The commercialization and privatization of government information

Government PublicationsReview, Vol. 12, pp. 45-63, 1985 Printed in the USA. All rights reserved.

0277-9390185 $3.00 + .OO Copyright 0 1985 Pergamon Press Ltd

THE COMMERCIALIZATION AND PRIVATIZATION OF GOVERNMENT INFORMATION

DIANE SMITH Head, Documents Section, Pattee Library, Pennsylvania State University, University Park, PA 16802

Abstract- In the past ten years there has been a marked effort by the information industry to draw parts of government publishing into the private sector. This lobbying effort has increased with the Reagan Administration’s federal budget cuts. Two distinct and opposing issues are involved: “What is the best economic decision for government publishing?” and “What is the correct social policy for government publishing?” This paper discusses these two issues from the private and public sectors’ perspectives. It outlines the legislative and regulatory sources of the conflict in government publishing. Discussed are the emergence of the information industry in the past decade and that industry’s attempt to capture public data and thereby restrict its use in public printing.

INTRODUCTION

A popular government, without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or, perhaps both. Knowledge will forever govern ignorance; and a people who mean to be their own Governors must arm themselves with the power which knowledge gives. [l]

Thus wrote James Madison describing the need in a democratic society for open access to government information. The essence of this statement can be found echoed over and over in the writings of other political philosophers: A democratic society cannot develop unless its people are informed about the workings, organization, and plans of its government. However, information without education and reasoning power is worthless. Thus, there developed an American belief in the need for an educated populace who could appreciate and understand information. These two principles, the need for both information and an educated citizenry, encouraged the development of a vast network of free public schools, public libraries and museums, and fostered a belief in the social value of information. Today these educational and informational rights are accepted as standard American social policy.

Another cornerstone of American life is the economic right to run one’s own business, to compete in a fair market place, and to be guaranteed protection from monopoly and illegal business practices. American business lore claims that given the correct mixture of a good product, planning, management, and luck, a business can be profitable and successful in the open marketplace.

In the past, this marketplace dealt primarily with tangible products and services. Today, a new commodity, government information, has entered the marketplace, and a struggle for its ownership has begun. For the first time in American history, government information is being treated as a commercial, rather than a social, good. Society accepts both the sale of information by the government (commercialization) and the sale of government information by the private sector (privatization) without protest. In fact, “privatization and commer-

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46 DIANE SMITH

cialization of information now have become the distinguishing practices of domestic information exchange” [2]. As this trend shifts economic perceptions of the commercial. value of information, societal valuation of government information as a free good appears to be diminishing.

There are a number of possible explanations for this phenomenon. Perhaps it is due to recent disenchantment with public education, or perhaps from a pragmatic acceptance that nothing is truly free. The sheer mass of government information being produced is so im- mense that perhaps society is simply being overwhelmed by its commercialization. Whatever the cause of the change in society’s perception of the value of information, technological developments are blurring the previously defined lines between the information producer, publisher, and library and/or end user. In the future, capabilities for full-text transmission of data may eliminate the need for libraries as information storage locations. If the traditional storage locations of information cease to exist, then the last pillars upon which rests the tenet of information as a social good may be shaken, without appropriate safeguards.

If society’s concept of information is shifting, an essential question emerges: “Should the information generated by the government be considered as an economic good to be dealt with in purely economic terms, or as a social good to be dealt with in purely social terms, or as a combination of both” [3]? The purpose of this article is to begin answering this question by discussing the primary issues and the stakeholders in the struggle for ownership of government information, to outline relevant legislation and regulations in the area of national information policy, to determine trends of commercialization and privatization, and to discuss their impact on government, the information industry, libraries, and eventual users.

THE ECONOMICS OF INFORMATION

Traditional capitalistic economic theory claims that information is a “free good” and dif- fers from other products in several ways. First, information can never be truly scarce, except through the manipulation of the marketplace. Consequently, the laws of supply and demand and resulting pricing policy are not relevant in any discussion of information as a commodity. In the transfer of information from one individual to another there is little or no marginal cost involved. Information is cheaply and easily reproduced and can be transferred im- mediately. In such an exchange there is no guarantee of payment. Once the buyer has the information, an intangible asset, the seller cannot retrieve it for lack of payment. Information cannot be described prior to sale without decreasing the monetary value of it as a commodity. Information is not easily divided into workable units since its value lies in the whole. Finally, the value of information is highly dependent upon its age.

Despite economic theory, information today has become a popular commodity to be bought and sold in the marketplace. The primary cause of this change has been techno!ogical innovation and the resulting “information revolution.” There are several indicators that point to this philosophical and economic change. One example can be seen in contemporary business literature, exploding with the message that information is something which can be “managed,” demonstrating that it is a commodity. Another example of the changing economic status of information can be seen in Marc Porat’s 1977 study of the information economy. In this work, Porat determined that 46% of the American economy was based on information and its transfer [4]. The information industry is fast becoming the heart of the American economy. Further proof of this revolution can be seen in the rapid growth in the number of information brokers offering services similar to those provided by the more traditional commodity brokers. Such entrepreneurs find needed information quickly and cheaply so clients need not deal with the intricacies of the “information marketplace.” All these facts substantiate the existence of an information industry in the United States.

Commercialization of government information 47

Yet the concept of selling certain types of information runs counter to the social policy of government information as a public good. As already discussed, this policy is firmly affixed in the American free educational system, in the belief in academic freedom and information exchange, in the First Amendment guarantee of free speech, and in the Freedom of Informa- tion laws dealing with government actions (51. As the commodity value and volume of government information grow, areas of conflict between economic and social policy have arisen and will continue to increase proportionately.

GOVERNMENT INFORMATION AS AN ECONOMIC COMMODITY

Government information is broadly defined as:

Anything compiled, generated, maintains by a government entity, including published material or unpublished records, electronic files, films, documents, white papers, memoranda and similar materials whether or not it is made available to the public through Title 44 of the U.S. Code, the Freedom of Information Act, the Federal Privacy Act, the Sunshine Act or any other law or by administrative discre- tion. 161

Obviously, this working definition is rather expansive for the context of this discussion, but the essence of government information is contained therein: Any information gathered by the government with tax dollars is government information.

Government information also has one unique quality not found in other types of information: No single person owns the product of government information. If the government is a government of the people, then all Americans own that which was generated by their taxes. Based on this premise, few copyrights have been placed on government publications. Anyone or any organization can freely duplicate government information, no matter the format, without fear of copyright infringement. If something is copied, two questions that have significance in any discussion of privatization arise: At what point does the information cease to be government or public property and become that of the duplicating individual or firm? At what point can copyright be instituted by the individual or firm?

