UK Postcomm proposes new licensing arrangements for postal operators

Postcomm today (Thursday 19 May) set out its detailed proposals for the licensing arrangements for postal operators in the fully liberalised postal market.

From 1 January 2006, the UK postal services market will be fully open to competition and the aim of these new licensing arrangements is to encourage new operators, while ensuring that customers can continue to have confidence in the market.

Under Postcomm’s proposals, the new licence would:

• Be issued – as at present – for a minimum of seven years. Postcomm believes this period provides licensees with sufficient certainty to encourage new operators to invest in the market.

• Require each licensee to provide information about its own performance, so that customers can make informed choices between different services and different operators.

• Require licence holders to set up systems to handle customer complaints.

• Introduce two codes of practice – one requiring licensees to ensure the safety and security of the mail they handle (mail integrity) and the other dealing with operational issues, including handling wrongly addressed and mis-delivered mail (common operational procedures). Postcomm is currently consulting on draft versions of both codes. (See notes for editors.)

• Require licensees to provide financial guarantees, or to have a contract with another licensee, so that customers would be protected if their own provider went out of business, with mail on hand.

Postcomm remains concerned that these licence conditions might present a barrier to entry for some smaller operators. It will review this aspect and consult later this year on a specially-tailored regime for smaller operators. In the meantime, anyone who wants to seek a licence under the proposed new arrangements is encouraged to do so from now onwards.

Commenting on the proposals, Nigel Stapleton, Postcomm’s chairman, said:

“The right licensing framework is a key contributor to making the new, open postal market work well in practice. We believe these proposals set out a fair way forward and strike a good balance between protecting customers and allowing new operators to come into the market.

“We remain concerned about how smaller postal operators may be affected by the licence requirements. We plan to examine this issue further and we will consult again later in the year on a specially-tailored framework for the smaller players.”

Notes
Postcomm plans to bring all existing licences into line with the new form before the market is fully liberalised on 1 January 2006 and will shortly begin discussions with all nine licence-holders on how best to achieve this.

Under the Postal Services Act 2000, operators require a licence to provide postal services costing less than £1, or for items weighing less than 350g, where those services are within the scope of the Universal Service.

Today’s document – “Licensing under the Postal Services Act 2000: Licensing framework in a fully open market. A proposals document” – was drawn up after a three month consultation with postal services providers and customers, and includes a draft licence, a draft application form and proposed guidance to applicants. It is published on Postcomm’s website at www.psc.gov.uk. Printed copies are available from Postcomm at 6 Hercules Road, London, SE1 7DB.

The deadline for responses is Thursday 30 June 2005.

This new consultation follows a three month consultation with postal services providers and customers launched on 30 November 2004: “Licences under the Postal Services Act 2000: Licensing Framework in a Fully Open Market”. Postcomm received 21 written responses – 19 are non-confidential and these, together with the document itself, are available on Postcomm’s website.

Royal Mail has separate licence arrangements. However, our intention is that the company will be required to comply with the two codes of practice. (Separate consultations on the two codes – for mail integrity and common operational procedures – were launched on 18 March 2005. The closing date for responses is 17 June 2005. Full details are at www.psc.gov.uk.)