Abstract
The financial pressure on universal service providers (USPs) arising from declining letter mail volumes and changing user needs increasingly burdens national universal service obligations (USOs). These dynamics have been recently reviewed by Cape and Groves (2017), who provided an overview of different changes to national USOs, their implications and possible future trends.
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Notes
- 1.
Prices for lowest weight categories available: 1.3 EUR price is for 50 g weight category, 3.6 EUR price is for 100 g (in 2016, the lowest weight category was changed from 50 to 100 g).
- 2.
Poste Italiane, annual reports.
- 3.
WIK (2016), “Future scenario developments in the Dutch postal market”.
- 4.
In Italy, there are two quasi-national end-to-end competitors, namely, Nexive and Fulmine.
- 5.
According to what reported in Delibera n. 395/15/CONS, point 23.
- 6.
Finnish Ministry of Communications (2016), note on ongoing review of the Finnish Postal Act. Link: https://www.lvm.fi/en/-/requirement-for-competitive-tendering-to-help-guarantee-postal-delivery-five-days-a-week-in-rural-areas-912399
- 7.
PTS (2016), “The Swedish Postal Services Market 2016”, report from the Swedish Post and Telecom Authority.
- 8.
Posten Norge Annual Report 2015, p. 36.
- 9.
A key caveat is that Ramsey-Boiteux pricing was historically designed for and applied to markets where products are independent. If products are substitute (or complements) the Ramsey pricing implication is that the firm should set price-cost margins that reflect cross-price elasticities. The markup is then proportional to the full set of elasticities, which can be aggregated into “super-elasticities”, i.e. a modified Lerner index. See Laffont, J-J. and Tirole, J. (1993), A Theory of Incentives in Procurement and Regulation.
- 10.
Indeed, this intuition is reflected in the modified Lerner index, insofar as the modification accounts for the role of cross-elasticity between the different products and the extent of diversion to competing suppliers.
- 11.
The Swedish Ministry if Enterprise and Innovation (2016), “A revision of the Postal Act in a digital society”.
- 12.
CEM Institute (2014), “Analysis of the Danes’ usage of postal services”, report for the Danish Ministry of Transport.
- 13.
The Finnish Ministry of Communications (2016), note on ongoing review of the Finnish Postal Act.
- 14.
See ComReg (2016) research on postal users’ needs. Link: https://www.comreg.ie/?dlm_download=research-postal-users-needs.
- 15.
See, for instance, Bender et al. (2016) Economies of scope in delivering parcels and letters together. Link to presentation: http://www.wik.org/uploads/media/AD_2016_05_18_EoScope_Florenz.pdf.
- 16.
Equally, in a scenario where competitors were to target rapid mail delivery (provided that users’ had high valuation for this service), this may force an equivalent reaction from the NPO, with a focus on rapid delivery.
- 17.
The Swedish Ministry if Enterprise and Innovation (2016), “A revision of the Postal Act in a digital society”; CEM Institute (2014), “Analysis of the Danes’ usage of postal services”, report for the Danish Ministry of Transport; The Finnish Ministry of Communications (2016), note on ongoing review of the Finnish Postal Act.
- 18.
Fabra et al. (2014, pp. 40–41) argued that “The European Commission should initiate a discussion on whether USO is still meaningful in mail alone, as there are alternative technologies that allow communications to benefit also more remote areas. The Commission should therefore consider a comprehensive redefinition of the USO concept, towards a more general ‘right to communicate’”.
References
Bender et al. (2016) Economies of scope in delivering parcels and letters together. Link to presentation: http://www.wik.org/uploads/media/AD_2016_05_18_EoScope_Florenz.pdf.
Cape, Steven & Groves, Philip (2017), Changes to the Universal Service: Influencing Factors, Impacts and Regulatory Implications. In: Crew and Brennan (Eds.) The Changing Postal and Delivery Sector
CEM Institute (2014), Analysis of the Danes’ usage of postal services, report for the Danish Ministry of Transport
ComReg (2016), Research on postal users’ needs
Fabra, N., Çarouche, P., Peitz, M., Valletti T., Waddams, C., and Liebhaberg, B. (2014), Network industries: efficient regulation, affordable and adequate service, CERRE dossier for the European Commission (2014–2018)
Laffont, J-J. and Tirole, J. (1993), A Theory of Incentives in Procurement and Regulation
PostNL (2017), European Postal Markets – an overview
PTS (2016), The Swedish Postal Services Market 2016, report for the Swedish Post and Telecom Authority
The Finnish Ministry of Communications (2016) Note on ongoing review of the Finnish Postal Act
The Ministry of Economic Affairs in The Netherlands (2014), The Dutch Postal Market and the Postal Directive
The Swedish Ministry if Enterprise and Innovation (2016), A revision of the Postal Act in a digital society
The Swedish Postal Services Act (2010) Chap. 3, Sec. 1
WIK (2016), Future scenario developments in the Dutch Postal Markets
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Okholm, H.B., Cerpickis, M., Boivie, A.M., Basalisco, B. (2018). Kill Your Darlings: When Does Sacrificing Next-Day Delivery Help USO Sustainability?. In: Parcu, P., Brennan, T., Glass, V. (eds) The Contribution of the Postal and Delivery Sector. Topics in Regulatory Economics and Policy. Springer, Cham. https://doi.org/10.1007/978-3-319-70672-6_15
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