As a commodity, government information is growing in value. There are various reasons that explain commercial vendors’ increasing interest in government information. First, in order for Congress and the executive agencies to have adequate information to do their jobs, “the federal government has become the nation’s chief generator of knowledge in just about every field” [7]. Second, a great deal of valuable technical information is so costly in labor and intellectual terms that only the government can pay for its development. In fact, most government information is generated as a result of an agency’s work, and even if the information were not disseminated widely, the data collection would continue. Third, because there is no copyright on government publications or information, any firm selling government information has virtually no capital invested in the commodity’s production. All risk capital can be funneled into other aspects of marketing or product differentiation. Fourth, the U.S. government, as the most prolific publisher in the world, provides a great commodity base for potential products. Fifth, more and more government information that the private sector could never feasibly create or compile is gathered through direct legislative mandate. Private firms can then take these data compilations and repackage or massage the data into a salable product.

GOVERNMENT INFORMATION SOURCES

As befitting the world’s largest publisher, the number of information-producing agencies in the federal sector is very large and frequently confusing to the uninitiated. Several agen-

48 DIANE SMITH

ties have clear legislative mandates to write and publish reports or to be federal sales offices or information clearinghouses on specific topics. Other agencies have established limits to their publishing activities written into their budgets and print only specific reports as they deem necessary. Finally, there are “quasi-governmental” entities such as the Smithsonian In- stitution, the National Academy of Sciences, and the National Science Foundation, which receive government and private monies and publish out of the mainstream of government information activities.

The primary government organization concerned with information production and control are the Government Printing Office, the Department of Defense, the Defense Mapping Agency, the Bureau of the Census, the National Bureau of Standards, the National Techni- cal Information Service, the Library of Congress, the National Library of Medicine, and the National Agriculture Library. Amazingly, there is no single agency responsible for administration nor are there standard publishing regulations that are followed by all these information producing agencies. The following sections briefly deal with the three major printing and dissemination facilities in the federal government: the Government Printing Office, the National Technical Information Service, and the conglomeration of clearinghouses that have been established in executive agencies.

Government Printing Office (GPO)

The Government Printing Office, a legislatively mandated agency, is one of the largest printers in the United States. Created originally in 1860 to be the official printer only for Congress, GPO’s mandate has gradually expanded to include, theoretically, all executive, technical, and judicial publications. These responsibilities, combined with the necessary congressional printing, force the GPO to subcontract a minimum of two thirds of its printing to private concerns, accepting bids from over 7,000 companies a year for printing [8].

Besides printing, the GPO performs two other information dissemination roles: administration of the Depository Library Program and the pricing and sale of federal documents. The depository library program, codified in Title 44 of the United States Code, is based on the philosophy that “free access” to all government produced publications is a necessity for a democratic state. Under this program, all agencies are to provide GPO with copies of any documents produced with federal money. Copies of these documents are offered to over 1,300 libraries throughout the country so the citizenry can have access to federal information. The operating costs of managing this program are covered completely in the annual GPO budget.

Since 1922 the GPO has also maintained a sales program for certain popular documents. In this program the GPO tries to identify those items that have sales potential and prices them “at cost determined by the Public Printer plus 50 percent” [9]. This type of pricing policy subsidizes the purchase and sale of less popular titles with those of “best-sellers.” All costs of the GPO sales operation must be covered in the pricing policy since no money is appropriated for this endeavor.

In 1982 the GPO began planning a serious marketing campaign, including print, televi- sion, and radio advertisements for its sales and depository programs. These advertising strategies may be an indication that GPO management is beginning to break out of its mail order mentality and to recognize the commercial value of government information.

National Technical Information Service (NTIS)

The National Technical Information Service is an agency within the Department of Com- merce. Initially charged to be a clearinghouse for federally funded scientific and technical


documentation, NTIS has over the years expanded its responsibilities to include studies and reports clearly within the realm of public and social policy. Today, since no clear-cut delinea- tion exists between the information available from NTIS and the GPO, an apparent overlap exists.

Pricing policy at NTIS varies greatly from that of the GPO. NTIS is required through its enabling legislation to recover the full costs of its operations, Documentation from NTIS can be costly and for items available from both NTIS and the GPO a price differential can exist. For example, a particular paper document would cost $17.00 from the GPO, but it would cost $20.50 from NTIS. The same item on microfiche would be $4.50 from NTIS [lo].

In the past five years there appears to have been a conscious effort in the executive branch of the government to encourage the use of NTIS over the GPO for the sale of specific documents. In the July 25, 1978 Federal Register, the OMB published for comment a notice requiring a11 executive branch technical publications to be sold only through NTIS, ignoring the existence of the GPO and its programs [11]. Due to substantial protests to the proposal, this policy directive was eventually dropped. Nonetheless, this OMB notice demonstrates a push toward commercialization of all government-produced information.

The presence of NTIS in the federal information arena has had three important effects on the dissemination of government publications. First, it has further confused the user as to possible sources for information. Second, as an agency in the Department of Commerce, NTIS has “officially” commercialized government information. Third, success of NTIS has weakened the GPO’s philosophy and mandate of information dissemination to the American people through the depository libraries [12].

Clearinghouse/~e~osilory Programs

Besides the information giants of NTIS and the GPO, there are more than 300 agency-run clearinghouses, depository programs, and information centers providing federally generated reports to the public [13]. The pricing policies and services vary within each entity, ranging from totally free to full cost and full service. Publications sold or distributed free by these clearinghouses might also be sold by NTIS and/or the GPO. Among the more well known of these programs are the Census depository program, the Patent and Trademark Office depository program, the Education Resources Information Center (ERIC) program, the Na- tional Criminal Justice Retrieval Service (NCJRS) and the now defunct Smithsonian Scien- tific Information Exchange (SSIE) [14].

It is clear that within the U.S. government there is no centralized management of information dissemination; the government is not even able to provide a comprehensive annual list of publications issued. There are single departments that cannot provide a list of their own publications for one year. There is no federal information policy, there is no agreement as to who or what should manage the publications of the three branches of government, there is no set pricing policy, nor is there even agreement on whether there should be charges for government information.

