Postal Services Act 2011
2011 CHAPTER 5
Annex: Transposition Notes for the Postal Services Directive (2008/6/Ec)
508.The Act implements provisions of Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services.
509.This Directive amends Directive 97/67/EC which was previously amended by Directive 2002/39/EC. References are to the consolidated version of the Directive.
Articles 3, 4(1) and 5: Provision of the universal postal service
Objective
510.Article 3 places an obligation on member States to ensure that users enjoy the right to a universal service of a specified quality at all points in their territory at affordable prices. This includes the requirement to ensure that the density of access points takes account of the needs of users. It also sets out the minimum requirements of a universal service.
511.Article 4.1 provides that each Member State shall ensure that the provision of the universal service is guaranteed.
512.Article 5 provides that each Member State must ensure that the universal service provision is such that the “essential requirements” are guaranteed; that there is no discrimination and that it shall not be interrupted except in the case of force majeure.
Implementation
513.These Articles are implemented by sections 29, 30, 31, 36, 42 and 49 of, and Schedule 6 to, the Act.
514.Section 29 provides that OFCOM must carry out their functions in relation to postal services in a way that they consider will secure the provision of a universal service and the provision of sufficient access points to meet the reasonable needs of users of the universal postal service.
515.Section 30 provides that OFCOM must set out in an order a description of the services they consider should be provided in the UK as a universal service. This must include at least the minimum requirements as set out in Article 3 and Section 31. Section 31 sets out the services that must as a minimum be included in a universal service, including the requirement to service the whole UK at affordable prices.
516.Sections 36 and 42 allow OFCOM to impose conditions on postal operators for the purpose of securing the universal service to the required standards.
517.Section 49 allows OFCOM to impose conditions which include those necessary to secure essential requirements.
518.Schedule 6 provides the test that must be met before imposing or modifying regulatory conditions and includes that there must be no undue discrimination.
Responsibility
519.OFCOM.
Article 4.2: Designation of universal service providers
Objective
520.Article 4.2 allows member States to designate universal service providers in order that the whole of the national territory can be covered. When they do so, member States must publish the obligations and rights of universal service providers. They must notify the Commission of the identity of universal service providers. The designation of a universal service provider must be subject to periodic review.
Implementation
521.Section 35 provides that OFCOM may designate one or more postal operators as universal service providers and must publish each designation. It provides for designations to be subject to review in accordance with regulations made by OFCOM. The procedure for designating and reviewing designations must be efficient, objective, proportionate, transparent and not give rise to any unfair discrimination. OFCOM must notify the Commission of designations and of cases where designations ceased to have effect.
Responsibility
522.OFCOM.
Article 6: Provision of information by universal service providers
Objective
523.Article 6 provides that member States must take steps to ensure that users and postal service providers are given sufficiently up to date information regarding the particular features of the universal service offered, including information as to conditions of access to these services and prices and quality standards. This information must be published and member States must notify the Commission of how this information is to be made available.
Implementation
524.Section 36 allows OFCOM to impose a designated USP condition on a designated universal service provider. This may include provisions requiring a universal service provider to provide any information specified in the condition about any service it is required to provide as part of the universal service. Schedule 6 provides that the way in which a regulatory condition is to be imposed or modified is by publication of a notification setting out the condition (or modification). Paragraph 5(2) of Schedule 6 provides that the European Commission must be sent a copy of every notification in respect of a designated USP condition or a general universal service condition.
Responsibility
525.OFCOM.
Article 7 and Parts B and C of Annex I: Financing of universal service
Objective
526.These provide for a range of alternatives available to member States in cases where there is a need for external financing of the universal services. The financing alternatives include public compensation through direct state subsidies or cost sharing mechanisms (Articles 7(3) to (5)), or indirectly, financing through the use of European public procurement procedures (Articles 7(2)).
Implementation
527.Article 7(3)(b) to (5) are implemented through sections 42(3) and 44 to 47 of the Act. These provisions confer powers on OFCOM to set up (by regulations) a cost-sharing mechanism to finance the postal universal services by means of contributions from service providers and/or user’s fees. Before a cost-sharing mechanism is set, OFCOM is required to carry out a review of costs of a universal service provider and conclude that the (i) service provider is subject to an unfair financial burden when complying with universal service conditions; and (ii) it would be unfair for that provider to bear the whole or part of that burden.
528.Article 7(2) and (3) (a) do not require implementation.
529.The net cost calculation mechanisms in Part B and the recovery of costs provisions in Part C of Annex I to the Directive only become relevant when OFCOM reviews the financial burden of the universal service and decides whether to set-up a cost sharing mechanism, through regulations made pursuant to these new enabling powers. Accordingly, these provisions only need to be given effect in the regulations made by OFCOM under the new powers.
Responsibility
530.Secretary of State and OFCOM.
