 Hello everyone, welcome to my presentation on giving open source software tax break. I think by now you should all be familiar with the format. So this is a prerecorded session and my digital version on the bottom left will guide you through the presentation while I'm available in the chat to answer any questions you might have. Before we start, I do sentences to myself. My name is Sven Frank. I'm German. I work for NECCD, which is a free software publisher in the north of France, actually not so far from Brussels. And I mostly work on administration and application for European and French R&D projects. And I'm also the Treasurer for the Funded Rotation du Libre, which applied to hold this presentation today. It's an endowment fund. I will also use the abbreviation FDL now because my French pronunciation. It's still lacking. So every time I talk about FDL, it's the Funded Rotation du Libre. For today's presentation, it took me about 20 minutes. I will first explain you what is FDL, what is the French Endowment Fund. I will give you some examples how you can use tax breaks to finance open source software. Afterwards, I want to introduce a few examples of projects we either have completed or which we are currently working on. And I'll close with some takeaways, which for me are the points which you should have, you should take away from this presentation. So let's start. FDL, it's, like I said, it's an endowment fund created in 2018. I don't know about the specificities in other countries, but in France it's relatively easy to set up an endowment fund. You basically have to define the statutes and submit them to the Prefecture for validation. And once it's validated that your endowment fund is in the way it's set up, is serving a general public interest, then you're more or less ready to go. For us, the idea to FDL was since, at Next City, we do quite a lot of government-sponsored R&D projects. We wanted to replicate this procedure of applying for R&D budgets and projects within FDL. This means we require a dossier for every project which is to be undertaken. We have an expert committee currently with three panel members who evaluate proposals and who, on the one hand, have to assure that it's serving general public interest. And on the other hand, that it's a project they would recommend the FDL to finance. Once this is done, and it's financed, projects will, well, the other way. First, I want to talk about the tax exemption. So, the Fondo dossier or endowment funds in general, they finance themselves through donations. So, in France, there's two levels of donations, one is 60% and one is 66%. One for corporations and one is for individuals. I have some details on every slide, if you scroll down. We either provide links, like in this case, or some more explanations. Instead, there's two versions or two different rates you can use for corporations that can reclaim up to 60% of donations. Up to 2 million euros or it's capped at half a percent of the annual turnover. So, if you're a company and you're making 1 million of turnover, you have a cap of 5,000 euro, which means you can make a donation of 5,000 euro and can claim back 60% from taxes you will have to pay in the future. So, that is 3,000 euro. For individuals, the percentage is 66% and the maximum is 20% of your taxable income. So, also an example, if you have 40,000 euro taxable income, you can donate 8,000 euro per year and recover 66% of it from taxes you have to pay. So, a donation of 2,000 euro would mean you could have a tax exemption of 4,320 euro. To give you two examples, how this works. So, imagine you have a company and you donate 10,000 euro to FDL. You can claim back 6,000 euros at the end of the year on the taxes you will have to pay. FDL on the other side would receive project proposals to finance the development of certain open source software or similar proposals. Let's say it's a software project in this case and some features had to be developed. So, we would run this project proposals by our committee who have to evaluate it. Like I said earlier, and if they agree and approve, then it's a project FDL will undertake. So, eventually they will pay the developer 10,000 euro for adding this case feature 1, 2, 3 to the software. A variation to this is if you also utilize what is called in France, crédit d'un pôle de recherche. So, it's also a reimbursement on tax you have to pay for R&D activities, not for research activities, not development. So, if I do the same example, a company would donate 7,000 euro to FDL. It could claim back 4,200 euro at year's end. At the same time, a project proposal which now doesn't have development but research items, so which is a research project more than a development project would also qualify for the crédit d'un pôle de recherche, which means you could still finance a project worth 10,000 euro and in this case FDL would pay 7,000 euro to the developer and the developer could claim back 3,000 euro for his research activities from the taxes he will have to pay. So, same result you can finance projects of up to 10,000 euro doing it like this. My next one to talk about actual projects, where we applied both of the approaches. I will start with an easy one, which is similar to the first example I showed, it's JXR. It's open source software. If you don't know, JXR is an online JavaScript spreadsheet editor. It's developed by a single developer in the UK called Mosanova and FDL financed the development of a new release of his software, which was published in April of 2020. For us it was actually the first project we undertook, a project where we also wanted to check whether the process