LEGISLATIVE AND REGULATORY ENVIRONMENT

Government Information Legislation

Today there are hundreds of pieces of legislation that require the production of various reports for informational purposes. These laws range from the Constitution’s provision for a decennial census to a law requiring an agency’s annual report to Congress. Three major laws presently form the legislative backbone of America’s government information policy: Title

50 DIANE SMITH

44 of the U.S. Code, the Paperwork Reduction Act, and the National Technical Information Services Act.

Title 44 (44 USC l-3702). The majority of federal printing practice and publication dissemination is carried out in accordance with the Printing Act of 1895, codifed as Title 44 of the U.S. Code. Embedded in this section of the Code is all legislation relevant to GPO operations, sales, and depository programs. Amended only a few times since 1895, there have never been changes to establish a national information policy.

One of the main provisions of Title 44 requires the GPO, administered by the Joint Con- gressional Committee on Printing, to print and distribute government publications to designated libraries. The cost of the printing is either to come from the issuing agency’s budget or the agency is to provide the GPO with sufficient quantities of documents not printed at GPO facilities.

In theory, Title 44 should work; in practice it does not. First, some agencies do not fully comply and the law lacks provision for enforcement. Agencies are loathe to have money taken from their budgets for activities they can frequently do more efficiently and economically than the GPO. Second, Title 44 grants a congressional committee oversight control for all publications of the government’s executive branch. This rankles many executive agencies. Finally, the law deals only with printing, standard ink on paper production. In 1979 there were attempts to update the law to include technological innovations for information storage and retrieval such as computer tapes and optical disks. Heavy lobbying efforts by groups both internal and external to the government prevented the passage of such legislation.

National Technical Information Act (15 USC 115 l-1 157). The National Technical Informa- tion Act (PL 91-412) established the National Technical Information Service (NTIS) in 1970. The law provided for a national clearinghouse for technical, scientific, and engineering information. The requirement that services offered by such a clearinghouse be self-supporting was based on the assumption that those individuals and businesses needing specific information could pay for it, thereby freeing the remainder of society from supporting their needs. This was the first application of such a philosophy to government information pricing.

Paperwork Reduction Act of 1980 (PL 96-511). Passed in December 1980, the Paperwork Reduction Act amended Title 44 of the USC “to reduce paperwork and enhance the economy and efficiency of the Government and the private sector by improving Federal information policy making.” The law basically is designed to reduce and standardize the data collected by agencies, making government statistical gathering and publishing efforts more economical. Any agency wishing to collect a new data type must first receive approval from the Office of Management and Budget’s Office of Information and Management.

Regulatory Environment

In this federal information marketplace there are two primary regulators: the Joint Com- mittee on Printing (JCP) and the Office of Management and Budget (OMB). Each controls the operation of publishing within its branch of the government: the JCP overseeing the regulation of plant operations and information dissemination of the GPO, and the OMB providing similar guidance in the executive branch. Due to this structure, the federal government’s printing organization and control functions have long been recognized as unique. As a federal district court has stated, “it is a curious hybrid of legislative and executive functions fraught with potential conflict” [ 151.


Joint Co~~i~ree on ~~in~i~g. Working under Title 44, the JCP regulates the daily routine and operations of the GPO and approximately 235 executive printing plants located throughout the country 1161. As a congressional committee, the JCP has final decision over all government printing and binding regulations, including questions of what will and will not be printed, in which format, how it will be distributed to the public, and at what price. One key factor about the JCP is that its present purview is only over the printed word. Until Title 44 is amended, or new federal printing regulations are approved, the JCP has no authority over government information in computer or optical disk formats.

Office of Management and Budget (OMB). Since the 1921 Budgeting and Accounting Act, the OMB has had some control on information production and dissemination through its budgeting oversight role. In the past ten years the OMB, through its Office of Information and Management, has been steadily expanding its role in this area and has relied heavily on its Circulars A-76 and A-25 to legitimize the agency’s stance.

OMB Circular A-76, originally promulgated in 1955 and last amended in 1979, states in part:

In a democratic free economic system, the government should not compete with its citizens. The private enterprise system, characterized by individual freedom and ini- tiative, is the primary source of national economic strength. In recognition of this principle it has been and continues to be the general policy of government to rely on competitive private enterprise to supply the products and services it needs [17].

Circular A-76 thus places primary reliance on the private sector for goods and services, with the understanding that there are certain tasks inherently governmental in nature that cannot be done by private firms. A-76 also requires a comparison of in-house versus private sector costs; if the government can provide the good or service at a cheaper rate, then A-76 can be ignored.

Despite the economic logic of A-76, many government agencies disregard this circular’s policy for a variety of reasons. First, compliance may cause delays in information dissemination since bidding and contract negotiation time must be built into the production schedule. Second, contracting with a private sector firm is a substantial additional cost to the agency. Unlike internal information production and dissemination costs, private sector contracting may not be as easily absorbed into the general operating budget and may not have been appropriated in the yearly budget. Finally, the reliance on an outside source for printing and information dissemination may be inhibiting to the agency’s goals and may prevent interagency exchange of data [ 181.

OMB Circular A-25, issued in 1959, presents a basic philosophy of cost recovery for government produced goods and services. A-25 states “when a service (or privilege) provides special benefits to an identifiable recipient above and beyond those which accrue the public at large, a charge should be imposed to recover the full cost to the Federal Government of rendering this service” [19]. Circular A-25 is interesting from two perspectives. First, its philosophy is seen later incorporated in the legislation establishing NTIS. Second, this concept of full-cost recovery appears to have encouraged internal information source development rather than dependency upon the private sector as required by Circular A-76. Both Cir- culars A-76 and A-25 are designed to save money, yet A-76 prevents the government’s entry into a market already well served by the private sector while A-25 encourages self-sufficient government services [20]. This dichotomy in information policy is one of the many factors that has caused government information development and dissemination to be rather schizophrenic.

In 1978 OMB attempted to channel the availability and distribution of scientific and

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technical information only through NTIS, ignoring the very existence of the GPO and its legislative mandate to distribute all government documents. Only extensive public comment against this circular resulted in its withdrawal and a reconsideration of the agency’s information policy. In 1980 the OMB again released an official information policy statement which softened its 1978 stance [21]. In this draft circular, OMB stated that “information is not a free good” and “it must be available in an effective, efficient, and economic manner.” However, it also stated that “no member of the public should be denied access to public information held by the Federal Government solely because of economic status.” The circular reiterated the intent of Circular A-25, in that “information available through a mechanism other than the depository library system shall, unless required by other law or program ob- jectives, be made available at a price which recovers all costs to the government associated with the dissemination of such information. Finally, OMB reaffirmed reliance on Circular A-76, placing maximum feasible reliance upon the private sector to disseminate public information.” In 1982 OMB directed the abolition of hundreds of “ephemeral” executive agency publications citing budgetary reasons and is presently beginning consideration of a national information policy [22]. This notice and OMB’s recent actions clearly demonstrate that the agency plans to monitor government information activities in the future.

