sou · GTB35 · 2006-01-01 00:00:00 — Requirements regarding pricing for a postal service to the effect that prices are to be fair and individual items of mail de- livered at uniform prices are also largely considered to be fulfilled. has tried to estimate the costs of providing a postal service. This estimate is based among other things on earlier Swedish studies of the issue. After comparing conditions in , costs are judged to lie somewhere between to 460 million a year. has also analysed different models for financing and ensuring postal services as regards different types of charges from the markets actors, a compensation fund and pro- curement of services. has studied conditions in the postal sector in some countries with similar conditions to . The countries in question are , , , the UK, , the The survey shows that is by no means alone in simultaneously maintaining postal services of good quality and exposing the postal market to compe- tition. Our survey shows that several countries in the EU and EEA intend to keep ahead of the EUs timetable which means the full opening of the postal market to competition from 1 January 2009. The survey also shows that like , and have completely put an end to the monopoly in the postal area. There are also several countries which have done away with the monopoly altogether or which have only retained the monop- oly for a minor part. At the same time, it has proved that, in spite of the market being or partly open to competition for many years in several countries, without exception the previous mo- nopolist holds a clearly predominant position on the letter market. A corporatisation of the national post office has been carried out in most EU countries. Some countries are furthermore in the proc- ess of privatising the previous monopolist. The countries to the fore as regards opening the market for postal services to competition, in addition to , include , the UK, the , , and . As from 2007, the markets in the UK, , and the will probably be fully open to competition. Today, the UK and apply a regulation that gives other postal operators right of access to the previous monopolists net- work for the distribution of post. The are in the proc- ess of introducing such a regulation. also applies a regulation on access. These regulations may lead to increased com- petition but it is not yet possible to see any proven effects. An economic analysis of the effects of liberalisation has carried out an economic analysis of the liberali- sation of the postal market. The aim of liberalisation was to en- hance efficiency in the letter market. By opening the market to competition, gains were envisaged for the consumer in the form of lower prices and improved service. Price development on the letter market varied depending on the sub-market analysed. A very rough estimate shows that the average nominal prices for sending a letter in the early 2000s was at least 30 per cent lower than in the early 1990s. sideration inflation, this should mean a decrease of around 50 per cent in real terms. Regarding the sub-market individual letters the price for the overnight delivery of a letter has increased by 50 per cent excluding value added tax and 90 per cent including value added tax over the period 1993–2003. The reform must be considered largely successful, although the number of companies added to the market is limited. The positive effects are chiefly an adaptation of products and services to de- mand as well as more cost-adapted prices. The favourable price de- velopment on the sub-market deliveries is a more direct conse- quence of liberalisation. Requirements of the postal service have been fulfilled during the period; thus, liberalisation has not meant poorer service or quality regarding nation-wide overnight delivery. However, Posten AB continues to have a strong and dominant position on the letter market, particularly regarding individual items of corre- spondence. are there any signs that Posten ABs strong posi- tion in this area will change noticeably in the near future given the current competitive conditions. A circumstance which may be part of the explanation to the relatively weak development of competition after liberalisation is that there are high barriers to on the sub-market individual deliveries, particularly that part referring to overnight nation-wide delivery. This means that it is very expensive to build up a parallel nation-wide network for delivery of letters. Another circumstance that partly explains the situation is that legislation in the postal sector was initially not adapted to support or create pre- conditions for competition. Act came into be- ing primarily to guarantee quality and maintain postal service. On the other hand, subsequent amendments to the statu- tory framework were to a greater extent intended to create the pre- conditions for competition. Possibilities for the co-distribution of unaddressed newspapers and magazines and addressed items of mail have been studied. Discus- sions have been carried on between the Swedish Newspaper Pub- lishers Association, representing newspaper distribution compa- nies, and Posten AB about possible co-distribution. essential main alternatives for handling co-distribution and these can then be combined in different ways: The newspaper agent collects and delivers the addressed items of mail to be distributed with the morning paper, which will probably be before six a.m. The postman collects the daily newspaper and delivers it with the addressed items of post on his ordinary round, which will probably be during the morning or afternoon. If the newspaper agent is also to deliver addressed items of post it will be difficult to meet the requirements of overnight delivery of letters in accordance with Posten ABs licence conditions, counter service in the rural delivery service and management of parcel deliv- ery and registered mail in the rural delivery service. Posten