The Directive reduces the part of the postal market that can be reserved to national monopoly postal operators from 350 grams to post weighing 100g from 1 January 2003 and 50g from 1 January 2006.

In the UK, Royal Mail and competing companies are licensed by Postcomm to provide postal services. At present licenses are required to handle mail weighing 350g or less and costing less than £1.

Postcomm recommends keeping UK licensing at the present limit. If agreed, this would be on the basis that licences above 100 grams (80p) after 1 January 2003 and 50 grams (65p) after 1 January 2006 would be granted by Postcomm with no restrictions on the nature of the services provided. Postcomm concludes that this is the best way to safeguard the universal service and to ensure that postal users benefit from competition in the early stages of market opening.

Postcomm also recommends that changes should be made to its statutory licensing powers so that it is clear that it can only licence services that fall within the scope of the universal service.

Both these recommendations would require amendment of the Postal Services Act 2000. Implementation is a matter for the Secretary of State.

The consultation also looked at implementing a number of other provisions in the Directive concerning transparency and non-discrimination in relation to special tariffs, prohibition of cross-subsidisation and complaint handling to protect users of postal services. Postcomm recommends that these changes be made through modifications to Royal Mail’s licence. Royal Mail has already agreed to all the necessary changes being made.