Competition in the postal services sector and the Universal Service Obligation - Business, Innovation and Skills Contents


Glossary


Access competition: The collection, sorting and transporting of letters around the UK carried out by providers other than Royal Mail, on behalf of a company. Those providers then pass the letters onto Royal Mail, and pay them to deliver to customers' addresses. Also known as 'final mile delivery'.

Bulk mail: Business mail services, which are not subject to regulatory requirements.

Designated Universal Service Provider (DUSP): A status subject to conditions, such as satisfying the Universal Service Obligation, meeting performance targets of each of the specified services, and publishing certain information, including delivery and collection times, and performance data. The current DUSP is the Royal Mail.

Direct Delivery: When postal operators other than the DUSP (Royal Mai) collect and deliver letters themselves, without using Royal Mail's network. (Also known as "end-to-end delivery", "bypass competition" and "downstream access").

Downstream Access (DSA): Mail that has been collected and distributed by a competitor, but then handed over to Royal Mail centres, for final delivery.

End-to-end delivery competition: See 'Direct Delivery'.

Final mile delivery: See 'access competition'.

General Universal Service Condition (GUSC): Requirements that could be imposed by Ofcom on any postal operator, requiring new entrants to deliver mail more days per week, and/or over greater geographical areas. This condition would not replicate the requirements of the Universal Service.

Inward Mail Centre (IMC): An operator collects mail from the customer, sorts it, and then transports it to Royal Mail's Inward Mail Centres, from where it is delivered to addresses by Royal Mail.

Ofcom: Ofcom is the Communications Regulator. It was established by the Office of Communications Act 2002 and received its full authority from the Communications Act 2003. On 1 October 2011, Ofcom took over responsibility for regulating the postal services industry from the Postal Services Commission (Postcomm), as a result of the Postal Services Act 2011.

Outward Mail Centre (OMC): where mail is sorted for delivery, and mail destined for the specific geographical area of the mail centre is retained, and mail intended for other mail centres is dispatched.

Reported Business: The subset of the Royal Mail Group Ltd core UK business that is regulated by Ofcom. It includes Network Access, and excludes Parcelforce Worldwide and Royal Mail Property Unit. It is the part of the Royal Mail Group that uses the Universal Service Network for collection, sorting, transportation or delivery of postal packets (both letters and parcels).

Royal Mail plc: A postal service company in the United Kingdom, which is also the Designated Universal Service Provider. It was state owned, but following the Postal Services Act 2011, the majority of shares of Royal Mail were floated on the London Stock Exchange on 15 October 2013. The Government hold a 30% stake in Royal Mail through Postal Services Holding Company Limited.

The Postal Services Directive 1997: Obliges all EU Member States to ensure that a Universal Postal Service covering a minimum range of specified services is provided.

Postal Services Act 2011 (PSA 2011): Sets out Ofcom's duty to secure the provision of a Universal Service, in order to comply with the minimum legal requirements as set out in EU law. Ofcom's duty to secure the provision of the Universal Postal Service must be given priority if there is a conflict with Ofcom's principal duty set out in the 2003 Act.

Postal Services (Universal Postal Services) Order 2012: Sets out the universal services in more detail.

The third Postal Services Directive 2008: Requires all EU postal markets to be opened to competition.

Universal Postal Service: Postal products and associated minimum service standards that must be available to all addresses in the UK. Ofcom's primary duty is to secure the provision of a Universal Postal Service. Also known as the Universal Service.

Universal Service Obligation (USO): The obligation to provide the Universal Postal Service, imposed on the Universal Service Provider by Ofcom, under Section 36 of the PSA Act 2011. Royal Mail (currently, the only USO provider) delivers to all 29 million addresses in the UK, irrespective of whether another postal company is delivering there as well. This service is provided six days a week. (EU law specifies a minimum of five days a week).

Universal Service Provider (USP): Any postal operator designated by Ofcom as the provider of the Universal Service, under the PSA 2011. Currently, the USP is Royal Mail.

Whistl: A postal delivery company, formerly known as TNT Post (and a wholly owned subsidiary of the Dutch company PostNL, which is the Dutch universal service postal provider). Currently, Whistl is the only rival to Royal Mail, with regard to end-to-end competition in the UK.

Zonal access pricing: Royal Mail can charge access operators different prices for delivery to different parts of the country, according to four zones.

Zones: The geographical zones that Royal Mail divides the United Kingdom into, based on the density of delivery posts, and the proportion of business delivery points of postcode sectors: Zone A (Urban): Zone B (Suburban): Zone C (Rural): and Zone D (London).


 
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© Parliamentary copyright 2015
Prepared 12 March 2015