The Changing Postal Environment: Market and Policy Innovation (Topics in Regulatory Economics and Policy)

The Changing Postal Environment
	The Conference was Kindly Supported by
	Preface and Acknowledgments
	Contents
	Postal and Electronic Communications Services: Together Again?
		1 Introduction
		2 Common Trends Affecting Postal and Electronic Communications Markets
		3 The Market Reaction of Operators and the Expected Evolution of the USO
		4 Toward an Intermodal USO Definition?
		5 A Simple Proposal
		6 Conclusions
		References
	Potential Insights for US USO from Recent Federal Communication Commission’s Broadband Auctions
		1 Introduction
		2 Current Political Debate over Restoring USPS to Financial Health and Privatizing It
		3 Crew and Kleindorfer and Interested Party Perspectives
		4 FCC’s Approach to Last-Mile Unserved Areas
		5 A Roadmap for Subcontracting Last-Mile Delivery
		6 Concluding Remarks
		References
	Postal Services: Quo Vadis?
		1 Introduction
		2 Background
		3 The Last 50 Years
			3.1 Corporatization and Privatization
			3.2 Business Volumes
			3.3 Service Provision
			3.4 Mail (Letter) Services
			3.5 Parcel and packet services
			3.6 International Services
			3.7 Divesting
			3.8 Diversification
		4 Quo Vadis
		References
	How the Fragmentation of the Postal Supply Chain Leads to New Business Models
		1 Introduction
		2 The Traditional Postal Supply Chain
		3 The Pressure on Traditional Post
			3.1 Technological Innovation
			3.2 Demographic Evolutions
			3.3 A New Interpretation of Inclusivity
		4 Post 2.0
			4.1 The Era of the Postal Consumer
				4.1.1 An Emotional Shift
				4.1.2 Fast and Free Delivery
			4.2 Sustainable Delivery Models
		5 The Impact of Technology on the Postal Stages
			5.1 Clearance
			5.2 Sorting
			5.3 Transport
			5.4 Delivery
				5.4.1 In-Car and In-Home Delivery
				5.4.2 PUDO Point Delivery
				5.4.3 Parcel Locker Delivery
				5.4.4 Crowdsourced Delivery
				5.4.5 Autonomous Vehicle Delivery
				5.4.6 Drone Delivery
		6 The Introduction of Platforms
			6.1 E-commerce Delivery Platforms
			6.2 Crowdsourced Delivery Platforms
		7 Conclusions on the Implications of the Postal Supply Chain Fragmentation
			7.1 Implications for Postal Operators
			7.2 Implications for Policy Makers
		References
	The Fading of the Traditional Postal Market Boundaries and a New Role for Postal Operators: A European Perspective
		1 Introduction
		2 Main Dynamics of the Postal Industry
		3 The Competitive Pressure of Electronic Communication on the Mail Market
		4 The Role of E-Commerce on the Parcel Side
		5 The PO’s New Role in the New Age of the Postal Industry
		6 Conclusions
		References
	European Postal Operators’ Diversification Strategies and Implications for Cost Allocation
		1 Introduction
		2 Postal Operators’ Diversification Strategies
			2.1 Overview
			2.2 Telecommunications Services
			2.3 Digital Services (E-Government Services, Dematerialized Solutions, Hybrid Mail and Virtual Mail)
			2.4 Financial Services
			2.5 Parcel and Express Delivery Services
			2.6 Logistics and Freight
			2.7 Local Services, Silver Economy and Circular Economy
		3 How to Properly Allocate Costs of New Activities?
			3.1 Some Costs and Regulation Concepts
			3.2 Proportionality and Accounting Methods
			3.3 Methods Inspired by Cooperative Game Theory
			3.4 Methods Based on the Value of the Activity
		4 Advantages and Disadvantages of the Different Methods
		5 Conclusion
		Annex
		References
	Pricing “Competitive” Postal Products
		1 Introduction
		2 Basic Ramsey Pricing
		3 Perfect Competition for Competitive Products
		4 The PO as Dominant Firm Facing a Competitive Fringe
		5 PO Price Leadership with Differentiated Products
		6 Differentiated Bertrand Equilibrium for Competitive Products
		7 Concluding Observations
		References
	Assessing the Recommendations of the President’s Task Force on the Postal Service
