Postal Services Bill

House of Commons

Session 2010 - 11
Internet Publications
Other Bills before Parliament

Postal Services Bill

Postal Services Bill
Part 3 — Regulation of postal services
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(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 30 (see
requirements 1 and 2),
(ii)
the service is not provided throughout the United Kingdom, or
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(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
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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)
OFCOM may impose a general universal service condition on—
(a)
every postal operator providing a service within the scope of the
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universal postal service, or
(b)
every postal operator providing a service within the scope of the
universal postal service of a description specified in the condition.
(2)
A general universal service condition is—
(a)
a condition containing such obligations as OFCOM consider necessary
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to impose for, or in connection with, securing the provision of a
universal postal service in accordance with the standards set out in the
universal postal service order, or
(b)
a condition containing such obligations as OFCOM consider necessary
to impose for the purposes of section 44.
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(3)
A general universal service condition may require a person—
(a)
to make contributions in accordance with any scheme established
under section 44, and
(b)
to take such steps as may be required by any such scheme as regards
contributions made by users of services within the scope of the
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universal postal service.
(4)
At any time when there is a universal service provider, nothing in subsection
(2)(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
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section 30,
(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.
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Recovery of administrative charges incurred by OFCOM
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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
postal services.

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Part 3 — Regulation of postal services
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Financial support for universal postal service
42
Review of costs of universal service obligations
(1)
OFCOM may from time to time review the extent (if any) of the financial
burden for a universal service provider of complying with its universal service
obligations.
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(2)
In carrying out a review under this section OFCOM must consider the extent
to which, in their opinion, the provider is complying with its universal service
obligations in a cost-efficient manner.
(3)
If—
(a)
regulations under section 34 require the financial burden of complying
10
with universal service obligations (or proposed universal service
obligations) to be taken into account in determining whom to
designate, and
(b)
the regulations provide for a particular method of calculating that
burden to be used for the purposes of that determination,
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that must be the method of calculation applied on a review under this section.
(4)
If subsection (3) 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
after allowing for market benefits accruing to the universal service provider
from—
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(a)
the provider’s designation, and
(b)
the application to the provider of universal service obligations.
(5)
After carrying out a review under this section OFCOM must either—
(a)
ensure that the calculations made by them on the review are audited by
a person who appears to them to be independent of universal service
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providers, or
(b)
carry out an audit of those calculations themselves.
(6)
OFCOM must ensure that a report on the audit—
(a)
is prepared, and
(b)
if not prepared by OFCOM, is provided to them.
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(7)
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
the calculations made for the purposes of that review.
(8)
The publication must be in such manner as OFCOM consider appropriate for
35
bringing it to the attention of the persons who, in their opinion, are likely to be
affected by it.
(9)
The Secretary of State may at any time direct OFCOM to carry out a review
under this section.
(10)
Unless directed to do so by the Secretary of State, OFCOM may not carry out a
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review under this section before the end of the period of 3 years beginning with
the day on which this section comes into force.

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Fairness of bearing burden of universal service obligations
(1)
This section applies if OFCOM—
(a)
have concluded on a review under section 42 that complying with its
universal service obligations imposes a financial burden on a universal
service provider, and
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(b)
have published that conclusion in accordance with that section.
(2)
OFCOM must determine whether they consider it is or would be unfair for the
provider to bear, or to continue to bear, the whole or a part of the burden of
complying with its universal service obligations.
(3)
The determination by OFCOM of—
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(a)
whether it is or would be unfair for the provider to bear, or to continue
to bear, that burden, or
(b)
the extent (if any) to which that is or would be unfair,

must be made in accordance with regulations made by OFCOM.
(4)
OFCOM must publish the determination.
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(5)
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.
(6)
If OFCOM determine that it is or would be unfair for the provider to bear, or
to continue to bear, the whole or a part of that burden, they must submit a
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report to the Secretary of State setting out their recommendations as to the
action (if any) that they consider ought to be taken to deal with the burden.
(7)
The report may make recommendations—
(a)
about the order in which action ought to be taken, and
(b)
as to whether the taking of action ought to be contingent on the success
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or otherwise of the taking of other action.
(8)
The recommended action may consist of one or more of the following—
(a)
the carrying out of a review under section 33 (review of minimum
requirements),
(b)
requiring contributions to be made in accordance with section 44 for
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meeting some or all of that burden, and
(c)
the making of a procurement determination.
(9)
A procurement determination is a determination by OFCOM as to whether, in
their opinion, any particular postal operator or operators (which may include
the provider) could provide any of the postal services required to be provided
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by the universal service obligations concerned in a way which would mean
that—
(a)
no unfair financial burden would be imposed on any person (or
persons) in complying with those obligations, or
(b)
the financial burden imposed on any person (or persons) in complying
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with those obligations would be less unfair than the one mentioned in
subsection (6).
(10)
A procurement determination must be made in accordance with regulations
made by OFCOM.

