Abstract
The U.S. Postal Service’s universal service obligation (USO) is a collection of requirements that ensures all users receive a certain level of service at a reasonable price. A USO can be fulfilled by one or more providers, and it is often a regulator’s responsibility to ensure that it is being met. Today, the United States Postal Service (USPS) has the sole responsibility for providing required postal services in the United States; however, the current law does not contain a comprehensive and clear definition of the USO. Instead, USPS’s USO is understood to be made up of various legal requirements and regulations that, in most instances, provide only broad guidance.
The views expressed are solely those of the authors and should not be construed to represent the views of the USPS Office of the Inspector General.
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Notes
- 1.
For legislation that references various aspects of the USO, see U.S. Postal Service, Report on Universal Postal Service and The Postal Monopoly, October 2008, http://about.usps.com/universal-postal-service/usps-uso-report.pdf, pp. 9–11, and Postal Regulatory Commission, Report on Universal Postal Service and the Postal Monopoly, December 2008, http://www.prc.gov/Docs/61/61628/USO%20Report.pdf.
- 2.
These include Henrik Lindhjem and Simen Pedersen, “Should Publicly Funded Postal Services be Reduced?; Copenhagen Economics, Main Developments in the Postal Sector; Rand Europe, Study on Appropriate Methodologies to Better Measure Consumer Preferences, 2011, http://www.rand.org/content/dam/rand/pubs/technical_reports/2011/RAND_TR1140.pdf.
Ofcom, Universal Service Obligation, Postal User Needs 2012 , Quantitative research report, 2012, http://stakeholders.ofcom.org.uk/binaries/research/post/quantitative-oct2012/report.pdf.
Ofcom, Review of Postal Users’ Needs. An Assessment of the Reasonable Needs of Users in Relation to the Market for the Provision of Postal Services in the United Kingdom, March 2013, http://stakeholders.ofcom.org.uk/consultations/review-of-user-needs/; NERA, The Social Value of the Post Office Network, Report for Postcomm, August 2009, http://www.nera.com/extImage/PUB_Postcomm_Aug2009.pdf; and Accent, Postal Universal Service Obligation and Rob Sheldon and Alison Lawrence, “The UK Service Obligation,” pp. 199–216.
- 3.
A detailed summary of studies in other posts can be found in Appendix B of U.S. Postal Service Office of Inspector General, Guiding Principles for a Universal Service Obligation, Report No. RARC-WP-15-001, November 11, 2014, https://www.uspsoig.gov/sites/default/files/document-library-files/2014/rarc-wp-15-001.pdf.
- 4.
Rand Europe, Study on Appropriate Methodologies to Better Measure Consumer Preferences, 2011, http://www.rand.org/content/dam/rand/pubs/technical_reports/2011/RAND_TR1140.pdf and Ofcom, Universal Service Obligation, Postal User Needs 2012 , Quantitative research report, 2012, http://stakeholders.ofcom.org.uk/binaries/research/post/quantitative-oct2012/report.pdf, and Ofcom, Review of Postal Users’ Needs. An Assessment of the Reasonable Needs of Users in Relation to the Market for the Provision of Postal Services in the United Kingdom, March 2013, http://stakeholders.ofcom.org.uk/consultations/review-of-user-needs/.
- 5.
Austria and other EU countries (2010) and Italy, Poland and Sweden (2011).
- 6.
Copenhagen Economics, Main Developments in the Postal Sector (2008-2010) Final Report, November 2010, http://ec.europa.eu/internal_market/post/doc/studies/2010-main-developments_en.pdf, pp. 135–150 and Appendix A.
- 7.
Ibid.
- 8.
For a more complete discussion of how the survey was developed and weighted, please see U.S. Postal Service Office of Inspector General, What Postal Services Do People Value the Most? A Quantitative Survey of the Postal Service Universal Service Obligation, Report No. RARC-WP-15-007, February 23, 2015, https://www.uspsoig.gov/sites/default/files/document-library-files/2015/rarc-wp-15-007.pdf.
- 9.
