POSTAL SERVICES COMMISSION / LICENSING CAN DELIVER POSTAL COMPETITION IN EUROPE

POSTAL SERVICES COMMISSION / LICENSING CAN DELIVER POSTAL COMPETITIO N IN EUROPE
From HERMES-GOVERNMENT PRESS RELEASES, June 20th, 2001

SAYS POSTCOMM CHAIRMAN
Postal competition in Europe might develop more effectively if member states were to abandon the areas reserved for their domestic monopolists in favour of a licensing system similar to that being pioneered in the UK. Speaking at a postal conference in Paris today, Graham Corbett, chairman of the Postal Services Commission (Postcomm), said: ‘It seems to me that the EU, which is finding it difficult to make headway on weight/price limits, might usefully look at the flexibilities that licensing offers in supporting the universal
service. The Directive allows licensing and this might be a route by which member states can make rapid progress.’ Later this month Postcomm will publish a major consultation document on the way it sees competition being introduced. At the same time it will release another document that seeks to evaluate the cost to Consignia of providing a universal postal service. Mr Corbett said the discussion over the cost of the universal service was confused because there were two different economic models for measuring it – the avoided cost model and the entry price model. The avoided cost model sought to establish the revenues and attributable costs of providing a universal service in a static
market. The entry price model, favoured by Consignia, looked at the effect
that loss of market share would have on the company’s ability to finance central and support costs. This was being used to predict the extent of damage in the event of competitive entry. ‘One question that has to be asked is whether this actually has anything to do with the universal service, rather than being a problem faced by every dominant supplier on losing market share to
new entrants,’ Mr Corbett said. Notes for Editors The universal postal service is defined as one collection and one delivery each weekday, at a standard affordable price, to every UK address. Most European postal monopolies operate within a reserved area. In Britain, until 26 March this year, the Post Office’s reserved area included all post weighing less than 350 grams and costing less than GBP1. After Postcomm licensed The Post Office (now Consignia) on 26
March this year, this area is now known as the licensed area.
Competitors can apply to Postcomm for licences to operate in this former monopoly area. The text of Graham Corbett’s speech to the Post Europeennes
conference, is published on the Postcomm website: www.psc.gov.uk. Postcomm – the Postal Services Commission – is an independent regulator. It has been set up to further the interests of users of postal services. Postcomm’s main tasks are to: – Ensure a universal postal service at a uniform tariff.
– Encourage competition in postal services.
– Licence postal operators
– Control postal prices and quality of service.
– Monitor and advise on the network of post offices.
Postcomm’s policies are steered by a board of seven commissioners, headed by Graham Corbett CBE. More information: Chris Webb Tel 020 7593 2114
Mobile 07779 635881 E [email protected]
Jonathan Rooper Tel 020 7766 1210 Pager P07693 352732 E [email protected]