14 March 2011

Postcomm consults on the removal of bulk mail from the universal service

Postcomm has published the first in a series of documents which set out initial views on the building blocks for a new and sustainable regulatory framework for 2012 and beyond. They launched a consultation on 1 March to seek views on whether bulk mail should be removed from the universal service and how Royal Mail's licence should be clarified in relation to the existing composition of the universal service. Postcomm is not otherwise conducting a fundamental review of the universal service. This consultation, and the supporting papers published alongside, are aimed at facilitating discussion and resolution of some key issues prior to the anticipated handover of regulatory responsibility to Ofcom later this year.

The consultation document can be downloaded at:

http://www.psc.gov.uk/documents/1808.pdf

The supporting documents can be downloaded at:

http://www.psc.gov.uk/documents/1809.pdf

http://www.psc.gov.uk/documents/1797.pdf

http://www.psc.gov.uk/documents/1798.pdf

The universal postal service remains important to customers today, but their needs are changing. The bulk mail market particularly has seen a lot of change and Postcomm are today publishing evidence that suggests that bulk mail products should be removed from the universal service. Their 2010 review of the needs of bulk mail users shows that they prioritise the importance of low price bulk products, but appear less attached to the key features of the universal service, in particular uniform pricing. The findings of Postcomm's recent market study also show that the bulk mail market is increasingly competitive. Consequently consumers have greater choice than in 2005, when Postcomm took the decision to retain a bulk mail product in the universal service. 

The consultation also seeks views on their provisional conclusion that Printed Postage Impression (PPI) is a payment channel like stamp and meter, and in relation to single piece mail should therefore be considered part of the universal service. They also aim to clarify the status of certain services that they consider to be within the universal service.

This document is accompanied by a statutory notice under the Postal Services Act in relation to proposed modifications to Royal Mail's licence that would follow in relation to all or any of the matters set out in the consultation document, subject to respondents' views. Postcomm believe it is helpful to run this process in parallel, so that they can proceed quickly and before the relevant licence conditions are rolled forward under the proposed new regime anticipated by the Postal Services Bill 2010.  They stress that this does not mean that they have prejudged the outcome of this consultation, merely that they will be able to act promptly at the end of the consultation period if there is support for their proposals.

Postcomm have also published the next phases of their analysis of markets work and a consultation reviewing the access regime. They state that their aim is to maintain the momentum for much needed change to the regulation of postal services, and to do what they can to help develop a stable regulatory environment that, in particular, safeguards the universal service and protects the interests of customers. Final proposals about the new regulatory framework, informed by their ongoing research and the views of interested parties on all these consultations, are currently expected to be published in late summer 2011. They expect that a final decision will be made about the new regulatory framework in early 2012 and the new regulatory framework to take effect in spring 2012. 

 The closing date for responses to the consultation is Tuesday 31 May 2011. if you have any comments you wish to make please email [email protected],uk