GOVERNMENT INFORMATION STAKEHOLDERS - PRIVATE SECTOR

The information industry, whose lobby in Washington is the Information Industry Association (IIA), is a polyglot of over 1,000 companies that provide information and telecommunication services. Members range from giants like IBM and Texas Instruments to little known publishing houses. One segment of this industry deals specifically with government information. The industry views its role as providing the content of the “Information Age” as opposed to the conduit of computer capability and technology [23]. The industry and its products are metaphorically described by IIA founder and spokesman Paul Zurkowski:

A prism refracts light and displays a spectrum of color. An information company is like a prism. It takes on light, ideas, and content. It applies refractory skills inside the company or inside the prism, and puts out a spectrum of information services [24].

Market Segments

The industry segments itself into businesses producing six varieties of services, each one content specific [25]. In the first category are those firms that provide primary information services and full-text retrieval of data. Examples of such firms using government information would be Disclosure, Pergamon, and Mead Data. In the second category are those firms that provide abstracting/indexing tools for government information; Congressional Infor- mation Service (CIS) and Excerpta Medica fall into this group. In the third category are computer-supported information entities that access bibliographic computer files. Firms such as Systems Development Corporation (SDC), Dialog, and Bibliographic Retrieval Ser- vice (BRS) are included within these areas. The fourth and fifth categories cover businesses specializing in literature/data base searches for individual customers and information con- sulting firms. These businesses tend to be small, single owner enterprises. The sixth category is comprised of businesses providing seminars and conferences on government information and its sources and uses, as exemplified by Washington Researchers.


Finances

By employing Zurkowski’s philosophy of information creation and manipulation, the industry in the past 15 years has developed a substantial economic force. In a 1979 report, The Business of Information 1980, it was estimated that the industry’s worldwide revenues amounted to $9.8 billion, with 90% of the revenue ($8.7 billion) produced in the United States. These companies employed 381,525 people in 1,023 firms. The industry was concentrated with only 14% of the firms producing 89% of the revenues. Growth forecasts for the entire industry were very optimistic, with over 20% growth predicted for the 1980s. Finally, the report showed the industry to be highly integrated with most firms performing services in more than one of the six aforementioned product lines [26].

Competitors

There are eight major firms in that segment of the industry that specifically sells government information: Capitol Services, Information Handling Services (IHS), Carrolton Press, Congressional Information Service (CIS), Pergamon, Research Publications, and University Microfilm International (UMI). Each of these companies reproduces and sells government information primarily to libraries.

Because these firms do not need to invest heavily in the production of the information, nor pay copyright royalties, they can utilize capital to create complete indexes, to reproduce the data in an archival form, and to market their products intensively. It is important to note that none of these three activities has ever been successfully undertaken by the federal government.

Product Lines

There are four potential product lines sold by these firms: back-files; index/abstract/ report combinations; current reports; and bibliographic databases. Back-files are primarily microform copies of large sets of government documents. The incentive for a library to buy such collections is usually to complete holdings or to reduce physical space requirements and thereby regain expensive shelving area. Frequently these specific document collections are sold by a number of firms. For instance, the U.S. Reports, the official opinions of the Supreme Court, are sold in microformat by CIS, UMI, and IHS, resulting in fierce price competition for the sale of these duplicate items. Consequently, most of these companies try to differentiate their products from those of other competitors to capture a specific market segment. The major firms providing such product lines are UMI and CIS. A few minor publishing firms are also in this market segment, republishing popular government titles no longer in print such as the findings of the Warren Commission.

Index/abstract/report lines are usually microfiche collections of government reports which include, as part of the subscription, detailed indexes to the reproduced reports. Fre- quently, the price of the companion microfiche library heavily subsidizes the production of the index/abstract. The major companies in this area are CIS with the Index to Congres- sional Publications and American Statistics Index, and Carrolton Press with its Declassified Documents Retrieval System.

Some companies provide access to current government documents and differentiate themselves from the actual government edition either by currency of the service or by distribution format. Disclosure, for instance, provides access on microfiche to all 10-K

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reports required by the Securities and Exchange Commission 1271. The sheer bulk of these reports would inundate any library attempting to collect them in paper. A similar situation exists with Research Publications, Inc., which provides microfilm copies of all U.S. patents granted [28]. A few minor publishing companies sell their reprint lines through intense marketing techniques, encouraging the customer to believe the product being purchased is something unavailable from the government.

The final product line is the provision of online data through computer systems, frequently competing with either a government produced online database or a paper index. Companies in this market segment currently are only database utilities, such as SDC and BRS. As more government information is entered into this storage medium and as society becomes more ac- customed to machine readable files, it can be expected that this field will develop and expand quickly. An example of this type of product is seen in Pergamon’s development of a patent database. This online database can provide drawings and schematics of inventions and may eventually eliminate the need for paper copies of patents.

Since all of this information is available from the government, a question arises as to, “What is actually being purchased from these companies when a sale is made?” One is buying either the repackaging of the information in a format acceptable to the library, an organized and complete group of documents, and/or an index for a set of documents. Thus, one is pay- ing for the refractory skills of the information firm as described by Zurkowski.

Pricing

Pricing policy for these products varies among companies. In general, products will be either marketed at a specific price for all customers or on a graduated scale with prices based upon the size of the purchasing library’s total acquisition budget. In the latter situation, the larger the budget, the more a library will pay for an information product. This pricing policy essentially forces major libraries, with the largest constituency base, to subsidize the use and purchase of an information product at a smaller institution. This pricing scheme is common throughout the publishing industry and is undoubtedly an attempt to maximize sales and, thereby, profits within a very limited market.

