Getmapping's Submission to the Committee's Review of Ordnance Survey


I am responding on behalf of Getmapping plc to your letter of 24 April 2007 to Sir Bryan Carsberg asking for submissions for your committee's forthcoming review of Ordnance Survey (OS). Getmapping is a member of the Locus Association


Getmapping is an OS Licensed Partner and a reseller of OS's mapping products. However, Getmapping's main area of business is to create and maintain a national aerial photographic survey of Britain (The Millennium Map) which is in direct competition with OS's Imagery Layer. Thus our main concerns with OS are from the point of view of a direct competitor and not a re-user of OS data.


Before answering your specific questions, I would like to try to give you a clear idea of how difficult Getmapping is finding it to operate as a competitor of OS now that OS is acting as an unregulated commercial entity with unclear boundaries between its public service and commercial activities. We think that these difficulties, experienced by many companies in the Geographic Information (GI) field, have badly damaged the development of Britain's GI industry.


I have also attached a number of Appendices to illustrate some of the issues raised in this letter and to demonstrate that the GI industry has been unable to find a satisfactory channel through which to have them addressed. Since some of the Appendices were sent in confidence I would be grateful if at least the Appendices are not made publicly available.





A Brief History


When we launched Getmapping (then the Millennium Mapping Company) in 1999 OS was not acquiring any colour photography and was not producing any mosaiced (ie seamless, map-accurate) aerial photography products. Furthermore OS had no plans to do so. OS therefore became a reseller of Getmapping's Millennium Map and the two organisations seemed set to work together in a long term and mutually-beneficial partnership. Had this state of affairs continued I believe that Getmapping would by now be a much larger and more profitable company operating on an international basis. We were the first company world-wide to develop a private-sector national aerial survey served via the internet, and our plan was to develop an international business from a solid UK base.


However in 2001 OS decided to compete with Getmapping by creating and owning its own Imagery Layer, an equivalent of Getmapping's Millennium Map. In Getmapping's view OS's Imagery Layer was going to be subsidised from public funds and so in 2002 Getmapping took legal action against OS to try to prevent OS from competing unfairly against Getmapping in the imagery market. Getmapping had to withdraw from this action before it came to trial because the company had insufficient funds to continue, and Getmapping also lost its appeal for an injunction to force OS to include the Millennium Map within OS's Digital National Framework. The judgement from the injunction hearing was highly critical of Getmapping's case, and Getmapping was ordered to pay OS's costs which were over 450,000 (although Getmapping and OS eventually agreed on the payment of a smaller six figure sum which our Settlement Agreement prevents me from disclosing). See Appendix A for a description of the issues behind the case.


Getmapping still believes that OS is competing unfairly in the imagery market. We think that OS can do this because the boundaries between its national interest and its commercial activities are not well defined and because there is no effective regulator to whom we can appeal for help. Had OS taken notice of the recommendations of the previous 2002 Select Committee report then we think that many of our current problems would have been avoided.


Competing with a Trading Fund: A Competitor's View


From Getmapping's point of view, competing with the OS in the imagery market has been a dangerous, frustrating and uncertain process.


From 1999-2001 we worked in partnership with OS with the expectation that OS would resell the Millennium Map and use it as an Associated Data layer within OS's Digital National Framework.

From 2001-2003 OS was a direct competitor of Getmapping and OS's intention at that time was to acquire colour imagery only once (for map update and the Imagery Layer) and to offset the majority of the Imagery Layer costs against its cartography budgets. In reaction to this situation Getmapping developed a new strategy which involved abandoning national maintenance of the Millennium Map. Instead Getmapping would become a licensed reseller of OS's Imagery Layer and Getmapping would supplement the Imagery Layer with its own higher resolution photography of key areas of the country. However, it soon became clear that OS did not have the power to license its Imagery Layer to its Licensed Partners.

From 2004 to 2006 it became apparent, although nobody ever told us, that in fact OS was not after all permitted to re-use its cartographic photography within the Imagery Layer. OS was in effect having to acquire (or procure from third parties) the photography twice, once for cartography update and once for the Imagery Layer. However, during this period OS explained that from 2007 they would return to the strategy of flying the country once for both cartographic update and the Imagery Layer. Suppliers of photography would not be allowed to retain ownership of the photography, as had happened for the first layer of the Imagery Layer. OS justified this policy, which in our view amounts to a cross-subsidy of funds from OS's dominant and unassailable position in the cartography market, on the basis that it was now winning its cartography contracts for Local and Central Government under open competition (the Mapping Services Agreement (MSA) and Pan Government Agreement (PGA) respectively).

