Solve Ordnance Survey (SOS)
19 March 2010
Solve Ordnance Survey (SOS)Infoterra Limited was originally the government owned National Remote Sensing Centre (NRSC), costing the Government £5 Million per year. It was privatised in 1988 and with a turnover of £10M in 2000, became a wholly owned subsidiary of EADS Astrium. Infoterra Limited now has a turnover of £40M and employs 300+ people in the UK. It is part of Spot Infoterra Group of Astrium Services, Spot Infoterra is one of the world’s top three geo-information businesses with clear ambitions grow from 185M€ today to 500M€ by 2020 through both organic and inorganic growth strategies.
Ordnance Survey was converted into a Government owned Trading Fund in 1999 with a remit to achieve operating profits each year through licensing the Crown Copyright mapping data products it maintains. Ordnance Survey turnover at £100 Million in 2000 has risen to £117 Million today and they have compiled and issued Mastermap ™, the best national mapping database in the world, during this time. There are well documented issues associated with the trading fund status of Ordnance Survey and whilst some moves are being made to address these in the current OS business strategy, implemented in April 2009, the call to ‘Make Public Data Public’ initiative backed by the Prime Minister has resulted in a consultation process, led by CLG, which has focused on three potential options for the future business model for Ordnance Survey.
Infoterra Limited has secured business in the UK geo-information market by producing information products where gaps existed in Ordnance Survey’s portfolio and marketing them to all sectors, including UK Government. Notably, against Ordnance Survey competition, Infoterra won the Aerial Photography and Height Data Lots of the Pan Government Agreement in 2006 to supply these datasets to central government and we continue to deliver these today. Infoterra wishes to pursue further growth in the UK Geo-information market but the continuing uncertainties surrounding Ordnance Survey status, their remit (particularly as defined by their Public Task) and the availability of (and possible migration to more) free public data significantly impedes investment.
Government’s Intent
The Ordnance Survey consultation document states ‘It is government’s intent that Ordnance Survey be positioned at the heart of the geographic information innovation chain. That means considering how best OS is structured and operates – both to ensure its own long-term sustainability, but also that of those who use its data’. Infoterra believes this should read: ‘It is government’s intent that Ordnance Survey data is positioned as the foundation of the geographic information innovation chain.’ We agree wholeheartedly that the long term sustainability of this mapping is key.
Current Situation & Issues (Option 1)
The current situation, as has been described in many reports, is unsustainable, and the effective continuation of the current business model through pursuit of Option 1 of the Consultation would as a result generate only minor improvements with respect to the key issues around Ordnance Survey’s role, contribution to “UK Plc” and business model. In our opinion, Ordnance Survey, acting as a Trading Fund and operating it’s current business model, is monopolistic, sometimes anti-competitive and with its licensing stance, ultimately unsustainable.
The proliferation of crowd-sourced and other mapping across the UK is a direct consequence of the national mapping being significantly under-utilized, primarily due to an overly restrictive business model. This has created choices in mapping, which could be seen as a benefit. In reality, however, we are a very long way from having any complete or comparable national mapping products to compete with Ordnance Survey MasterMap™, though this situation may change over the next 5-10 years if Option 1 is pursued.
The biggest opportunity under the current regime, and as proposed by Option 1, is the promise that the distribution channels and Value Add Licensing for ALL Ordnance Survey products will be opened up and simplified, coupled with a de facto separation of Ordnance Survey’s upstream and downstream activities, both by 1st April 2010. This move is essential to ensure that all private sector players and Ordnance Survey themselves, can license and add value to the existing data on exactly the same terms. This is clearly imperative under competition rules and follows the requirements of the Re-Use of Public Sector Information Regulations. This advancement is critical to introduce genuine competition into the marketplace and hence to allow the market to develop in an unrestricted fashion, and would be an essential prerequisite to the successful implementation of either Option 1 or Option 3.