Privafe Sector Views of Government Pubkshing

The industry argues that there is no room in the marketplace for the government and its unsophisticated attempts to publish or distribute federal information. The information industry views the goverment’s role as purely that of a gatherer; the distribution and publication of information should be performed by private industry [29]. More vocal members of the industry have even suggested that there be direct government subsidies to depository libraries to allow the libraries to choose among products of competing firms, rather than depending upon the GPO’s distribution system [30]. The philosophy behind these beliefs is best verbalized in a recent policy statement from the HA’s Meeting Information Needs in the New Information Age [31]:

I. Government should not develop and disseminate new information products or services that compete with those already available from or planned by, or which could be provided by, private sector sources. Nor should new formats for existing government information produets or services be developed by government when private sector sources are equipped to offer or are already offering such formats. government information products or services currently being offered should be carefully reviewed periodically to make sure that continued production and dissemination serve a need that still exists and that is not being met or cannot be


readily met by private sector sources and are done in a manner that diminishes potential “competition” with the private sector.

2. When there is a genuine, demonstrable and critical need for an information product or service not currently provided (or likely to be provided) by the private sector, government should take the following steps in order of priority:

First, encourage the private sector to meet the need; Second, provide secondary inducements for the private sector to meet the need

through such mechanisms as subsidies, loans, grants, tax credits, etc.; Third, if the private sector, cannot fulfill a demonstrable and significant informa-

tion need, contract out to the private sector the development of the needed product or service;

Fourth, when as a last resort to meet the need the government does produce such an information product or service, make it available in a way and at a price that diminishes potential “competition” with the private sector. That price should, with rare exceptions, be sufficient to recover all costs incurred in the development, production and dissemination of the particular information product.

The IIA states that distribution by the private sector and competition among the industry’s members are the information user’s insurance policy. The industry’s existence presumably protects against price exploitation, access controls, unreliable content, limited selection, poor quality, service, and lack of innovation. The industry firmly believes that, “if government policies eliminate or preclude private sector competition, the result will inevitably be a less informed public” [32].

At one time in the history of the United States, the government had no option but to produce and distribute its own information, because the private sector could not provide such a service at a reasonable cost. One of the major platforms upon which the IIA now lobbies is that this is no longer true; that if Circular A-76 were more religiously followed, the fact that these information services could be produced more economically by industry would become evident. Members of the industry advocate that the government should not be developing or continuing use of databases or information sources that are already available in the private sector, as such actions are clearly in opposition to Circular A-76. Examples of such government action can be seen in the controversy over the National Library of Medicine’s pricing policy for MEDLINE.

Finally, the industry maintains that allowing the government to distribute information is providing the potential for a government monopoly of federal information. In such a situation the government would not only be producing the report, but also approving its availability to the people. Should fiscal conditions necessitate a budget cut, then access to some federal data would presumably be eliminated through the combination of decreased distribution and indexing.

GOVERNMENT INFORMATION STAKEHOLDERS - INFORMATION USERS

In any discussion of government printing and information dissemination, the individual end user has little opportunity or audience to present his views. As information in- termediaries, librarians have become the prime advocates of free access to federal data, speaking for both their institutions and private citizens. Librarians are represented in Wash- ington by the American Library Association (ALA), an organization of over 40,000 members which actively lobbies on library issues and national information policy.

In a letter to the OMB concerning the proposed information policy circular issued September 12, 1983, ALA reiterated the importance of government information as a pre- requisite to a democratic society [33]:

that information has value to the American people beyond economic value, . . and that the greatest benefits of the federal compilation of information are derived only

56 DIANE SMITH

when the material is made available to the widest possible audience. Information collected or created at government expense should initially be made available by the Federal government and disseminated through the Depository Library Program for public access.

ALA also stated that the cost of production and dissemination should be borne completely by the government, and that full-cost recovery, as decreed in Circular A-25, should not include information creation. ALA’s position is that government information is not a commodity to be bought and sold at the citizenry’s expense.

The two tenets upon which these ALA policies are built are very simple. First, government information is usually not produced for the purpose of educating the public, but rather to educate bureaucrats on a topic so that decisions can be made intelligently, government programs can be designed, etc. The production of information is primarily to serve its issuing agency. The fact that this information may be of value to someone else does not enter into the decision to create the information. Since this is usually the case, should a citizen be denied access to such data and should he be charged for the information’s creation? Has he not already paid the price for the data through his taxes? Why should he pay again for the full cost of the intellectual creation? Should the citizen have to purchase this information from a private firm (or should a library purchase this data for its constituents) when the information is available “free” from the government?

If the government were to privatize federal information, ALA, librarians, and information specialists point to three outcomes. First, the opportunity for economic discrimination would increase substantially since it would be possible that much needed information might be too costly for individuals or libraries. Only those in communities with well supported libraries or those who could personally purchase information would have access to it. These fears have already been substantiated in a few cases in which only the private sector has disseminated federal data.

Second, librarians foresee that the private sector will develop technologically advanced methods of dissemination and storage and they doubt whether their institutions and private citizens will be able to pay for the equipment to access the data. The fact that library budgets are usually too small to meet community needs and that social services are frequently cut first in times of fiscal crisis only heightens this concern. How will a library provide sufficient terminals for access to government databases or purchase optical disk readers to access government records when most libraries cannot even buy a sufficient number of books and microform readers, the requisite resources for most libraries today? This concern does not arise solely from a fear of the loss of their intermediary position in the information marketplace. Librarians question how many private citizens will be able to purchase sufficient equipment for the extraction of data from machine-readable tapes or optical disk readers. The issue of the possible emergence of an information rich and information poor must be addressed.

Third, the user community questions whether the private sector would provide all federal information, or only produce those information products which have proven profitable, A basic tenet of any business endeavor is that unprofitable lines are cut quickly. Librarians question whether access to the full array of government data would be assured by the private sector and what safeguards would be put into place. Some feel that private sector distribution of information would only be establishing a new information monopoly in which profits would be the key determinate for information production and dissemination. They grant that this new monopoly might be more efficient than the benign monopoly which the government has created through its inefficiencies, but question at what cost does this efficiency come.


GOVERNMENT INFORMATION STAKEHOLERS - PUBLIC SECTOR

As already discussed, there are varying philosophies at the GPO, NTIS, OMB and the JCP as to distribution and pricing policies for government information. There are two other governmental bodies, the National Commission on Libraries and Information Science’s (NCLIS) Public Sector/Private Sector Task Force, and the President’s Private Sector Survey on Cost Control (Grace Commission) that have studied this issue and whose recommendations point to a definite pattern of commercialization and privatization of government information.

National Commission on Libraries and Information Science (NCLIS)

The NCLIS task force, composed of representatives from government, not-for-profit, and profit organizations studied for two years the interaction between the private and public sectors in the provision of information services. Its final report, published in 1982, highlighted seven principles for government action on government information [34]:

Principle 1. The Federal government should take a leadership role in creating a framework that would facilitate the development and foster the use of information products and services.