ABs licence conditions specify that 85 per cent of all items of mail shall be delivered overnight and 97 per cent within three days. Since mail will be delivered very early in the morning in the first alternative, there will not be sufficient time to distribute items of mail des- patched overnight. the mail delivered will be a day late. Today, provides basic counter service in the rural de- livery service. If items of mail are delivered by newspaper agents the consequence will be that wishing to carry out cash transactions must either do so at an unreasonably early hour or that the postman must do an extra round to handle counter service. also currently provides delivery of parcels and regis- tered mail in the rural delivery service. If these items of mail were to be delivered by newspaper agents there would be similar conse- quences, that is to say wishing to sign for parcels or registered mail must either do so at an unreasonably early hour or an extra round must be undertaken to manage this. If, on the other hand, the postman delivers newspapers on his ordinary rounds there will be problems with late delivery of news- papers. The subscriber will receive his morning newspaper at lunch time or in the afternoon – not at breakfast time. This will presuma- bly result in a reduction in the number of subscribers. Problems relating to co-distribution show that there are internal and external requirements imposed on and distribution companies that must be changed if co-distribution is to be feasible. Under the Ordinance (1993:1709), postal service providers may not raise prices for inland delivery of indi- vidual items of mail delivered overnight, and weighing at most , by more than the change in the consumer price index (CPI) between of the previous year and the year before that. When the first price ceiling was introduced in 1994, the reason given was to protect private individuals who it was considered did not have any alternative to . As a result of changes fol- lowing government bill Government responsibility in the postal sec- tor (Govt bill 1997/98:127) the aim of the price ceiling was ex- tended to apply to all postal who have no alternative to for delivery of individual items of mail. In practice this meant that the target group was extended from private individuals only to cover all unsorted post sent as individual items of mail at a normal postage rate. At the same time, the consumer price index (CPI) was chosen as an index rather than the net price index (NPI) on the grounds that value added tax is included in the price paid by private individuals which is not reflected in NPI, which is more adapted to a business perspective. CPI would therefore better re- flect changes in the price level consumers meet. The committees analysis shows that the current index which is based on CPI is correct if it is considered there are groups particu- larly worthy of protection. However, the committee considers this protection value is no longer relevant since postage costs represent a very small part of the total expenses of both private individuals and small companies. If, instead, the starting-point is that the index should reflect Posten ABs costs, finding a correct index becomes more compli- cated. At the request of the committee, Statistics (SCB) stud- ied which index could be used in connection with price regulation, and, in its report to the committee, SCB draws the conclusion that there is no existing index or balance of existing that reflects Posten ABs costs. To be able to reflect Posten ABs costs, a new special index must be created based on Posten ABs cost structure for the service. has made a comparison with another liberalised market, the telecommunications market, or to use more modern terminology, the market for electronic communication. Conclu- sions from this comparison have in some parts been used in con- tinued considerations. proposes new political goals for the postal sector. The new goals shall read as follows: Access shall be available to a broad supply of postal services at prices and quality corresponding to demands. From an interna- tional perspective, be at the forefront in these respects. Postal services shall be sustainable, customer adapted and accommo- date future needs. An important means of achieving this will be to create the precon- ditions for effective competition between several actors, without dis- tortions and unwarranted restrictions. The Government shall guar- antee that everyone has access to postal service of high qual- ity and at reasonable prices. proposes the above goals be presented to the Swedish Riksdag for approval. Aim of the law The aim of the Act must be broadened from focus- ing on the postal service to embracing all postal services. A new introductory section in the Act is proposed accordingly. The provisions of the Act shall aim at providing the private and public sectors with access to safe and efficient postal services with the greatest possible selection of services at different prices and of varying quality. An essential means of achieving this must be to create the preconditions for effective competition be- tween several actors without distortions and unwarranted restric- tions. Everyone should have access to a postal service of good quality and at reasonable prices. Monitoring responsibility will be broadened to include all postal services – not just the postal service. the authority appointed by the Government shall therefore con- tinually follow developments in the postal sector and ensure that postal services meet societys needs. Definition of postal operations does not consider there is any need to change the definition of postal operations. Instead, it is proposed that entities carrying on operations that consist in leasing post box facilities to the general public for a charge (leasing of post box facilities) be obliged to report their operations to the licensing authority in ac- cordance with the