1.1 The Postcode Address File, or PAF, is a list of the 28 million delivery points to which mail items are delivered in the UK. It is currently owned and maintained by Royal Mail, and made available to anyone wishing to use it. PAF has around 37,000 end users, many of whom use PAF as part of a larger product, for example, addressing solutions and software.
1.2 Following a request from Government, and the completion of our work on the new regulatory framework for postal services in March 2012, we undertook a review of PAF.
1.3 To this end, on 7 February this year, we published a consultation document. The consultation closed on 21 March, and we received 32 responses, of which five are confidential.
1.4 Our consultation focused on three key areas: the recovery of the costs of PAF, the simplification of the licensing regime, and the terms on which PAF is made available. We also sought views from stakeholders on quality measurements for PAF.
1.5 On the question of the recovery of PAF costs, the consultation set out our analysis of these costs in line with the six principles of cost recovery, and our primary duty to ensure the provision of the universal service, and proposed that Royal Mail should continue to recover the costs of PAF from PAF licensees. Having analysed the consultation responses, we remain of the view that Royal Mail should continue to recover the costs of PAF from licensees.
1.6 Our consultation also set out our proposal that Royal Mail should significantly simplify the licensing regime for PAF. Since publishing the consultation, Royal Mail and the Department for Business, Innovation and Skills ('BIS') have announced plans to review the licensing framework, including some immediate measures to make PAF more easily accessible to charities and small businesses in particular, and next steps for the review. This is in line with our proposals.
1.7 With regard to the terms on which PAF is made available, our consultation proposed that Royal Mail apply the UK Government Licensing Framework principles as part of their review, to help them design the details of the new licensing framework, and set out some objectives for the outcome of the framework review. Our decision, as set out in this document, retains those proposed principles and objectives for the outcome of the licensing review. Further, we consider that the current voluntary profit cap on PAF revenues should be removed. We have also provided some high-level guidance at Annex 1 on the factors we will consider when assessing whether the terms on which PAF is made available are reasonable.
1.8 On the question of quality measurements, our consultation sought views on whether the setting of quality targets for PAF would be constructive, and whether the publication of achievement against those targets would be helpful for users. We have concluded that the setting of such targets and publication of achievements against them would be appropriate, and we expect Royal Mail to develop robust, output based quality measures that are meaningful and constructive for users of PAF, within a reasonable time frame.