May 2010 consultation

May 2010 consultation - Laying the foundations for a sustainable
postal service

Postcomm proposes new regulatory framework for a sustainable postal service

On 27 May 2010 Postcomm set out its proposals for the introduction of the first phase of a new regulatory framework for the postal services market to replace the structure that has been in place since 2006.  A new and stable regulatory framework is a key requirement for securing a successful future for postal services, especially a universal postal service, as outlined in the Queen’s Speech on Tuesday, 25 May.

The new regulatory framework will be founded on the principles of cost transparency and accounting separation – as recommended in the Hooper Report  - and will reflect the significant market developments that have taken place in recent years.

The full package of measures proposed is intended to give Royal Mail greater commercial freedom, now that parts of the market have become more competitive.  At the same time, the measures are designed to provide assurance to the market and customers that, where Royal Mail continues to have market power, it is not able to hinder the development of competition.

Postcomm plans to introduce the first phase of these regulatory changes in April 2011.

Proposals in the consultation include:

  • removing price controls from all packets and parcels services weighing more than 750g because evidence suggests that this market is increasingly competitive
  • removing retail price controls on pre-sorted bulk mail, and replacing them with new regulatory safeguards on the wholesale prices Royal Mail is allowed to charge operators and other users accessing its network for 'final mile' delivery
  • giving Royal Mail more flexibility in setting its prices for pre-sorted bulk mail and access services

Further proposals for changes to the regulatory framework are dependent on further work being completed. Postcomm is, therefore, also consulting on some changes to allow the other elements of the current price control to continue in place until April 2012.

The consultation closed on 31st August 2010.

Summary leaflets

We have produced five summary leaflets which provide a brief introduction to the main areas covered by the consultation. Whilst these summaries should not be relied up in formulating responses to the consultation and readers are strongly advised to read the full version before responding, we hope that they will help participants gain an overview  of the main points and aid those interested in understanding the approach we are taking. The booklets cover the following:

Please note that the full consultation document can be downloaded from the bottom of this page.

Workshop slides

As part of the consultation we are running a number of workshops for stakeholders to gain as full an understanding of the consultation proposals as possible. The slides from the workshops are published below. Please note that slides will only be uploaded on completion of a workshop.


May 2006 Postcomm implemented the 2006 price control, intended to continue only until March 2010

August 2007 Postcomm published the results of its Strategy Review, identifying the need to reshape Postcomm’s regulatory responses from 2010 and beyond in a rapidly evolving postal market

December 2007 This work was overtaken by the independent review of the postal services market led by Richard Hooper CBE

December 2008 The independent review published its report (the Hooper Report), the recommendations of which were welcomed by Postcomm and endorsed by the Government

February 2009 The Government sought to implement Hooper’s recommendations through the Postal Services Bill 2009

July 2009 The Bill was postponed and fell at the end of the parliamentary session.  The Government announced that Postcomm would, for the time being, continue as the regulator for postal services

November 2009 Postcomm decided to extend the 2006 price control for one year to March 2011

March 2010 Postcomm published its Forward Work Plan for the next two years

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