The forecast for weather services is cloudy. There is a warming trend moving up from the private sector, but it is being affected by a wind out of Washington, D.C., blowing alternately hot and cold. Severe high pressure emanating from the Pentagon threatens to counteract the high-altitude entrepreneurial tendencies and could bring the private-sector warm front to a standstill before it gets a chance to really develop. The immediate forecast is continued uncertainty, and the long-run forecast is stormy, aggravated by worldwide meteorological socialism.
To most people, the Reagan administration's announcement this spring that it planned to sell off the government's weather satellites came as a surprise. The story made the front pages of the New York Times and Washington Post on March 19. Both Time and Newsweek carried skeptical news accounts the week of March 21, and the redoubtable Art Buchwald weighed in with a column parodying the idea, suggesting that pretty soon individuals would have to pay $10 for a national forecast and $50 for tornado warnings.
Actually, the idea of selling the weather satellites to private operators has been kicking around within the federal government for several years, as has the idea of charging certain users (but not individuals) for weather data. The National Advisory Committee on Oceans and Atmosphere (NACOA) spent much of 1981 and 1982 looking into the future of the nation's weather services. Concluding that existing services need to be improved and expanded, the committee considered as options not only increased taxpayer funding but user fees and complete privatization. And in 1982, the Office of Management and Budget directed the National Oceanic and Atmospheric Administration (NOAA), the government's principal weather agency, to study which of its several hundred services might be commercialized.
Government meteorologists are in a peculiar situation. They see a rapidly growing market in various industries for increasingly sophisticated weather information. But the source of the raw data—various agencies within NOAA—has no way to tap into the multibillion-dollar market. NOAA, under congressional mandate to protect life and property and to enhance commercial activities, provides its raw data essentially for free. The information provided is worth billions, but the only source of revenue is the annual appropriation from Congress.
These days, however, the government's weather agencies are experiencing the same budget cutbacks as other government agencies. At the same time, new technologies are making the potential for improved weather information enormous. Electronic breakthroughs have made possible automated weather data generation, but extensive placement of the equipment requires more funding. Computers used to analyze and store data are outdated, but money for upgrading the system has not been budgeted. The National Advisory Committee on Oceans and Atmosphere estimated that needed technological improvements over the next decade will require at least $1 billion in 1982 dollars. But with no public outcry for improved weather information, legislators are not excited about voting for expenditures in an area with no big political payoff.
Not surprisingly, then, as I talked to government officials in the course of investigating the weather front in the United States, I found a willingness among some government meteorologists to adapt market mechanisms to their agencies. Although none of them was willing to be quoted, they were receptive to the idea of implementing fees and contracting out more observational functions. Even the transfer of the government's weather satellites to commercial operators is welcomed by some—but not for attribution.
Of course, the official position of NOAA is that the provision of weather data is fundamentally a government function. And that seems to be the premise that has inspired widespread public and congressional dismay over selling the weather satellites—or any other suggested move toward privatization of weather services. But is there anything, really, standing in the way of free-market weather information—provided by private firms to users who pay for the amount and kind they want? That's what I wanted to find out as I looked into the current situation, the history of weather services in the United States, and the various interest groups who oppose putting weather on the market.
Although various degrees of weather-service privatization have been the subject of official debate for several years, the hot topic these days is the Reagan administration proposal to sell the government's weather satellites. It may come as a surprise to most people, but that proposal wasn't dreamed up by the administration. It is the latest twist in a long-standing move to let the private sector take over the government's Landsat program, which produces pictures of crops and geological formations from orbit.
In 1981 the Office of Management and Budget (OMB) decided to accelerate a Carter administration timetable for ending governmental operation of Landsat. Instead of extending into the 1990s, said OMB, the program would be ended after the launch scheduled for 1985, and the remote-sensing satellites would be sold to private operators as they were launched.
The decision, however, set off cries of alarm from much of the Landsat user community, who have grown accustomed to receiving the photos at a small fraction of their cost. Nobody disputed the eventual development of a market for Landsat data—estimates are that it will reach $10 billion a year—but many people argued that it would take far longer than a decade for a large enough market to develop to cover the program's costs.
