Consignia warns on speed of opening market
The postal market could be open fully in just half the time intended by regulators because of a loophole in plans gradually to end Consignia’s protected monopoly, the company will claim next week.
The warning is expected to escalate a row between the Royal Mail group and Postcomm, the government regulator, over its proposals for introducing competition.
Postcomm has already had to delay the implementation of the scheme after political opposition from unions and Labour MPs forced an extension of an earlier consultation period. It has given its critics until next Friday to argue against the scheme.
In its submission to the regulator, Consignia is ex-pected to argue that the plans are badly drafted and could allow complete commercial freedom for rival operators by 2004 rather than the 2006 deadline envisaged by Postcomm.
Yesterday, the regulator said it would consider the criticism carefully, but insisted it was not its intention to dismantle Consignia’s monopoly so quickly.
The loophole identified by Consignia concerns rules allowing companies to collect mail from small customers and then “consolidate” the items before passing them on to other private operators for sorting and distribution.
Initially, Postcomm has proposed that consolidators can only pass items on to Consignia for sorting and distribution. However, the second stage of the competition proposals suggests there should be a relaxation of this rule, allowing private companies to take part in both stages of the collection process.
Consignia fears this will allow its rivals to circumvent rules designed to stagger the introduction of competition by limiting initial services to customers who send bulk deliveries of 500 to 1,000 letters at a time.
If consolidators can collect smaller quantities of letters from individual customers before aggregating them and passing them to bulk mail companies, then the rules could, in theory, allow anyone to send letters through a private operator.
“If Consignia makes a strong case to us about consolidators then obviously we will look at that,” said Postcomm.
“So far we have only said we will review the restrictions on consolidation licences to decide wether operators have to pass the mail to the Royal Mail or whether they can pass it to other operators such as the bulk mail providers,” it added.
The issue is the latest of Consignia’s objections, which are designed to turn up the political heat ahead of Postcomm’s final decision.
