Abstract
Universal service in the postal sector entails the provision of an ubiquitous minimum quality of postal services to all (national) customers at an affordable (almost always) uniform set of prices. Most public postal operators (PPOs) are required by government to provide universal service. Since costs are not uniform, meeting this “universal service obligation” (USO) inevitably involves subsidy of higher cost routes. Although external subsidies for public postal operators may yet provide some support for universal service, the granting by government of a “reserved” area represents the main means of funding universal service costs. The exclusive right to provide reserved area services (generally defined by reference to weight and/or price) enables PPOs to fund the costs of universal service through cross-subsidy.
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Rodriguez, F., Smith, S., Storer, D. (1999). Estimating the Cost of the Universal Service Obligation in Postal Service. In: Crew, M.A., Kleindorfer, P.R. (eds) Emerging Competition in Postal and Delivery Services. Topics in Regulatory Economics and Policy Series, vol 31. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-5122-2_13
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DOI: https://doi.org/10.1007/978-1-4757-5122-2_13
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