Postcomm publishes licence arrangements for a fully competitive mail market

8 August 2005

Postcomm, the independent regulator for postal services, today published details of the licensing system designed to operate from 1 January 2006 when the market will be fully open to competition.

“This initiative, on Postcomm’s part, is an important step in underpinning customer confidence in using alternative operators to carry their mail, apart from Royal Mail,” said Postcomm’s chairman, Nigel Stapleton.

“In a multi-operator and fully liberalised market it is essential that arrangements are in place to make sure different mail operators work together to meet common standards – for example ensuring security of the mail and handling misdirected letters. These licensing arrangements will make sure the efforts of Royal Mail staff and other credible mail companies are not undermined by cowboy operators.”

The new arrangements are contained in three documents, published today, which cover the following areas:

Licensing framework 

This framework will apply to all operators other than Royal Mail (which, as the super dominant company, is already subject to strict price and service quality requirements). While encouraging entry of new companies to the market, the primary focus of the framework will be to safeguard customers' interests by ensuring mail is handled properly. Licences issued under this framework will operate on the same basis as Royal Mail's licence (currently 15 years from 2001). 

A code of practice protecting mail integrity 

All licensed operators in the open market, including Royal Mail, must meet the minimum standards laid down in this code of practice. It includes rules on recruitment and vetting of staff, training, disciplinary procedures, security of the mail, information and reporting requirements, and the use of agents and sub-contractors. 

Common operating procedures 

Among other things, this deals with mail that goes astray or is marked "return to sender". When the UK had a monopoly postal market, these would be put into a post box for return to Royal Mail. In a multi-operator market, envelopes will carry an identifier to indicate which operator has carried the mail so that mail put in a Royal Mail post box can be "repatriated" to, and dealt with by, the company concerned. The procedures also require operators who are wrongly contacted by customers of other operators to redirect enquiries to the company that handled their mail.  

These licence modifications now need to be agreed by all operators. If all licencees consent, postcomm will publish a formal 28-day consultation to amend the existing licences.