of the letter mail infrastructure to perform these services. In the DP case, the mail-order service costs could be specifically attributed to the mail order function. There is also a question as to the cost of running the capital, maintenance, and supplies of the network, and how these costs should be apportioned between the postal and express arms.

2. Historical legacy of government ownership. It is necessary to track back to establish the real impact of the historical legacy of government ownership. There may be transfers of assets, real estate, or other property to the formerly state-owned company, perhaps even as part of the privatization process. The British Post Office, which intervened in the DP case, maintained that the transfer of any property to the public postal service constituted unlawful state aid. In the DP case, there were also transfers of funds from the DB-Telekom to DB-Postdienst which allegedly constituted state aid. In the case of the privatization of the JPN, a question will be whether there are any funds or property transfers which could constitute both anticompetitive aid, but also would lead to the reduction of the costs of providing the express delivery service. We understand that as part of the privatization process, the Universal Service Fund will be met from the proceeds of the sale of the constituent parts of the JPN. This is a very important area which needs to be carefully monitored by the JFTC. This is because these funds could be regarded as transfers as defined above. They could be problematic from a competition and market distortion standpoint. An assessment would also have to be made about any other funds that have been transferred to JPCo from other branches of JPN prior to, or as part of the privatization.

3. Historic costs associated with government ownership. In the DP case, DP maintained that it had historic costs that private competitors did not have - these included above average wages, redundancy payments, government sponsored programs such as affordable housing for its employees and so forth that together constituted an atypical cost element. $ ^{86} $ It is likely that JPCo would make similar arguments to justify anti-competitive activity. It is important to note that many of these alleged atypical components are not really higher cost that private competitors would have, and to the extent they are usually dealt with in prior transfers of assets from State to the Post (as they were in the DP case).

4. Targeted rebates. The DP gave rebates to major users. These rebates were partially funded out of its revenues from the letter mail monopoly, and from other revenues. One of the problems for DP was that it was clear from the documents that the rebate strategy was designed to deal with DP's declining market share and not to deal with any concept of a universal service component.

5. Legacy-based privileges and benefits. JPN’s legacy as a state-owned monopolist may mean that the JPCo has certain privileges and benefits that it has as part of its government status. These can include preferential tax status, parking privileges and preferential customs status when sending packages across national boundaries. These kinds of benefits must also be added to the cost of the provision of the service.

6. Interaction between Universal Service Obligation, Reserved Sector and costs of service provision. In the DP case, DP maintained that it had a Universal Service Obligation for delivery of all postal