added industry will still provide the greatest return to the Nations tax base, because the value added to the data will generally far exceed the original cost of the data. A strong value-added industry would also indirectly assist gov ernmental uses for the data by continuing its development of innovative ways of manipulating, displaying, and analyzing them and creating low-cost computer hardware and software. 4. Foreign Policy and Data Price and Distribution Policies For the balance of the century, several participants argued, Landsat could be an increasin gly important component of U.S. foreign policy. The United States, as a good global citizen and leader, could exploit its past investment m Landsat by offering imagery to foreign gov ernments and international entities, such as the World Bank, that need information about desertification, water supply, patterns of settlement, wildlife habitat, forest cover, and coastal issues. In the 1970s, through U.S. AID and NASA, the United States mounted a major effort to make Landsat imagery available to developing nations. Thosc efforts often resulted in a beneficial transfer of know-how and technology to these countries. However, because they were not continued in the 1980s, the growth in use of Landsat imagery has slowed considerably. Many developing countries still lack supportive institutions and appropriate training to make effective use of land remote sensing data. Others are highly capable but often lack funding to support extensive use of Landsat data. To the extent the United States has an interest in helping other nations learn more about their resources and processes of change, it may have a strong interest in providing data to some foreign gov ernments at cost-ofservice prices. On the other hand, two participants proposed that the U.S. foreign aid program be empowered to subsidize friendly countries purchase of Landsat data at whatever price is charged. U.S. foreign aid could also be directed to help other nations build or maintain downlink stations on their territory and assist indigenous research using the data and value-added enhancement of imagery. 56 A fundamental problem with such aid to many developing countries, however, is the difficulty of making such resources available through the foreign aid budget, which has many other demands placed on it. Foreign countries also use earth imagery to find out information about their neighbors and adversaries. Some participants noted that some governm ents would be willing to pay extremely hi@ prices for scenes of adjoining areas for purposes of national security. Such uses of Landsat data may not qualify as a public good by the standards of the U.S. foreign aid program. This leads to the awkward conclusion that in a free market for earth imaging information, some governments-perhaps % Off& of T@uMio~ ASSCSSXIICng op. cit., foomOte 2.2, d. 7.
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16 l Remotely Sensed Data From Space: Distribution, Pricing, and Application ones at war with their neighbors-would be in the same price category as farmers or state governments, Le., commercial users paying the market or tier two, prices. 57 Foreign companies would be expected to pay market prices; they could be very large customers for Landsat data m the future, as they already account for about 25 percent of EOSAT sales. The workshop did not resolve how a two-tier pricing arrangement, if it were instituted would apply to foreign users. Participants contended that the application of mm-tier pricing to foreign users warrented careful study. A related issue, barely discussed was the extent to which the U.S. government should open its black systems in remote sensing for public access and international use. The Russian release of data from its synthetic aperture radar system Almaz, could be an important precedent~ since the system offers an important new source of data about the oceans, ice pack and land Surface. s8 Some asked whether-with the Cold War over and the Russians opening up formerly closed systems to public, international use--the United States should make some of its now-classified systems publicly available as well? One participant noted that the U.S. national security community is closely following the fate of EOSAT, the overall commercialization process, and NASAs Landsat 7 and EOS programs, with an eye to what role its own classified systems might play in the public market. 59 Most legitimate foreign policy uses-such as helping friendly gov ernments or monitoring global changemight deserve a low, cost-of-service price for data. However, the international market for Landsat imagery offers the same problems as the domestic one: the smaller value of unenhanced data versus a potentially large market for value-added information. 60 These problems underscore the vital role of private value-added firms in enhancing data and making it more useful. The workshop did not resolve these issues, except to note that the French, the European, Japanese, Russian, and Indian systems will no doubt be joined by other earth-imaging systems. In short, an international industry will grow, no matter what the United States does with Landsat. The workshop also explored the U.S. nondiscriminatory data distribution policy, which is codified in the Landsat Act of 1984. When the Landsat Act was under debate in Congress, several private entities, who wished to launch and operate their own satellites, contended that they should have the right to market data on whatever terms would result m a profitable business. In their view, the right to discriminate among services and, for exam pie, to offer exclusive rights to data to those who would pay substantially more than the standard price for the privilege, was key to establishing a viable commercial business. Others argued on the contrary, that the nature of Landsat as a gov ernment-owned system required that data sales adhere to the open skies principle originally enunciated by Resident Eisenhower, and that data should be offered on a nondis criminatory basis to al potential buyers. 