Act. Those who hold a licence to carry on postal operations should not need to report such opera- tions. As in the case of postal operations, leasing of post box facili- ties shall be carried on under conditions that accommodate reason- able requirements of reliability and uphold the protection of send- ers and recipients personal integrity. Possibility to revoke licences We propose that the licensing authority be given the possibility of revoking a licence if the holder has not carried on postal operations for at least six months. Scope of the postal services The postal service should have the same scope as today. does not propose that it should be restricted to covering only individual items of mail. Quality of the postal services The requirement of overnight delivery shall continue to apply. No change is proposed to the quality requirement. The requirement is of importance, inter alia for the matter of co-distribution of unad- dressed newspapers and magazines with addressed items of mail. However, the committee considers that this matter should be solved in negotiations between the parties concerned within the framework of the applicable body of rules. Today, applies certain guidelines for its delivery service in population centres and sparsely populated areas respectively. These guidelines were already established when was a public administration. In spite of what is specified in the guidelines about these being formulated in consultation between , they are not official regulations nor even general advice. Instead, they are Posten ABs own internal guidelines for manage- ment of its delivery service. considers that PTS should issue general advice concerning the delivery service of postal services. The transition to delivery of mail in apartment blocks in communal post boxes should be speeded up. We consider that PTS can specify the details of this transition in the form of general advice concern- ing the delivery service of postal services. Procurement of a postal service in certain cases Under the present formulation of the Act, entities wishing to carry on postal operations may be bound to provide a postal service. However, the Act specifies no limitation of the burden following from such an undertaking. In order to create good market preconditions for all actors on the postal market, protection should be introduced against any ac- tor being obliged to provide postal services to an extent that is unreasonably onerous for the company. When deciding whether or not such an obligation must be considered unreasona- bly onerous, attention must be given not just to the unprofitable aspects but also to the market advantages that may be associated with the provision of a postal service. therefore proposes that a postal service shall be procured if this is specially required bearing in mind the costs of providing the service. However, the committee judges that there is no need at present to procure a postal service. Measures against unclear pricing and discrimination postal service providers shall apply clear and unequivocal as well as non-discriminatory pricing of the service. The require- ment of non-discrimination also applies to individual agreements concerning a postal service. Furthermore, the committee proposes a provision be introduced into the Act under which the postal ser- vice provider must apply the principal of non-discrimination in connection with the use of special prices and other special condi- tions for certain . A special price of this nature shall take into consideration the costs saved compared with a standard service consisting of collection, sorting, transport and delivery of individ- ual items of mail. Price and other conditions shall be applied equally, both in a comparison between or other licence holders as in the relationship between a customer or other licence holder and the provider of a postal service of a corre- sponding nature. It must be considered clear that postage costs for households and small companies, both in absolute figures and in relation to other costs, are so small that they do not justify the imposition of a price ceiling. The real reason of those actors demanding price regulation is rather to prevent from cross-subsidising between different services. The conclusion that may be drawn from the study carried out by Statistics at the request of the committee is that it is not fair to to continue to use CPI for calculating the price ceiling since, as a result, will not be compensated for the annual increases in costs for the services covered by the price ceil- ing. Statistics judged that there is no existing index that can be used to reflect Posten ABs costs for the price-controlled ser- vice. Instead, according to Statistics , a new special postal index must be produced. But the alternative recommended by Sta- tistics involves a considerable administrative burden. Above all, it means details of Posten ABs underlying costs for providing the service that is to be regulated will have to be pro- duced. This work is the same as that needed to be able to verify that Posten ABs prices for the service are based on the costs. presents a proposal that aims to increase trans- parency and protection against discrimination in connection with the pricing of a postal service. We also present a proposal for protection against discrimination in connection with the appli- cation of special conditions in the form of discounts for major and the like. For we consider that this is a better way of managing problems such as cross-subsidising than by asserting very small protection interests as a reason for a general price control – when the real rea- son is something else. In the light of this, the committee proposes that price control under the Ordinance shall be abolished. However, the abolition can be effected at the earliest six months after the proposals for amendments to the Act have entered into force. In addition, further time may