However, as long as OS remains a Trading Fund, with a remit to secure licensing revenues and generate an operating profit, it will always be inclined to act in monopolistic manner, protecting the IPR of what OS perceives as “its” products and driven to maximize its own financial performance. Quite simply, Ordnance Survey’s basic operating structure and mission cannot be separated from its behavior in the market. As a result, as long as it remains a Trading Fund, Ordnance Survey will never be incentivized to resolve key issues, such as the derived data issue, which is the main limiter to efficient, joined-up operations for Government and the wider exploitation of the national mapping.
It appears that a number of submissions from Government Departments will state Option 1 as their preferred solution; principally because Option 2 may be perceived as more costly to them and Option 3 will, we believe, indeed cost government significantly more than at present. It is our belief that Government Users are as disenchanted with the current OS business model as is industry. Government licenses Ordnance Survey mapping through Collective Purchasing Agreements (CPA), but we understand that the terms provided by Ordnance Survey, even after lengthy negotiations, do not allow sharing between government sectors or solve the derived data issue even within government. Conversely, when selling national aerial imagery and height data into this CPA, Infoterra, a private company, accepted all usage terms required by Government.
OS Free (Option 3)
OS Free, as proposed, represents a backwards step from Option 1 in terms of defining Ordnance Surveys role and enabling improved access to the key datasets that Ordnance Survey currently licenses. As described, Option 3 will result in Ordnance Survey charging government excessive amounts as compensation for lost revenue to release mid scale raster mapping data for free, which are of minor importance to the most serious users of geo-information in the UK. Furthermore, we believe that this step is clearly anti-competitive in assuming that Ordnance Survey is best placed to produce and provide these refined data products. If provided with the opportunity, it is probable that industry would provide these data at less cost to Government. It also represents a move in precisely the opposite direction to both OFT recommendations and re-use of Public Sector Information regulations by making what are refined data products (i.e. cartographic products) available but not the core un-refined database (i.e. the under-pinning geometry of key features, namely OS Mastermap™), thereby strengthening Ordnance Survey’s position against competition in this critical area. Furthermore, we do not believe that this option is ultimately sustainable for Ordnance Survey or the national mapping either, as it is likely to result in substitution by, and proliferation of, competing products. This will itself lead to a number of unwanted outcomes, such as unnecessary duplication of effort and expenditure, fragmentation of the core (and key) geometrical mapping underpinning most statutory activities and resulting in national analyses being undertaken against differing base data. Future exchange of data will become more difficult as the quality of the base mapping for different parts of the country starts to diverge, creating difficulties for both future policy makers and critical users e.g. first responders. In other words, the integrity of the critical base mapping of the UK will be eroded, threatening national resiliency, data exchange and operational efficiency.
The cost implications of implementing OS Free, as proposed, are excessive, with Government expenditure rising from £54 Million per annum to £94 Million per annum due in the main to ‘tariff rebalancing’. This amount would indeed cover nearly ALL Ordnance Survey costs, meaning that ALL OS products including the valuable large scale data could become freely available for ALL. This would provide the nation with a unique high quality core national dataset which is fully maintained ensuring all analysis and visualisation could be undertaken against this geographic standard. Government should have to pay nothing extra for OS Free as proposed. As is shown in the consultation figures, the real cost (plus) of producing OS Free data is listed as £6 - £9 Million per year, a cost which could, of course, be covered by the 5% efficiency savings which Ordnance Survey has already agreed to deliver.