Article 9: Conditions governing the provision of postal services: granting of Authorisations
Objective
531.Article 9 allows member States to introduce authorisation procedures. For services which fall outside the scope of the universal service, these may be introduced to the extent necessary to guarantee essential requirements; and for services which fall within the scope of the universal service, to the extent necessary to guarantee the essential requirements and to ensure the provision of the universal postal service. Article 9.2 sets out restrictions on what authorisations may and may not do. Article 9.3 provides that the procedures, obligations and requirements referred to in the preceding paragraphs must be transparent, accessible, non-discriminatory, proportionate, precise and unambiguous, be made public in advance and based on objective criteria. There must also be an appeal procedure.
Implementation
532.Section 28 provides a general authorisation for persons to provide postal services without the need for any licence or authorisation but the provision of those services may be subject to regulatory conditions imposed by OFCOM. The types of conditions are listed in Section 28(2).
533.Section 49 provides that “essential conditions” can be imposed on any postal operator if OFCOM consider it necessary for the purposes of safeguarding certain matters, which include some of the essential requirements which might not be secured by other means. Under section 42 general universal service conditions may be imposed on operators providing services within the scope of the universal service (as defined in section 41) to the extent necessary to secure the universal service. Section 36 provides that a designated USP condition may be imposed on a designated universal service provider to secure the provision of the universal service.
534.Schedule 6 provides for the procedure in relation to imposing and modifying regulatory conditions and provides amongst other things that any condition must be objectively justifiable, non-discriminatory, proportionate and transparent. Notifications of conditions must be published.
535.Specific provision is made under section 57 for appeals to the Competition Appeal Tribunal against the imposition of regulatory requirements and the imposition of penalties for breach of a regulatory condition. The grounds for appeal are the same as could be made on judicial review. In addition, price control decisions may be appealed to the Competition Commission under section 59. Any other of OFCOM’s decisions can be appealed to the High Court in accordance with the usual rules on judicial review.
Responsibility
536.OFCOM, the Competition Appeal Tribunal, the Competition Commission and the High Court.
Article 11a: Access
Objective
537.This Article provides for member States to ensure, where necessary to protect the interests of users and/or to promote effective competition, transparent, non-discriminatory access conditions are available to postal infrastructure or services provided within the scope of the universal service, without prejudice to member States’ right to adopt measures to ensure access to the postal network under transparent, proportional and non-discriminatory conditions.
Implementation
538.Article 11a (first limb) is implemented by sections 28(2) and 50 and Schedule 3 to the Act. Section 50 confers power on OFCOM to impose general access conditions on postal operators, which can require access to be given by a postal operator to its infrastructure or to services within the scope of the universal service. An operator may be required to maintain a separation for accounting purposes between different matters for access purposes. Schedule 3 sets out further provision as to the types of access conditions which may be imposed on an operator, including terms of access, price controls, use of accounting methods, non-discrimination and transparency and provides for resolution of access disputes.
539.Article 11a (second limb) is implemented through sections 28(2) and 38 and Schedule 3 to the Act. Section 38 confers powers on OFCOM to impose access conditions on a designated universal service provider requiring it to provide access to its postal network, or to maintain a separation for accounting purposes between matters relating to access to its postal network. Schedule 3 sets out the types of access conditions which may be imposed and provides for resolution of access disputes.
Responsibility
540.OFCOM.
Article 12: Tariff principles and transparency of accounts
Objective
541.Article 12 provides that member States must take steps to ensure that tariffs for each of the services forming part of the universal service are affordable and that prices are cost oriented and give incentives for a universal service provision. The tariffs must be such that all users independent of geographical location and in the light of specific national conditions have access to the service provided. Article 12 goes on to provide that member States may provide for a uniform tariff and may maintain a free postal service for the blind or partially sighted.
542.The requirement for transparency of accounts requires member States to take steps to ensure that tariffs for each of the services forming part of the universal service are transparent and non-discriminatory and that if special tariffs are applied the principles of transparency and non-discrimination are applied.
Implementation
543.Section 31 provides that OFCOM must include in its universal service order the services and standards it considers should be part of the universal postal service in the United Kingdom. Section 32 (read with sections 33 and 34) describes the minimum such services, and includes a service of conveying postal packets at affordable prices in accordance with a uniform public tariff. Section 36(4) provides that a designated USP condition may make provision as to the tariffs to be used for determining prices in accordance with which the universal service is provided. Section 36(5) provides that OFCOM must seek to ensure that the prices are affordable, take account of the costs of providing the service and that the prices provide incentives to provide the services efficiently.
544.The requirement for transparency of accounts (Article 12 fourth and fifth indent) is implemented by section 39 of the Act. This confers on OFCOM the power to require a universal service provider to maintain separate accounts between different matters and comply with rules for determining costs and allocating costs, and may require the publication of such accounts and other related information as OFCOM consider appropriate and to submit to regular independent audit of its compliance.
Responsibility
545.OFCOM.
Article 14: Accounting of universal service providers
Objective
546.This requires member States to ensure that universal service providers keep separate accounts to distinguish between services and products within and outside the universal service. It requires consistently applied and objectively justifiable cost accounting principles. It sets requirements for the use of different methods for the allocation of costs to be carried out by the accounting systems and sets further requirements for verification of compliance and information provision.
