The start of the loss of the USO?

[POSTMAN]

28 February 2011

Postcomm consults on the removal of bulk mail from the universal service

Postcomm has today published the first in a series of documents which set out initial views on the building blocks for a new and sustainable regulatory framework for 2012 and beyond. Today we are launching a consultation to seek views on whether bulk mail should be removed from the universal service and how Royal Mail’s licence should be clarified in relation to the existing composition of the universal service. Postcomm is not otherwise conducting a fundamental review of the universal service. This consultation, and the supporting papers published alongside, are aimed at facilitating discussion and resolution of some key issues prior to the anticipated handover of regulatory responsibility to Ofcom later this year.

The universal postal service remains important to customers today, but their needs are changing. The bulk mail market particularly has seen a lot of change and we are today publishing evidence that suggests that bulk mail products should be removed from the universal service. Our 2010 review of the needs of bulk mail users shows that they prioritise the importance of low price bulk products, but appear less attached to the key features of the universal service, in particular uniform pricing. The findings of our recent market study also show that the bulk mail market is increasingly competitive. Consequently consumers have greater choice than in 2005, when Postcomm took the decision to retain a bulk mail product in the universal service.

Today’s consultation also seeks views on our provisional conclusion that Printed Postage Impression (PPI) is a payment channel like stamp and meter, and in relation to single piece mail should therefore be considered part of the universal service. We also aim to clarify the status of certain services that we consider to be within the universal service.

This document is accompanied by a statutory notice under the Postal Services Act in relation to proposed modifications to Royal Mail’s licence that would follow in relation to all or any of the matters set out in the consultation document, subject to respondents’ views. We believe it is helpful to run this process in parallel, so that we can proceed quickly and before the relevant licence conditions are rolled forward under the proposed new regime anticipated by the Postal Services Bill 2010. This does not mean that we have prejudged the outcome of this consultation, merely that we will be able to act promptly at the end of the consultation period if there is support for our proposals.

Later this week, we will be publishing the next phases of our analysis of markets work and a consultation reviewing the access regime. Our aim is to maintain the momentum for much needed change to the regulation of postal services, and to do what we can to help develop a stable regulatory environment that, in particular, safeguards the universal service and protects the interests of customers. Final proposals about the new regulatory framework, informed by our ongoing research and the views of interested parties on all these consultations, are currently expected to be published in late summer 2011. We would expect a final decision to be made about the new regulatory framework in early 2012 and the new regulatory framework to take effect in spring 2012.

The closing date for responses is Tuesday 31 May 2011.

For any enquires please contact:

Tim Crowley, Head of Communications

Tel: 07545 422293

tim.crowley@psc.gov.uk

[andy2007]

This is disturbing news. But sadly, I'm not surprised. I doubt that we'll have anything resembling the USO within 3 years.

[Eric]

I know the CWU thinks the USO is wonderful but like most things it has its pros and cons. Is it really fair that a multi-millionaire farmer living right out in the sticks whose delivery takes the postie miles out of town pays the same as the pensioner in a block of flats?

[beeswax]

I know the CWU thinks the USO is wonderful but like most things it has its pros and cons. Is it really fair that a multi-millionaire farmer living right out in the sticks whose delivery takes the postie miles out of town pays the same as the pensioner in a block of flats?

its whats known as a public service, we pay our taxes to fund these sort of ventures.

the NHS is also a public serice, as is the police and fire service, street cleaning and refuse collections also.

the tax system should ensure that the millionaire pays his fair share along with the granny in high rise flats, but thats another argument.

[Spedley]

I know the CWU thinks the USO is wonderful but like most things it has its pros and cons. Is it really fair that a multi-millionaire farmer living right out in the sticks whose delivery takes the postie miles out of town pays the same as the pensioner in a block of flats?

What!!
Is it really fair that a poor hard working farmer living right out in the sticks whose delivery takes the postie miles out of town pays more than millionaire in a block of flats?

Does it mean that not only can they charge radically different prices but that bulk mail would not have to be delivered every day?

[POSTMAN]

There was 'never' a problem delivering to all these out of the way places before was there?

[borders]

its the beginning of the end .

[axeman]

[quote="Spedley [/quote]
Is it really fair that a poor hard working farmer living right out in the sticks whose delivery takes the postie miles out of town pays more than millionaire in a block of flats? [/quote]

farmers i see are hardly poor, not saying they aren't hard working but poor far from it !!

