On-Line Networks Spark New Bottom-Line Anxieties : Technology: Critics say costly private computer services could limit public access to government data.

WASHINGTON — For a growing number of Americans, the vaunted information highway is already turning into a costly toll road.

The traffic in question is government data. Taxpayers pay for its collection, but private-sector middlemen have become its main purveyors through lucrative “on-line” services that can cost as much as $300 an hour to use.

Congress, for example, has an on-line system that allows staffers to view the status and, in some cases, the full text of proposed legislation and other information. Computer users say this material could be made publicly available via computer relatively cheaply, but outsiders must pay $1,900 a year and more to get the information from companies such as Legi-Slate Inc., an on-line service owned by the Washington Post Co.

“People who criticize us for selling government information misunderstand what we are doing,” said Arnold Winkelman, who oversees Legi-Slate’s marketing division. “What we are selling is a tool to get information in a timely and accurate fashion.”

There is little disagreement that the nation’s emerging electronic information infrastructure will offer great public benefit, such as helping the government speed medical research to doctors or making the Library of Congress available to any scholar, anywhere, with a personal computer. Nor is there much quarrel with the right of information vendors to resell government information that’s quickly and cheaply made available elsewhere.

The concern is that exclusive arrangements with costly private on-line services will create what Temple University’s Nolan A. Bowie calls “an information underclass.” Critics also fault government agencies for charging as much as 50 times more for electronic versions of documents routinely available on paper.

“What we are building is society’s nervous system for the next millennium--something that will change the way we think and affect the kind of society we want to become,” said Bowie, a communications professor. “If we want an information (highway) that’s inclusive of all people, we ought to build that into the system from the very beginning and not have a system just for the elite.”

In fact, even a toll-free information highway is likely to leave some people behind. The poorest of the poor, lacking the education, the computers and perhaps even the phone lines, are unlikely to begin scouring electronic Securities and Exchange Commission filings even if access is free.

But the high-priced system evolving now shuts out many of those otherwise equipped for the Information Age--including many libraries, where even the poorest might otherwise gain access. High-priced data could also curb research.

A Princeton University student ran into just such a roadblock in writing a senior thesis on federal banking regulations. The student needed electronic versions of Federal Reserve “call reports,” quarterly snapshots showing the financial health of banks.

The Fed used to give the computer tapes to researchers for free. But on Feb. 1, 1991, it denied the student’s request for 40 tapes, saying he could buy the tapes from the National Technical Information Service, a federal agency, for $20,000.

“I felt very frustrated,” said Susan White, the computer on-line coordinator for Princeton’s social science library, “I felt the university could do a lot of public good . . . If a student or economist is going to look at (financial) patterns, he needs to get the information electronically.”

Another group shelling out lots of money for government information is investors.

Philip J. Keating, a Delray Beach, Fla., money manager, says he pays $39 a pop to get SEC reports on insider stock transactions via Compuserve. SEC filings offering details on a company’s financial operations--which are also public documents--cost $30 to $35 each from private on-line computer services, he said.

Keating estimated his computer bill for financial documents, which is partially reimbursed by a computer group he heads, runs to several hundred dollars a month.

“We would love to have investment information from the government if it were priced within our means,” said C. J. Leleux, a Houston investor who heads an American Assn. of Individual Investors’ computer group. “But most of us are retired . . . and the information available from on-line retrieval services is very expensive. We’re not millionaires, we just use computers to keep on top of things.”

But government officials say that granting cheap, universal access to Washington’s vast stores of on-line data is easier said than done. They say it costs money the government doesn’t have to invest in the necessary staff and technology.

Roger Cooper, for example, deputy assistant attorney general for information resource management at the Justice Department, said that while he supports cheaper access to government information, an elaborate setup to handle thousands of computer inquiries daily would cost $200,000 to establish, plus $75,000 in annual salary and telecommunications costs.

“Theoretically, it’s a very good idea, but there are operational considerations and security matters,” he said.

Yet a good deal of government information is already available for free--or nearly so--from many federal departments and agencies.

By subscribing to a commercial provider of Internet, the global matrix of computer networks that traditionally has been used by academic researchers, at a cost of perhaps $20 a month, anyone with a personal computer can dial a local number and tap into, say, the latest information on new drugs from the Food and Drug Administration--at no charge whatsoever.

The Commerce Department, the Agriculture Department and the Environmental Protection Agency, among others, also make information available on-line for free. Supreme Court rulings, a copy of the North American Free Trade Agreement and other documents can be had on the Internet as well.

