Advances in Regulatory Economics series
Edited by Michael A. Crew, Paul R. Kleindofer and James I. Campbell Jr
3. 1. Pricing for postal access and worksharing* Michael A. Crew† and Paul R. Kleindorfer‡ INTRODUCTION This chapter evaluates approaches to setting access prices and worksharing discounts by postal operators (POs). POs are typically synonymous with universal service providers (USPs), so the terms are used interchangeably here. In the postal sector, the term ‘worksharing’ is used to describe what is known more generally in network industries as access pricing. As with other network industries, access to a postal network can occur at multiple stages, but it is usually referred to in the postal sector as either upstream or downstream access. The latter refers to access to the regional or local delivery network; for example newspaper or periodical publishers might print and address their publications and then deliver them in bundles to local post oﬃces for ﬁnal delivery. Competitors of the PO may also use downstream access provided by the PO to complete their coverage oﬀerings for high-cost areas. All other types of access are deemed upstream access. Upstream access activities are also referred to as ‘worksharing’. These include collection, consolidation, presorting, barcoding and transportation undertaken by customers or mail preparation companies in advance of tendering the mail to the PO. While there are some important diﬀerences in costing and pricing of upstream and downstream access, this chapter will treat both of them under the umbrella of access pricing, drawing distinctions as needed. The notion of access implies that worksharing activities by customers or third parties have been...
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