Respondents were not given any direction on how to think about these questions—whether it were how the USO change affected them personally or everyone.
- 10.
For a complete explanation of the relationship between random utility models and a mixed logit model, see, Train, Kenneth, E., Discrete Choice Methods with Simulation, 2nd Ed., Cambridge University Press, 2008.
- 11.
For a discussion of the Hierarchical Bayes method see, Allenby, Greg M. and Rossi, Peter E. and McCulloch, Robert E., Hierarchical Bayes Models: A Practitioners Guide (January 2005). Available at SSRN: http://ssrn.com/abstract=655541.
- 12.
For other examples of the use of the logit model to estimate part worth utilities in postal and non-postal contexts, see Rohr, Charlene, Trinkner, Urs, Lawrence, Alison, Kim, Chong Woo, Potoglou, Dimitris and Sheldon, Rob, “Measuring Consumer Preferences for Postal Services,” Swiss Economics Working Paper, July 2012, Kjær, Trine, Bech, Mickael, Kronborg, Christian and Raun Mørkbak, Morten, “Public Preferences for Establishing Nephrology Facilities in Greenland: Estimating Willingness-to-Pay using a Discrete Choice Experiment,” European Journal of Health Economics, 2003, Vol. 14, 739-748, or NERA, “The Social Value of the Post Office Network, A Report for Postcomm,” manuscript, 2009.
- 13.
For a detailed description of the methodology used to calculate these values, see Gallup’s Technical Report in Appendix C.
- 14.
We do not mean to imply that the WTP measure should be used as an attempt to identify the maximum price the Postal Service should charge for its services.
- 15.
The Urban Institute, A Framework for Considering the Social Value of Postal Services, Final Report. Prepared for the Postal Regulatory Commission, February 2010, http://www.prc.gov/prc-docs/library/archived/Final_Report_Sent_to_PRC_Feb_3_943.pdf.
- 16.
As mentioned earlier, Gallup used curb as the base for the consumer-letter survey in order to avoid having a negative WTP value.
References
Accent. Postal Universal Service Obligation and Rob Sheldon and Alison Lawrence, “The UK Service Obligation”
Copenhagen Economics (2010) Main developments in the postal sector (2008–2010) final report. http://ec.europa.eu/internal_market/post/doc/studies/2010-main-developments_en.pdf
Lindhjem H, Pedersen S. Should publicly funded postal services be reduced?
NERA (2009) The social value of the post office network, report for postcomm. http://www.nera.com/extImage/PUB_Postcomm_Aug2009.pdf
Ofcom (2012) Universal service obligation, postal user needs 2012. Quantitative research report. http://stakeholders.ofcom.org.uk/binaries/research/post/quantitative-oct2012/report.pdf
Ofcom (2013) Review of postal users’ needs. An assessment of the reasonable needs of users in relation to the market for the provision of postal services in the United Kingdom. http://stakeholders.ofcom.org.uk/consultations/review-of-user-needs/
Rand Europe (2011) Study on appropriate methodologies to better measure consumer preferences. http://www.rand.org/content/dam/rand/pubs/technical_reports/2011/RAND_TR1140.pdf
The Urban Institute (2010) A framework for considering the social value of postal services, final report. Prepared for the Postal Regulatory Commission. http://www.prc.gov/prcocs/library/archived/Final_Report_Sent_to_PRC_Feb_3_943.pdf
U.S. Postal Service (2008) Report on universal postal service and the postal monopoly. http://about.usps.com/universal-postal-service/usps-uso-report.pdf
U.S. Postal Service Office of Inspector General (2014) Guiding principles for a universal service obligation, report no. RARC-WP-15-001. https://www.uspsoig.gov/sites/default/files/document-library-files/2014/rarc-wp-15-001.pdf
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Bradley, J., Bradley, M.D., Colvin, J. (2016). Which Universal Service Obligation Attributes Do Americans Value?. In: Crew, M., Brennan, T. (eds) The Future of the Postal Sector in a Digital World. Topics in Regulatory Economics and Policy. Springer, Cham. https://doi.org/10.1007/978-3-319-24454-9_5
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