That, essentially, was the conclusion also of Communications Satellite Corp. (Comsat), which was interested in operating Landsat. (Comsat was created as a federally chartered, stockholder-owned company in 1963 as a compromise, interestingly, between those who wanted to turn communications satellites over to the market and those who wanted the government to operate them.) In preparing an unsolicited proposal to OMB for taking over Landsat, Comsat came up with a package deal: Throw in the weather satellites—two geostationary satellites and two polar orbiters—Comsat said, and we'll buy all the satellites, design and launch replacements as they wear out, and save taxpayers' money by achieving economies (for example, by operating a common ground station to process both weather and remote-sensing data and later developing a dual-purpose satellite). As part of the deal, the government would have to sign a 15-year contract to purchase its remote-sensing and weather data from Comsat. The government would continue to provide weather information to users through the National Weather Service and other agencies, and Comsat could develop other commercial markets for specialized weather data, with the price paid by government declining as Comsat succeeded in this. The arrangement would ensure Comsat a profit while it carved out a market for earth-resources data from the Landsats.
How much money would the deal save the government? As much as $1 billion over 10 years, said Comsat—though that number has been challenged because in making the calculation, it assumed that the government would still operate Landsats far beyond OMB's cut-off date.
Visiting Comsat's headquarters in Washington, D.C., and the National Weather Service (NWS) in Silver Spring, Maryland, I was impressed by the difference between them. The profit-oriented business has plush, modern, expansive facilities located next to the luxurious Loews Hotel in L'Enfant Plaza; the top brass of the NWS are housed in the Gramax Building, across the street from the Econolodge. Yet it is the satellite system that provides NWS data that Comsat is vying for, and I couldn't help feeling sorry for the government meteorologists, whose offices look like they were furnished from junior-high-school teachers' lounge surplus. That is the irony of the government weather service—it is handling products of immense value but is forced to beg Congress for funds.
When I talked with Paul Maughan at Comsat, he seemed to be straining at the bit as he complained about the way NOAA is "dragging its feet" with transferring the satellites to the eager company. Maughan is director of Comsat's Earthstar project—the firm's name for its proposed integrated weather and remote-sensing system. According to Maughan, the major criticisms of the transfer are related to the government's defense needs, but he also pointed out that there are plenty of government bureaucrats with a vested interest in continued administration of the projects.
The Pentagon has indeed protested sale of the satellites to Comsat "for security reasons." But Comsat, insisted Maughan, "is willing to cooperate with the military in supplying any data they require." This is in line with a Commerce Department proviso that whoever buys the system would have to provide "selected priority service to defense needs when required."
Meanwhile, however, other firms have jumped into the satellite-sales picture. Only Comsat has proposed taking over both programs. But two firms, RCA and Environmental Satellite Data, have expressed interest in parts of the weather system. And another, American Science and Technology Corporation (ASTEC), has proposed taking over operation of the Landsat satellites without a guarantee of government data purchase. The firm had previously announced plans to build and launch its own, privately financed remote-sensing satellites as successors to Landsat. ASTEC plans to launch the first of its satellites in 1984, using the launch services of Space Services, Inc., the private developers of the Conestoga rocket. Industry insiders say that ASTEC's offer has upset what Comsat had thought would be a no-contest decision, forcing NOAA to go through a full-fledged competitive bidding process.
Transferring the weather satellites to the private sector would not by a long shot bring weather services into the marketplace. The satellites are only one component of a complex weather-information system in this country that includes private firms but is dominated by the government as the source of raw data.
It is costing NOAA this year $150 million to operate the four weather satellites. They generate information that, along with data from other sources, is given away by the government in some cases outright and in some cases for the one-time cost of a hook-up into the system (currently $5,000). Altogether, the federal government is spending over $1 billion this year to gather, analyze, and disseminate weather information and conduct related research.
NOAA is the primary weather agency. One of its arms, the National Earth Satellite Service, operates the weather satellites (as well as, since January 1, Landsat). NOAA's Environmental Data and Information Service collects global meteorological and climate information and makes it available to a multitude of users—businesses, the media, agriculture, the scientific community, the general public, and federal, state, and local government agencies. And the National Weather Service (NWS) provides daily forecasts directly to the public, to the media, and to various sectors of the economy and government entities.