we had set up was working as we intended it to do. So, after we were approached regarding sponsoring the development of a specific feature set in JXR and after we went into contact with Mosanova, we developed a dossier together and had it validated by our committee and then made a contract for the development of the features. And like I said, once it was published in April 2020, we paid, it was also 10,000 euro and the project was completed. We look at the second project, which is currently ongoing. It's in the open hardware area. We call it currently open radio system. It's not software development. We are actually with FDL acquiring the technology of a remote radio hat. Our age, if you don't know what it is, of course it's the box and the picture. It's a device which you can use to extend the range of telecommunication networks. So imagine you want to have cell phone service in a subway tunnel. This is a box you would put there, which doesn't have a lot of range, but it can transmit a signal either 4G, LTE or 5G in the white corners of your network, which are hard to access. And the objective of acquiring the technology is to afterwards publish the PCB design files and bill of materials under an open source license. So some more info, the whole idea came about when we were approached last year by a small teleco provider who was closing down and to ask if we were interested in acquiring the technological assets, which included the remote radio hat. And since ethnic CD, we were involved in an in an R&D project four years ago, which topic was to create an open source telecommunications provider. So trying to research whether it was possible only with open source components to do all, to do everything you need to do to become a teleco provider. And that that project we already saw back then that the remote radio hat not that they're not being an open source remote radio hat was a blocker and we, yeah, back then we didn't have any solution. So for us it was interesting once it was proposed to us to acquire the technological assets to say, we could do this and we could publish it, the PCB design and the bill of materials under open source license. So everyone who is in the field of software defined radio signal processing open source radio would have one missing component to building a complete solution. So long story short, we started to look for funding to do an acquisition and current status is that we finalized an acquisition contract and it has been signed and we're in the process of transferring the technological assets and trying to validate A, it's complete and B, whether it's, it is sufficient to reproduce the technology and to for us and also in the next step for, for any third person who wants to use what we will publish once the project is over. So the next project, a compliment to the open source and the open hardware projects I talked about just before it's open service, or the, we call it currently the hyper open initiative, it's an initiative created by FDL. And we already will so it's in the cloud area. We already have to cloud providers trying to implement the idea. What we came about from where you all know currently interoperability in the cloud is, is a topic much discussed about with initiatives such as guy X and also reversibility is just as important and we thought that Imagine you're using open source software you're using open hardware, but if a service is not open you can never completely reproduce a cloud solution or a cloud service. So our idea was to create an initiative and to, to try and establish open service as an, as an equal part next to open source software and open hardware, and to apply the for freedoms of free software to do the service industry. So it means open service means that a service has to be usable. You have to be able to study how it's made you have to be able to modify it and you have to be able to become your own provider of that service. In the cloud for us this means that there must be transparency about what suppliers are using what components what procedures. And yes basically to formalize this into something which cloud providers interested in could cooperate with us we said let's create an initiative which we call the hyper open initiative and the current status. As early as we already have to cloud providers who are interested in implementing it and for us this means there are two, two, two companies which with whom we are working together to, to look how this can actually be done what needs to be documented to make a service reproducible. And yeah, we are working on documentation quite a lot and also in parallel we are trying to create the underlying association and structure for, for this initiative. Next project, we're going into open data it's also it was the second project we were working on at fdl. It's called AFS dot one awesome free software. It's a directory of European open source software publishers and with the selling proposal with the unique point that it's focusing on success cases for us. It's, it's a question we often run into if we are in sales trying to sell free software there, we suddenly get asked how many stars does the software have on GitHub but we get asked, okay which large industrial is using this. Can you show me an example, or where is this used in a public administration, where we can actually see what it's doing. Based on getting this question a lot of times we thought why don't we do like a yellow pages of European open source software publishers, but based, not based but using showing showing the use cases, and to make the whole thing and an open and format so the links are up there for everyone