But vast stores of federal information either aren’t on-line or are available only by paying stiff charges, even if the information is obtained directly from the government.

A paper subscription to the Federal Code of Regulations costs about $400 annually, but an electronic version costs $21,750. A one-year subscription to the Department of Defense telephone directory costs $25 from the Government Printing Office; the same information on magnetic tape costs $375, according to the GPO.

Judith C. Russell, director of the office of electronic information at the GPO, said the price gap “is largely a product of packaging and users manuals.” She also said that in some cases the government has to pay licensing fees for software that organizes the data electronically.

“Some agencies want their material converted, some don’t,” Russell said. “We are not funded to take the initiative” and put all government information on computer.

The Clinton Administration appears to be pushing for change. In a report last month entitled the National Information Infrastructure Agenda for Action, it called on government officials to “extend the ‘universal service’ concept to ensure that information resources are available to all at affordable prices.”

That followed an Office of Management and Budget order directing federal bureaucrats to maximize “the free flow of information between the government and public” by releasing it through federal agencies, educational groups, and state and local governments as well as through profit-making entities.

In June, President Clinton--citing “the costly printing of tons of paper documents”--signed a law requiring the GPO to give citizens on-line access to the Congressional Record and the Federal Register.

Despite all this, private vendors have enjoyed a growing role. This summer, for instance, Interactive Systems Inc. of Arlington, Va., began providing exclusive on-line computer access to the Federal Communications Commission’s database--for fees of between $36 and $100 an hour.

Likewise, farmers, geologists and others interested in getting government information on the planet’s changing topography, population and climate have to pay a private company for data supplied by National Oceanic and Atmospheric Administration satellites.

Although taxpayers paid $36.5 million to launch the latest government satellite on Oct. 5, Earth Observation Satellite Co., a Lanham, Md.-based joint venture of Hughes Aircraft Co. and Martin Marietta Corp., charges between $2,500 and $5,900 annually for data the satellite gathers. The commercialization of NOAA’s satellite program was authorized by Congress in 1985.

Next year, the SEC--which since the mid-1980s has been developing a program for automated submission of the 10 million pages of corporate filings it receives annually--will join the list of government agencies who make public information available electronically through private vendors.

The SEC’s $13-million contract calls for Mead Data Central, which provides the Nexis and Lexis databases, to collect and manage a database of corporate filings. By early next year, the public will get access to the system, known as EDGAR--for Electronic Data Gathering, Analysis and Retrieval.

Some 2,500 companies are now required to file documents electronically through the EDGAR system. But citizens who want to peruse the documents will have to pay private on-line companies, to which Mead is required to sell SEC data at cost plus a “reasonable profit,” said John Lane, who oversees the SEC’s computer and communications operations.

“Mead is our information disseminator; they can (do it) at a lower cost than we can ourselves,” Lane said. Although he expressed hope that competition among private information vendors would keep prices as low as on the Internet, the actual prices will not be regulated by the SEC.

Mead spokeswoman Judi Schultz said SEC data may be available for a minimum of perhaps $28 a page, but data would be available only in limited form at that price.

“We are in business to make a profit, and one of our best customers is the federal government,” Schultz said.

Computer users and other critics contend that federal information would be cheaper and more widely available if the government directly released it on inexpensive CD-ROMs (like audio CDs but packed with computer-readable data) or via the Internet.

But accommodating a huge new data source could prove tricky for the burgeoning Internet, which is already running short of code numbers for addressing the network, whose traffic grew more than 200% last year.

As fees have mounted, activist computer users have begun to challenge government agreements to provide electronic data exclusively to private vendors.

In Sacramento, more than 1,200 computer users wrote in to support low-cost computer access to state statutes, bills and committee schedules, now available electronically only through the private State Net and Legi-Tech services.

The users got their way; legislation they backed was pushed through by Assemblywoman Debra Bowen (D-Marina del Rey) and signed by Gov. Pete Wilson.

“(Thomas) Jefferson believed that an informed citizenry was the best guarantee of a responsible government,” Bowen said. “He didn’t say we should be hawking the Constitution on the Home Shopping Channel for $19.95.”

Similarly, West Publishing Co. announced last month that it would not renew its contract with the U.S. Justice Department after more than 200 computer users complained to Atty. Gen. Janet Reno.

But the story doesn’t end there. West Publishing insists that it owns the data it has already received, even though it is all public information. And the Justice Department has to arrange some other way for citizens to access new material electronically.