Postcomm publishes licence arrangements for a fully competitive mail market

“This initiative, on Postcomm’s part, is an important step in underpinning customer confidence in using alternative operators to carry their mail, apart from Royal Mail,” said Postcomm’s chairman, Nigel Stapleton.

“In a multi-operator and fully liberalised market it is essential that arrangements are in place to make sure different mail operators work together to meet common standards – for example ensuring security of the mail and handling misdirected letters.

These licensing arrangements will make sure the efforts of Royal Mail staff and other credible mail companies are not undermined by cowboy operators.” The new arrangements are contained in three documents, published today, which cover the following areas:

Licensing framework

This framework will apply to all operators other than Royal Mail (which, as the super dominant company, is already subject to strict price and service quality requirements). While encouraging entry of new companies to the market, the primary focus of the framework will be to safeguard customers’ interests by ensuring mail is handled properly. Licenses issued under this framework will operate on the same basis as Royal Mail’s licence (currently 15 years from 2001).

A code of practice protecting mail integrity

All licensed operators in the open market, including Royal Mail, must meet the minimum standards laid down in this code of practice. It includes rules on: • Recruitment and vetting of staff

• Training
• Disciplinary procedures
• Security of the mail
• Information and reporting requirements
• Use of agents and sub-contractors

Among other things this deals with mail that goes astray or is marked ‘return to sender’. When the UK had a monopoly postal market these would be put in a post box for return to Royal Mail. In the multi-operator market envelopes will carry an identifier to indicate which operator has carried the mail so that mail put in a Royal Mail post box can be “repatriated” to, and dealt with, by the company concerned.

The procedures also require operators who are wrongly contacted by customers of other operators, to redirect enquiries to the company that handled their mail. These licence modifications now need to be agreed by all operators. If all licensees consent, Postcomm will be publish a formal 28-day consultation to amend the existing licences.

NOTES FOR EDITORS

The three decision documents are published today on Postcomm’s website www.psc.gov.uk. They are:

1. Licenses under the Postal Services Act 2000: Licensing Framework in a Fully Open Market;

2. Protecting the Integrity of Mail – A Code of Practice;

3. Postal Code of Practice for Common Operational Procedures.

Printed copies will be available shortly from Postcomm at 6 Hercules Road, London SE1 7DB

Postcomm and the mail market

Postcomm regulates Royal Mail’s prices and service quality in the letters market and licences postal operators who handle items that cost less than £1 to post or weigh less than 350 grams.

In the UK postal market

• Over 80 million items are delivered each day six days a week to more than 27 million addresses
• Around 30% of the market, by value, for bulk mail, is open to competition
• Postcomm has licensed 10 companies to compete with Royal Mail
• Royal Mail is by far the biggest operator with more than 95% of the market
• Royal Mail made a profit from operations of £452 million on its regulated activities last year (excluding exceptionals and pension deficit payments)
• The letters market will be open to full competition on 1 January 2006.

Chris Webb
T 020 7593 2114
M 07779 635881
chris.webb@psc.gov.uk.

Suzanne Murray
T 020 7593 2164
M 07966 059983
suzanne.murray@psc.gov.uk