Edited by Michael A. Crew and Paul R. Kleindorfer
Chapter 4: Competition through Downstream Access in the UK Postal Sector: The First Four Years
4. Competition through downstream access in the UK postal sector: the ﬁrst four years* Paul Dudley, Stephen Agar, Leonardo Mautino and Felipe Flórez Duncan 1 INTRODUCTION In most countries within Europe the postal markets are not yet fully liberalized. Even so some competition has developed in some countries where entrants have provided a service bypassing the incumbent’s network for the parts of the market open to competition. In Sweden and Germany, entrants serve about 10 percent of the addressed postal market, and in the Netherlands entrants provide a service about 20 percent. In contrast, the UK has engaged in a rapid liberalization of its postal market since 2000. Since the start of 2003, parties wishing to carry postings of 4000 items or more have been able to seek licenses for operation, and the UK addressed postal market has been fully liberalized since 2006. Thus for a nominal license fee1 an operator can engage in end-to-end competition or it can choose to undertake upstream services and inject its mail into the incumbent’s network downstream for delivery. In 2000 the Postal Services Act established an independent regulator, and Royal Mail’s subsequent Licence created the potential for third parties to access its network.2 For many years, bulk-mail customers in the UK have received price discounts from Royal Mail for the pre-sortation and presentation of their mail, and these were extended with the creation of the Mailsort product range in 1989. This mail is collected by Royal Mail and taken to a regional...
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