2007. There has been no sign of any procurement activity for OS's second layer of the Imagery Layer, and we have no idea of their current intentions. However we have recently discovered that OS is already using some of its cartographic update photography in the Imagery Layer which in our view is a cross-subsidy from its public service to its commercial activities.


It has been very difficult to develop the company in the face of these swings in OS's intentions - we know that OS intends to make our current business model unsustainable, and we have to spend a lot of time and effort planning alternative business models and trying to find a regulator/arbitrator who can help us.


Throughout this period of uncertainty Getmapping has tried to establish a channel through which it could voice its concerns and have them debated and resolved openly and fairly. We have tried OS itself (at all levels), DTLR/ODPM/DCLG (at all levels), OFT, HMSO and the National Audit Office. In 2003 we founded the Geographic Information Forum (GIF) to try to get the weight of several companies behind the need for recognition and resolution of the problems. And in 2005 we were closely involved in the establishment of the Locus Association. We have used our own resources as well as help from our MP. Through the GIF and Locus we have engaged in political lobbying in Britain as well as lobbying to the European Union. See Appendices B.1 to B.4, C.1 to C.3 and D for some examples of our attempts to try to establish a channel for complaint: none of these efforts has so far resulted in any useful advice or support.


From the point of view of a competitor of OS Getmapping has formed some strong impressions about OS, its regulation and the effect of the current situation on our ability to compete effectively.


a) Competition versus Co-operation


As a Trading Fund OS has a responsibility to act as a commercial entity and make a profit. This is bound to clash with OS's remit to act as a force to develop the GI Market in Britain for the good of all.


We think that OS has not paid nearly enough attention to the effect of its actions on other companies within the sector. OS is in a dominant position in the market and it is (in effect) state funded (through un-competed or ineffectively-competed mapping contracts for government and the utilities). From this dominant position OS ought to have a duty to ensure that it deals fairly with the rest of the market. In our view it does not do so.


b) Regulation/Arbitration


As far as we can see there is no effective regulation of OS. None of Getmapping's complaints has seemed to result in a useful outcome. Furthermore I personally believe that in the case of Getmapping's 2003 complaint to HMSO, Geoff Sadler (who was responsible for our case) was not given the freedom to deal with it as he saw fit. I believe this because at our first meeting Geoff Sadler was very sympathetic and said that there did appear to be an abuse. He said that at the very least he would ensure that we were given a fair hearing and that he would get the parties together to discuss the issues. However, Getmapping's complaints were dismissed. HMSO's report appeared to contain a fundamental discrepancy. HMSO acknowledged that OS "should not use its market power to compete unfairly" but then said that "where there is mixed use of imagery for cartography and the Imagery Layer, the costs are apportioned. HMSO are satisfied with this approach." We asked for a justification of this discrepancy but we were never able to discuss this with Geoff or anybody else. See Appendices C.1 to C.3 for details of the complaint, HMSO's response and Getmapping's counter-response.


The regulatory framework appeared to be moving in the right direction with the creation of OPSI, and we were all encouraged when in 2006 Intelligent Addressing had a complaint upheld by OPSI. However, it now appears that OPSI has no power to enforce its recommendations, and so we are no further forward.

This situation is analogous to a dog (OS) worrying sheep (OS's competitors). From 2001 to 2006 the sheep bleated but there was no owner (regulator) within earshot. When at last the owner listened (OPSI in 2006) and ordered the dog to heel, the dog ignored the command. We think that the dog must be put on a lead (through effective regulation) and/or the sheep must be enclosed within a field (ie there must be clear boundaries to the scope of OS activities). Only when the sheep are safe can they develop properly and attract investment.


Despite the apparent lack of success, we suspect that behind the scenes things may not be quite as bleak as they seem. For instance, although Getmapping lost its injunction hearing, and although its complaint to HMSO was dismissed, OS for some reason never carried out its stated intention of using the bulk of its cartographic photography to populate its Imagery Layer. Perhaps after all there is a mechanism, invisible to the private sector, by which OS is to some extent controlled. However, we think that it is more likely that OS is aware that it cannot afford to be too aggressive in its treatment of its competitors for fear of arousing the interest of the regulators.


c) Consultation and Communication


Since 2000 OS has stopped publishing the Information Papers and Consultation Papers which used to keep the industry informed of its plans and intentions. OS has never consulted Getmapping about its plans for the Imagery Layer or listened sympathetically to Getmapping's concerns about the effect of its plans. At a working 'Account Manager' level OS staff have been helpful and co-operative. However, the Account Managers seem ignorant of, and are certainly not able to influence, OS's policy. At the policy/director level OS's attitude to Getmapping has generally been aggressive and arrogant. Several times Getmapping has been urged to become a supplier of imagery to OS and to give up its aspirations of owning its own data.


d) OS Remit and Boundaries


It seems to us that OS has at least one market in which it is both dominant and in effect publicly funded. This 'national interest' market is the creation and maintenance of national large-scale mapping (MasterMap). However, there are other 'commercial' markets in which OS is not in a dominant and publicly-funded position. Aerial photography is one such market in which the private sector is stronger than OS, and so far the OS Imagery Layer has not made very much impact on our sales. In these markets OS should compete on equal terms with the private sector.


