Table of Contents

Competition and Regulation in the Postal and Delivery Sector

Competition and Regulation in the Postal and Delivery Sector

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

orldwide, postal and delivery economics has attracted considerable interest. Numerous questions have arisen, including the role of regulation, funding the Universal Service Obligation, postal reform in Europe, Asia and North America, the future of national postal operators, demand and pricing strategies, and the principles that should govern the introduction of competition. Collected here are responses to these questions in the form of 24 essays written by researchers, practitioners, and senior managers from throughout the world.

Chapter 22: The Accounting Implications of the EU’s Third Postal Directive

John Hearn

Subjects: economics and finance, public sector economics


* John Hearn 1. INTRODUCTION This chapter considers the regulatory accounting requirements of the independent National Regulatory Authorities (NRAs) following the full accomplishment of the Internal Market for postal services within the European Union, in which a high-quality universal service will be obligatory (normally referred to as Full Market Opening or FMO). The term ‘regulatory accounting’ is used throughout the chapter to describe the accounting methodology, principles and systems that Universal Service Providers (USPs) are required to use when maintaining their own internal management accounts and when supplying accounting information to the European Commission and NRAs. The accounting information extracted from these systems is referred to as the regulatory accounts.1 Article 13 of the Telecoms Framework Directive (2002) uses the terms ‘accounting separation and financial reports’ to describe the same concepts. The first part of the chapter highlights the need for NRAs to secure further improvements in the standard of regulatory accounting, including accounting principles, methodology, and frequency of preparation and audit. Several areas where the decisions taken can have significant impacts on the quality of regulatory accounting are examined, and the impact that granularity of accounting can have on unit costs is highlighted. The second part of the chapter deals with the accounting implications of the functions of NRAs under the proposed Third Postal Directive (2006).2 The implications for the accountant of obligations about price control, interoperability of postal networks, and the financing of Universal Service Obligations (USO) are considered in detail. On the USO issue, the chapter...

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