Supplementary memorandum by Ordnance Survey
Ordnance Survey has considered the Uncorrected
Evidence submitted in response to the Committee. Since the Uncorrected
Evidence was submitted:
— The Government Response to the Office
of Fair Trading (OFT) Study on the Commercial Use of Public Information
(CUPI Study) has been published (in June 2007);
— Ordnance Survey and the OFT have
continued constructive engagement in respect of the CUPI Study
findings as they affect Ordnance Survey. Although all outstanding
issues are not yet completely resolved, significant progress has
been made and Ordnance Survey is eager for final resolution on
outstanding issues; and
— The definition of Ordnance Survey's
Public Task referred to in paragraph 1a.3 of its Memorandum of
1 June 2007, has now been finalised by Shareholder Executive and
approved by Ministers of Communities and Local Government. A copy
of this document is attached at Annexe 1.
Ordnance Survey comments below on a number of
issues raised in the Uncorrected Evidence. However, it has not
sought to comment on individual points that were raised by different
parties as it assumes that the Committee's intention is to review
the overall position rather than to arbitrate specific disputes.
However, if the Committee considers that any specific points
have not been adequately dealt with by Ordnance Survey in its
memoranda, Ordnance Survey would welcome the opportunity to provide
further written evidence to the Committee on such points.
Q1 Ordnance Survey's public service and national
interest work
Many Government respondents to the Committee
underlined the importance to them of Ordnance Survey data maintained
to the currency, reliability, consistency and completeness they
require.[79]
These needs are reflected in the new Public Task document which
now has been agreed with Ministers in order to provide additional
clarity as to the boundaries of Ordnance Survey's "public
service and national interest work".
These issues are, in our view, largely distinct
from the recommendation of the OFT, following its CUPI study,
that Ordnance Survey's "monopoly activities" (unrefined
information) should be separated from its "competitive or
contestable activities" (refined information).[80]
Although Ordnance Survey would agree that Ordnance Survey's "unrefined
information" is likely to overlap to a substantial extent
with its Public Task information, it does not believe that this
is necessarily true in all cases. The concept of "public
task", which is directed at securing that information is
available to Government, and "unrefined data", which
is directed at separating out "monopoly" activities,
are essentially directed to different issues. It is entirely possible,
for example, that there could be a need for certain types of data
to be produced as a "public task" matter in order to
ensure that a certain specification or geographic coverage is
maintained, despite the fact that similar products are available
in the market for certain geographies and, as regards other customers,
are regarded as competitive alternatives to the Ordnance Survey
product. In this respect Ordnance Survey disagrees with the OFT
view that the public service and national interest work of Ordnance
Survey needs to be drawn narrowly to reflect the "monopoly
element in the geographic information market".[81]
Q1(a) Distinction between public service and
commercial activity
Although Ordnance Survey now has a revised Public
Task, it remains the case that a clear distinction cannot be drawn
between Ordnance Survey's "public" and "commercial"
operations. Ordnance Survey is required to fund all of its operations
(both Public Task and non-Public Task) under its Trading Fund
model, and consequently has to obtain a commercial return on all
of its activities. The distinction between its public service
and commercial activity is therefore inherently blurred.
The OFT, as part of its CUPI Study, has recommended
that there be accounting separation between Ordnance Survey's
unrefined and refined information activities. However, this is
not the same as a distinction between "public" and "commercial"
activities—the OFT recognises that Ordnance Survey needs
to charge for unrefined information in order to fund unrefined
information activities. Also, as stated above, some Public Task
activities may fall in Ordnance Survey's refined information activities.
Nor are the OFT's recommendations directly addressed
at the issue many Government respondents have identified, which
is that one of the main issues of data access for them is affordability.
Although OFT believes that accounting separation would lead to
cheaper unrefined information, because any possibility of downstream
cross-subsidisation will be removed, the level of potential savings
is as yet unassessed and may not be material. In any case, Government
customers, who already benefit from extremely favourable terms
under the collective purchasing agreements under which they obtain
that data, are unlikely to be the primary beneficiaries of any
such pricing adjustment.