We think it is absolutely vital that a clear boundary is drawn between OS's 'national interest' markets and its 'commercial' markets, and that procedures are put in place to ensure that there is no form of cross-subsidy between one and the other. At the moment there are no clear divisions between the two types of market, and there are no clear rules to prevent cross-subsidy.


e) Unfair Practices (with an Example)


In Getmapping's opinion, OS indulges in practices which are blatantly unfair and which it knows to be unfair. OS acts unfairly because it calculates that it can get away with it and because it puts its commercial interests before the wider interests of the GI industry. OS is encouraged in this behaviour by the knowledge that there is no effective regulator.


I will provide a single current example to illustrate this point. OS is competing with Getmapping for the provision of the Imagery Layer, and from 2004 - 2006 OS has been funding its Imagery Layer photography separately from the photography it uses for updating its cartography. In other words OS is effectively funding two layers of photography, one for the Imagery Layer and one for cartographic update. This is good for Getmapping because there is no cross-subsidy of the Imagery Layer from OS's cartographic budgets. However in June 2005 OS announced to Getmapping that from 2007 it would procure a single layer of photography that would be used for both the Imagery Layer and the Cartography update programme, and that OS would offset the cost of the photography against its cartographic budgets. OS's justification for doing this is that all the government's mapping requirements have now been competed (under the Mapping Services Agreement (MSA) for Local Authorities in 2004 and under the Pan Government Agreement (PGA) in 2006). Because OS would win this mapping work in open competition then OS was justified in arguing that it was no longer in a monopoly position and that it could therefore offset its Imagery Layer costs against its cartography programmes.


If OS was allowed to do this then Getmapping's current business model would be unsustainable. We would have to pay (about 1m pa) to acquire our photography while OS could offset those costs. Getmapping simply could not compete.


OS's argument is clearly unfair because both the MSA and PGA competitions were designed in such a way that only OS could supply the cartography. (They could have been designed differently, but ODPM, of which the Director General of OS was a director, chose not to do so). How can we assert that only OS could win? The main reason is that the winning contractor was required to supply complete large-scale cartography for the entire country within 6 weeks of winning the contract. This is clearly impossible unless a bidder was prepared to invest in creating an entire large-scale map of Britain in advance. This would take about five years and cost perhaps 100m. Please see Appendix F for more details of why we believe the PGA procurement was unfair.


We believe that OS can only indulge in such blatantly unfair practices because it knows that there is no effective regulator and that its private sector competitors cannot risk taking them to court.


f) Effect on Getmapping's Ability to Develop its Business


Getmapping entered the Imagery Layer market in 1999, and we floated the company in 2000 with the aim of developing an international imagery layer which would be served online. In other words we wanted to create a Google Earth. Getmapping was the first company in the world to create a privately-owned national scale aerial survey.


Until 2001 the business developed well in the UK. In addition we launched a Spanish and an Australian joint venture and we opened discussions with third party data suppliers in many other countries (Sweden, Germany, France, Holland etc).


However when OS announced its plans for its own Imagery Layer in May 2001, the whole picture changed. Our sales were damaged by the loss of OS as a reseller; public sector sales were damaged because OS failed to announce any prices for its Imagery Layer; we had to abandon our 50 cm survey of Scotland because OS offered us a contract to license our Scottish data from us provided we re-flew it at 25 cm; our shares crashed; and we spent nearly two years and c. 300,000 on legal fees to try to prevent OS from abusing its dominant position. As a result of this the company nearly failed. We had to cut our staff, abandon our overseas plans and retrench.


However, the effects of OS as an unregulated Trading Fund go much further than that. Even now we find it very difficult to plan our future when we don't know whether OS will be allowed to offset the costs of its post 2007 imagery against its cartography budgets. If it is allowed to do this then Getmapping's current business will become unsustainable. Our difficulty is that we cannot raise money for new investments or make a proper business plan until we know how these issues are going to be resolved. Every year we have to reflect the uncertainty over OS in our Annual Report and Accounts, and this keeps our share price depressed and makes it impossible for us to raise more money for investment.


