14 Accomplishment of the internal market
for postal services
| (a)
(27949)
14368/06
COM(06) 595
+ ADD 1
|
Commission Report on the application of the Postal Directive (Directive 97/67/EC as amended by Directive 2002/39/EC)
|
| (b)
(27950)
14357/06
COM(06) 594
+ ADDs 1-2
|
Draft Directive amending Directive 97/67/EC concerning the full accomplishment of the internal market of Community postal services
|
| (c)
(27992)
14371/06
COM(06) 596
|
Commission Report: Prospective study on the impact on universal service of the full accomplishment of the postal internal market in 2009
|
| Legal base | (a) —
(b) Articles 47(2), 55 and 95EC; co-decision; QMV
(c) —
|
| Documents originated | 18 October 2006
|
| Deposited in Parliament | (a) and (b) 31 October 2006
(c) 10 November 2006
|
| Department | Trade and Industry
|
| Basis of consideration | EMs of 8 November 2006 and 20 November 2006
|
| Previous Committee Report | None, but see footnotes
|
| To be discussed in Council | First quarter of 2007
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared
|
Background
14.1 Following a Council resolution in 1994 which endorsed the
aim of combining a gradual controlled opening of the postal market
to competition with providing a durable guarantee of a universal
service, the Community adopted Directive 97/67/EC.[45]
This established a harmonised regulatory framework for the Community
postal sector, covering the provision of a universal postal service
(as well as the conditions governing non-reserved services); tariff
principles and the transparency of accounts; the setting of quality
standards (and compliance with them); the harmonisation of technical
standards; and the creation of independent national regulatory
authorities.
14.2 In particular, the Directive included definitions
of the minimum characteristics of the universal service which
had guaranteed, and set a maximum limit of 350 grams for those
services which could be reserved by a Member State to its universal
service provider in order to maintain that service (thereby opening
up about 3% on average of the postal revenues of those providing
universal services). Among other things, this was accompanied
by conditions governing the provision of non-reserved services,
where Member States were allowed to set certain conditions designed
to safeguard the universal service, including, where necessary,
an obligation on non-reserved service providers to contribute
to a fund compensating for any unfair financial burden borne by
the universal service provider, and a prohibition on their providing
certain "special services" which are effectively indistinguishable
from those supplied by the universal provider.
14.3 Directive 97/67/EC also provided for decisions
to be taken on the further gradual and controlled liberalisation
to apply from 1 January 2003, and Directive 2002/39[46]
accordingly stipulated that the maximum weight limit for services
reserved to universal providers should be reduced to 100 grams
from that date and to 50 grams from 1 January 2006. That measure
also required the Commission to provide a study which would assess
for each Member State the impact on universal service of the full
accomplishment of the postal internal market in 2009, and, based
on that study's conclusions, to submit a proposal confirming,
if appropriate, that year as the date for the full accomplishment
of the postal internal market.
The current documents
14.4 These three documents comprise (a) a report
by the Commission on the application of the Postal Directive,
(b) a draft Directive, which would bring about the full accomplishment
of the internal market in this sector, and (c) the prospective
study on the impact on universal service of full accomplishment
of the postal internal market in 2009.
Document (a)
14.5 This report is the third of its kind,[47]
and recalls the importance of postal services not only in ensuring
social and regional cohesion, but as an element of the Lisbon
strategy. It says that reform in the Community is "advancing
well", with improvements having been made particularly as
regards the quality of services, customer orientation, business
efficiency and the separation of regulators from operators, and
it highlights the fact that the UK fully opened up its own market
on 1 January 2006 (thereby joining Finland and Sweden in this
respect). It also notes that the reduction of the reserved area
to 50 grams from that date has been transposed in all Member States,
but it adds that the successful implementation of some of the
more complex aspects of the Directive, such as the licensing/authorisation
of operators and price control and accounting, has been very varied.
14.6 The report also notes, although traditional
mail has not been replaced by other communication technologies
as quickly as forecast, there has been a continuing shift in the
postal market itself, towards one way distribution. As a result,
business to the consumer segment now accounts for more than 60%
of letter post items, and this trend is expected to continue,
as is the increased pace of change. At the same time, however,
the report suggests that, even where a monopoly has been abolished
or substantively reduced, meaningful competition, particularly
in the letter post market, has yet to develop, though the Commission
adds that the prospect of market opening is likely to generate
further changes. It therefore concludes that there is nothing
to suggest a need to change the 2009 deadline in the Postal Services
Directive, though it adds that, if consumers are to continue to
enjoy the same quality of service, their rights could be strengthened
in certain respects.
Document (c)
14.7 These conclusions are also contained in this
document, which comprises the required prospective study on the
impact on universal service of the full accomplishment of the
postal internal market in 2009. It concludes that the full accomplishment
of the postal internal market, together with a high quality of
universal postal service can be achieved by 2009 in all Member
States, and that there are serious risks in delaying the process
as the market is evolving quickly and needs further reform.