Various other federal agencies work jointly with the NWS to collect and disseminate information and carry out meteorological research. From the Department of Agriculture to NASA, a host of federal agencies have a hand in weather.
The heart of the government's weather network is data collection. In one year, 3.5 million observations are taken. They range from upper-air balloon observations and automatic electronic readings on ships and inaccessible areas to readings collected by thousands of volunteers. Over the past decade, satellites have become an important part of the data-collection process.
There are nearly 1,300 land stations providing weather data—about a third of them NWS facilities, a third FAA facilities, and the rest Department of Defense and other federal agencies. About 12,000 land-based volunteers report temperature and precipitation each day. Some are paid for their data on a fee basis by the NWS, and others provide data at no cost to the government. About 2,000 ships voluntarily report information from sea, and airline pilots channel high-altitude information to the NWS.
The data are routed to the NWS National Meteorological Center in Suitland, Maryland. The processing of data and preparation of forecasts and other products for users goes on at the National Meteorological Center, at NWS field stations around the country, and at other agencies' facilities.
Finally, data and forecasts are disseminated to users. Who are the "customers" for this valuable information resource? Most individuals don't get their weather information directly from the NWS (except for those who own specialized radios that can tune in to NOAA's Weather Radio frequency). Instead, the agency acts as a wholesaler, supplying its data to a relatively small number of "retailers"—newspapers, radio stations, and TV stations—who sell the information to their customers. Newspaper readers pay for the information when they buy the paper; radio and TV audiences "pay" by being subjected to advertising.
The government's other weather customers are also, like broadcasters and newspapers, large business interests. The main sectors of the economy needing specialized weather data are the aviation, maritime, transportation, and farming industries. Many operations in these industries rely on information provided by the government at no cost to them. Increasingly, though, private meteorological firms have found varying degrees of opportunity to take NWS raw data, sometimes adding additional data of their own, and offer it in more useful forms (more frequent updates, more detail, better analysis) to these industries.
There are hundreds of forecasting firms catering to a variety of businesses. There is now a 24-hour cable subscription channel offering up-to-the-minute weather information. Firms supply tailored weather information to the media—television, radio, and newspapers—that offer daily weather reports. Several firms offer specialized weather information to the maritime industries. Oceanroutes, for example, based in Palo Alto, California, provides information on the best routes for ships at sea. The information is tailored to fit the tonnage, power, and even hull design of their customers. With offices located all over the world, Oceanroutes provides international service.
The intensely competitive nature of the private forecasting business was driven home when I talked to Fritz Snideman, president of Oceanroutes, about the scope of their services. Even as I sat in his office, he was checking my credentials to make sure I wasn't an industrial spy. When he was satisfied that I was a journalist, he said that Oceanroutes is ready to expand into other forecasting markets, but the lack of any coherent government policy on what weather information will be provided "free" makes investment too risky.
Of particular interest is Oceanroutes' willingness to enter the aviation forecasting business. Private pilots can now get recorded weather forecasts by calling the nearest FAA Flight Service Station. But the timeliness and accuracy of these forecasts leaves much to be desired. Recently Compuserve, a computer utility for home-computer users, began offering more-detailed aviation weather reports and an interactive flight-planning service. Oceanroutes has plans to offer a more-sophisticated version of this service. Payment would be by credit card.
"There are a number of other services we would like to provide also, but government policy changes like the weather," complained Snideman. "We can't afford to invest in something the National Weather Service may later provide at no cost."
MacLaren Plansearch, based in Toronto, is another private forecasting firm. An international staff provides weather information for any place in the world. Many of MacLaren's clients are oil companies that depend on accurate weather information for the operation of their ocean-based drilling rigs. Customers are located, for example, in Korea, Libya, Borneo, Nova Scotia, and England.
Accuweather, known to many TV viewers for its private forecasts on the news in many cities, sells information to many large agricultural firms. Although the NWS offers agricultural weather reports at taxpayers' expense, Accuweather has found it profitable to provide more-detailed and sometimes more-accurate information to its clients. A 1977 incident underscores the economic value of good meteorological services. While Accuweather issued a severe frost warning to its citrus-growing clients in Florida, the government report at the time did not forecast a frost. Accuweather's clients were among the few prepared for the inclement weather, with smudgepots and fans ready. Not only did Accuweather's customers profit from good crops in a market that was badly hurt by the cold, but several of Accuweather's executives bought into the futures market, anticipating an orange shortage. They reaped an 833 percent return on investment in two weeks.
