Data sharing could jeopardise taxpayer-funded forecasting agency profits

Sunday, 6 January 2019

Niwa's new supercomputer, unveiled in November 2018, is the most capable computer in the country.

Open access to weather data could jeopardise the profitability of New Zealand's two taxpayer-funded forecasting agencies, government officials believe.

It might also blow apart the model set up more than 25 years ago, which has state-owned enterprise (SOE) MetService as New Zealand's official weather forecaster and the National Institute of Water and Atmospheric Research (Niwa) as a Crown research institute (CRI) with one of its focuses on public-good climate and weather research.

Documents released to Stuff under the Official Information Act highlight potential repercussions predicted by the Ministry of Business, Innovation and Employment (MBIE) if more weather data is made available to private forecasting companies, such as WeatherWatch.

Dissatisfaction with successive governments' handling of MetService and Niwa's dominance of the weather sector has grown in recent years.

A June 28 MBIE briefing for Research, Science and Technology Minister Megan Woods says extra funding 'would need to be provided by Government to Niwa and MetService to compensate for the loss of revenue caused by making data use less restrictive'.

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However, the detail in the report of the likely cost for each agency of opening up access has been withheld, citing commercial sensitivity, the protection of obligations of confidence, and to enable the 'free and frank' expressions of opinion by ministers and the organisations.

Dissatisfaction with successive governments' handling of MetService and Niwa's dominance of the weather sector has grown in recent years.

The wrangle about access to what has been advertised as 'open' data is one issue; the second is Niwa's move into weather forecasting, which some say confuses the public about who they should listen to and which means taxpayers are actually paying for two, competing, government forecasting organisations.

An earlier report on open-access weather data for MBIE by PwC and Experian, Weather Permitting, had concluded:

- New Zealand weather data was mostly not open access.

- Restrictions caused by the funding and governance models used to set up Niwa and MetService discouraged other businesses from using the data.

- Opening up significantly more data would require a change to MetService and Niwa's structures and need extra government funding.

Last year WeatherWatch complained to the Commerce Commission claiming MetService was engaging in 'misleading advertising', but that was rejected by the commission before Christmas.

Managing director Philip Duncan had said delays of up to six hours in releasing publicly available weather information from surface and upper-air observations meant the data was of limited use and was affecting its forecasting business.

The MBIE briefing suggests five options for improving access to data, ranging from the status quo to the Government buying data, to regulatory and structural changes of both agencies.

A fully competitive market for data would require 'significant structural change' to the CRI and SOE models under which Niwa and MetService operated, it says.

MBIE has recommended option two – negotiating changes based on the amount of potential lost income and other risks. Benefits would need to be weighed up against the costs of running the weather instrument network, it says.

'There would likely be a reduction in commercial viability of MetService and Niwa, particularly if funding does not keep pace with cost increases.'

There might also be a low risk the 'quality of public information may be compromised, and confusion created among the users of weather forecasting as to which source of forecasts is most reliable'.

Philip Duncan, managing director of private forecasting company WeatherWatch.

The report says all of MetService's revenue comes from contracts - 40 per cent from its agreement with the Minister of Transport to provide public forecasts and a warning service - rather than from direct government funding.

A paragraph on Niwa funding has been redacted, although elsewhere the report says the Government does not buy any short-term forecasting services from Niwa. Contracts with MBIE and the Ministry for Primary Industries constitute between 60 per cent and 70 per cent of Niwa's revenue.

'There is a risk that making more data available for free may transfer value from MetService and Niwa to commercial users or large multinationals with limited net return to New Zealand consumers or taxpayers,' the report warns.

Given the funding models of each, where possible 'Niwa is encouraged to take on board the Government's open-data principles, while MetService is invited to take on board the principles, without undermining commercial mandates, of each of the entities'.