### ii. Accounting Separation

Another critical component of monitoring and preventing cross-subsidization is accounting separation. This is an important part of understanding the cost base of the cross-subsidizer. Without this knowledge, it is very difficult to bring a cross-subsidization case.

All of the above methods are designed to ensure that where some markets are reserved to a monopolist, the monopolist, be it private or public, does not abuse its monopoly position and create an anti-competitive spill-over effect in another related or unrelated market.

### 10. Postal Regulation

Regulation of the postal sector must be pro-competitive and must ensure that levels of competition increase. In particular, regulation must be sensitive to the fact that any damage to the competitive process in the express delivery or other sectors related to the postal monopoly will have a negative impact on consumers. A competition authority must have a role in the regulation of the postal sector to ensure that there is no abuse of the dominant position by the universal service provider.

In examining how regulation in postal affects competition, it is the interplay between regulated postal services and unregulated express delivery services where the possibility for anticompetitive behavior in the regulated sector exists. Express delivery is a method of communication and transportation that serves to get items from door to door within a definite period of time. The key elements of this service stem from the integrated nature of the service. Integrated express service providers understand and cater to the time sensitivity of the commercial business. Given the rapidly globalizing economy that utilizes a just-in-time production schedule, express delivery of parts has become essential to global operations of businesses. Further, express delivery offers faster delivery of business documents, thereby promoting more rapid transactions for services. It also allows small and medium-sized businesses to compete in the global marketplace by giving them access to an international distribution system. A well functioning express delivery market that allows for all express delivery operators to compete without government distortions in favor of a preferred carrier allows for the more rapid development of the Japanese economy and infrastructure. This development will ensure that Japanese businesses will be made more globally competitive.

Express delivery requires a robust service system that involves air and ground transport, distribution centers, delivery, and the use of advanced technologies in all facets of its business to track items and provide information. Express delivery services consist of the expedited collection, transport, and delivery of documents, printed matter, parcels, and/or other goods, while tracking the location of, and maintaining control over, such items throughout the supply of the service. Services provided in connection with express delivery services include, but are not limited to, customs facilitation and logistics management. Express delivery services may include one or more value added elements, such as collection from an address designated by the sender; release upon signature; guarantee of delivery within a specified time; electronic and/or other advanced technologies; and ability of the sender to confirm delivery. Many WTO Members classify postal services separately because they are performed by postal administrations. The Central Product Classification system (CPC), used by numerous countries, generally classifies services performed by postal administrations separate and apart from any other services. Postal services lack these value added services. In