61 These experts reasoned that a nondiscriminatory policy would allay fears among the poor nations that the United States or some other rich country would gain important economic information about a poorer country, itself without access to similar data. A nondisc riminatory data policy would also underscore U.S. adherence to the principle of the free flow of public information across national boundaries. The Administration has proposed changing the law regarding nondiscrimin atory data policy in order to encourage private entry. 62 H.R. 3614 as passed by the House of Representatives and S. 2297 also include a provision that would void the nondiscrimina tory provision for privately funded satellite systems. However, even if changing this policy enhanced the chances of a private firm launching its own satellite, the firm would still have to compete with Landsat in marketing data. Therefore, the data a private system supplied would have to hold considerable additional or distinct value over Landsat data in order to earn a Profit. 63 Most workshop participants felt that, on the whole, the nondis criminatory policy has served this country and users of remotely sensed data well, as it has not only made data readily available (for a price) to all U.S. users, but has helped stimulate the overseas market as well. U.S. policy has set the standard for the world community. It was a major factor in the French decision to establish the same policy for data from SPOT However, with the entry of SPOT and other satellite systems offering remotely sensed data, some workshop participants felt that the supply of data was sufficiently diverse and the market sufficiently competitive that systems financed entirely fl ontb Otk ha@ W united states govanmmf intenfema m export markets forotkrcmnmoditiea ofstmtegic value during ~ of war or vastly he@emxl tmaions. It could do so for remotely sensed data as WCit. ~ The Eurqxan Spaa Agencys ERS-1 satellite system and J~S JERS-1 also carry synthetic qcrture radar systems. 59 ~ ~~~gm cOmmmity has a of this ~ ~y, @*y With rCSpCCt to the USC of previously classified data for global change rcaearch. 60 -e it ~ tie, f~ -k, tit p~to~p~ e m hndsat data are used dimctiy for some applications, electronically processed digital data pokntially carry much greater value. 61 ~= of T-logy ~msm~g op. & footnote 1, for a discussion of b nondhdmim tory policy and its relationship to the open skies policy. 62 Spce B~nesS News, Apr. 13, 19~v P 5 63 KpMG pa r6nvic~ op. cit., footnote 34, p. 11.
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Remotely Sensed Data From Space: Distribution, Pricing, and Applications l 17 with private investment capital could soon begin to offer data that discrimin ated according to price or timing without undercutting the foreign policy benefits of the nondiscrimin atory policy for the Landsat system. Most participants agreed that publicly funded systems should retain the nondiscriminatory policy consistent with the open skies principle. 64 5. Academic Research and Instructional Needs Many participants agreed that the U.S. academic research community can contribute to the development of public and private applications of earth sensing technology. Published research broadens remote sensing technology and applications. Students trained in college and university program s form a cadre of experts needed by gov ernment, private industry, nongov ernmental organizations, and international institutions. Several participants suggested strongly that academic researchers should be able to purchase Landsat data on the same terms as gov ernment users. 65 Even participants who advocated multiple-tier pricing agreed that university researchers were performing a public service and therefore should be charged cheaper prices or proffered subsidies to support purchases at higher prices. Participants from nonprofit conservation groups stated that the costs of earth imagery for evaluating major environmental problems such as African desertification or depletion of Amazonian rain forests were a major part of their annual budgets. They argued in favor of low data prices During the 1980s when EOSAT came into operation, federal support for applied research in the earth sciences decreased as did support for new technology exploration and demonstration. The problem the academic community is encountering, according to this argument, is not that EOSATS prices are too high or unfair, but that support for university research and teaching has declined. Adherents of this view argue that a proper remedy, in this case, may not be to force data prices lower, but for the Federal Government to offset whatever price is charged-and any price increases-by appropriate grant and contract research support. Most academic researchers do not require data immediately after it is acquired so that charging of premiums for rapidly filling orders is not an issue for them. 66 A key issue for academics, however, is the need for government to maintain the quality of archived images, 67 so that historical data they need will remain useful in later years. While university users were considered as legitimate candidates for low prices, some of the workshop participants did not place state and local gov ernments in this category. They said state and local governments form a major market for specialized value-added services, which can be provided most efficiently by private firms. However, participants recognized that cases might arise in which state or local governments need Landsat or EOS data to serve national purposes. In such cases the Federal Gov ernment could award grants or offer other preferential treatment to provide these data at a lower price. @ H~ 3614, WMC dJowing a privatdy ftuldd SyStCfti tO Sd 1L5 OWII @CCS h XCOdMCC witb Administration policy, wodd retain a nondiscrlmmat Ory policy with respect to publicly funded systems. ti Now tit ~ 3614 would ~o~ s~~h low &~ ~~ for glow -e m-~@ hox w~ ~ WV crxtment gmnt or contract. 6 As global change mscarch grows in unportance, many more academic users may require timely access to data in order to evaluate the utility of data for studying cnvmxuncntal changes and for comdinating field campaigns for collcctmg in SIfU ti s? Afc~vd photograptuc and dig~ Ixdsat unagcs arc maintamed at the EROS Data Cente.r in Sioux Falls. which is operated by the U.S. Geological S1l.mcy.
