Proposal Deadline Nears on UK Postal Competition Plan

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Consignia and other organizations have until March 15 to comment on a Postcomm proposal that would open the UK-based mail organization to full competition by 2006.

Independent regulator The Postal Services Commission, or Postcomm, ruled in January that bulk business mail, which incorporates almost half the letters sent in Britain, could be handled by rival operators by April and that all deliveries would be open to competition within four years.

Postcomm gave Consignia -- which runs Royal Mail, Parcelforce International and the Post Office -- and other organizations affected by the proposals until March 15 to comment. The regulator may revise its proposal based on the comments, but Consignia must implement the final reform package.

Postcomm said Consignia's performance had deteriorated so badly that it faced little choice but to speed up the introduction of alternative operators.

Postcomm proposes a three-step plan to full competition by 2006.

The first phase, from April to March 31, 2004, would allow operators to apply for licenses to handle batches of mail from large users containing more than 4,000 items. Operators would be able to deliver this mail themselves or pass it to Royal Mail for delivery. This step would open up around 30 percent of Consignia's market.

The second phase, which would run from April 1, 2004 to March 31, 2006, would open up a further 30 percent of the market to include mailings that include 500 to 1,000 pieces.

The third phase, which would begin no later than March 31, 2006, would lift all restrictions on other mail carriers entering the market.

Consignia is concerned about the proposal, and said that it would face "death by a thousand cuts" under the plan and revealed that it is already losing 1 million pounds ($1.4 million U.S.) a day on letter delivery.

However, the Direct Marketing Association UK welcomed the proposal, and said it reflects ideas the organization has submitted to the regulator about promoting effective competition.

"These proposals will give the direct marketing industry greater choice, improved quality of service and reduced prices," said David Robottom, DMA UK's director of development and postal affairs. "The structure proposed by Postcomm also ensures the protection of the universal service, which is fundamental to the direct marketing industry."

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