to check out if you're interested so we have all the data and Jason format on a good repository you can contribute to it and the idea is to have that data exportable and integratable in third party applications. To be able to, if you have a catalog of famous proprietary software one and the catalog of famous proprietary software two that you also have the possibility to create a catalog of free and open source software publishers and their solutions, including the success cases. And in the first step or this was our first. So we used the first two nations we had in this project to create the first the website which at that time had about 150 publishers and their solutions and success cases. It's currently still at that level, since we didn't have the budget to continue all the time to continue working on it. It was in 2019 where we also mentioned it during the European Commission's workshop on the future of open source software and hardware. And we were, you know, we did to follow a pitch project for a bigger initiative on European level, but nothing came out of it to this point unfortunately but it was still interesting to discuss and work on it. The current status is that we have a backlog of about 150 publishers we would like to add. We also need to update also the financial indicators and also improve filtering and export of data so it's easier to use and easier to integrate. So if this is a project you like to contribute to we're very happy to accept donations or also contributions to add more software companies to the directory. The last example I will talk about is from the open policy area. It's about the health data hub. If you're not from France you probably don't know it it's a French platform created by the government to collect hospital patient data. And the contract was awarded to Microsoft in what later turned out to be a very questionable process and FDL was involved in financing to lawsuits based one based on the tender process or the lack of the tender process and the second one regarding The two lawsuits are filed by an association called Santé Naton. It's a group of IT companies and non-profit organizations who work in oil fields relating data protection in the health sector. And the CNIL ruled at the end of the year the CNIL is the Commission National d'informatique Liberté so I would say the National Commission for data privacy. It ruled that in fact the health data hub needed to provide short term guarantees to to assure that the data stored on this platform with Microsoft was not accessible by foreign governments. If you probably are all familiar with the cloud act and similar simulation which gives access to data stored on servers of American companies no matter where they are located. So it was said that this was not okay to use Microsoft for storing these type of sensitive data and the second request aside from providing guarantees was to also migrate the platform to a French or European provider. So I think this was November, December last year so it's still a topic which is far from over and in my opinion and also if you look at the last decree of the outgoing president. One was on requiring US cloud companies to verify the identity of foreign individuals using their services so I think this would be an until there's a real migration to to a French or European provider. I remember there was also a tribune last week which talked about this in France which said this should not take five years or three years this should be done quicker. So it's a topic far from being over. But speaking of being over that was almost my last slide. I'm coming to the takeaways. What you should take out of the last 15 to 20 minutes. First point software is eating the world but it's also is often found out in numerous studies nobody is really paying for open source software. But provided the legal conditions endowment funds can be a tool to to facilitate or to incentivize investing in open source software development. Maybe this is one of the reasons why the French ecosystem of free software providers is so vibrant and active, because it's it's easier to finance. And in fact, the development of open source software here in France. And since it's a topic continuously being discussed on European level for, well, I guess for quite some time now. And since for me, one of the advantages advantages I see in Europe I always talk about is that you have 27 different attempts to to solve certain problem and just by looking abroad at how, how other countries are doing. And if you're able to pick things which work in in countries that are successful in certain things, you, you have more. Yes, there's more chances to find the best practice. And I don't want to say the French model is the best practice, but maybe it's something which which warrants attention, which could be replicated elsewhere on national or maybe even on on on European level. It's also remember another tribune from Julia Radar a few months ago which was asking for just that was the Europe's Open Technology Fund, where she was talking about similar things. And I don't know if it's a fund or if it's tax incentives, but if the topic is also like in another initiative, public money, public code. I think if you take the general interest and if you can argue that open source software is in the general interest and it could be financed as being a general interest item. I think it opens quite a few interesting doors on what you could do with open source software and how you could finance it. This is the end of my presentation. I'd be available for questions. I think the next 10 minutes and afterwards as well. So, let me know if any of