		1 Introduction
		2 The Model
		3 Calibration
		4 Numerical Solutions
			4.1 Scenario 1: Profit Maximization and Cross Subsidy
			4.2 Scenario 2: Effects of Cost Savings
			4.3 Scenario 3. Introducing Fully Distributed Costing
		5 Conclusions
		References
	On Correcting the Cross-Subsidies Caused by the US Postal Tariff
		1 Introduction
		2 The USPS Data and the Single-Driver Model
		3 The Complete Incremental Cost Test
		4 Bounds for the Price Increases Needed to Correct Cross-Subsidies
		5 On the Elimination of Cross-Subsidies in Practice
		6 Conclusion
		References
	Funding the USO: Cross-Subsidization and Net Cost Balancing
		1 Introduction
		2 USO Funding and Cross-Subsidization
		3 Cost Allocation Rules and Impact on Welfare
		4 Conclusions
		References
	The Compensation Fund on the Postal Market: The Polish Case
		1 Introduction
		2 The Universal Postal Service
		3 The Designated Operator
		4 Calculating the Net Cost
		5 The Compensation Fund
		6 The Compensation Fund on the Telecommunication Market in Poland
		7 Conclusions
		References
	Blockchain and Postal Digital Services: Opportunities and Drawbacks
		1 Introduction
		2 Blockchain: A Disruptive Technology
			2.1 What Is Blockchain? A Brief Description
			2.2 A New Challenge to Two-Sided Platforms?
		3 Blockchain Applications for Digital Services: A Future Opportunity for Posts
			3.1 Why Use Blockchain to Provide Digital Services?
			3.2 POs’ Opportunities to Use Blockchain
				3.2.1 Why POs Could Seize the Opportunities?
				3.2.2 POs and Blockchain: Some Examples of Initiatives Related to Digital Services
		4 Is Blockchain Challenged by Legislation and Competition Rules?
			4.1 Governance Is the Keystone for Solutions Based on Blockchain
				4.1.1 Roles and Responsibilities in the GDPR
				4.1.2 Blockchain and Digital Services
			4.2 Is Blockchain Compatible with Data Protection Rules?
				4.2.1 Is Blockchain Contrary to the Main Principles Laid Down in the GDPR?
				4.2.2 Exercise of Data Subjects’ Rights and Transparency
				4.2.3 How to Protect Personal Data in the Blockchain?
			4.3 Can Blockchain Create Competition Risks?
		5 Conclusions
		References
	E-Commerce Growth: Competition and Regulatory Implications for the Postal Sector
		1 Introduction
		2 Marketplaces: Positive Effects and Possible Theories of Harm
			2.1 Abuse of Dominance by Vertically Integrated Online Platforms: The Case of Tying
			2.2 Abuse of Economic Dependence of Online Merchants by Marketplaces
		3 Are Traditional Competition Policy Tools Fit for Purpose?
			3.1 Defining the Relevant Market
			3.2 Assessing Market Power
			3.3 Assessing the Use of Data
		4 Is ex Ante Regulation Better Placed?
		5 Conclusions
		References
	“Gravity” and the Packaging of B2C Cross-Border Ecommerce
		1 Introduction
		2 The Fundamentals of Cross-Border Ecommerce Trade
		3 Ecommerce and the Gravity Effect
		4 Illicit Trade in Small Packets
		5 Physical Presence and Taxation
		6 Customs and De Minimis
		7 Terminal Dues
		8 Conclusion
		References
	Postal Traffic in Portugal: Applying Time Series Modeling
		1 Introduction
		2 Literature Review
		3 Postal Traffic in Portugal
			3.1 Data Source and Samples
			3.2 The Evolution of Postal Traffic
			3.3 Postal Traffic Determinants
				3.3.1 Correspondence (Letters, Editorial Mail, and Direct Mail) Determinants
				3.3.2 Parcels Determinants
		4 Time Series Modeling
			4.1 Methodological Framework
			4.2 Estimation, Goodness-of-Fit and Forecast
				4.2.1 Correspondence (Letters, Editorial, and Direct Mail)
				4.2.2 Parcels
		5 Conclusions
		References
	Demand Elasticities at the Intensive and Extensive Margins for Advertising Mail Traffic in the UK
		1 Introduction
		2 Modeling Demand for Advertising Traffic
			2.1 Intensive Margin
			2.2 Extensive Margin
		3 Estimated Price Elasticities for Retail Addressed Advertising Mail
			3.1 Intensive Margin
			3.2 Extensive Margin
			3.3 Full Price Elasticities: Adding Margins
		4 Conclusion
		References
	Platform Competition: Market Structure and Pricing
		1 Introduction
		2 The Model
		3 Equilibrium Under Various Scenarios
			3.1 The Game Without Integration or Restrictions
				3.1.1 Stage 2
				3.1.2 Stage 1
			3.2 Integration Without Delivery Restrictions
			3.3 The Game with Integration and Bundling
			3.4 The Game with Integration and Foreclosure
			3.5 The Game with Integration and Total Bundling/Foreclosure
			3.6 Double Integration
		4 Numerical Results
		5 Concluding Comments
		References
	Ex Ante and Ex Post Access Regime in the Postal Sector: A Revival of Margin Squeeze?
