Postal Services Bill [HL]

House of Commons

Session 2008 - 09
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Other Bills before Parliament

Postal Services Bill [HL]

Postal Services Bill [HL]
Part 3 — Regulation of postal services
18

(ii)
are sent by post to a member of either House of Parliament or of
a devolved legislature or to the Clerk of the Scottish Parliament,
and
(iii)
meet the requirements of subsection (4), or
(c)
petitions and addresses forwarded to Her Majesty or, in Northern
5
Ireland, to the Secretary of State.
(4)
The requirements of this subsection are met if the petitions or addresses—
(a)
do not exceed 1 kilogram in weight, and
(b)
are sent without covers or in covers open at the sides.
(5)
“Registered items service” means a postal service which provides—
10
(a)
for the registration of postal packets in connection with their
transmission by post, and
(b)
for the payment of an amount determined by the person providing the
service in the event of theft or loss of or damage to the packets.
(6)
“Uniform public tariff” means a public tariff which is uniform throughout the
15
United Kingdom.
Universal service provider
34
Designation of universal service provider
(1)
OFCOM may designate a single postal operator as the universal service
provider.
20
(2)
OFCOM must publish the designation in such way as they consider
appropriate for bringing it to the attention of members of the public.
(3)
The procedure to be followed for the making of a designation under this
section must be provided for in regulations made by OFCOM.
(4)
OFCOM may—
25
(a)
review the designation for the time being in force, and
(b)
consider what (if any) designated USP condition should continue to
apply to the universal service provider.

The procedure to be followed on a review must be provided for in regulations
made by OFCOM.
30
(5)
Regulations made by OFCOM must provide for a postal operator’s
designation to cease to have effect where, in any case described in the
regulations, the designated USP condition applicable to the operator is
revoked.
(6)
Both the procedure for designations and the procedure for the conduct of
35
review of designations provided for by regulations under this section must be
one appearing to OFCOM—
(a)
to be efficient, objective, proportionate and transparent, and
(b)
not to involve, or to tend to give rise to, any undue discrimination
against any person or description of persons.
40
(7)
OFCOM must notify the European Commission of the designation and of any
case where the designation ceases to have effect (and the notification must
identify the postal operator designated or ceasing to be designated).

Postal Services Bill [HL]
Part 3 — Regulation of postal services
19

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Designated USP condition
(1)
A designated USP condition is a condition that OFCOM impose on the
universal service provider requiring it to do the following—
(a)
to provide a universal postal service throughout the United Kingdom
in accordance with the standards set out in the universal postal service
5
order,
(b)
to provide, or make arrangements for the provision of, access points for
the purposes of a universal postal service,
(c)
to provide specified information (at such times and in such manner as
OFCOM may direct) to other postal operators and users of postal
10
services about the universal postal service,
(d)
to provide specified postal services free of charge to specified
descriptions of blind or partially sighted persons, and
(e)
to do anything else that OFCOM consider appropriate for the purposes
of, or in consequence of, the requirements imposed under any of
15
paragraphs (a) to (d).
(2)
OFCOM may impose a designated USP condition only if it appears to them
that it is necessary to do so in order to secure the provision of a universal postal
service in accordance with the standards set out in the universal postal service
order.
20
(3)
A designated USP condition may make provision as to the tariffs to be used for
determining prices in accordance with which a universal postal service, or part
of a universal postal service, is provided.
(4)
In exercising the power conferred by subsection (3) OFCOM must seek to
ensure that—
25
(a)
the prices are affordable,
(b)
the prices take account of the costs of providing the service or part of a
service, and
(c)
the prices provide incentives to provide the service or part of a service
efficiently.
30
(5)
A designated USP condition may impose performance targets.
(6)
In this section “specified” means specified in the designated USP condition.
(7)
Nothing in this section or section 36 is to be read as restricting the generality of
the provision that may be included in a designated USP condition.
36
Publication of information about performance
35
(1)
A designated USP condition must include provision requiring the universal
service provider—
(a)
to publish information about the extent to which it is providing
specified postal services in accordance with specified standards, and
(b)
to publish annually an independently audited performance report.
40
(2)
The reference in subsection (1)(b) to an independently audited performance
report is to a report that—
(a)
contains information about the provider’s performance in complying
with specified requirements under the designated USP condition, and
(b)
is audited for accuracy by a person who is independent of both
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OFCOM and the provider.