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(11)
After receiving the report under subsection (6), the Secretary of State must
determine what action (if any) the Secretary of State considers ought to be
taken by OFCOM to deal with the burden.
(12)
The Secretary of State may then direct OFCOM to take that action.
(13)
A direction under subsection (12) may make provision—
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(a)
about the order in which specified action is to be taken, and
(b)
for the taking of specified action to be contingent on the success or
otherwise of the taking of other specified action.

In this subsection “specified” means specified in the direction.
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Contributions for meeting burden
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(1)
This section applies where the Secretary of State has directed OFCOM to
require contributions to be made for meeting some or all of the burden
concerned.
(2)
The contributions are to be made by either or both of the following—
(a)
postal operators providing services within the scope of the universal
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postal service,
(b)
users of services within the scope of the universal postal service (by
way of the charges paid by them).
(3)
OFCOM may determine that the contributions under this section are to be
made only by a description of postal operator or user.
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(4)
The assessment, collection and distribution of the contributions must be
carried out in accordance with a mechanism provided for in a scheme
contained in regulations made by OFCOM.
(5)
OFCOM must exercise their power to make the regulations in a way they
consider will secure the operation of the scheme—
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(a)
in an objective, proportionate and transparent way,
(b)
in a way that does not involve, or tend to give rise to, any undue
discrimination against particular postal operators (or a particular
description of postal operators) or particular users (or a particular
description of users), and
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(c)
in a way that avoids, or (if that is impracticable) minimises, any
distortion of competition.
(6)
The regulations may provide for—
(a)
the scheme, and
(b)
any fund set up for the purposes of the scheme,
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to be administered by OFCOM or some other person specified in the
regulations.
(7)
A person may be specified only if OFCOM are satisfied as to the person’s
independence of both—
(a)
universal service providers, and
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(b)
postal operators providing postal services within the scope of the
universal postal service.
(8)
The regulations may not be made unless—
(a)
the Secretary of State has consented to the making of them and

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Part 3 — Regulation of postal services
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(b)
a draft of the statutory instrument containing them has been laid
before, and approved by a resolution of, each House of Parliament.
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Report on sharing mechanism
(1)
This section applies where regulations under section 44 provide for a scheme
for the assessment, collection and distribution of contributions.
5
(2)
OFCOM must prepare and publish a report setting out, in relation to the period
to which it applies—
(a)
every determination by OFCOM that has had effect in relation to a time
in that period as a determination of the costs of providing anything
required to be provided by a universal service provider to meet its
10
universal service obligations,
(b)
the market benefits for each universal service provider that have
accrued to the provider during that period from its designation and the
application to it of universal service obligations, and
(c)
the contribution made by every person who has made a contribution
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during that period.
(3)
The first report under this section must be prepared in relation to the period of
12 months beginning with the coming into force of the first regulations made
under section 44.
(4)
Subsequent reports must be prepared in relation to the period of 12 months
20
beginning with the end of the period to which the previous report applied.
(5)
A report under this section—
(a)
must be prepared as soon as practicable after the end of the period to
which it is to apply, and
(b)
must be published as soon as practicable after its preparation is
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complete.
(6)
OFCOM are not required under this section—
(a)
to publish any matter that is confidential, or
(b)
to publish anything that it would not be reasonably practicable to
publish without disclosing such a matter.
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(7)
A matter is confidential for this purpose—
(a)
if it relates specifically to the affairs of a particular body and publication
of the matter would or might, in OFCOM’s opinion, seriously and
prejudicially affect the interests of the body, and
(b)
if it relates to the private affairs of an individual and publication of the
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matter would or might, in OFCOM’s opinion, seriously and
prejudicially affect the interests of the individual.
(8)
A report under this section must be published in such manner as OFCOM
consider appropriate for bringing it to the attention of the persons who, in their
opinion, are affected by the matters to which it relates.
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