The Postal Services Act 2011 (“the Act”) replaced the previous licensing regime with a general authorisation regime. This means that operators may provide postal services without the need for any licence or prior authorisation by Ofcom. Ofcom has powers to impose the following types of regulatory conditions under the Act:
Ofcom put a new regulatory framework in place in March 2012 and has made some additional changes to conditions and new conditions after this date. These conditions are available on the links below.
Ofcom may impose a DUSP condition on a universal service provider and may, in summary, require it do one or more of the following:
In particular, a DUSP condition can be used to set some limits on universal service prices and/or impose performance targets.
In the March 2012 regulatory framework Ofcom designated Royal Mail as the universal service provider in the UK and imposed a number of DUSP conditions on Royal Mail.
Following our Review of the Second Class safeguard caps 2019, on 1 April 2019 two new safeguard caps will enter into force superseding DUSP Condition 2 and DUSP Condition 3 currently in operation:
DUSP Condition 2 – Safeguard cap price control for Second Class standard letters (in force from 1 April 2019) (PDF, 225.0 KB)
DUSP Condition 3 – Safeguard cap price control for Second Class large letters and small and medium parcels up to 2kg (in force from 1 April 2019) (PDF, 278.2 KB)
Ofcom may impose a USP access condition on a universal service provider. A USP access condition is a condition requiring the provider to do either or both of the following:
This can include a control on prices for access services.
In March 2012 Ofcom imposed USP access conditions on Royal Mail in relation to the provision of D+2 and later than D+2 services at the Inward Mail Centre.
In November 2018 Royal Mail wrote to Ofcom providing reasons for a different implementation date for the New USP Access Condition. Having carefully considered the issues, we have decided to provide Royal Mail with a short extension to come into compliance with the New USPA Condition.
Ofcom may impose a USP accounting condition on a universal service provider. A USP accounting condition can require the universal service provider to do one or more of the following:
Ofcom has imposed USP accounting conditions on Royal Mail. This includes requirements in relation to accounting separation, costing methodologies and reporting. In addition, we have also imposed Regulatory Accounting Guidelines (RAG).
Ofcom may impose a notification condition on any postal operator who is providing, or intending to provide, a service within the scope of the universal service. This condition requires operators to give Ofcom advance notice of their intention to commence or expand letter delivery operations.
Following a direction from the Secretary of State, Ofcom imposed a Notification Condition on operators requiring them to notify it three months in advance if they are intending to enter or expand letter delivery operations. This condition only applies to operators intending to provide new or additional letter delivery services of a certain scale (2.5 million items per quarter).
Ofcom has the power to impose a general universal service condition (GUSC) on postal operators that provide services within the scope of the universal service.
GUSCs are generally applicable to all relevant postal operators (i.e. they are not specifically attached to an individual operator), however, they could be designed to only apply to operators of a specified description (for example, operators that have reached a minimum scale or provide a certain type of service).
A GUSC may contain obligations that Ofcom considers are necessary to impose for or in connection with securing the provision of a universal postal service. A GUSC may also, in certain circumstances, require postal operators to make contributions for meeting the financial burden of the provision of a universal postal service.
A GUSC cannot replicate the requirements of the universal service i.e. they may not require a person to:
To date, Ofcom has not imposed any general universal service conditions.
Ofcom may impose an essential condition on every postal operator, or every postal operator of a description specified in the condition.
An essential condition may contain obligations that Ofcom considers necessary to impose to:
Ofcom imposed an essential condition on all regulated postal operators (RPOs) in March 2012 requiring them to comply with the Mail Integrity Code of Practice (MICOP). The MICOP intends to minimise the potential for postal packets to be subject to loss, theft, damage or interference.
Ofcom may also impose a general access condition on a particular postal operator or operators requiring them to:
To date, Ofcom has not imposed any general access conditions.
Ofcom may impose a consumer protection condition on postal operators (or postal operators of a specified description) requiring them to do one or more of the following:
Ofcom imposed a number of consumer protection conditions in March 2012 some of which have been updated since.