NextBus Information Systems responds to this piece here. Kind of.

When Steven Peterson created Routesy, an iPhone app that lets riders see Muni arrival times, the last thing he expected was to hear was that Muni’s real-time arrival times were actually the property of a private company located in the East Bay. But that’s exactly what happened, when Alex Orloff, COO of a company calling itself NextBus Information Systems, contacted him in August, 2008, demanding a “straight revenue split” or a “data licensing agreement” from Peterson.

In other words: this company says that the NextBus predictions generated by Muni — a public agency, owned by San Franciscans — don’t belong to San Franciscans. Want to use it? Sure, that’s fine — they’re happy to rent it back to you for thousands of dollars a month. And the worst part is: even though their ownership claim is probably bogus, nobody’s ready to fight it in court.

The story of how public data became the property of a private company — or maybe it didn’t — starts a few months ago with Steven Peterson, a San Franciscan web developer who wanted to build a better iPhone app because he rides Muni every day and likes data. “I used to live in the Union Square area and had to ride the 30 or 45 to CalTrain. I realized that if I could come up with an app that could give me the precise time I needed to be at the bus stop, I could sleep 10 more minutes. Then I realized that other people might want to sleep in, too, so instead of making it just for myself I made it for everyone.”

Instead of letting us see when our buses are coming, NBIS locked the arrival times in an imaginary vending machine. This would be like if advertising giant Clear Channel waltzed into the subway stations, tore down all the Muni maps, and then offered to sell them back to you at a steep markup.A company called NextBus placed transponders on all Muni vehicles so they could be tracked; their arrival predictions are displayed in stations, bus shelters, and in their own online and mobile applications. But don’t confuse NextBus with NextBus Information Systems (NBIS) — a separate company represented, at least in this case, by a guy named Alex Orloff who seems to be laying claim to the data produced by NextBus.

Last fall, after determining that the Routesy’s user numbers were pretty low (at that time, about 990 people had downloaded the $2.99 app from Apple’s site), Orloff emailed Peterson again, saying “I don’t think there is a workable potential licensing arrangement for your application. You do not make any recurring revenue and we typically quote a price in the tens of thousands of dollars per month to license the prediction data feeds.” He demanded an “orderly shutdown process.”

After Orloff made his shutdown demand, Peterson did a little digging of his own, and realized that though the company Orloff spoke for, NextBus Information Systems, shared a name with NextBus, the arrival-prediction company responsible for giving you news like “Next 33-Stanyan in 148 minutes,” the affiliation between the companies was tenuous, at best. He called Orloff’s bluff, told him he had no right to shut Routesy down, and the conversation seemed to be over.

That is, until Orloff reared his head again about two weeks ago. This time, he went to Apple, and in an email to the company dated June 12, Orloff said

We demand that you do not approve any updates for the App Store application “Routesy” until the application developer has licensed the NextBus real-time prediction data from us, or removes the use of NextBus data from his application. As I have mentioned numerous times in our previous discussions, NextBus Information Systems Inc. is the sole agent for commercial use of the NextBus real-time prediction data in the United States and has exclusive rights to distribution of this data to mobile phones. The Routesy application downloads and republishes this copyrighted data which is damaging to us.

Apple complied with Orloff’s requests, and since the 12th, Routesy, as an app, has been dead. In an effort to revive it, Peterson fired back, offering to make Routsey free, in hopes of negating the argument that the data was being used in a commercial fashion. Orloff’s response:

Our Franchisee rights cover commercial use of the data, as well as exclusive rights to distribute the NextBus data to mobile phones. Furthermore, we do not view free applications on the App Store as a non-commercial use of the data. The Apple Store is currently using the tagline “Your iPhone gets better with every new app.” If Apple wishes to promote iPhones by releasing a free version of Routesy, we would be happy to have Apple pay the licensing fees.

(Good luck sending Apple a bill for that, NBIS.)

This move doesn’t just deprive Peterson of an opportunity to tinker — it deprives all San Franciscans of access to arrival times. Instead of letting us see when our buses are coming, NBIS locked the arrival times in an imaginary vending machine. This would be like if advertising giant Clear Channel waltzed into the subway stations, tore down all the Muni maps, and then offered to sell them back to you at a steep markup.

“The outpouring of support I’ve gotten since Routesy got killed has been amazing. All these people, sending me messages of support over what is basically a broken app. It’s really heartwarming to see so many people so passionate about using public transportation. This is the wrong city to mess with.”

So, why does NBIS seem to speak for NextBus, and does a private company indeed own Muni’s data? We asked NextBus about their relationship with NBIS. They refused to comment, “due to legal issues.” So, neither a confirmation nor a denial, eh?

Peterson did us one better, and corresponded with Owen Moore, President and co-founder of Grey Island (the company that owns NextBus). Moore told Peterson that when Grey Island acquired NextBus Information Systems in 2004, they made an agreement that says:

A franchise right has been granted to the seller of the Nextbus business, Nextbus Information Systems Inc., for a period of 25 years, renewable for a further 25 years. The franchise relates to advertisement and subscription services of Nextbus and it is agreed that the Company will contribute towards the development of any product as it relates to the Franchise Agreement, contingent upon the mutual agreement between Company and Nextbus Information Systems Inc. Such development costs are to be borne equally by the parties, to a maximum potential contribution by the Company of US$200,000. To date, no development costs related to advertisement and subscription services have been incurred

.

But were those rights Grey Island’s to promise to NBIS? Muni spokesperson Judson True says otherwise. In fact, he says that, no, Muni owns the data in question and that the public is, of course, entitled to access it. In fact, he went even further: Muni isn’t just giving us all permission to access the data, they’re also committed to finding ways to make it easier to get to it. So that means that independent developers should have unfettered access to develop whatever nifty little apps they want.

When we told Peterson about True’s statement to us, he was silent for a moment. Then “Awesome. That. Is. Awesome.”

In the last few days, Peterson has been hard at work on a web-based version of his app, but is now hopeful that with Muni’s statement of support the app can return to Apple. But , while we’d love to say that it’ll be smooth sailing for Steven and his app from here on out, what we’ve seen so far from NBIS suggests that this story is far from over. We’ll keep you posted.

Thanks to Greg Dewar for his insights as we prepared this report.