The construction business is susceptible to economic loss from weather changes, so building contractors buy information to assure themselves that their work will not be ruined by rain or wind. One day's payroll for a large project can be tremendous, and weather-tailored construction scheduling can make the difference between profit and loss. Rail shippers pay meteorologists to tell them whether to ship agricultural products in open cars or more-expensive enclosed cars.
The more specialized the information or the greater the need for accuracy, the greater the likelihood that the private sector will be found providing the weather reports. The NWS offers more-general information, though there are some exceptions, such as the information provided via the FAA to the airlines.
The NWS brings all its guns to bear whenever weather is life- and property-threatening. The NWS's Disaster Preparedness Program tracks and warns the public of tornadoes, floods, hurricanes, and other natural disasters.
The government's weather services exist on both ends of the weather spectrum. On one end is information of the general sort delivered by Willard Scott on the Today Show. On the other end is the Tsunami Warning System that warns Pacific communities of earthquake-produced tidal waves. The private sector operates somewhere in the middle between emergency services and forecasts for the general public (although Accuweather, for example, has entered the latter market, as well).
To understand the weather market today, it is necessary to take Deep Throat's advice and "follow the money." Or in the case of the government, it may be more enlightening to follow the wealth, because the NWS is not operating in the market.
It is the raw data that represents the wealth. That is the resource that all government and private forecasting services work with. Ours has been called the age of information because of the increasing value of information in society. The weather information controlled by the government is worth its weight in gold. Taxpayers underwrite the generation of most of the data, but the result is offered at no cost to some users (such as agricultural firms) and for next-to-nothing to anybody who pays the onetime cost of hooking into the NWS network.
It is almost too much for anyone with an understanding of the economic facts of life to visit an NWS regional station like the one in Redwood City, California. Streaming into a computer terminal in a back room are satellite pictures and data from all over the world, courtesy of the government's information network. To the big metal terminal, a half-dozen cables are attached with corporate names like Grinnel, IPS, Oceanroutes, and MATSCO. The sight of all that wealth, collected at taxpayers' expense and flowing at nominal cost to profit-making businesses, is staggering.
Rich Wagner, the meteorologist in charge of the installation, didn't grasp the irony of the situation. Standing next to the terminal, he complained about NWS budget cutbacks. "We are at the point now with Reagan's budget," he lamented, "where there is no place left to cut without eliminating stations or programs." It's as if the manager of an oil refinery complained that there was no money for plant operations, while watching tanker trucks load up gasoline and drive away without paying for it. I became determined to find out how this business became a part of government in the first place.
Dolores Tremewan Martin, an economist at the University of Nebraska-Lincoln, provided the answer. Her research in the National Archives in Washington, D.C., documents the confusing, unstable relationship between private meteorology and the government.
As a business, forecasting is older than the US government, though the state of 18th-century science makes the connection between early forecasting and modern meteorology mostly historical. Benjamin Franklin is perhaps the best known of the early weathermen. His forecasts in Poor Richard's Almanac were crude but undoubtedly provided a valuable service to immigrants who were totally unfamiliar with American weather patterns. Thomas Jefferson, too, worked to expand knowledge of weather phenomena. Jefferson was part of a group of people who voluntarily recorded and transferred local weather readings.
With the invention of the telegraph in 1844, early weather-data networks received their most important technological breakthrough. But even before then, profit-making businesses were engaged to sell weather information to shipping and agricultural customers. In 1870, however, Congress gave the Army Signal Corps the responsibility of providing weather information for the government. And according to Martin, the burgeoning private weather business seemed to stall at about the same time that Congress started funding the Signal Corps's activities.
The task of forecasting was subsequently shifted to the Department of Agriculture, then to the Department of Commerce, where it still resides. Through its Weather Bureau, the government virtually monopolized the business until the late 1920s, when the demands of new businesses went beyond the scope of government forecasts. A firm was established in Hollywood, for example, to serve the film industry's need for accurate information to plan shooting schedules. Another firm provided weather data to airlines flying between San Francisco and Los Angeles. As the number of private firms grew during the '20s and '30s, the Weather Bureau handled their requests for data on a casual basis. There was no policy on this matter until 1940, when the secretary of Agriculture, Henry Wallace, decided one was needed.