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Appendix A Proposed Policy for Handling Remotely Sensed Data S.2297 Land Remote Sensing Policy Act of 1992, Section 202 Dissemination of Unenhanced Data. (a) DISSEMINATION POLICY-The Administrator and the Secretary of Defense shall implement a Landsat data dissemination policy, defined in the plan required by section 201(b)(3), that (1) ensures that existing Landsat data and future unenhanced data acquired by the Landsat system are routinely available to Earth and global change research scientists at costs that do not exceed the marginal cost of filling a specific user request; (2) considers the reasonable and legitimate requirements of all segments of the satellite land remote sensing user community for access to unenhanced Landsat data; and (3) ensures that copies of all unenhanced data acquired by the Landsat system are provided to the Secretary of the Interior for perman ent preservation. (b) AUTHORITY NOT AFFECTED The provisions of this section shall not affect the authority of the Administrator and the Secretary of Defense to contract for the dissemination of data acquired by the Landsat system, so long as(1) the Federal Government retains ownership of all unenhanced data acquired by the Landsat system; (2) no exclusive marketing rights are extended to any contractor. (3) the Federal Government retains the right to set pricing policy for unenhanced data; and (4) all other requirements of this section are met. Section 501. Nondiscriminatory Data Availability. (a) MAKING DATA AVAILAB LE---Any Unenhanced data generated by the Landsat system, or by any system operator under the provisions of this Act, shall be made available to all users on a nondiscrimin atory basis in accordance with the requirements of this Act. (b) INFO RMATION-The Administrator and the Secretary of Defense and any other system operator shall make publicly available the prices, policies, procedures, and other terms and conditions (but not necessarily the names of buyers or their purchases) upon which the operator will sell such data. Section 502. Archiving of Data. (a) PUBLIC INTEREST-It is in the public interest for the Federal Government (1) to maintain an archive of land remote sensing data for historical, scientific, and technical purposes, including long-term global environm ental monitoring; (2) to control the content and scope of the archive; and (3) to assure the quality, integrity, and continuity of the archive. H.3614 National Landsat Policy Act of 1992. Section 203. Data Policy for Landsat 1 through 6. (a) CONTRACT NEGOTIATIONS-Within 30 days after the date of enactment of the National Landsat Policy Act of 1992, the Landsat Program Management shall enter into negotiations with the Landsat 6 contractor, with respect to pricing, distribution, acquisition, archiving, and access of Landsat 1 through 6 unenhanced data. (b) CONSIDERATIONS-In carrying out negotiations under this section, the Landsat Program Management shaU(1) seek to ensure that such unenhanced data shall be provided to the United States Governm ent and its affiliated users at the cost of fulfilling user requests, on the condition that such unenhanced data is used solely for noncommercial purposes; (2) seek to ensure that instructional data sets, selected from the Landsat data archives, will be made available to educational institutions exclusively for noncommercial, educational purposes at the cost of fulfilling user requests; (3) seek to ensure that Landsat data users are able to acquire unenhanced data contained in the collective archives of foreign ground stations as easily and affordably as practicable; (4) seek to ensure that the United States Gov ernment and its affiliated users shall not be prohibited from reproduction or dissemination of unenhanced data to other agencies of the United States Government and other affiliated users, as long as the unenhanced data will be solely for noncommercial purposes; (5) explore options, including the provision of vouchers and data grants, for providing unenhanced data to nonprofit, public interest entities engaged in environmental research at the cost of fulfilling user requests, as long as the unenhanced data will be used solely for noncommercial purposes; and (6) seek to ensure a viable role for the private sector in the promotion and development of the commercial market for unenhanced data from the Landsat system. (c) FAILURE TO REACH AGREEMENT If negotiations under subsection (a) have not, within 120 days after the date of the enactment of the National Landsat Policy Act of 1992, resulted in an agreement that the Landsat Program Management determines generally
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.. 19 l Remotely Sensed Data From Space: Distribution, Pricing, and Applications achieves the goals stated in subsection (b)(1) through (4), the Administrator and the Secretary of Defense shall, within 30 days after the date of such determina tion, jointly certify and report such determin ation to the Congress. The report shall include a review of options for achieving, and recommendations with respect to, such goals. The options reviewed shall include-(1) retaining the existing or modified contract with the Landsat 6 contractor. (2) the termination of existing contracts for the exclusive marketing rights of Landsat unenhanced data; and (3) the establishment of an alternative private sector mechanism for the marketing and commercial distribution of such data. Section 204. Transfer of Landsat 6 Program Responsibilities. The responsibilities of the Secretary of Commerce with respect to Landsat 6 shall be transferred to the Landsat Program Management, as agreed to between the Secretary of Commerce, the Secretary of Defense, and the Administrator pursuant to section 201. Section 205. Data Policy for Landsat 7. (a) LANDSAT 7 DATA POLICY PLANS-The Landsat