Denis Joram

Social Costs and Benefits of the Universal Service Obligation in the Postal Market

The universal service obligation (USO) is a cornerstone of regulatory policy in the postal sector. In the EU, where the sector is headed towards full liberalization, the USO is the major argument used to advocate some residual regulation. In the postal sector, like in many other network industries, universal service was historically provided by a monopolistic public or regulated operator. While the need for monopoly protection has been increasingly disputed, the very idea of universal service has remained relatively uncontested during the early stages of the liberalization process. The debate was not that much about the appropriate extent of the USO but about the most efficient (or least costly) way to make it competitively neutral, or at least as compatible as possible with competition. This in itself is a challenging question. More recently, however, the USO in itself has increasingly been questioned. The question is whether the social benefits associated with the USO are significant enough to justify its cost and in particular the impediment to competition it often implies. The spectacular development of electronic communications is likely to further fuel this debate. To ensure a sound design of the future regulatory context in the postal sector, it is important not to restrict this debate to political or ideological considerations. The underlying economic aspects are of crucial importance and have to be given thorough consideration. While there are some papers in the literature that deal with this issue, it appears fair to say that most of the contributions on USO have concentrated on the “how” (to implement) rather than on the “why” (to impose it and to what extent). This is true to some extent for all network industries but even more so for the postal sector.

Environmental Cost and Universal Service Obligations in the Postal Sector

This paper studies the relationship between USO and environmental concern in the postal sector. We concentrate on the obligation to deliver mail on a D+1 basis. We examine how the USO should be designed to properly account for the environmental cost in a variety of situations ranging from a first-best setting to a (Ramsey-type) second-best world with differentiated or uniform prices. We show that, it may be desirable to scale down the D+1 obligation and to restrict it to specific geographic areas. We also study how postal products should be priced to account for their environmental impact.

Personal Data and Privacy Issues and Postal Operators Stand

Data has become the raw material of production, a new source of considerable economic and social value. Advances in data mining and analytics, the massive increase in computing power and data storage capacity coupled with decreasing cost (falling by a factor of 6 since 2005 according to Podesta et al. 2014) and the increasing number of people, devices, and sensors that are now connected by digital networks and able to communicate with each other (“Internet of Things”) have revolutionized the ability to generate, communicate, share, and access data. According to the World Economic Forum (2011), 15 billion devices will be connected to the Internet by 2015 and 50 billion by 2020. The amount of data stored on the Internet is predicted to grow exponentially and looks set to be 44 times larger in 2020 than it was in 2009 (World Economic Forum (2011), figure 3, pp. 14).

Quality and Pricing of Delivery Services in the E-commerce Sector

We study the delivery market for e-commerce products, with two technologies: home delivery and delivery to a relay point. Taste differences for these are represented by a Hotelling model. Operators choose the (costly) quality of their delivery service. We study a single operator who uses both technologies and a duopoly with two single-technology operators. The home delivery operator may or may not be regulated; the relay operator is not regulated. We study pricing policies and the impact of competition on welfare. We also show that quality regulation may have an adverse effect on welfare.

The Pricing of Cross-Border Parcel Delivery Services

The role of parcel delivery services in cross-border e-commerce is a hotly debated topic within the EU and beyond. While volumes of domestic e-commerce have increased dramatically over the last years in all member States, cross-border purchases remain lower, even though the latest figures released by E-commerce Europe (2016) showed an acceleration of cross-border transactions. This can be explained by a variety of factors including language and cultural barriers and bureaucratic obstacles (in particular the complexity of VAT regimes—see E-commerce Europe last cross-border barometer) but also simply by the fact that goods are available on the domestic market without any significant price differential. The EU Commission has recently launched a proposal that focuses on parcel delivery services and particularly their pricing as an alleged major impediment for the development of cross-border e-commerce (European Commission 2016).

Differentiated pricing of delivery services in the e-commerce sector

Pricing strategies for parcels delivery from e-commerce remain a hot topic for postal and parcel delivery operators. As shown by Borsenberger (2015), the e-commerce sector is subject to concentration trends, due to a fierce price competition between retailers, the existence of increasing returns to scale in e-commerce activity, and the importance of retailers’ reputation to attract consumers.

Segmentation and nonlinear pricing in the postal sector

In our increasingly technology-focused world, demand for traditional postal services is steadily shrinking. This timely volume examines the many challenges that the worldwide postal sector is facing as a result of growing electronic competition, and offers expert recommendations for reshaping postal structures to strengthen their competitiveness in an electronic age.

Réseau intégré ou réseaux spécialisés

RésuméĽ accroissement et la diversification de la demande de services de télécommunication a été à ľ origine de la création de réseaux ou ď équipements dédiés. Et ľ émergence de nouveaux réseaux pourrait s’intensifier avec ľ accroissement de la concurrence, la libéralisation des infrastructures et la nécessité de préempter les marchés. Paradoxalement, cette situation propice à ľ éclatement du réseau général se produit au moment oú la technologie semble mûre pour la naissance ď un grand réseau capable de supporter ľ ensemble des services actuels et futurs. La premiére partie de cet article décrit les technologies constitutives ďun réseau à large bande et examine le cas où un monopole cherche à promouvoir ce réseau. Puis, seront introduits les effets ľ une concurrence frontale fondée sur ľécrémage. On verra dans ce cadre comment la fragile soutenabilité du réseau à large bande affecte la solution théorique fondée sur le réseau intégré unique. Il sera finalement possible de dresser un bilan des avantages et inconvénients respectifs des solutions dédiées et intégrées, et ľexaminer les solutions de semi-intégration qui pourraient émerger.AbstractThe increase of telecommunications services demand has been so far satisfied by the creation of new networks or dedicated equipments. The emergence of new networks could stress through the density of competition, the liberalization of infrastructures and the market preemption strategies. Paradoxically this situation leading to burst the general network occurs as technology evolution matures into the alternative of providing a great broadband network, able to support the whole set of today’s and tomorrow’s services. In this paper, first will be considered the case in which the monopoly promotes the broadband network. Then the effects of cream-skimming competition will be introduced. This shall allow to observe how the fragile sustainability of the broadband network disturbs the theoretical solution based on a single integrated network. This will lead to draw up a balance sheet of the respective advantages and drawbacks of integrated and dedicated solutions, and consider the opportunity of half-integrated networks emergence.