Principle 2. The Federal government should establish and enforce policies and procedures that encourage, and do not discourage, investment by the private sector in the development and use of information products and services.

Principle 3. The federal government should not provide information products and services in commerce except when there are compelling reasons to do so, and then only when it protects the private sector’s every opportunity to assume the func- tion(s) commercially.

Principle 4. The Federal government, when it uses, reproduces, or distributes information available from the private sector as part of an information resource, product, or service, must assure that the property rights of the private sector sources are adequately protected.

Principle 5. The Federal government should make governmentally distributable information openly available in readily reproducible form, without any constraints on subsequent use.

Principle 6. The Federal government should set pricing policies for distributing information products or services that reflect the true cost of access and/or reproduction, any specific prices to be subject to review by an independent authority.

Principle 1. The Federal government should actively use existing mechanisms, such as the libraries of the country, as primary channels for making governmentally distributable information available to the public.

These principles clearly support the side of the information industry and reaffirm policy statements announced by the OMB. From the seven principles the task force developed 27 recommendations for their implementation [35]. These statements also demonstrate the push for further privatization of government information.

Grace Commission

The second task force to study these issues, the Grace Commission, concentrated its efforts on methods of reducing printing and publishing costs in the government. The committee specifically avoided the topic of information distribution systems (e.g., depository libraries), stating “that these issues lack sufficient opportunities for cost savings and management improvements to justify their inclusion in this report” [36]. Rather, the Committee studied in detail methods of printing and produced specific recommendations which would result in $854.7 million savings in three years. A savings of $331 million would be realized by

58 DIANE SMITH

reviewing items prior to publication, effecting appropriate agency organization to facilitate such review and management, and providing oversight of the type of information published. Approximately $158.9 million would come from agency printing plant closings and the enforcement of OMB Circular A-76 for printing services. The Committee also felt it highly likely that $264.8 million could be generated by allowing agencies to set more realistic user fees for their publications and by developing accounting procedures to track real costs of production. All agencies currently must use either the price structure set by the GPO in accordance with Title 44 or distribute the item at no charge.

All three of these recommendations point to the trend of privatization and commercialization. The first recommendation comes dangerously close to censorship of potentially unprofitable items and demonstrates an acceptance of the philosophy that the government should be making a profit, regardless of the social value of the information. The second recommendation, closing printing facilities and relying upon the private sector, highlights the trend to privatize government operations. Finally, the discussion of new pricing policies for government information points toward commercial endeavors for the government.

COMMERCIALIZATION/PRIVATIZATION VENTURES

In the past 20 years there have been a number of discernable cases of privatization and commercialization in government information. Each of these events taken separately appears to be unique, with little bearing on the total picture of information dissemination; yet taken as a whole, they point to a noticeable trend. The following section briefly discusses these events and their impact on government publishing.

Research and Development (R&D)

Research and development contracting is the one area of government information dissemination in which the greatest steps toward commercialization/privatization have taken place. Since World War II, the U.S. government has been contracting with private sector firms to perform specific research projects and produce reports describing their results and conclu- sions. Any report produced in this manner clearly falls within the accepted definition of government information given earlier. In 1981 the federal government appropriated $36.1 billion for R&D contracting [37]. Even if report generation and dissemination were a small percentage of this sum, the cost of publishing this information would be large. In fact, these information dissemination activities cost a great deal. In 1975, for instance, the U.S. government appropriated and spent $4.6 billion of a total $10.3 billion on scientific/technical information dissemination. This cost was only for printing and information dissemination and did not cover the cost of R&D or writing [38]. R&D contracts and their eventual report dissemination are an obviously profitable endeavor for any well-run private sector research firm.

The total profitability of R&D report generation increases substantially if the information becomes a saleable item. Once a report is printed, commercialization by the government or privatization by the private sector can quickly occur. Commercialization happens when the government takes the report and offers it to the public through NTIS. Privatization occurs if a contracting firm decides to reproduce and sell the information on its own. Because the information, though contracted by the government, is not copyrighted, there are no legal bar- riers to the company’s information distribution. In fact there are contracts in which only the private company is allowed copyright on the information and the federal government can not legally distribute the information to the public without compensation to the R&D firm

1391.


NTIS

As already discussed, the establishment of NTIS in 1970 legitimized commercialization of federal information. NTIS’s emergence, compliance with Circular A-25, and the push by OMB for the use of NTIS over the GPO all point to the trend to commercialize government information.

Smithsonian Scientific Information Exchange (SSIE)

The trend for privatization occurs not only for the traditional printed information sources, but also for machine readable data. A prime example of this was seen in the development and sale of information in the Smithsonian Scientific Information Exchange (SSIE). SSIE was a computer listing of all scientific research in progress funded by the federal government. The information within the database was generated primarily by federal funds, yet access to the database was not provided by the government. The information initially was available only through a commercial vendor, which priced the database at one of its highest rates. The question of access to SSIE could only be viewed as an attempt by government to privatize information at a monetary cost to users.

GPO Microfiche

In 1975 the GPO began seriously investigating the feasibility of distributing government documents on microfiche to depository libraries. The economic rationale for such a policy would be production and postage savings for the GPO and space savings for the recipient libraries. However, such a plan could potentially cut into many IIA members’ market segments. Consequently, the policy was vehemently opposed by the private sector. Their main argument was that for many of these documents a superior microfiche product was already available and that Circular A-76 should be followed. Certain industry members felt that the GPO, if it wished to distribute the microfiche, should either purchase sufficient quantities of industry fiche and redistribute it, or subsidize its purchase by depositories [40]. After a bitter struggle between the GPO, the IIA, and libraries, the GPO decided to distribute government produced microfiche. The fact that it took more than three years to reach this point highlighted the growing influence of the information industry.

National Library of Medicine and Excerpta Medica

An interesting example of the private sector trying to force government commercialization can be seen in the present conflict between Excerpta Medica and the National Library of Medicine (NLM). Both NLM and Excerpta Medica produce databases covering medical literature and experimentation, but the coverage is not precisely the same. Excerpta Medica has demanded that NLM charge more for access to its medical databases, justifying this demand on the full cost recovery requirement outlined by Circular A-25. The present cost of NLM’s MEDLINE is $22/hour, compared to $70/hour for Excerpta Medica’s equivalent on Dialog. Obviously, Excerpta Medica does not want this type of competition. Although two studies, one by the General Accounting Office and one by the Office of Technology Assess- ment, have found NLM within its legislative mandate, the cost for access to NLM data is still under consideration in Congress and “supporters of NLM’s pricing practices have advanced the thought that these studies will continue until the private sector gets its way, as it did with copyright” [41].