As can be seen from the above, Infoterra believes that implementation of Option 3 would serve only to exacerbate the current situation, strengthening Ordnance Survey’s monopoly position in key markets, further confuse the issue of its Public Task and significantly increase costs to government. A large proportion of submissions from companies (with limited Value Add reseller businesses or perceived competing mapping products (but without the coverage or detail)) will state Option 3 as their preferred solution in the short term, primarily because they perceive Option 2 as a much greater threat to their business. In reality, we believe that these companies would benefit more through gaining fair access to all OS mapping and updates, under the same terms as everyone else, in order to enhance their own value added product portfolios. Also, it would appear that many other responses, including those from Government advisors, are advocating Option 3 as a step towards Option 2, which could then, perhaps, be pursued in three years time. This will create a further period of uncertainty and disruption in the market which has effectively been constrained for 10 years already. It will most likely cause substantial reductions in the value of Ordnance Survey and its data through encouraging avoidance of the use of the key data products and increased substitution. Ordnance Survey and the data it holds are at their most valuable now.
| Options | Cost Implications to Government | % of OS Cost | P.A. Cost to Government |
| Current situation & Option 1 | Remains as is through Central Procurement Agreements - £54 Million | 49% | £54 Million Ongoing |
| OS Free Option 3 | As above PLUS £40 Million p.a. with £40M initial set up | 100% for first 2 years then 85% | £114 Million for 2 years then £94 Million |
| Option 2 | £59 to £73 Million Cost for OS Data Co. Reduced to £54 Million with efficiency Savings £38 to £47 Million Cost for Product Co (Privatised) | 100% of OS Data Co. | £54 Million for 3 years £Zero therafter |
Freely Available Public Sector Information for Re-Use (Option 2)
Option 2, whereby all OS products, produced as PSI, are made freely available (in price and licensing terms) is, we believe, the only sustainable solution, and which also delivers on the stated intent above. By allowing re-use of this public sector information, the national infrastructure will be built upon it now and in the future. All users, both governmental and in the private sector, would receive free, standardized, high quality data which is available for the whole country and, which is maintained and kept up-to-date. As a result, there would be no need for others to attempt to replicate it and the value inherent in many years of past investment would be sustained. The opportunity to create innovative, new, value-added products upon this core is huge and these would be built in the knowledge that updates of the core data, and its quality, are guaranteed. Access to this information will greatly stimulate innovation, engendering economic growth and added employment in the crucial Knowledge Economy sector, and hence the benefits to the UK as a whole will be significant.
This is, we believe, the only solution which successfully addresses all the fundamental issues, namely:
- Meeting Re-Use of Public Sector Information Regulations
- Removal of any Monopolistic/anti-competitive activities
- Removal of all licensing constraints (especially derived data)
- Creation of long term Ordnance Survey sustainability
- Provision of a common national geo-information infrastructure
- Fulfillment of national welfare benefits
- Enhancement of Government Operational Efficiency
- Reduction in costs to government
- Stimulating innovation and growth, thereby increasing taxation revenues
- Government, in consultation, should specify which products it requires from OS Data Co on an ongoing basis and these are those that are created by OS and made available as Public Sector Information.
- OS Data Co should make these data available in bulk form to any interested party - government, public, industry and Product Co. in order that tailored distribution/value add services can be developed.
- OS Product Co (comprising the non Public Task refined products, services and sales of Ordnance Survey) should be sold as soon as possible. Immediately on this privatisation, the PSI data produced by OS Data Co. can become freely available and creative commons licensing can be offered to all including government users.
- OS Data Co. could be fully funded by existing levels of Collective Purchase Agreements for up to three years, until such time as it can be fully funded through implementation of charging fees for change; via Land Registry and/or Planning Applications. With fees in the region of £25 for minor and £250 for major change/applications granted, we believe the costs of national mapping could be covered. Industry, the public and government would not begrudge such amounts in return for the mapping to become freely available.
| Options | Derived Data Issues | Free Data Availability | Sustainability |
| Option 1 | Partial Solution |
None | Decreasing |
| Option 3 | Partial Solution |
Partial Solution for 10% of Data Value |
Decreasing |
| Option 2 | Fully Solved Mapping becomes National Infrastructure and Foundation |
Fully Free Public Sector Information 100% of Data Value |
Fully sustainable OS and National Mapping Indefinitely |
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