The Committee's Six Questions


Many of the Committee's six questions have already been covered to some extent in the paragraphs above. Additional comments are provided below:


Q1. Boundaries of OS's Public Service and National Interest Work


We believe that very little has changed since 2002. We think that it is vital to define clear boundaries between OS's National Interest (and quasi-publicly-funded) activities and its Commercial Activities and to ensure that there is no cross -subsidy between the two.


It might also be helpful to define a third category of activity in which OS will not be allowed to operate at all, for instance publishing road atlases. This would give companies a clear indication of where they could build a business without fear of competition from a dominant National Mapping Agency.


Once defined we believe that the boundaries between these three classes of activity should not be allowed to change without extensive consultation and a five year warning so that companies involved can make plans to adjust their business plans accordingly.



Q2 Effective Arbitration.


We think that the current arbitration process is hopelessly weak and inadequate. Furthermore we do not believe that it is independent: we think that HMSO was prevented from dealing properly with our 2003 complaint.


However, it does appear that behind the scenes OS may sometimes be constrained by somebody. An example of this is that, despite saying in 2002 that it would replace the first licensed layer of the Imagery Layer with its own cartographic photography, OS has not done so. This is a mystery to us.


We would also like to stress that an effective arbitration system must allow for a complaint to be made in a simple letter and in layman's terms. The onus should then be on the arbitrators to get to the bottom of the issues and make their ruling. If a company has to spend perhaps 50,000 paying lawyers to formulate a complaint then most issues will never see the light of day.


Q3 What is your Assessment of UK Geographic Panel's operation?


Getmapping has very little knowledge of how the panel is working. We have had no contact with the panel and have not seen any significant outputs.


However, we think it is wrong on two counts that OS leads the panel that provides strategic GI advice to the government. First, OS now has a commercial interest, and we believe that OS would naturally use its position on the GI Panel to further that interest. Second, OS is a supplier of maps, and it will naturally lean towards a Rolls Royce solution to mapping products which may be far removed from what the users need. For example many users consider that MasterMap is over-specified and too sophisticated for the majority of its users. And yet OS was able to specify it on behalf of government and the utilities who are now forced to pay for it. We think that it would be better for the specification of the customers' needs to be entirely separate from the suppliers.


Q4 Is the UK Geographic Panel's membership Well Balanced?


No, it is far too biased towards OS and the public sector. In addition none of the GI panel members has ever made an approach to Getmapping to ascertain our views about National GI policy.



Q5 Should DGOS advise the Government on GI?


No, DGOS should definitely not advise the Government on GI issues. DGOS is almost bound to try to influence policy to benefit OS's commercial position.


This would apply even if there was a clear separation between public service and commercial activities because DGOS would still have an interest in providing advice which benefited OS's Commercial arm.


Q 6 Unfair Competition


A lot of the Q1 arguments apply here. OS is unquestionably in a dominant position in the mapping market - this dominance is perpetuated by the MSA and PGA competition structures which do not make it possible for anybody to compete for the large scale mapping - therefore OS receives over 50m of public money per annum to maintain the country's mapping - OS sees no distinction between its public good and commercial activities and therefore feels free to cross-fund between these activities. This is still the case - OS is now embarking of a policy of "fly once and use may times" for aerial photography which means that OS still intends that its cartography budgets will underwrite its commercial Imagery Layer.


This takes us back to Question 1. The solution is to define clearly each of OS's activities as "Public Good", "Commercial" or "Out of Scope". Then there needs to be a clear procedure to ensure that there is transparency and no subsidy between the Public Service and the Commercial activities.




In summary, Getmapping is in the business of providing a product which it has to pay for itself. Getmapping competes against OS which is allowed to offset the costs of its photography against its Public Service cartography budgets. This behaviour has been specifically condoned by HMSO. So far OS has, in the main, chosen not to cross-subsidise the bulk of its Imagery Layer. However, from 2007 it intends to do so. So Getmapping is in effect living on borrowed time - it should not be possible for Getmapping to compete effectively with OS under these conditions. This is both unfair and bad for the development of the GI industry.


In 2002 the DTLR Committee correctly identified the main problems with the structure of OS and made clear recommendations for putting them right. All but one of the recommendations were ignored by ODPM/OS, and as a result Getmapping and the other direct competitors are still suffering from an unfair competitive environment.


Getmapping hopes that the Committee will recognize the problems that still exist and that it will re-iterate its recommendations. Furthermore, Getmapping hopes that the committee will consider mechanisms for ensuring that its recommendations cannot be ignored for a second time.