In October 2011, the Postal Services Act 2011 ("the Act") came into force and Ofcom gained the responsibility and powers to regulate postal services. In the same month we published a consultation ("the October consultation").
Our principal duty under the Act is to secure the provision of a universal postal service. With that duty in mind, the October consultation proposed a major change in the regulation of the sector. In broad terms, it proposed to grant Royal Mail pricing freedom coupled with key safeguards to ensure that it would have strong incentives to improve efficiency and to protect vulnerable consumers.
In December 2011, we consulted on the range of regulatory conditions that apply to either Royal Mail or other postal operators operating in the UK ("the December consultation"). This consultation proposed to simplify the overall structure of regulation affecting more technical and operational areas. We also proposed to grant Royal Mail further commercial and operational freedoms so that it could adapt to the considerable challenges facing the market.
We received 72 and 28 responses to the October and December consultations respectively, which we have fully considered in reaching our decisions. We have also had regard to the House of Commons Business Innovation and Skills Committee's report on stamp prices, which was published in March. This document sets out our conclusions on the proposals set out in the October and December consultations.
Taken together this statement sets out the basis for a new regulatory framework in the postal sector.