COMMUNITY POSTAL SERVICES
Amended Proposal amending Directive 97/67/EC with regard to the further opening to competition of Community postal services.
||Articles 47(2), 555 and 95 EC; co-decision; qualified majority voting
||Trade and Industry|
|Basis of consideration:
||EM of 26 November 2001
|Previous Committee Report:
||None; but see (21503) 10544/00: HC 23-xxviii (1999-2000), paragraph 10 (1 November 2000) and HC 28-iv (2000-01), paragraph 1 (24 January 2001)
|Discussed in Council:
||22 December 2000|
24.1 Directive 97/67/EC established a harmonised
regulatory framework for the Community postal sector. It also
defined the process for further liberalisation of the postal market,
including a decision on the next step to apply with effect from
1 January 2003.
24.2 On 24 January 2001, the previous Committee
recommended for debate the Commission's original proposal which
set out two stages of liberalisation, in 2003 and 2007. The debate
was held on 4 April 2001.
24.3 On 18 July, we considered the Commission's
amended proposal, presented in the light of the 47 amendments
proposed by the European Parliament. The Commission had rejected
36 of the proposed amendments, and accepted ten in full and one
in part. The accepted amendments mainly related to changes to
recitals and drafting and so did not substantively change the
Commission's original proposal.
24.4 Following its consultations, the Belgian
Presidency decided that there was a willingness by Member States
to reach an early decision on an amended proposal before the current
Directive lapsed in 2004. On 12 October the Minister for E-Commerce
and Competitiveness (Mr Douglas Alexander) informed us that a
political agreement was likely to be reached at the Telecommunications
Council on 15 October on a revised draft on postal services liberalisation.
The Minister enclosed an exchange of correspondence with the UK
postal regulator (PostComm), in which PostComm broadly agreed
that the revised draft would be consistent with the UK's policy
objective of maintaining the universal service at a uniform tariff
and the UK's licensing regime.
24.5 The Belgian Presidency is currently
preparing the text of the revised draft Directive. The Explanatory
Memorandum summarises the main elements of the common position
and compares it with the Commission's original proposal and that
proposed by the European Parliament by reference to:
- the maximum weight/price limits for services
that may be reserved;
- whether a final date should be set for full market
- the definition of specialised services and whether
these should be excluded from the reserved services; and
- whether out-going cross-border mail can be reserved.
24.6 In his Explanatory Memorandum of 26
November 2001, the Minister says:
"The final form of the Presidency proposal was
not received until the working day before the Council but various
options emerged from the working level debate. DTI sought PostComm's
views on those options. PostComm supported the overall government
aim of progressively opening the European market whilst making
provision to safeguard the universal service. Its advice was that
for the UK, provided the European Directive continued to make
provision for authorisations/licensing regimes, a phasing out
of price/weight limits according to a predetermined timetable
remained the most legally certain way to achieve this; the size
of the individual steps was not a critical issue but PostComm
noted that a reduction to 100 grams in 2003 represented a relatively
limited share of the market. It expressed concerns that an overly
complicated formulation on special services would reduce legal
certainty. PostComm was in favour of a review to focus on how
to safeguard the universal [service].
"At the Council, Member States (with the exception
of the Netherlands who dissented and Finland who abstained) and
the Commission reached political agreement on a compromise framework
with the following elements:
limits to reduce from 350 grams (5x basic tariff) to 100 grams
(3x basic tariff) in 2003 and to 50 grams (2.5x basic tariff)
- that there will be a review in 2006 focussing
on the impact on the universal service of completing the internal
postal market in 2009 leading to proposals either confirming the
last step or making other proposals in the light of the study;
- to maintain the status quo for specialised services
and not to make new provisions to define and exclude them from
- to make limited provision to exclude overseas
crossborder mail from reserved services."
The Government's view
24.7 The Minister says:
"At the Council the UK pressed and it was agreed
that the review in 2006 and the subsequent proposals from the
European Commission should focus on the continued provision of
the universal service. Agreement was also secured that if the
sunset clause in the Directive were to be invoked then existing
authorisation procedures would not be affected.
"The Government believes that this political
agreement provides a good basis for a more legally certain framework
to progressively liberalise the European postal market whilst
maintaining the commitment to ensure the continued provision of
the universal service and as such meets UK objectives. The proposal
is consistent with domestic policy to introduce more competition
into the market and does not conflict with the UK regulatory regime.
The resulting opening of other European markets will provide opportunities
for UK companies."
24.8 The Minister describes a number of
changes that have occurred in the UK postal market, including
the new licensing regime and the conversion of Consignia into
a public limited company. Under the new licensing regime, Consignia's
statutory monopoly is replaced by a licence from the postal regulator
to operate in a similar area of the market (known as the licensed
area). A condition of Consignia's licence is that it will provide
a universal service. The Minister informs us that, to date, PostComm
has issued six other interim licences of limited scope to operate
in the same area as the licensed area. The Minister also tells
us that early in the New Year, PostComm is expected to issue a
report with recommendations following its consultation on the
best way to introduce more competition into the market.
24.9 Although we have not yet received
the official text of the revised draft Directive, we have nevertheless
decided to report substantively on it before it is formally tabled
for Council agreement at the Telecommunications Council on 6 December.
24.10 When the previous Committee considered
the Commission's original proposal on liberalising postal services,
it noted the wide division of opinion that the proposal generated.
Not surprisingly, the proposal from the European Parliament favoured
a slower pace of liberalisation. The revised draft has elements
of a compromise. For example, in terms of the price/weight threshold
that will define the reserved area in 2003, the revised draft
proposes 100 grams and three times the standard first class price,
which is fairly close to the mid-point between the Commission's
original position of 50 grams and two and half times the standard
first class price and the European Parliament's proposal of 150
grams and four times the standard first class price.
24.11 The revised draft also maintains
the present rules on "special services", which prevents
other operators from providing so-called "special services"
that are effectively indistinguishable from those provided
by the universal provider. The revised draft also provides for
a review before the next stage of liberalisation takes place.
The review in 2006 will focus on the effect on the universal service
of completing the internal market in postal services in 2009.
This reflects the tension that exists between the drive towards
further liberalisation of postal services and the need to maintain
a universal service.
24.12 After the Telecommunications Council
on 6 December the revised draft Directive will still need to have
its second reading in the European Parliament. Some members of
the European Parliament may question further whether an affordable
universal service is sustainable under the terms of the revised
24.13 Given that the liberalisation of
postal services was debated earlier this year, that the UK regulator
considers the proposal consistent with maintaining the universal
service at a uniform price, and that political agreement has already
been reached on the revised draft Directive, we clear the document.