Statement published 8 November 2018
This document sets out amendments to the margin squeeze control set out in Ofcom’s Universal Service Provider Access (USPA) condition, a control which is intended to ensure fair competition between access operators and Royal Mail. Access competition is where rival operators collect and sort mail, before handing it over to Royal Mail to complete delivery. We do not directly regulate the access prices that Royal Mail charges access operators for completing delivery but have in place an ex-ante margin squeeze control, which is intended to ensure that the difference between Royal Mail’s access prices and the equivalent retail prices are consistent with principles that allow efficient competition.
On 31 March 2017, we published a consultation document setting out proposals for changes to the regulatory financial reporting requirements we impose on Royal Mail, including changes to the condition that sets out the margin squeeze control. Following that publication, taking into account stakeholder responses and our own analysis of additional information, we published a further consultation on 24 May 2018 which set out revised proposals regarding the margin squeeze control.
This statement sets out our decisions on each of the margin squeeze proposals set out in the March 2017 and May 2018 Consultations. These decisions affect the way in which Royal Mail calculates its compliance with the margin squeeze control and the information that it provides to Ofcom to demonstrate that compliance.