the projects interested you if you have any follow up questions and thank you for your attention. I hope you can enjoy for them in the online version that it is and I'm looking forward to hopefully next year, having a real for them in Brussels again. Thank you very much and bye bye. So, we are live for the Q&A session. Thanks Frank for your talk. That was quite interesting. And yeah, I think financing free software project is always an issue. We now have seen how you do this in France but do you think governments have to invest more money in free software projects and they do you think they should support it you also mentioned the tech fund for example. So what are your ideas here and also maybe on a national but also on a European or even global level. Do you have any ideas here on that. So, let's say, basically to answer. Yes, of course governments need to finance free software free and open source software I think there's already quite a few things which exist from look on European and French level to the projects at the funds like horizon. I think it's 2027 now. We are also participating in it usually they all require the software to be developed to be open source. So, I think on this on the one hand this is a nice direct way to finance free and open source software. The vehicle I described in my talk is an indirect way, which I think also helps because you can for example now see it with the plan de relance or the recovery plan from COVID, where, at least here in France. What the administrative infrastructure to handle a lot of small projects. So, the recovery funds, usually I think they start at 50 million or not, or higher so all the small and medium enterprises are more or less. They participate in project calls like this because the budgets are much too large so I think you really have to look at it from two ways on the one hand what direct forms of financing can you provide for free and open source software and what indirect tools or vehicles. Can you set up or support that also allow to finance free and open source software in a much more broader scope. And what are your experience with the administration part of it. Normally, if you work together with governments or administrations, you are confronted with a lot of paperwork for example. So what is your experience here is there anything which should be or could be improved or is this working quite smoothly for you. So it's a lot. I think it's also important to have it because I mean there's also a due diligence on the side of whoever provides the funding who decides to give public money to finance a certain project so it's necessary to have the legal. And security also on behalf of who is financing to make sure that the money goes into projects which really have the potential to turn out something and it's not wasted so I don't know how to simplify it it's a lot. I mean currently for projects and it's, it's, it's, yeah it takes time let's say it like this but it's, it's also okay and I mean let's say you have economies of scale if you handle more than one project because you can, like from the administrative side at least from a participant you can, you can reuse templates for reports and so let's say you try to cut corners on the administrative side when you have more than one project so that that helps. Yeah, so once, once you figured out how it works then it's getting easier by every project you are running right. Yes, let's say that it helps let's say like this of course there's differences on national and European projects, but still you can like the, even for the project applications we always use the same template, and you can more or less streamline a lot of things. Like this. So, yeah, but it's important so I like that these possibilities exist I wish there would be more. Maybe also coming back to your earlier question because I think how to say open source has or free software has a is a general interest topic. Looking for good example. I think what we've seen just currently is the corona tracing apps so this is something everybody every country needs and especially in Europe we speak so many different languages and but also we are traveling a lot across borders and therefore it's a good idea to have solutions in place and you know also think national and European funds would be very helpful to support these kind of projects and this is for me at least to take away from this crisis so. Yes. I was happy to see so many initiatives trying to work on open source software solutions to respond to cove it. What was talked about in the earlier panel. And I think there's how to say a society is the sum of contributing I always say open source is like, they're like as a, everybody can make a contribution. And it's a bit similar to society where everyone can make a contribution so I like the idea of having an open system where we can contribute to and you will have the potentially the ideas of everyone and the knowledge of everyone rather than something, something that's cooked up by a few people. So, I'm a defendant of the idea that the more people contribute their ideas and capacities to to something the better solution will be in the end so. Yes, I think it's very worth supporting. That's definitely true and I think these are also good. Final words for this talk. We're handing over to the compilants panel, which will happen directly after this talk. Thanks a lot to Sven for this talk and for being here for the Q&A session. Enjoy the foster also the death room here on legal and policy staff. And yeah, thanks a lot for for being here and see you later and yeah, thanks for joining. Thank you very much for having me. Bye bye.