Document (b)
14.8 In this proposal, the Commission accordingly
confirms that full market opening should take place by 1 January
2009, and therefore includes a prohibition on Member States granting
or maintaining exclusive or special rights in the sector beyond
that date. At the same time, it notes the recognised need for
measures to compensate, where necessary, the uneconomic cost of
providing the universal service in ways which would be less distortive
than the retention of monopolies.
14.9 The proposal would also make a number of other
changes, as follows, in order to help safeguard the universal
service:
- at present, the Directive requires
Member States to designate its universal provider(s): in future,
they would be able to decide on the most efficient and appropriate
way to guarantee the availability of a universal service;
- universal service tariffs must at present be
geared to costs, subject to a Member State being able to apply
a uniform national tariff: it is now proposed to allow universal
service providers greater freedom to react to competition by limiting
tariff uniformity to items for which competition is expected to
be limited, or to circumstances where other legitimate public
interests are at stake;
- it would recognise the need to finance the residual
costs of universal service providers, and to clarify the measures
which Member States may take to achieve this: these include public
compensation through direct state subsidies or through the use
of public procurement procedures, as well as a continuation of
the present provision for a compensation fund to which other service
providers contribute (although the Commission notes that experience
in this area has so far been very limited);
- Member States would be able to continue to authorise/license
the providers of non-reserved services where this is necessary
to safeguard the universal service, but they would not in future
be able to limit the number of authorisations, impose a simultaneous
obligation to provide a universal service and contribute to a
compensation scheme, or to impose disproportionate or unjustified
technical or operational conditions;
- there is at present a prohibition on the cross-subsidisation
of universal services outside the reserved sector from revenues
derived from services within the reserved sector, unless this
is necessary to fulfil specific universal service obligations:
the Commission now says that Member States should be free to decide
on the precise mechanisms needed in this area, and it has therefore
proposed the removal of this prohibition, as well as of a provision
specifying the detailed basis on which universal service providers
have to keep separate accounts;
- it would reinforce the protection provided to
consumers by extending the principles governing complaint procedures
beyond universal service providers; and
- it would improve the effective functioning of
national regulatory bodies by requiring Member States to guarantee
their independence, by ensuring transparency in the allocation
of regulatory functions, by encouraging increased cooperation
between the relevant national bodies, by clarifying the rights
of appeal against their decisions, and by providing such bodies
with the power to collect information for statistical purposes.
The Government's view
14.10 We have received from the Parliamentary Under-Secretary
of State for Employment Relations & Postal Services at the
Department of Trade and Industry (Mr Jim Fitzpatrick) three Explanatory
Memoranda — two, dated 8 November 2006, dealing with documents
(a) and (b), and a third, dated 20 November 2006, dealing with
document (c). However, in each case, he makes it clear that the
documents contain nothing which causes any difficulty for the
UK, and in particular he welcomes the proposal that full market
opening should take place in 2009, a step which he describes as
closely concordant with UK policy objectives, and as consistent
with the steps which the UK has already taken to open fully its
own market.
Conclusion
14.11 Although the liberalisation of the postal
market raises important issues, it is clear that the purpose of
the present documents is essentially to ensure that a process
which was set in train in 1997 is brought to fruition in line
with the timetable originally envisaged. It does not, therefore
seem to us to raise any new issues requiring further consideration
by the House, bearing in mind also that the goal of full liberalisation
is consistent with the steps taken by the UK in 2006 regarding
its own postal market.
14.12 However, this proposal is one of two brought
forward recently which COSAC[48]
has identified as meriting further examination by national parliaments
as regards their subsidiarity and proportionality, and we have
therefore looked closely at these two aspects. We note that, in
putting forward the draft Directive, the Commission says that
the objectives[49]
cannot be sufficiently achieved by Member States alone, not least
because of the different degrees to which they have retained monopolies
in this sector. It also points out that, rather than setting a
detailed set of rules, the proposal continues to provide for a
general framework, leaving Member States with a range of choices
as to how best to attain the proposed objectives. As the Minister
makes clear, the Government concurs with this assessment, and
we ourselves do not consider that there are any major subsidiarity
implications. In particular, the proposal does not, as we have
observed, break any new ground in this respect, as compared with
Directives 97/67/EC and Directive 2002/39/EC, and indeed the Commission
has in a number of areas now proposed a less prescriptive approach
than hitherto.
14.13 In the light of these considerations, and
having drawn the issues in question to the attention of the House,
we are content to clear the proposal.
45 OJ No. L 15, 21.1.98, p.14. Back
46
OJ No. L 176, 5.7.02, p.21. Back
47
The previous two reports were in 2002 and 2005; see (24081) 15190/02
and (26473) 7757/05 respectively. Back
48
Conference of Community and European Affairs Committees of Parliaments
of the European Union. Back
49
Of achieving an internal market through the removal of exclusive
and special rights in the postal sector, of safeguarding a common
level of universal services for all users in all Community countries,
and of setting harmonised principles for the regulation of postal
services in an open market environment. Back
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