be needed before PTS has implemented the new provisions on clear and unequivocal pricing and protection against discrimination to such an extent that they protect against cross-subsidising. It is then for the Government to decide the exact date for removal of the price ceiling regulation. The postal code system Today the Government may appoint a licence holder providing a postal service to also provide and administer the postal code system. The Government has appointed for this task. It is proposed that the Government should now be given powers to authorise the licensing authority (PTS) to appoint a li- cence holder providing a postal service to also provide and administer the postal code system. The entity providing the postal code system is under obligation to allocate on the request of other licence holders, postal codes for post box facilities within the postal code zones requested. It is proposed that the same obligation should apply if it is requested by an entity registered under the Act for lease of post box facilities. The approval of the licensing authority is required under the Act for changes to the postal code system unless the changes only concern individual postal addressees. The licens- ing authority must consult other licence holders, the authorities responsible for national registration and the real estate directory as well as the municipalities concerned on the matter. It is proposed this obligation to consult should also apply to those registered for lease of post box facilities under the Act. It is proposed that, on request, postal service providers be obliged to redirect letters weighing a maximum of conveyed by other licence holders to an address located outside their delivery zone. Conditions for redirection must be fair and not affect com- petition and also be non-discriminatory in relation to what the uni- versal postal service provider applies in its own operations. Rational and safe handling of unpaid and underpaid letters Under the Act, for a letter that is unstamped or has insufficient stamps to be considered undeliverable, it is required that the recipient does not redeem the letter. pro- poses instead that the delivery companys obligation to offer the recipient an opportunity to redeem the letter be removed. Thus, letters that are unpaid or underpaid may be handled as undeliver- able. However, there should be no impediment to delivering the letter to the recipient without a surcharge or to offering the recipi- ent an opportunity to redeem the letter. agencies in the postal sector proposes that, in addition to its present tasks in the postal sector, PTS shall also promote an efficient postal market from the point of view of competition in certain specially specified respects. We propose that PTSs present task to complete the re- view or inspection specially decided by the Government in con- nection with agreements between the state and postal operators, should cease. In connection with its inspection, the licensing authority should pay special attention to ensuring that agreements are entered into that mean 1.that the items of mail the licence holders convey reach other licence holders facilities for delivery to recipients, 2.that addressed items of mail weighing a maximum of that have been conveyed by another licence holder can be redirected to an address that is located outside the licence holders deliv- ery zone, 3.that the principles of transparency and non-discrimination be applied between a postal service provider and other li- cence holder in connection with the application of special prices and other special conditions for certain . Should disputes about such agreements arise, the licensing author- ity shall look into the circumstances without delay and, unless spe- cial reasons speak in favour of some other action, mediate between the parties. In a dispute of this nature the authority may give an opinion at the request of one of the parties. PTS may issue regulations concerning requirements imposed on postal service providers, also regarding the use of clear and unequivocal as well as non-discriminatory pricing for the ser- vice, and taking care of redirection as well as application of non- discriminatory conditions in certain cases, in the same way as ap- plies to other requirements imposed on postal service providers. PTS shall also specify through licence conditions the way in which obligations are to be fulfilled. We propose that PTS annually publish a report on the extent to which pricing for the postal services meets requirements under the Act. This task may be included in the authoritys appropriation directions. It is proposed that, in accordance with Article 14.8 of the EC Postal Directive, PTS be authorised to take decisions on waivering the obligation of the service provider to apply the Postal Directives accounting rules. PTS shall inform Commission of its decision. Charges for financing PTS operations It is proposed that the Government or, if the Government so de- cides, the licensing authority may provide an obligation for entities carrying on operations registered under the Act that consist in leasing space in post box facilities to the general public for a charge (leasing of post box facilities), to pay a charge to the licensing authoritys activities under the Act. PTS may provide that entities carrying on operations registered under the Act as leasing of post box facilities shall pay an annual charge of at most 500. PTS shall be authorised to issue more detailed regulations on the charges. Regarding charges for leasing of post box facilities, PTS shall also be authorised to or partly grant freedom from the charge if there are special reasons for doing so. considers it essential that developments on the postal market are closely followed in the years ahead and also that a new follow-up be carried out within 4–5 years in which the effects of regulation of the postal sector are followed up and analysed.