60 DIANE SMITH

Naval Research Logistics Quarterly

Another small example can be seen in a relatively obscure title, Naval Research Logistics Quarterly, a publication of the Department of Defense. Originally distributed to depositories and sold to subscribers at a cost of $22.20/year, this journal fell victim to OMB demands for compliance with Circular A-76. In 1982 a private publishing company, John Wiley, contracted with the agency to produce the serial. Wiley’s subscription rate for this journal was $60.OO/year, a 270% increase. If such an increase is representative of private sector cost recovery plans, it is highly questionable if libraries or private citizens will be able to purchase or obtain access to government information in the future should privatization continue.

Bureau of the Census Products

An even more unsettling example of current privatization can be seen in the 1980 census data dissemination. In designing the decennial census and its byproducts, the Census Bureau announced plans to generate population characteristic data by zip code area, a statistical break-out of value to businesses and nonprofit organizations. Due to budgetary cuts, however, the Bureau soon withdrew its plans. Still, the data was available and could be sold in machine-readable form. It was not long before private firms purchased the tapes, developed software to sort by characteristics, and published the data in print. One specific company, Clarita Corporation, sells this data to libraries for $900, with a proviso that the data cannot be duplicated or resold [42]. A similar strategy was undertaken by a small marketing firm, National Decision System, which purchased census tapes and produced the first complete national summary of the 1980 census, at a cost of $395 per set [43].

In both cases the information was gathered by the government, but manipulated and sold by the private sector. Thus, the government distributed the information in a cost efficient method and actually received revenues for the tape sales. Using its refractory skills, the private sector firm also realized a profit. Everyone profited, except the individual citizen who has no access to the data due to hardware or monetary limitations or who does not have access to data deemed “unprofitable” by the private sector firm.

Patent and Trademark Office

An example of the government setting up the scenario for future privatization can be seen in the Patent and Trademark Office’s (PTO) automation endeavors. The PTO is beginning to automate its operations and part of this plan is to produce a “paperless” office. In order to achieve this goal, the physical design of all trademarks must be entered manually into a computer database through use of a coding scheme. In compliance with Circular A-76 this work was contracted through a private firm. Compensation for the contract, however, is not merely monetary; the contracting firm also receives a master copy of all computer tapes storing the data entered [44]. Thus this company will have the resources to produce any number of information products in direct competition with the federal government’s operations and databases. The company may even be able to claim that the PTO should employ its database in compliance with Circular A-76 or require full cost recovery from users in compliance with Circular A-25.

Political and Regulatory Indicators

In addition to the specific privatization and commercialization ventures just discussed, there are several other general indications of a trend toward privatization. These can be grouped as either political or regulatory signs.


One of the most telling indications was the appointment of the Grace Commission. The purpose of this commission was to study the economic feasibility of private sector firms tak- ing over certain government functions. The fact that government publishing was investigated at all seems to imply a tendency within the government to privatize these operations. Predicted cost savings by the Commission only increases the likelihood of further privatization [45].

The 1981 appointment of Daniel Sawyer as U.S. Public Printer further pushed government publishing toward privatization. Sawyer, a Florida publisher prior to his federal appointment, was very outspoken about the needs to streamline and economize government publishing. It is interesting to note that his nomination was strongly supported by the IIA. In his Senate confirmation hearing, the IIA suggested “the establishment of an advisory body on private sector information activities . . . such a body would be quite helpful in assisting the Public Printer in evaluating the competitive impact of any new GPO activity and deter- mining if decisions are being reached in a fair and open way” [46]. Sawyer subsequently established such a body that lacked representation from the library community or user stakeholders. Sawyer’s leadership also resulted in a representative from the private sector being appointed a member of the Depository Library Council, an advisory council to the Public Printer for issues dealing with the GPO depository program.

CONCLUSION

No single agency has control over the situation. The OMB is beginning to work on the issue, but is far from being in charge. In fact, the situation seems to be one in which the industry is “capturing” the activity rather than capturing the regulatory agency [47]. It can be hypothesized that this capture is in progress since there is no single regulatory agency for government information activity and confusion therefore appears to be the norm. The lack of clear regulatory control results in internal confusion within the government and allows the activity to become easily privatized. Other signs of capture are also evident. There has been an exodus of government officials from information producing government agencies into the private sector. In the past few years two commissioners of NTIS, a director of the PTO depository program, and the chief counsel for the JCP have joined private sector firms that publish government information [48]. What are the economic consequences of the capture? The results are diffused costs and concentrated benefits-a sure sign of traditional regulatory capture and, in this case, interpretable as an indication of privatization.

This article has presented evidence substantiating the thesis that commercialization and privatization are prevalent in government information dissemination. Recent events point toward an acceleration of these activities in the 1980s. Before any further escalation, several issues should be seriously analyzed by both the public and private sectors to achieve economy in government operations, maximize profitability for the private sector, and guarantee maximum information accessibility for the public good. These questions are obviously complex, defy a simple solution, and are intricately interwoven with the question of access to government information. The answer to these critical issues will reside in a delicate balance of economic and social goods for the benefit of both the private and public sectors.

EPILOGUE

The issues that must be addressed in the public forum to determine a future policy for government information loom before us. First, to what extent should the public fund government information production and its redistribution? Does public funding of printing and dissemination have a chilling effect on private sector entrepreneurs? What types of

62 DIANE SMITH

guarantees can be made to ensure that only “needed” information will be produced and printed? Should information generation costs be included in information sales (as decreed by Circular A-25) or should prices cover only dissemination costs? What methods of continuing access to unprofitable or esoteric information can be instituted if Circular A-76 is followed?

Second, should government documents be copyrighted? What type of mechanism, if any, should be established to gather fees? To whom should fees, royalties, or copyright clearance charges be paid? Would and could private sector firms continue to produce their products in such an environment? If they continue to exist, what would be the effect on end users? If they ceased to provide their services, would the government step into their roles?

Third, is there a need for a centralized regulating agency for government information? In the past an absolute need was not evident. With recent technological developments, computer transfer of data, and new storage media, perhaps there is a need to regulate that which was always assumed to be free. If there is a need, which agency should logically provide the service? Would the establishment of a central “information czar” improve the scenario or simply add to the confusion?

