- Advances in Regulatory Economics series
Edited by Michael A. Crew and Paul R. Kleindorfer
Chapter 11: State Funding and Cost Sharing of the USO Under the 2008 EU Postal Services Directive
11. State funding and cost sharing of the USO under the 2008 EU Postal Services Directive Richard Eccles† 1 INTRODUCTION One of the inevitable consequences and underlying intentions of the 2008 EU Postal Services Directive in removing the reserved sector is the need for new means to be found of ensuring the financing of the universal service. No longer can member states rely upon the reservation of any core postal services to ensure a secure revenue stream to cover the universal service costs. The Directive allows for various approaches, including the State procurement of parts of the universal service in accordance with the EU public procurement rules, and indeed the Directive recognizes that insofar as parts of the universal service are sufficiently profitable, market forces can be relied upon to ensure its provision. Considerable attention is, however, devoted to the possibility of State funding of the universal service through a compensation fund, or a cost-sharing scheme between postal operators where, in either case, the provision of a universal service overall results in ‘net cost’ giving rise to an ‘unfair financial burden’ on a universal service provider (USP). This is provided for in the new Article 7(3) introduced by the 2008 Directive, together with a comprehensive definition of ‘net cost’ in Annex I, Part B of the 2008 Directive. This concept of ‘net cost’ is a new one under the 2008 Directive, though the principle of a compensation fund based on an unfair financial burden to the USP, and the...
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