Postwatch urges Postcomm to rethink Presstream proposal
Postwatch has written to all Members of Parliament, to encourage them to support the Early Day Motion number 1632, which urges the regulator Postcomm to rethink its proposal to remove the Presstream product from the Royal Mail price control. This action supports the Periodical Publishers Association call for the regulator to change its position and protect the magazine industry – and customers – from the potential of exposure to higher prices. A spokesman said
"We hope that the regulator will look again at its proposal. If it doesn't, magazine publishers will be in the hands of an unregulated de facto monopoly service provider, with no notable competitive options available for years. Postwatch welcomes deregulation, but at the right time and for the right products. The regulator has got it wrong on both counts."
Letter:
February 2006
Early Day Motion 1632: Royal Mail and Presstream
Postwatch, the watchdog for postal services, is very concerned that the removal of Presstream 2 – the second class magazine delivery service – from Royal Mail’s price control will result in magazine publishers being exposed to significant price increases.
We, with the Periodical Publishers Association, support Early Day Motion 1632, which recommends that the regulator, Postcomm, reconsiders its recommendation to deregulate Presstream 2. We urge you to sign this Early Day Motion. Enclosed is a copy Motion’s text for your convenience.
As you will be aware, the UK postal market opened to full competition on 1 January 2006. Companies can now apply to the regulator, Postcomm, for a licence to collect, sort and deliver mail anywhere in the UK. Currently, although the competitive market is developing, it is still at an immature stage. For many businesses, and all households, Royal Mail remains the only company that they can use.
This is also the case for the magazine publishing industry. Royal Mail operates a de facto monopoly with no notable competitive option available, and none likely for at least half a decade. In other words, magazine publishers have no option but to use Royal Mail’s ‘Presstream’ products. We therefore believe it is essential that Royal Mail’s Presstream prices continue to be regulated.
Postcomm’s proposal to remove Presstream 2 from the price control could have a detriment to business customers, with an unregulated monopoly provider operating in an uncompetitive market. The effect could be higher prices for affected businesses, and ultimately for customers.
We would be grateful if you could add your name to this EDM. If you have any queries, or want any further information, please do not hesitate to contact me.
Kind regards,
————————————————————————————————————
That this House notes with concern the recommendation of Postcomm to remove the second-class magazine delivery service, Presstream 2, from price control from April 2006; believes that this is abdicating its responsibility to control prices chargeable by a dominant supplier, Royal Mail, whose de facto monopoly has been granted by Postcomm; fears that magazine publishers will be exposed to significant price increases due to lack of regulatory controls and no notable competitive option for at least the next five years to the ultimate detriment of consumers; and urges the Government to suggest to Postcomm that it looks again at this recommendation following, as it does, so soon after the introduction of size-based pricing and the changes that Royal Mail have introduced in the move from weight to size-based delivery.
Please add my name to Early Day Motion 1632: Royal Mail and Presstream
Signed…………………………………… Name……………………………………….