Wallace chose Dr. Karl Compton, then president of the Massachusetts Institute of Technology, to chair a committee to set policy concerning public access to government weather data; the other committee members were all government employees. In their report of April 1940, the committee recommended strict governmental control of access to the teletype service for all but a few favored firms not in competition with the Weather Bureau.
At the annual meeting of the American Meteorological Society (AMS) in 1946, Weather Bureau Chief F.W. Reichelderfer admitted that the bureau's withholding of data from the private sector was contrary to the principles of the free-market system. But he upheld the opinion that private firms should not be allowed to compete with government-provided services. The next year, the Weather Bureau started charging fees for specialized services, an activity made legal in 1935. At that time, fees were called "cost sharing." Before Congress, Reichelderfer explained that fees were desirable, because "if those who benefit bear some of the cost, you may be reasonably sure that they ask for the service because they need it and not because they get it free from the government."
It is important to clarify the role of fees in the post-war years. There were no charges for raw data, but the Weather Bureau aggressively solicited business and charged direct consumers of weather forecasts (generally, large firms). Private meteorologists protested the tax-subsidized competition. Several attempts to introduce legislation banning the Weather Bureau from supplying specialized services, however, were unsuccessful.
Private firms, however, continued to demonstrate their ability to provide competitive services. Consequently, some in government saw that there was less justification for a nationalized weather industry. So in May 1953, the Commerce Department formed a new Advisory Committee for Weather Services. The list of committee members—six private-sector meteorologists, one academic, and the executive secretary of the AMS—must have been a severe-storm warning to those in the Weather Bureau who wanted the old practices to continue.
The committee's recommendations, known as the George Report, were to limit the Weather Bureau's activities to general forecasts and areas where it was believed that private meteorologists could not provide service. Easier access to teletype and facsimile circuits also was recommended. In effect, the committee recommended limiting the bureau's specialized, charged-for services and expanding its "free" services (that is, the collection and dissemination of raw data). The Department of Commerce adopted the George Report, and its general thrust has remained in effect to the present.
The usual justification for government weather services is that no one else could do it. Weather forecasting is considered a "public good."
As economists and political scientists use the term, a public good is something that, once produced, is necessarily available to everyone, whether they pay for it or not. National defense is the classic example: if somebody provides an army, navy, and air force to protect a territory, everybody in that territory receives defense—whether or not he's paid for it. Economists generally conclude that if something has the attributes of a public good, it should be produced by government and financed by levying taxes. But are weather services that kind of animal?
Originally, it was thought that no aspect of weather services could be carried out competently by the private sector, but private firms have proved that a great many specialized services can be marketed to paying customers. But what about data collection, emergency services, and general forecasting?
No one seriously thinks that the private sector can't produce general daily forecasts. There are too many firms—like Accuweather—already producing that kind of information, and the media market is too developed to doubt that avenues of dissemination are available. The reasoning behind government provision of the kind of information used to decide whether or not to take an umbrella to work goes something like this: "Data collection is a public good, and it is the government's responsibility to provide emergency forecasts. Since a general forecast can be considered a by-product of the work necessary to keep track of potentially dangerous weather situations, the government might just as well give the taxpayers something for their money."
The problem with that thinking is that it ignores the misallocation of resources involved in government production. When a service is provided free, there is no real way to gauge people's demand for it or their willingness to allocate scarce resources to producing it.
A good example of such misallocation involves weather forecasts for commercial aviation. Accurate, up-to-date weather information makes it possible to plan the most efficient routings for commercial jetliners. That can make a large difference in airline fuel bills. Yet during the last decade of skyrocketing fuel prices, the accuracy of NWS/FAA aviation forecasts has not been improved at all. Large-scale forecasts are still issued only twice a day, yet weather systems can change dramatically in as little as six hours. According to NASA's Robert Steinberg, speaking at a 1981 symposium, poor routings due to coarse government forecasts could be costing airlines as much as $1 billion a year in wasted fuel.