547.The Article may be disapplied in certain limited circumstances where there is no state assistance and competition in the market is fully effective.
548.It provides that member States may introduce appropriate accounting separation where there is a compensation fund.
Implementation
549.Article 14(1) to (7) are implemented by sections 28(2)(c) and 39 which confer powers on OFCOM to impose conditions on a universal service provider to maintain accounting separation in a way OFCOM direct and comply with rules in connection with that separation and cost identification and orientation as well as requirements for independent auditing and for the publication of such accounts and of the cost accounting system used. Further, Section 55 of, and Schedule 8 to, the Act implement information requirements which may include accounting information.
550.Article 14(6) and (7) are implemented by a combination of provisions. OFCOM will have the information on cost accounting systems through the above information requirements and section 56(2)(g) provides for information to be provided in pursuance of Community obligations.
551.Article 14(8), (9) and (10) do not require implementation unless member States decide to do so in accordance with the conditions specified.
Responsibility
552.OFCOM.
Article 15: Financial accounts of universal service providers
Objective
553.This requires the financial accounts of all universal service providers to be drawn up, submitted to independent audit and published in accordance with relevant Community and national legislation on commercial undertakings.
Implementation
554.This provision appeared in the original Directive, was implemented by the UK and has not been amended by Directive 2008/6/EC.
Responsibility
555.Secretary of State.
Articles 16, 17 and 19: Quality of services
Objective
556.Article 16 provides that member States must ensure that quality of service standards are set and published in relation to the universal postal service.
557.Article 17 provides that member States must notify their quality standards for national services to the Commission. National regulatory authorities must ensure that annual independent performance monitoring is carried out on universal service providers.
558.Article 19.2 provides that in accordance with Article 16, universal service providers must publish an annual report of the monitoring of their performance.
Implementation
559.Section 30 provides that the universal postal service order must set out the standards to which any service specified under it must comply. OFCOM is required to notify the Commission of the universal postal service order.
560.Section 37 deals with publication of information about performance. It provides that a “performance condition” must include provision requiring a designated universal service provider to publish annually an independently audited performance report.
Responsibility
561.OFCOM.
Article 19: Users complaints
Objective
562.This Article places an obligation on member States to ensure that transparent and inexpensive procedures are made available by all postal service providers for dealing with users’ complaints. The procedures must enable the disputes to be settled fairly and promptly. Member States must ensure that cases where users’ complaints to universal service providers have not been satisfactorily resolved may be brought before the competent national authorities. Member States must also ensure that universal service providers publish information on the number of complaints and how they have been dealt with.
Implementation
563.Section 51 provides that OFCOM may impose a consumer protection provision on postal operators requiring them to assume specified liability in respect of specified loss and damage and to establish and maintain procedures in respect of (amongst other things) the handling of disputes and the resolution of disputes with users. These procedures must be easy to use, transparent and effective and otherwise facilitate the settling of disputes fairly and promptly. These procedures must also be free of charge to the users.
564.Section 52 provides that amongst other things a consumer protection condition may require postal operators and must require a universal service provider to publish information about the number of complaints made about them and the way that complaints were dealt with.
Responsibility
565.OFCOM.
Article 22: National regulatory authorities
Objective
566.This Article requires member States to designate one or more national regulatory authorities that are legally separate from postal operators. The tasks of the authorities must be published in an easily accessible form. Member States must ensure that users or postal service providers affected by the decision of a national regulatory authority has the right to appeal to an appeal body independent of the parties involved.
Implementation
567.OFCOM is an independent regulator, legally separate from postal operators. The Act sets out the tasks of OFCOM in relation to postal services. The Act is accompanied by Explanatory Notes.
568.Decisions of OFCOM regulatory conditions and penalties are appealable to the Competition Appeal Tribunal, its decisions on price control matters are appealable to the Competition Commission and all other decisions of OFCOM are appealable to the High Court, in accordance with the usual rules on judicial review.
Responsibility
569.OFCOM, Competition Appeal Tribunal, the Competition Commission and the High Court.
Article 22a: Provision of information
Objective
570.This Article requires member States to ensure that postal service providers provide all information, in particular to the national regulatory authorities, including financial information and information concerning the provision of the universal service, to allow the authorities to ensure conformity with the Directive and for clearly defined statistical purposes. Postal service providers must provide information promptly. A national regulatory authority must give reasons justifying the request for information. The national regulatory authorities must provide the Commission with relevant information, where requested.
Implementation
571.Schedule 8 provides that OFCOM may require a person to provide information they consider necessary for carrying out their functions. This information must be provided within such reasonable period as may be specified by OFCOM.
572.Section 56(2)(g) provides for information to be disclosed in pursuance of Community obligations.
Responsibility
573.OFCOM.
Provisions not requiring implementation
574.Articles 8, 10, 11, 13, 18, 20 and 21 do not require implementation.
