Liberalisation of postal services

In recent weeks several correspondents have written on direct mail services and door-to-door distribution of unaddressed material. Some of these opinions, however, have been clearly based either on purely erroneous information or on common misconceptions that require clarification, especially in the light of Malta's imminent accession to the EU and consequently its obligation to abide by the EU directives related to postal services.

The EU's main priority in this sphere is the continued, and eventually the total, liberalisation of all postal services by 2009. By this date all services exclusively reserved to the Universal Service Provider (USP) - which in our case refers to Maltapost - will gradually have been opened to private operators and a situation of monopoly would have evolved into one of total liberalisation.

This same liberalisation process has most recently been experienced in the telecommunications sector. The setting up of the Malta Communications Authority (MCA) in January 2001 and the Amended Post Office Act (CAP 254), which came into force last June, are both direct consequences of Malta's alignment with EU regulations.

In view of this, the role, rights and obligations of private postal operators such as those involved in the distribution of unaddressed mail, must be considered not as an isolated phenomenon but as part of the larger picture affecting postal services within the present EU liberalisation framework.

One clear misconception is that the distribution of unaddressed (and therefore unsolicited) mail is synonymous with private operators and that all other mail and postal services are limited to the USP. In reality a large proportion of unsolicited mail is carried by Maltapost both in the form of unaddressed flyers, brochures and magazines on a door-to-door basis exactly as is done by private operators, as well as equally unsolicited addressed material to specific unrequesting households only.

On the other hand, besides the distribution of unsolicited promotion material, private operators are also actively involved in the delivery of countless other items, such as express delivery articles, newspapers and periodicals, directories, official documents and items, and a vast array of other useful and often solicited material.

All criticism and comments pertaining to unsolicited mail should therefore not exclusively target private operators but should equally be directed at Maltapost. Moreover, private operators provide useful and essential services to the public.

These services open to private operators will continue to expand with the gradual liberalisation of the postal sector. According to the Amended Post Office Act, these services should already include the delivery of items of ordinary correspondence weighing over 350 grams as well as (addressed) newspapers, magazines and periodicals, provided that the private operator holds the necessary licence.

Although the MCA is fully aware of this, no licensing structure has yet been created by the MCA and, although the law enables private operators to obtain such a licence, no such provision is available in practice. This situation is rendering the Post Office Act ineffective and creating a clearly discriminatory position against private operators who are themselves requesting the provision of licences for such postal services.

Similarly, other provisions of the Act, which ensure that the USP's inherent advantages through the allocation of services strictly reserved to it, are counterbalanced by certain obligations, are being ignored. The Act, which has been formulated to ensure a fair commercial working environment with equitable competitive practices, also accounts for such issues as the charging of VAT by the USP on non-reserved services similarly to its private counterparts.

Likewise, the Act states that the USP is prohibited from cross-subsidising its commercial services through its reserved services operation, which must remain as two distinct entities holding separate accounts.

The situation now, however, is that the USP has recently and aggressively entered into the provision of various commercial services, not least the distribution of unaddressed mail, thereby largely encroaching into areas previously held exclusively by private operators, while firmly holding on to its past monopolistic advantages.

This has brought about a situation that in practice goes against all principles of liberalisation. It has created a business environment which has deteriorated from one of strict monopolisation to one where the monopoly has further been allowed to expand freely into the commercial arena without conceding the inherent rights to the private sector.

The topic of unaddressed promotional mail is therefore but a small segment of a much larger scenario. To look more specifically into this area, however, one must first draw parallels with all other forms of advertising which affect individuals in many different ways.

Advertising may be considered a nuisance by some or something that is barely tolerable by others. But ultimately, as the saying goes, "advertising is the right to choose", it provides an enormous amount of information and never fails to catch our attention and to prove useful at some time or another.

As distributors of such material along with Maltapost and other private operators, we realise that while much of the material we distribute will by all means be considered useful and even essential by virtually all households, such as the distribution of directories or parking disks, to mention just two obvious examples, other material we carry may be considered useful by a smaller proportion of the population.

A 20 per cent discount voucher on electrical appliances might appeal to a segment of the population, while a free product sample of washing powder or instant coffee to another. However, everyone is free to choose what is useful or not and no-one is qualified to make this choice for others based on their own personal criteria or requirements at the time.

Moreover, it would be impossible to draw a definite line between purely promotional material and useful material, as often promotional material is useful while non-promotional material might be useless to a particular household.

This merging of different types of material distributed as well as the blending of various so-called essential postal services with purely commercial activities, championed so far by Maltapost, is set to increase over the coming years making their distinction ever more indistinct, albeit a very slow start in Malta.

As we become a more modern and liberal society and shed our past monopolistic and restrictive heritage based on protectionist concepts we will come to understand that a modern economy must be based on free and fair competition. MCA please note!