The NWS and the FAA, however, have little incentive to spend the money needed to improve these forecasts, since they don't charge the airlines for them and, hence, couldn't increase prices to cover the costs. When asked in a telephone interview whether airlines would be willing to pay for more-useful forecasts, United Airlines' chief meteorologist Carl Knable replied, without hesitation, "Of course."
The logic used to justify government provision of general forecasts—that they are a by-product of emergency services—can be turned around. Since it takes the same basic tools to prepare both, it is hard to imagine that a company selling general forecasts would not be interested in warning its customers of severe weather, as well.
In fact, the real argument against emergency services being offered by private firms is not economic at all. It is legal. Most of the meteorologists I talked to take it for granted that only a government agency can handle the kind of liability problems that are inevitable when dealing with an inexact science like meteorology. The mantle of government is seen as a partial defense against negligence lawsuits.
The consumer may question whether that kind of protection is good for anybody to have. Private forecasting firms do carry liability insurance, and there is no logic preventing its extension to emergency services were private firms to enter this field. But would such insurance be so expensive as to constitute a significant barrier to entry in the field?
There is a quick-and-dirty method of disposing of the problem. Martin has suggested that emergency services be shifted from the NWS to the military, which already has the capability in most I areas. (In fact, the Defense Department presently generates the data for the NWS's Hurricane Warning Service.) The plan makes sense if one accepts the military's true role as protecting the life and property of US citizens. It is unlikely that the military will relinquish their weather arms, anyway, so they might just as well put them to peace-time use.
There is still the question, though, whether data collection is a public good. Could anybody else do it if the government didn't?
Although nearly everyone benefits from weather forecasts, very few of us deal directly with the data collector, the NWS. That agency functions as a wholesaler, providing information to commercial organizations that retail it to the ultimate users. The fact that the government fails to charge for its valuable outputs doesn't mean that charging its customers—the airlines, shipping companies, agricultural enterprises, newspapers, broadcasters—is impossible. It simply reflects the NWS's nature as a bureaucracy imbued with a noncommercial mentality.
If a commercial entity were doing the data-collection job, it could continue to function as a data wholesaler but charge its retailing customers. In fact, of course, at least one commercial firm, Comsat, is eager to enter the data-collection business, so it's clear that commercial entities could carry out this function. Clearly, then, weather data collection is not inherently a public good either.
At this point, critics are wont to raise another classic objection against free-market provision of basic goods—that data collection is a "natural monopoly." In other words, it would be a costly duplication to have two or more competing firms operating the satellites, ground stations, and volunteer networks needed to collect the raw data. And if a single profit-making company were allowed to operate, it would have to be regulated to prevent it from charging outrageous prices for the data that only it could provide.
This is the argument by which we came to have regulated monopolies providing telephone service, electricity, and so on. Increasingly, however, economists are challenging the premise of "costly duplication" (see "Two Utilities Are Better Than One," REASON, Oct. 1981). Moreover, the evidence is that even when a single firm ends up the sole seller in a market, any monopoly pricing cannot be maintained when competitors can enter the market with lower prices. The real danger is that, in fear of a natural monopoly, the government creates a most-unnatural monopoly—one that suffers regulation of its prices in exchange for a government guarantee that no competitors may poach on its turf.
What are the chances of privatizing the weather business? Who would be for it and who would be against it? And by what steps could we move in that direction?
Richard Hallgren, head of the NWS, clearly understands the peculiar position that his agency is in. He is conscious of the value of the information that his agency produces. Hallgren told me that he has nothing against the charging of fees to those who tap into the NWS network—except for the probability that revenues gained through user charges would then be subtracted from NWS funding, leaving the agency holding the tab for the bookkeeping costs and without the capital needed to improve the existing technology.
"But if you were a federally chartered corporation like Comsat, you could charge what the market would bear," I reminded him. His response was simply, "It's a Catch-22 situation, isn't it?"
From the point of view of the taxpayer, user charges to companies that use NWS data would be an improvement in terms of the tax bill, but it would do little to rescue the NWS from its difficulties as it struggles to operate as a government agency. The NACOA report estimated that at least $1 billion needs to be invested in improvements to the system over this decade. The only real solution is to free weather service from the nonprofit status of a government agency.
In the 1960s, Comsat took a taxpayer burden, communications satellites, and turned it into an extremely profitable business, improving service in the deal. The National Weather Service is a potential Comsat.
