Funding the postal universal service – principles and practice 12 August 20

One of the key concerns for postal policy and regulation is the sustainability and funding of the postal universal service.

The Postal Services Directive sets out that two of the possible means of funding, a contributory compensation fund or public financing, may only be introduced if it can be established that the provision of the USO entails a net cost and imposes an unfair burden on the universal service provider. However despite many national regulatory regimes providing detailed methodologies for establishing the USO net cost, in practice compensation is rarely paid.

Given growing pressures on the sustainability of the postal universal service, it is arguable that the future review of the Postal Services Directive should consider a less complex and more practical way of ensuring appropriate funding for the universal service.

Cullen International’s Postal service provides comprehensive national benchmarks to show different aspects of the law and regulations governing the USO net cost calculation and compensation, and also how these rules have been applied in practice.

We also track the rules applying to public financing and relevant postal state aid cases. Postal providers in some European countries, including in Belgium and Portugal, provide services under a public contract with the state to ensure the universal service.


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