Postal Services Bill [HL]
Part 3 — Regulation of postal services
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(3)
OFCOM must notify the European Commission of anything contained in a
designated USP condition as a result of subsection (1).
(4)
A designated USP condition may require the universal service provider to
meet the costs of the audit required by virtue of subsection (1)(b).
(5)
A designated USP condition may include other provision requiring the
5
universal service provider to publish information about its performance in
complying with specified requirements under the designated USP condition.
(6)
The provision made as a result of this section—
(a)
must include provision—
(i)
requiring information previously published to be updated and
10
published again, and
(ii)
requiring the published information to satisfy requirements
that OFCOM consider appropriate to secure its adequacy, and
(b)
may include requirements as to the times at which, and the manner in
which, the information is to be published.
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(7)
In this section “specified” means specified in the designated USP condition.
37
USP access conditions
(1)
A USP access condition is a condition that OFCOM impose on the universal
service provider requiring it to do either or both of the following—
(a)
to give access to its postal network to other postal operators or users of
20
postal services, and
(b)
to maintain a separation for accounting purposes between such
different matters relating to access (including proposed or potential
access) to its postal network as OFCOM may direct.
(2)
The provider’s “postal network” means the systems and all the resources used
25
by the provider for the purpose of complying with a designated USP condition
(and, accordingly, includes arrangements made with others for the provision
of any service).
(3)
OFCOM may not impose a USP access condition unless it appears to them that
the condition is appropriate for one or more of the following purposes—
30
(a)
promoting efficiency;
(b)
promoting effective competition;
(c)
conferring significant benefits on the users of postal services.
(4)
In addition, OFCOM may not impose a USP access condition that imposes
price controls on the universal service provider unless it appears to them that
35
the provider—
(a)
might fix and maintain some or all of its prices at an excessively high
level with adverse consequences for users of postal services, or
(b)
might impose a price squeeze with adverse consequences for users of
postal services.
40
(5)
In imposing a USP access condition that imposes price controls in connection
with the giving of access to the universal service provider’s postal network or
to part of that network, OFCOM must have regard to such of the costs incurred
in the provision of that network, or part of that network, as OFCOM consider
appropriate.
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Postal Services Bill [HL]
Part 3 — Regulation of postal services
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(6)
In imposing a USP access condition that imposes price controls OFCOM may—
(a)
have regard to the prices at which services are available in comparable
competitive markets, and
(b)
determine what they consider to represent efficiency by using cost
accounting methods.
5
(7)
In deciding what USP access conditions to impose in a particular case, OFCOM
must take into account, in particular, the following factors—
(a)
the technical and economic viability, having regard to the state of
market development, of installing and using facilities that would make
the proposed access unnecessary,
10
(b)
the feasibility of giving the proposed access,
(c)
the investment made by the universal service provider in relation to the
matters in respect of which access is proposed,
(d)
the need to secure effective competition in the long term, and
(e)
any rights to intellectual property that are relevant to the proposal.
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(8)
For the purposes of this section a reference to giving a person access to the
postal network includes giving a person an entitlement to use, be provided
with or become a party to any services, facilities or arrangements comprised in
the postal network.
(9)
In Schedule 3—
20
(a)
Part 1 makes provision about the kind of matters that may be included
in a USP access condition, and
(b)
Part 2 makes provision about the resolution of access disputes by
OFCOM.
38
USP accounting conditions
25
(1)
A USP accounting condition is a condition that OFCOM impose on the
universal service provider requiring it to do one or more of the following—
(a)
to maintain a separation for accounting purposes between such
different matters as OFCOM may direct for such purposes as they may
direct,
30
(b)
to comply with rules made by OFCOM in relation to those matters
about the identification of costs and cost orientation,
(c)
to comply with rules made by OFCOM about the use of cost accounting
systems in relation to those matters, and
(d)
to secure that its compliance with those systems is audited annually by
35
a qualified independent auditor.
(2)
A condition within subsection (1)(a)—
(a)
may require the separation to be maintained in relation to different
services, facilities or products or in relation to services, facilities or
products provided in different areas, and
40
(b)
may impose requirements about the accounting methods to be used in
maintaining the separation.
(3)
A condition within subsection (1)(b) or (c)—
(a)
may include conditions requiring the application of presumptions in
the fixing and determination of costs and charges for any purpose, and
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Postal Services Bill [HL]
Part 3 — Regulation of postal services
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(b)
may require the universal service provider to publish such accounts
and other information relating to anything required to be done as a
result of those provisions as OFCOM consider appropriate.
(4)
A condition within subsection (1)(d) may require the universal service
provider to meet the costs of the audit.
5
(5)
If a USP accounting condition imposes rules on the universal service provider
about the use of cost accounting systems, OFCOM may secure that the
condition also imposes an obligation on the provider to make arrangements for
a description to be made available to the public of the cost accounting system
used.
10
(6)
If OFCOM impose an obligation under subsection (5), the description of
information to be made available must include details of—
(a)
the main categories under which costs are brought into account for the
purposes of that system, and
(b)
the rules applied for the purposes of that system with respect to the
15
allocation of costs.
(7)
In this section “qualified independent auditor” means a person who—
(a)
is eligible for appointment as a statutory auditor under Part 42 of the
Companies Act 2006 (c. 46), and
(b)
if the appointment were an appointment as a statutory auditor, would
20
not be prohibited from acting by section 1214 of that Act (independence
requirement).
(8)
Nothing in this section is to be read as restricting the generality of the power to
impose a USP accounting condition.
Persons providing services within scope of universal postal service
25
39
Services within scope of the universal postal service
(1)
A postal service is within the scope of the universal postal service if—
(a)
the service falls within the description of a service set out in the
universal postal service order, or
(b)
the service would fall within the description of a service set out in that
30
order but for the fact that—
(i)
in the case of a service consisting of the delivery or collection of
letters or other postal packets, the delivery or collection is not
made on each of the days required by section 32(3)(a) to (d),
(ii)
the service is not provided throughout the United Kingdom, or
35
(iii)
the service is not provided at an affordable price in accordance
with a public tariff which is uniform throughout the United
Kingdom, or
(c)
in the opinion of OFCOM the service is of a kind that, from the point of
view of users of postal services, could reasonably be said to be
40
interchangeable with a service of a description set out in that order.
(2)
In this section any reference to a service includes a part of a service.
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General universal service conditions
(1)
A general universal service condition is—