		1 Introduction
		2 Access to the Postal and the Telecom Networks in Light of the Respective Technical and Economic Features
		3 Margin Squeeze Abuses in the Postal Sector
		4 What Do Comparisons of Margin Squeeze in the Postal and the Telecoms Sectors Tell Us?
			4.1 Is the Legacy Postal Network an Essential Facility or Just an Important Input?
			4.2 Margin Squeeze and Discriminatory Pricing
		5 Conclusions
		References
	Competition Law in the Postal Sector: Trends and Analyses of Competition Cases in Europe
		1 Introduction
		2 Regulatory Evolution and Market Trends in the Postal Sector
			2.1 The Regulatory Landscape in the Postal Sector in Europe
				2.1.1 Green Paper
				2.1.2 First Directive (Directive 97/67/EC)
				2.1.3 Second Directive (Directive 2002/39/EC)
				2.1.4 Third Directive (Directive 2008/6/EC)
			2.2 Market Trends in the Postal Sector in Europe
		3 The EC Analytical Framework for Competition Decisions in the Postal Sector
			3.1 Antitrust and Cartels Procedure
			3.2 Merger Control Procedure
			3.3 State Aid Control Procedure
		4 Postal Competition Analysis Data
		5 Analysis of the Trend in Competition Case Law in the Postal Sector and Link with Regulatory Changes and Market Trends
			5.1 State Aid Cases
			5.2 Merger Cases
			5.3 Antitrust Cases
		6 Conclusion and Possible Extensions
		Bibliography
	Approaches to Assessing Vertical Mergers: A Review and Evaluation
		1 The Policy Debate About Vertical Integration
		2 The Matrix Approach to Vertical Mergers
		3 Antitrust Implementation Responses
		4 European Concerns and Directions
		5 Conclusion
		References
	(Un)Locking Parcel Lockers
		1 Introduction
		2 Different Market Developments and Regulatory Approaches in EU Countries
			2.1 Number of Parcel Lockers: EU Countries Overview
			2.2 Different Regulatory Approaches in EU Countries
		3 Should Parcel Lockers Be Open?
			3.1 The Regulatory Question
			3.2 The Essential Facilities Concept
			3.3 Are Parcel Lockers Essential Facilities?
		4 Should Parcel Lockers Be Regulated at All?
			4.1 Why Regulate?
			4.2 General Social Regulation as a Primary Instrument
			4.3 Sector-Specific Regulation as a Supplement
		5 Conclusion
		References
	Can the Postal Market Afford Affordability? How to Assess It?
		1 Introduction
		2 The Affordability Principle and Other Regulatory Aims
			2.1 Definition of Affordability
			2.2 Regulatory Challenges in Assessing Affordability Following the Letter Volume Decline
		3 Methods to Ensure Affordability
			3.1 Affordability Assessment in Practice
			3.2 Discussion of the Main Approaches
				3.2.1 Price Benchmarking
				3.2.2 Households’ Postal Expenditure
				3.2.3 Consumer Surveys
		4 Will the Affordability Principle Survive?
			4.1 Affordability of Letters Is a Shrinking Problem
			4.2 Affordability of Letters Might Still Be a Concern for Vulnerable Consumers
			4.3 Affordability of Parcels May Become a New Debate
		5 Conclusion
		References
	A Note on “Postal Users’ Needs” and Their Role in Postal Regulation
		1 Introduction and Literature Review
		2 Background
			2.1 The Connection of Postal USOs and User Needs
			2.2 User Needs and Regulatory Needs
		3 Two Concepts Behind the Notion of Users’ Needs
			3.1 Concept 1: User Needs as Preferences and Dependencies
				3.1.1 Description
				3.1.2 Relation to Consumer Theory
				3.1.3 Discussion of Concept 1
			3.2 Concept 2: User Needs as Fundamental Communication Needs
				3.2.1 Description
				3.2.2 Relation to Consumer Theory
				3.2.3 Are User Needs Really Changing?
				3.2.4 Discussion of Concept 2
		4 Conclusion
		Bibliography
	The Economic and Social Utility of the Postal Infrastructure: Above and Beyond Postal Items Delivery
		1 Introduction
		2 The Direct Economic Value of POs Is Negatively Affected by the Digital Revolution
		3 The Real Value of Posts: Far Beyond Purely Economic Own Performance Indicators
		4 The “New” Societal Contribution of Posts: Promoting a Digital and Aging Society in a Sustainable, Inclusive, and Human Way
			4.1 Post’s Involvement in an Inclusive and Human Digital Economy
			4.2 Posts’ Involvement in an Elderly Society
			4.3 Posts’ Involvement in Sustainable, Circular, and Solidarity Economy
		5 Conclusion
		References
	Beyond the USO: Reflections on Recent Decisions on Postal SGEIs
		1 Introduction
		2 The Compatibility Conditions Under the 2012 SGEI Framework
		3 The Recent Commission Decisions
			3.1 The Czech Post Case: DBIS
			3.2 The La Poste Case: Territorial Presence
			3.3 The Post Office Ltd Case: The Network SGEI and the Products SGEI
		4 Main Takeaways
		5 Conclusions
		References
	How the USO Might Help Influence and Enhance the Growth of Smarter Cities
		1 Introduction
		2 Review and Background of Smart Cities
		3 Applying Principles of Platform Economics to Smart City Business Models
		4 How the Strictness of the USO Influences Postal Operators’ Ability to Deliver Smart City Services
		5 Conclusion
		References