When I pressed Hallgren about the possibility of chartering the government's weather arms, kit and caboodle, as a corporation, he said, "The private meteorologists would scream bloody murder if they had to compete with us."
"But would you like to see 'the National Weather Service' competing in the free market?" I asked.
"I could never support that kind of move," he insisted.
"But what if it happened?" I pestered him.
He smiled at me then and said, "I'd love to run the thing."
Another possibility for the role of data collector is Comsat itself. The company already has plans for marketing specialized weather data from the satellites and has bought up Environmental Research and Technology, a company with meteorologists (Comsat is loath to say how many) working in weather-related areas.
Fritz Snideman of Oceanroutes was not excited by such a possibility, whether it were Comsat or some other firm. He probably speaks for most private meteorologists, who fear that such a firm would be in a uniquely favorable position to provide all sorts of weather information if it owned the raw data. Yet there is no guarantee that Comsat, for example, could best all the competition.
It shouldn't be too surprising, though, to find that private meteorologists are not enthusiastic about privatizing data collection. They now get the data essentially for free. Private weather firms are in the enviable position of having the raw material of their manufacturing process provided at taxpayers' expense. As far back as 1940, the Compton Report warned that the "private sector should not be allowed to acquire a vested interest in the Government's weather data, the gathering of which is financed by the taxpayer."
The electronic revolution is changing the world, however, and private users of the government's weather data may find themselves paying for more and more information from alternative sources. Completely new methods of analyses are being developed—outside the government. As part of its Landsat follow-on, Comsat envisions launching a stereo satellite imaging system that will relay three-dimensional information to the company's data banks. According to its package deal for acquiring the government satellite system, the NWS would pay for the data and then distribute it. NWS policy, of course, is to give it away for the cost of hook-up. Still, Comsat expects to sell the same data to private firms who need updated information faster than the NWS service. Ironically, Oceanroutes is one of the firms that has expressed an interest in buying the data from Comsat.
Besides the obvious vested interests of private weather firms that don't want to have to pay for what they now get free, is anyone making good arguments against privatization? What we might call the noncommercial Weather Establishment is represented by the National Advisory Committee on Oceans and Atmosphere. NACOA's July 1982 report considers—but rejects—both user fees and private operation of the weather system.
The report jumps through some incredible hoops attempting to show that user fees aren't practical. Charging broadcasters, says the report, would be "counterproductive," because in exchange for getting the data for free, the media provide a valuable public service by disseminating the forecasts to the public at no cost to the government. The idea, apparently, is that it just wouldn't do to risk offending the media moguls by asking them to pay!
In fact, of course, media weather reporting is an extremely lucrative business. The broadcast media spend upwards of $1.5 billion a year to present weather forecasts. This is not done "as a public service"—it generates advertising revenue. The Weather Channel is a 24-hour cable service begun in May 1982 by John Coleman, weather forecaster on Good Morning America. It is completely advertiser-supported. I asked Susan Storey at the Weather Channel whether, if government's weather services were privatized, having to pay for their raw data would change the firm's financial picture. "We would anticipate that it would not be a burden," she said. "It wouldn't affect us at all." Not much need for a subsidy there!
And those users who need specialized data—aviation, agriculture, maritime users, and private forecasters? The NACOA report's tortuous logic continues.
How could we compromise the safety of the public by making airlines pay for weather forecasts? The report is seriously suggesting that some of them might just decide to forget about checking the weather before taking off in their $60-million 747s!
And "because agriculture is so central to the national welfare, we regard it as frivolous to propose charging users." Yet in the very same report, the observant reader will note an estimate of the annual savings to agriculture from the government's weather information: $750 million. Also in the report, an estimate of the cost of providing that information: $1.2 million. Yet the taxpayers are to swallow yet another farm subsidy.
And how could we expect merchant shippers to continue sending in about 2,000 voluntary observations per month if we charged them for forecasts? Never mind that the largest participant in the analogous voluntary airline reporting program—United—pulled out last September. The value of the free information it was getting back from the government didn't justify the cost of making the radio calls. So much for NACOA's much-vaunted quid pro quo argument.