Ordnance Survey therefore believes that the
distinction between its public service and commercial activities
will remain blurred for as long as it is required to self-finance
all of its operations under the Trading Fund model. Some respondents
have suggested an alternative model whereby Ordnance Survey's
Public Task activities obtain direct Government funding and be
made more freely available (both in terms of cost and restrictions
on use).[82]
That would, of course, make the distinction clear, but Ordnance
Survey itself is not able to change the model under which it operates
(which is dictated by statute).
In accordance with the Government's Response
to The Power of Information, Ordnance Survey understands that
an independent review has been commissioned, to be published by
Budget 2008, of the costs and benefits of the current Trading
Fund charging model for the re-use of public sector information.
A number of respondents criticised Ordnance
Survey's financial performance as a Trading Fund. Ordnance Survey
disagrees with the analysis of these respondents who have either
misinterpreted the financial information and/or misunderstand
the financial targets which Ordnance Survey is required to meet.
As the issue of Ordnance Survey's financial performance is not
a direct subject of inquiry for this Committee, Ordnance Survey
has provided further information on this issue in Annexe 2.
Q2 Independent Arbitration
Intelligent Addressing in its Uncorrected Evidence
states that NLPG "cannot be licensed for use outside local
government on what IA consider to be fair and reasonable terms
because an element of NLPG data was originally derived from Ordnance
Survey".
These issues have already been the subject of
a complaint by Intelligent Addressing to OPSI under the Information
Fair Trader Scheme and the Re-use of Public Sector Information
Regulations. That complaint has been fully heard, both by OPSI
and (in relation to a number of specific points) on appeal to
APPSI. Intelligent Addressing succeeded in part of its complaint
and OPSI made a number of recommendations to Ordnance Survey,
including recommendations for some substantive amendments to its
licensing terms, which Ordnance Survey has complied with.
Intelligent Addressing's appeal to APPSI (which
was unsuccessful) was solely on the issue of the Re-use of Public
Sector Information Regulations and did not affect OPSI's findings
under the Information Fair Trader Scheme.
Ordnance Survey understands that Intelligent
Addressing is dissatisfied with the ultimate outcome of its complaint
but does not consider that dissatisfaction justifies the conclusion
that OPSI's and APPSI's "processes do not offer clarity or
certainty of redress because of a lack of empowerment and resources
amongst the appropriate authorities". Part of Intelligent
Addressing's complaint was ultimately unsuccessful on its merits.
In respect of the part of the complaint that was successful, Ordnance
Survey complied with OPSI's recommendations.
We note that the Intelligent Addressing complaint
(or the factual substance of it) has been raised by no fewer than
nine other respondents,[83]
many of whom have a relationship with Intelligent Addressing.[84]
Ordnance Survey would like to emphasise that it took this complaint
very seriously and has now addressed the issues raised to the
satisfaction of the adjudicating bodies.
Q3-Q5 Geographic Panel
Some submissions comment on the membership of
the UK GI Panel. The initial members of the Panel were appointed
by the then Parliamentary Under Secretary of State within the
Office of the Deputy Prime Minister (Yvette Cooper MP) on the
advice of ODPM officials. Four members of the GI Panel represent
organisations with significant private and commercial sector interests
and membership within the geographic information community.
Some submissions to the Committee have perceived
a potential conflict of interest at Ministerial level as the sponsor
Minister for the UK GI Panel, (and hence the Minister to whom
the UK Location Strategy would be submitted), was also the sponsor
Minister for Ordnance Survey. This original decision was made
by CLG, but the perception has now been addressed following the
changes in Ministerial responsibilities in June 2007. Baroness
Andrews, Parliamentary Under Secretary of State for Communities
and Local Government, and the Minister with responsibility for
the procurement of Geographic Information on behalf of Government,
has assumed Ministerial responsibility for the UK GI Panel.
Q6-Q8 National Interest Mapping Services Agreement1
Ordnance Survey has nothing further to add to
its previous submissions on these questions.