Fourth, should the establishment of a government information monopoly be avoided? Such a monopoly evokes three concerns: control over information itself, control over distribution patterns, and control over price. What would become of citizens who cannot af- ford information and how would equity be guaranteed? What would prevent the emergence of two classes of society- the information rich and information poor? What would determine information distribution patterns? How would libraries and end users fit into this scenario?

Finally, should further privatization and commercialization of government information dissemination be encouraged? Although economically justifiable in the present chaos of data access, technological innovations might alter the situation. The government at some future time might be able to provide information more efficiently and economically than it presently does and there then may be no need for the private sector in the business of government information.

REFERENCES

1. 2.

3.

4.

5.

6. 7. 8. 9.

10.

11. 12. 13. 14. 15.

16. 17. 18.

James Madison in a letter to W.T. Barry, August 4, 1822. Herbert D. Schiller, Who Knows: Information in the Age of the Fortune 500 (Norwood, NJ: Ablex, 1981), p. 47. U.S. Congress, Joint Committee on Printing, Ad Hoc Advisory Committee on Title 44 to the Joint Committee on Printing, Federal Gover~menf Printing and P~biishi~g: Policy Issues (Washington, DC: GPO, 1979), p. 63. U.S., Department of Commerce, The Znformat~o~ Economy: Definition and measurement, by Marc Porat (Washington, DC: 1977), p. 1. U.S. Congress, Office of Technology Assessment, Computer-Based National Znformat~on Systems (Wash- ington, DC: GPO, 1981), pp. 49-50. Federal Government Printing and Pubiishing, p. 30. Schiller, Who Knows, p. 50. Federal Government Printing and Publishing, p. 11. 44 USCA 1708 The Desert Project Soil Monograph is the document cited in this example. NTIS pricing is partially based on pagination, with the base price for items being $7.00 and $1.50 added for page increments over the base. “Dissemination of Technical Information; Request for Comment,” Federal Register 43 (19781: 32204-32205. Schiller, Who Knows, p. 62. Federal Government Printing and Publishing, p. 33. Ibid., pp. 33-34. President’s Private Sector Survey on Cost Control. Selected Zssues, Vol. 1, Pu&tishjng, Printing and Reproduc- tion and Audiovisual Activities (Washington, DC: GPO, 1983), p. 3. Ibid., p. 2. Office of Management and Budget, Circa~ar A-76~arch 29, 1979 (revised) (Washington, DC: GPO, 1979). p. 1 Forest Woody Horton, Jr., ed., The Znformation Resource: Policies, Background, and Issues (Washington: In- formation Industry Association, 1979). p. 9.


19. Anthony Oettinger, Elements of Information Resources Policy: Library and Other Information Services, rev. ed. (Cambridge, Mass.: Harvard University, 1975), p. 160.

20. U.S., Department of Commerce, National Telecommunications Information Administration, Issues in Infor- mation Policy (Washington: GPO, 1981), p. 68.

21. “Improved Management and Dissemination of Federal Information; Request for Comment,” Federal Register 45 (1980): 38461-38463.

22. “Development of an OMB Policy Circular on Federal Information Management-Solicitation of Public Com- ment.” Federal Register 48 (1983): 40964-40965.

23. U.S., Congress, House, Committee on Energy and Commerce, Status of Competition and Deregulation in the Telecommunications Industry (Washington: GPO, 1981), pp. 253-255.

24. Ibid. 25. Ibid. 26. Ibid, pp. 269-274. 27. The Securities and Exchange Commission requires 10-K reports of all firms which sell their stock over the

counter. These reports contain financial data and information on product lines, research and development, and litigation involving the firm.

28. Beginning in 1984 Research Publications contracted to provide to PTO depositories this microform collection at a nominal cost to the PDL. As of April 1984 Research Publications ceased distribution due to lack of payment by the PTO.

29. U.S., Congress, House, Committee on Government Operations, Government Provision of Information Services in Competition with the Private Sector (Washington: GPO, 1982), p. 65.

30. U.S., Congress, House, Committee Rules and Administration, Public Printing Reorganization Act of 1979 (Washington: Government Printing Office, 1979), pp. 257-263.

31. Meeting Information Needs in the New Information Age, (Washington: Information Industry Association, 1983). pp. 5-7.

32. Government Provision of Information Services in Competition with the Private Sector, p. 41. 33. Letter to J. Timothy Sprehe of the OMB, from Eileen Cooke of the American Library Association November

10, 1983. 34. U.S., National Commission on Libraries and Information Science, Public Sector/Private Sector Interaction in

Providing Information Services (Washington: GPO, 1981), pp. 7-13. 35. Ibid., pp. 57-71. 36. Publishing, Printing, Reproduction and Audiovisual Activities, p. 5. 37. Schiller, Who Knows, p. 50. 38. U.S., Genera1 Accounting Office, Better Information Management Policies Needed: A Study of Scientific and

Technical Bibliographic Service (PSAD-79-62), (Washington, GPO, 1979), p. 1. 39. Federal Government Printing and Publishing: Policy Issues, p. 44. 40. U.S., Congress, House, Committee on Rules and Administration, Public Printing Reorganization Act of I979

(Washington: GPO, 1979), p. 221. 41. “Library and Medical Associations Oppose Excerpta Medica,” Library Journal 108 (1983):935. 42. The Census Store: Database Inventory, (Arlington, Va.: Claritas Corp., 1983). 43. “Census Figures for Corporate Use,” New York Times Book Review (August 21, 1983): 7 + 44. Presentation by J. Howard Bryant, Administrator for Automation at the 6th Patent and Trademark Office

Conference, Sept. 27-30. 1983. 45. It is also interesting to note that the final summary report of the Grace Commission, War on Waste, is being

published by a private firm, Macmillan and Co. 46. U.S., Congress, Senate, Committee on Rules and Judiciary, Nomination of Danford L. Sawyer, Jr. (Wash-

ington: GPO, 1981), p. 33. 47. A permutation of George Stigler’s theory of regulatory agency capture appears to be applicable to this situation.

The “capture theory” maintains that regulatory agencies established for public good are captured by interest groups and, consequently, regulations and rulings are passed favorable to the interest group.

48. Melvin Day (NTIS), Peter Urbach (NTIS), James Terragno (PTO), and Drew McKay (JCP) joined private sector firms.

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