Program Management, in consultation with the Secretary and appropriate officers of other appropriate United States G OV ernment agencies, shall develop a preliminary and a Final Landsat 7 Data Policy Plan in accordance with subsections (b) and (c). The Preliminary and Final Landsat 7 Data Policy Plans shall(1) define the roles and responsibilities of the various public and private sector entities that would be involved in the acquisition, processing, distribution, and archiving of Landsat 7 data and in the operations of the Landsat 7 spacecraft; (2) ensure timely and dependable delivery of unenhanced data to the full spectrum of civilian, national security, commercial, and foreign users, and the National Satellite Land Remote Sensing Data Archive; (3) seek to ensure that unenhanced data shall be provided to the United States Gov ernment and its affiliated users at the cost of fulfilling user requests, on the condition that such uunenhanced data is used solely for noncommercial purposes; (4) ensure that instructional data sets, selected from the Landsat data archives, shall be made available to educational institutions exclusively for noncommercial, educational purposes at the cost of fulfilling user requests; (5) ensure that the United States Government and its affiliated users shall not be prohibited from reproduction or diss emination of unenhanced data to other agencies of the United States Government and other affiliated users, as long as such unenhanced data is used solely for noncommercial purposes; (6) ensure that the proposed data distribution system contributes to the commercialization goal for land remotesensing; and (7) to the extent possible, ensure that the data distribution system for Landsat 7 is compatible with the Earth Observing System Data and Informa tion System. (b) PRELIMINARY PLAN AND REPORT-Not later than December 31, 1993, the Landsat Program Management shall develop and submit to the Congress a report that contains a Preliminary Landsat 7 Data Policy Plan and that addresses each of the issues identified in subsection (a). (C) FINAL PLAN AND REPORT-Not later than July 15, 1996, the Landsat Program Management shall develop and submit to the Congress a report that contains a Final Landsat 7 Data Policy Plain In developing the report and plan, the Landsat Program Management shall assess the operational effectiveness of the data distribution system and policies for Landsat 1 through 6, established pursuant to section 203, in order to assist the Landsat Program Management in determinin g what, if any, modifications should be made in the preliminary Landsat 7 Data Policy Plan. The report shall address any such modifications.
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Appendix B Office of Management and Budget Circular A-130 The Office of Management and Budget published OMB circular A-130 in 1985 to establish a national policy for the reproduction and distribution of information collected or paid for by the federal government. A-130 can be applied to any federally collectcd data and information, including those as diverse as census data and images collected from space. In particular, distribution of Landsat data and data from future Earth Observation System satellites are governed by A-130. Inf ormation is defined by A-130 as any communication or reception of knowledge such as facts in various forms and on any medium. Informati on technology is similarly defined as any hardware or software used in connection with this information. The circular establishes several ground rules for the collection of informati on, two of which are important for Landsat data. Firs&in an effort to minimize the cost and maximize the usefulness of information collected by the government, the anticipated public and private benefits that can be derived from the information, insofar as they can be calculated should exceed the public and private costs of the information." Second, the open and efficient exchange of information. fosters excellence in scientific research and the effective use of Federal research and development funds. A-130 also sets policies for information management Foremost for managing information similar to that from Landsat are two policy statements included in the circular. a) b) c) in a manner that ensures that members of the public have a reasonable ability to acquire the information. in a manner most cost effective for the government, including placing maximum feasible reliance on the private sector for the disseminati on of the products or services and so as to recover costs of disseminatin g the products or services through user charges, where appropriate . OMB Circular A-130 also stresses long-term strategic pl anning by agencies for acquiring data and operating information technology programs. It also encougages timely acquisition of information and information technologies, and also dictates some specific agency requirements. Any data distribution plan must conform with the requirements set forth by A-130, which will be revised in 1992. -2 &
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OTA Publications Containing Significant Analysis of Remote Sensing from Space U.S. Congress, Office of Technology Assessment, Civilian Space Policy and Applications, ~-s~~l (Washington, DC: U.S. @V ernment Printing Office, August 1982). U.S. Congress, Office of Technology Assessment, Commercial Newsgathenng from Space, UIA-ISC-TNWM) (Washington, DC: U.S. Government Printing OHice, May 1987). U.S. Congress, Office of Technology Assessment International Cooperation and Competition in CivaZian Space MMies, 0M-ISC-239 (Washington DC: U.S. Government Printing Office, July 1985). U.S. Congress, Office of Technology ~sessmen~ Remote Sensing and the Private Sector, OTA-ISC-TM-239 (Washington, DC: Us. Gov ernment Printing Office, April 1984). -21-
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