Guernsey Post postal licence change rethink

GUERNSEY Post and its watchdog will consult again on proposed changes to its operating licence.
The Office of Utility Regulation now suggests scrapping and replacing condition 18, which contains the clauses that specify the conditions for price regulation.
‘The OUR’s aim with this proposed modification is to clarify further the services intended to be regulated under condition 18 of Guernsey Post’s licence,’ said director-general John Curran.
The OUR’s initial attempt to regulate prices of postal services through its licence – as distinct to regulation law and postal law – was appealed by the company in October 2004. This is ongoing.
Behind the appeal was Guernsey Post’s concern that it would lead to regulation of prices in competitive markets, where it believes it is entitled to a level playing field. However, the OUR argues that the October modification was ‘a tidying-up exercise’ and that there would be no increase in the watchdog’s powers.
The new section 18 states powers can be implemented only where ‘a licensee has a dominant position in the market’.
Guernsey Post managing director Mike Hall said: ‘Customer confidence comes in many forms but formally it comes from the independent scrutiny of the OUR, the authority that issued the licence.
‘In the same light, Guernsey Post believes that it should be free to participate in the competitive part of the postal market on the same basis as any other operator.
‘From discussions with the OUR, it is quite clear that the regulator recognises that, as a commercial company, Guernsey Post wants to compete effectively in all parts of the postal market and the OUR is keen to encourage such competition.’
It contested the initial decision to amend its licence as ultra vires, disproportionate and unreasonable, but informal discussions seem to be leading to agreement. The director-general is contesting the appeal and does not accept any of the grounds for appeal raised by Guernsey Post.
The OUR said that the aim of the new consultation paper was simply to specify which services came under regulation and that market power was the determining criterion. It is not compromising its authority.
In a statement, the watchdog said: ‘The director-general believes that the proposed modification may address certain of Guernsey Post’s concerns whilst ensuring that the director-general’s powers under the law are preserved.’
Mr Curran added: ‘In those markets where the company is found to be dominant, the OUR will look to examine what further regulatory scrutiny is required. I am grateful to Guernsey Post for the constructive approach it has taken on this issue.’