Postal Services Bill [HL]
Part 3 — Regulation of postal services
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(a)
a condition that OFCOM consider necessary to impose for the purpose
of securing that a universal postal service is provided in accordance
with the standards set out in the universal postal service order, or
(b)
a condition imposed for the purposes of section 43 (sharing of burden
of universal service obligations).
5
(2)
A general universal service condition may require a person providing services
within the scope of the universal postal service—
(a)
to make contributions in accordance with any scheme established
under section 43, and
(b)
to take such steps as may be required by any such scheme as regards
10
contributions made by users of such services.
(3)
At any time when there is a postal operator designated as the universal service
provider under section 34, nothing in subsection (1)(a) is to be read as
authorising the imposition of a condition requiring a person—
(a)
to deliver or collect letters or other postal packets as mentioned in
15
section 32(3)(a) to (d),
(b)
to provide a service throughout the United Kingdom, or
(c)
to provide a service at an affordable price in accordance with a public
tariff which is uniform throughout the United Kingdom.
(4)
A general universal service condition may be applied—
20
(a)
to every postal operator providing a service within the scope of the
universal postal service, or
(b)
to every postal operator providing a service within the scope of the
universal postal service of a description specified in the condition.
(5)
Nothing in this section is to be read as restricting the generality of the provision
25
that may be included in general universal service conditions.
41
Recovery of administrative charges incurred by OFCOM
Schedule 4 makes provision authorising OFCOM to impose charges on postal
operators providing services within the scope of the universal postal service to
meet costs incurred by OFCOM in carrying out their functions in relation to
30
postal services.
Financial support for universal service
42
Review of costs of universal service obligations
(1)
OFCOM must from time to time review the extent (if any) of the financial
burden for the universal service provider of complying with its universal
35
service obligations.

The provider’s “universal service obligations” means the obligations imposed
on it by a designated USP condition.
(2)
In carrying out a review under this section OFCOM must consider the extent
to which, in their opinion, the provider is complying with those obligations in
40
a cost-efficient manner.
(3)
The first review under this section must be carried out no later than 5 years
after this section comes into force; and every subsequent review must be
carried out no later than 5 years after the previous one.

Postal Services Bill [HL]
Part 3 — Regulation of postal services
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(4)
Where—
(a)
regulations under section 34 (designation of universal service provider)
require the financial burden of complying with universal service
obligations (or proposed universal service obligations) to be taken into
account in determining whom to designate, and
5
(b)
the regulations provide for a particular method of calculating that
burden to be used for the purposes of that determination,

that must be the method of calculation applied on a review under this section.
(5)
Where subsection (4) does not apply, the financial burden of complying is to be
taken to be the amount calculated by OFCOM to be the net cost of compliance
10
after allowing for market benefits accruing to the universal service provider
from—
(a)
the provider’s designation, and
(b)
the application to the provider of universal service obligations.
(6)
After carrying out a review under this section OFCOM must either—
15
(a)
cause the calculations made by them on the review to be audited by a
person who appears to them to be independent of the universal service
provider, or
(b)
themselves carry out an audit of those calculations.
(7)
OFCOM must ensure that a report on the audit—
20
(a)
is prepared, and
(b)
if not prepared by OFCOM, is provided to them.
(8)
OFCOM must publish—
(a)
their conclusions on the review, and
(b)
a summary of the report of the audit which was carried out as respects
25
the calculations made for the purposes of that review.
(9)
The publication must be in such manner as OFCOM consider appropriate for
bringing it to the attention of the persons who, in their opinion, are likely to be
affected by it.
43
Sharing of burden of universal service obligations
30
(1)
This section applies where OFCOM—
(a)
have concluded on a review under section 42 that complying with its
universal service obligations imposes a financial burden on the
universal service provider, and
(b)
have published that conclusion in accordance with that section.
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(2)
OFCOM must determine whether they consider it would be unfair for the
provider to bear, or to continue to bear, the whole or any part of the burden.
(3)
The determination by OFCOM of—
(a)
whether it is or would be unfair for the universal service provider to
bear, or to continue to bear, the burden of complying with its universal
40
service obligations, or
(b)
the extent (if any) to which that is or would be unfair,

must be in accordance with regulations made by OFCOM.