De-regulating the postal service
Postcomm, the Postal Services Commission, is the independent regulator for the postal market. It was set up by the Postal Services Act 2000 and is classified as a non-ministerial Government department. Postcomm is there to make sure licensed postal operators including Royal Mail meet the needs of their customers across the UK.
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It does this by:
- Protecting the universal service, which means that anyone in the UK can post letters and parcels to any other part of the country at the same affordable rates. It guarantees delivery of mail for every UK household and business six days a week, with one collection per day every day except Sunday.
- Licensing postal operators who deal with mail weighing less than 350g and costing less than £1 to deliver.
- Introducing competition into mail services - Postcomm opened the UK mail market to competition for bulk mail services (postings of 4,000 items or more) in 2003, and introduced full market opening in January 2006.
- Regulating the Royal Mail’s quality of service and prices in order to protect customers and prevent the company from taking unfair advantage of its dominant position. With more than 95 per cent of the letters market, Royal Mail is the dominant provider in the UK and will probably remain so for years to come.
- Advising the the Department of Trade and Industry about the Post Office network - although Postcomm doesn’t make direct decisions.
The multi-operator market
In order for a multi-operator mail market to run smoothly, Postcomm must set out clearly how companies are expected to work together wherever necessary, and make sure that proper systems are in place to deal with any ‘overlaps’ between operators, so that users receive a good service.
The licensing framework sets out the requirements for each licensee and aims to strike a balance between protecting customers and encouraging new postal operators to come into the market.
The mail integrity code is designed to improve security of the mail and minimise the risk of loss or theft of mail.
This code became operational on 1 January 2006. The common operational procedures code is designed to make sure that if mail gets into the wrong system, it will find its way back to the right place. It also covers other inter-licensee issues such as the handling of misdirected customers service calls.
Postcomm has been working with Royal Mail on systems to ensure that mail redirection works well in the multioperator market. When different companies are working together, it is important that data protection issues are taken into account.
Not all licensed operators have identifying stamps or logos on their envelopes, so mail identification - a series of unique codes - will ensure that if mail does get into the wrong operator’s network, its true ‘owner’ is easily identifiable.
The licensing application procedure
Operators planning to carry mail weighing less than 350 grams and costing less than £1 to post are generally required, under the Postal Services Act 2000, to have a licence. Postal operators carrying heavier or more expensive mail however, are not required to have licences.
Postcomm, as the regulator for the mail market, is required to make sure the mail is safe and thus ensures that anyone planning to set up as a postal operator can provide the necessary financial guarantees. Operators must also meet minimum standards set down by Postcomm’s mail integrity code and common operational procedures code.
The licence application procedure includes a series of checks by Postcomm on the suitability of applicants and the arrangements they have in place to deal with mail, on hand in the event of business failure. Also, applications are put out to consultation for a minimum of 28 days so that mail operators, mail customers and any other interested parties can comment.
There is an application fee of £1,000, and unlicensed operators who do not qualify for exemption will be committing a criminal offence.
Licensed postal operators
Currently, including Royal Mail, there are 15 licensed operators: DHL Global Mail (Deutsche Post Global Mail (UK) Ltd); AMP (Alternative Mail and Parcels Ltd); DX Network Services Ltd; Intercity Communications Ltd; Lynx Mail (trading name of Red Star Parcels Ltd); Mail Plus Ltd; Racer Consultancy Management Services; Royale Research Ltd; Securicor Omega Express; Special Mail Services Ltd (SMS); Speedmail International Ltd; Target Express Parcels; TNT Mail (TPG Post UK Ltd); and UK Mail.