By the time NACOA gets around to the private weather firms, it admits that "some form of user fees would seem to be appropriate." But it concludes that the small volume just wouldn't justify the cost of administering the fees.
The committee's treatment of private-sector operation of the weather service is just as superficial. The case for a fully private weather system was presented in testimony before the committee by Steven Hanke when he was a senior economist on the President's Council of Economic Advisers.
The NWS, concedes the report, is faced with a real funding problem—which privatization could solve, by putting weather service into the marketplace—but the report finds "many disadvantages" as well. It is doubtful that quid pro quo arrangements could be maintained under private enterprise. National security considerations present "difficult obstacles." Only the federal government could "deal effectively with private citizens, private corporations, and foreign governments." And besides, says NACOA, we asked the private weather firms, and they all said that data collection and basic forecasting "should remain the responsibility of the Federal government." And this was convincing, of course.
The NACOA report raised the matter of dealing with foreign governments. This issue arises because of US membership in the World Meteorological Organization. Started nearly a century ago as the International Meteorological Organization, WMO arranges the free flow of data among virtually all nations. Even during the Bay of Pigs invasion, the weather bureaus of Cuba and the United States carried on their data flow with no interruption. During the long period when Communist China was an official uncountry, the meteorologists in both governments managed to trade information through third parties.
Yet the claim that only the government is capable of interacting with the WMO is contrived. International meteorologists would not reject weather data simply because it was not produced by a government; global weather data are too important.
There's an obvious precedent with Intelsat. Every member of this international communications-satellite entity is a government agency—except for the US member, which is Comsat. The same situation obtains with Inmarsat, the organization that operates maritime communications satellites.
There is nothing implicitly anti-market about trading for information, and there would be great incentive for businesses to supply data to the WMO in return for international weather data. Trading US data for the rest of the world's data is a nice deal. It is easy to imagine that the cost of transferring US data, paid for on the market, could be recouped by selling WMO's international data to other firms.
The "national security" issue is also a red herring. Defense Department needs and priority during defense-related emergencies can be provided for by contract with any firms operating weather satellites or other weather facilities. Even today the Navy obtains maritime UHF radio communication services via Comsat's Marisat satellites. Comsat maintains required physical security at its ground stations in accordance with Navy requirements. Military bureaucracies nearly always prefer the status quo to the unknown, so it's not surprising that the Pentagon has voiced opposition to weather satellite privatization. But there are no valid reasons for it to do so.
Is anyone in government really for privatization? Apparently, only those watchdogs of the public purse, the General Accounting Office and the Office of Management and Budget. The GAO reiterated its support for real user charges on March 28, 1980:
Federal agencies provide goods, services, and privileges that benefit identifiable recipients. Charging for these benefits is equitable since it assumes that costs are borne by beneficiaries, rather than by taxpayers in general. Full cost pricing also ensures that products whose costs exceed their benefits will not be produced.
OMB has enunciated basic federal government policy regarding the provision of goods and services for the executive branch's use. Its Circular A-76, first issued in 1966 and revised in 1976, provides that the executive branch shall rely on the private sector for its goods and services unless (a) there is no satisfactory source available, (b) military needs take precedence, or (c) the cost would be higher if privately produced. The Department of Commerce's announcement of the pending sale of Landsat and weather satellites reiterated the A-76 policy. And in his Economic Report to the Congress in February 1982, President Reagan stated flatly, "Federal Government action should be reserved for those needed functions that only the national Government can undertake."
Weather forecasting, clearly, is not something that only government can do. Even the part of it that may look like a natural monopoly—data collection—can be carried out by private enterprise. As a valuable resource, weather data ought to be bought and sold; that's the only way we can be sure that enough of it—and the right kind—will actually be produced and that the necessary resources will be invested.
Characteristic of government agencies, the National Weather Service has named an award to volunteers—the Thomas Jefferson Award—after one of the most important critics of government activity in economic enterprises. I think that Thomas Jefferson would be less than happy to be associated with the modern government weather monopoly. If the government really wanted to honor Jefferson, they would follow his advice when he said, "A wise and frugal government which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government."
Patrick Cox is REASON's Spotlight writer and a frequent columnist for USA Today. This article is a project of the Reason Foundation Investigative Journalism Fund.
This article originally appeared in print under the headline "Fair Weather".