Advances in Regulatory Economics series
Edited by Michael A. Crew and Paul R. Kleindorfer
Chapter 18: How Should Regulation be Adjusted when Universal Service Substitution Grows?
* Pekka Leskinen, Peter Karlsson, Heikki Nikali and Päivi Rokkanen 1 INTRODUCTION Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services (the Third Directive)1 is in the process of implementation. The deﬁnition of Universal Service Obligation (USO) has remained unchanged in the Third Directive but the member states and national regulators have ﬂexibility in implementing the Third Directive in the light of national conditions. In this chapter, we ask what the content of the USO is in traditional letter communication today as well as in the near future. We also discuss the eﬀect that the scope of the universal service has in our changing environment on the position of the regulator and the competition authority. Our starting-point is that traditional letter communication should no longer be considered as a separate market but that it is part of a more extensive market of messaging as stated in the Third Directive. We exclude from our discussion the distribution services of publications and parcels usually included in the USO. The volume of communication through other media than letters is increasing. At the same time the volume of communication included in the broad USO (including all letter items under 2 kilograms) is decreasing. In the future the decrease will accelerate. Communication that has traditionally taken place on paper will transfer to electronic communications media. The new electronic communications media...
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