Promoting Competition in Postal Services

The postal sector remained, until recently, relatively untouched by the waves of regulatory reform that have transformed public utility industries. At the time of the roundtable (1999), postal services in most OECD countries were provided by monopoly operators, some still organised as government departments or ministries. Incumbent operators are threatened by competition from electronic communications networks and from express mail and package carriers. The analytical note addresses how to introduce competition. Which segments of the postal sector are competitive? How can competition be encouraged in those segments? Is competition compatible with the preservation of universal service obligations? What other policy actions are necessary to ensure the development of effective competition? Most postal operators have been state-owned and protected from competition. A primary concern has thus been preventing incumbent operators from using the funds from their protected services or from the state to subsidise, distort or prevent competition in competitive segments. Policy action such as privatisation and liberalisation limit the ability of the incumbent operator to cross-subsidise. This document comprises proceedings in the original languages of a Roundtable on Promoting Competition in Postal Services which was held by the Working Party n°2 of the Committee on Competition Law and Policy in February 1999. This compilation, which is one of several published in a series named “Competition Policy Roundtables”, is issued to bring information on this topic to the attention of a wider audience.