Q9 Competition
The Government Response to the CUPI Study was
published on 26 June 2007 and Ordnance Survey is actively engaged
in discussions with the OFT to resolve its outstanding concerns.
Ordnance Survey expects that the final conclusion of these discussions,
which are ongoing, will lead to some changes in Ordnance Survey's
business model but as these discussions are ongoing it is difficult
to comment more specifically on these.
Two issues that are not the direct focus of
the OFT recommendations are those that have been raised by a number
of Government respondents—data sharing and derived data.[85]
While Ordnance Survey tries to do what it can to accommodate these
needs of its Government customers and also recognises the need
to continue to improve its licensing terms, these are two issues
which present significant challenges to Ordnance Survey under
its current Trading Fund model. For so long as Ordnance Survey
is required to fund all of its operations from its revenues, it
needs carefully to control the use of its data by licensing in
order to preserve the value of the intellectual property rights
in the data. It is Ordnance Survey's licensing income which accounts
practically for its entire revenue. If Ordnance Survey were to
allow unfettered sharing of its data (which is the ideal for Government
customers) then either the prices charged for the data would need
to significantly increase (to reflect the much broader use that
is being licensed) or the value of its intellectual property rights
to the taxpayer would quickly diminish. Clearly this is a spectrum
and a balance needs to be struck. Ordnance Survey considers that
the balance that it has currently achieved is a compromise which
meets many of the needs of Government customers, while preserving
the value of Ordnance Survey's assets.
Some of the Uncorrected Evidence makes speculative
assertions which are presented as fact. In some instances unfounded
allegations of unlawful or irregular behaviour on the part of
Ordnance Survey are made. The Committee has asked for information
relating to perceived unfair competition by Ordnance Survey. However,
Ordnance Survey considers that there is a danger in coming to
any conclusions based on information where issues either have
not been brought before, or alternatively have already been adjudicated
on by, a relevant court or regulatory body.
79 Department for Environment Food and Rural Affairs,
Uncorrected Evidence 08; Defence Intelligence, Intelligence Collection
Strategy and Plans, Ministry of Defence, Uncorrected Evidence
10; Local Government Association/Improvement and Development Agency,
Uncorrected Evidence 13; Local Government Data Unit-Wales, Uncorrected
Evidence 14; The Association of Regional Observatories, Uncorrected
Evidence 16. Back
80
Uncorrected Evidence 03, paragraph 4.1. Back
81
Uncorrected Evidence 03, paragraph 4.18. Back
82
For example, Local Government Association/Improvement and Development
Agency, Uncorrected Evidence 13; The Association of Regional Observatories,
Uncorrected Evidence 16; Defence Intelligence, Intelligence Collection
Strategy and Plans, Ministry of Defence, Uncorrected Evidence
10. Back
83
Local Government Association / Improvement and Development Agency,
Uncorrected Evidence 13, paragraph 10 "issues over licensing
of [NLPG] data remain intractable despite effort on several fronts
over recent months"; Getmapping, uncorrected evidence 07,
section b); OFT, Uncorrected Evidence 03, paragraph 4.32; OPSI,
Uncorrected Evidence 02, paragraph 14; Pollard, Uncorrected Evidence
11; Corbin, Uncorrected Evidence 12, paragraph 5; Association
of Geographic Information, Uncorrected Evidence 06, paragraphs
2.2, 2.3, 8.2 and 8.3; The Locus Association, Uncorrected Evidence
05, "a member's recent complaint"; Government Data Unit-Wales,
Uncorrected Evidence 14, Q2. Back
84
Intelligent Addressing is a limited company in a "public/private
partnership" with Improvement and Development Agency and
is a member of The Locus Association and Association of Geographic
Information. Back
85
Department for Environment food and Rural Affairs, Uncorrected
Evidence 08; Local Government Data Unit-Wales, Uncorrected Evidence
14; The Association of Regional Observatories, Uncorrected Evidence
16. Back
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