[fishtank]

Is it really fair that a multi-millionaire farmer living right out in the sticks whose delivery takes the postie miles out of town pays the same as the pensioner in a block of flats?

Yes...he pays exactly the same....nothing....because he is the recipient.
It's the sender that pays and how exactly do you discriminate between the farmers rich accountant sending him his ridiculous bill and his minimum wage farm labourer sending him his time sheets.

[Eric]

Is it really fair that a multi-millionaire farmer living right out in the sticks whose delivery takes the postie miles out of town pays the same as the pensioner in a block of flats?

Yes...he pays exactly the same....nothing....because he is the recipient.
It's the sender that pays and how exactly do you discriminate between the farmers rich accountant sending him his ridiculous bill and his minimum wage farm labourer sending him his time sheets.

-- and that is precisely the problem with the USO as it stands. If someone lives in a remote place they should be prepared to pay for the privilege and that can't happen while the USO exists. I'd like to see a surcharge for people with long driveways and awkwardly positioned letterboxes too. Why not? We are no longer a public service I'm afraid.

After all, if the CWU say the USO is a good thing.....

[barbario]

The Government said that the USO was safe under privatisation. They wouldn't lie ,would tthey ?

[skull]

The Government said that the USO was safe under privatisation. They wouldn't lie ,would tthey ?

I think I'm right in saying this . In the privatisation bill there's loads of loop holes where a privatised RM can riggle out of the USO . All the amendments to try and close these loop holes were heavily defeated in the House of Commons . I'll be amazed if the USO is still in full operation in four years time .

[TrueBlueTerrier]

Is it really fair that a multi-millionaire farmer living right out in the sticks whose delivery takes the postie miles out of town pays the same as the pensioner in a block of flats?

Yes...he pays exactly the same....nothing....because he is the recipient.
It's the sender that pays and how exactly do you discriminate between the farmers rich accountant sending him his ridiculous bill and his minimum wage farm labourer sending him his time sheets.

-- and that is precisely the problem with the USO as it stands. If someone lives in a remote place they should be prepared to pay for the privilege and that can't happen while the USO exists. I'd like to see a surcharge for people with long driveways and awkwardly positioned letterboxes too. Why not? We are no longer a public service I'm afraid.

After all, if the CWU say the USO is a good thing.....

In isolation, you may have a good point but your post does raise more questions than it answers.

What about the minimum wage farm labourers, my brother in law is one, who can't afford to move. Or who are paid minimum wage, should they move into towns. If they did what what is the impact on the farms and/or businesses in those isolated areas they would have to raise prices to cover their costs, thereby raising the costs for your own groceries.

Its not just farmers though, what about tourism in rural areas, higher mail prices again will force costs up, or reduction in jobs for workers in those areas.

If you have no workers in rural areas then you have less business. Less businesses means less revenue for RM means less cash available in the pot to increase our own wages.

Another question it raises is who pays the postage costs - if in your argument the rural addresses have to pay then that is unfair as those in large conurbations wont have to, this would increase the chances of real competition in Towns and Cities. This would increase pressure and costs on RM as no government is going to surrender the USO completely. The only other option would be to weaken it and this would in some cases lead to increased competition in the Parcel sector.

If the sender has to pay the extra postage, which I think is more likely, then that is Zonal pricing which I think goes against PostComs and the Governments wishes (and acts) would the Coalition be willing to water down the USO so soon after privatisation.

However, long drives (especially those that double back on themselves), awkward and low letterboxes, addresses with problem dogs etc. - Cant see a problem with them being charged.

[janitor]

The fact is after privatisation the new privatised RM , will go to the government and say" we either need taxpayers subsidy to pay for the USO or you weaken it". The government will go for the cheaper option of watering down the USO, whether that will be losing the six day service, losing first class( of course you will still be able to buy a fisrt class stamp, just not get the service.)paying extra for deliveries to remote locations(i.e anywhere the dom can't see from his office chair.) extra charges for longer distances. So strand by strand the USO will be abolished, all within the law of course, and all in the name of saving the tax payer money, money that could have been saved by not privatising it in the first place.

[Straight4ward]

If the government is to have any chance of finding a buyer for the deliveries part of RM then they will have to find a way of making it attractive to potential suitors. The removal of the USO will be but one step in that direction.