The Postal Services Commission (PostCom), Britain’s newly created postal industry regulator, has told the post office, recently rebranded Consignia [WAMN: 1-Jan-01], that commercial competitors must be allowed “fair” access to its distribution network.

Consignia, now a government owned public limited company, is the first postal operator to receive a licence from the Commission – although it will certainly not be the last as PostCom has stressed that it intends to promote effective competition as soon as possible.

According to Commission chairman Graham Corbett, the issue of the licence is "the first step in PostCom's task to set a framework for a healthy and competitive postal services sector across the UK". It bars Consignia from using its commercial muscle to squeeze out competitors through "predatory" pricing, and imposes tougher service standards.

In addition prices on most postal services - including first and second class letters – have been frozen for two years and others restricted to the official rate of inflation. However, there are no price controls in those markets where there is already significant competition – specifically express and courier services.

The licence requires competitors to be given access to Consignia's infrastructure on terms not less favourable than the Royal Mail letters business, stressing that the allocation of costs must be "reasonable." Commented Consignia chief executive John Roberts: “Overall, the licence is balanced but it will stretch us.”

Meantime, PostCom is in discussion with a number of major European postal operators and express mail contractors. It is thought that the first competitor will be licensed within a few months, probably on the basis of a single city delivery service.

News source: Financial Times