Action for Libraries

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ACTION FOR LIBRARIES
May, 1986
Volume Xll, No.5
EAR OF SERVICE TO LIBRARIES
,SN: 0363-0250 ( MAY 20 1986 \ Editor: Joyce Coyne
Assistant Editor: Mary Flowers
\ Unresolved Contract Issues Betwee criteria sho ave rights to handle all new products for their
Networks and OCLC
by David Brunell
For the last three years OCLC and participating networks have
been involved in negotiations for a new contract. While a
nUffi.ber of significant problems have been resolved, four crucial
issues remain in contention. These issues are:
......... II&O~_t6rraries if they wish. OCLC believes that the networks,
or some networks, may be the appropriate vehicle to handle new
products, but that a conrractual obligation to do so might cripple
OCLC's competitive ability in the future.
1) Should OeLe be contractually limited to one price
increase per year of no more than 10%, and should oeLe
charge the same price for products and services to every
network? The network position is that multiple increases in
Oele products and services during a single year cause serious
budgetary and planning problems for both networks and our
member libraries. It was conceded that OCLC could pass along
price increases on purchases of goods and services, such as
telecommunications. Oele's position is that the once .. per .. year
limitation on all price increases and the 10% cap on such
increases would limit theiT ability to respond to competitive
circumstances and future market factors. They concede that such
limitations might be feasible for the basic online services.
On the uniform pricing issue, the networks felt that unifo~ .
most~favored·customer pricing for all networks is a basic tenet of ---­networks
and Oele as cooperative, membership organizations.
Moreover, the Network Directors felt that any deviation from
uniformity of pricing to one network, particularly in price
reductions, amounted to a subsidy unwillingly provided by other
networks and member libraries. It was felt that this would
increase pressure on the other networks from their members, and
properly so, to demand similar reductions, and lead to continuing
legal battles over prices. OCLC's position is that, while they are
committed to dealing evenhandedly with all participating net­works,
there are special situations in which it might be advan~
tageous for OCLC to depart from this policy. They were
particularly concerned about the need to meet competitive
situations in one geographical area without having to reduce
prices nationally.
2) Should networks have the right of first refusal to
handle all new OeLC products and services? The network
position is that OCLC should propose appropriate criteria
allowing for network participation, and networks meeting the
3) Should the new contracts be binding for several years?
The networks propose that the new conrracts exist, for all
networks, for a fixed term of five years, with automatically
renewable one~year terms, unless either party gives six months
prior written notice of intent to terminate. It was felt that this
would give some guarantee of stability for network services.
OCLC's position was that the core conrtact term should be
indefinite with six month or ninety day termination provisions,
and with OCLC guaranteeing not to exercise its right of
termination during the first six months of any contract, giving, in
effect, a conrract term of at least one year. They felt that the
shorter term was needed to guarantee that they have sttong
network representation at the local level to meet increased
competitive pressure.
4) What are the rights for the use and transfer of OeLe­derived
machine-readable records by networks, General
Members, and OeLe? Essentially this issue revolves around
OCLC's copyright claims, and the legitimacy of close conttol of a
cooperatively developed database. The networks feel that more
burrently ongoing activities, such as retrospective conversion and
small library cataloging, should be permitted by networks or
General Member Libraries, without prior OCLC approval. They
also feel that the development of new products from the database
should be encouraged, rather than discouraged by strict regulation,
and that all decisions on uses of the database by the OCLC
Managment Database Committee should be appealable to the
Principles and Guidelines Advisory Committee. Furthermore,
the networks indicated that the Guidelines {and conrtacr}
should not restrict uses of data by member> libraries after
termination, Oele's position is that their goal is to preserve the
integrity and economic viability of the database and the shared
system, while providing member libraries with the widest access
to records for resource sharing. They feel that thc copyright and
current Guidelines do this and should be cited and enforced by
the contract provisions.
All four of these issues are complex and have a significant
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