Advertisement

Is the Compensation Fund an Appropriate Tool for Financing Universal Postal Service Obligations?

  • Vincenzo Visco-ComandiniEmail author
Chapter
Part of the Topics in Regulatory Economics and Policy book series (TREP)

Abstract

This chapter discusses pros and cons of the compensation fund in the postal industry, envisaged in the European directive as an alternative measure to a state subsidy for financing universal service obligations. The fund is a tax charged only to competitors for sharing these costs. Its application conflicts with general normative principles required for making a tax socially efficient, as the benefit principle, the competitive neutrality and the solidarity principle. Their respect makes its tax base and rates definition very problematic, especially with regard to multisided e-commerce parcel markets. The chapter provides a positive explanation for why governments, regulators and national providers may be interested in enacting the fund.

References

  1. Armstrong, M. (2008). Access pricing, bypass and universal service in post. Review of Network Economics, 7, 172–187.CrossRefGoogle Scholar
  2. Boldron, F., Borsenberger, C., Joram, D., Lécou, S., & Roy, B. (2009). A dynamic and endogenous approach to financing the USO in a liberalized environment. In M. Crew & P. Kleindorfer (Eds.), Progress in the competitive agenda in the postal and delivery sector (pp. 67–82). Cheltenham: Edward Elgar.Google Scholar
  3. Boldron, F., Cremer, H., De Donder, P., Joram, D., & Roy, B. (2009). Network externalities and the USO: a two-sided market approach. In M. Crew & P. Kleindorfer (Eds.), Progress in the competitive agenda in the postal and delivery sector (pp. 184–195). Cheltenham: Edward Elgar.Google Scholar
  4. Borsenberger, C., Joram, D., Magre, C., & Roy, B. (2010). Cross-country comparisons of optimal mail delivery frequency. In M. Crew & P. Kleindorfer (Eds.), Heightening competition in the postal and delivery sector (pp. 235–253). Cheltenham: Edward Elgar.Google Scholar
  5. Brennan, T., & Crew, M. (2014). Gross substitutes versus marginal substitutes: implications for market definition in the postal sector. In M. Crew & T. Brennan (Eds.), The role of the postal and delivery sector in a digital age. Cheltenham: Edward Elgar.Google Scholar
  6. Chołodecki, M. (2018, May 30–June 2). Polish postal market in transition: The role of state on postal market. Paper presented at the 26th Conference on Postal and Delivery Economics, Split Croatia.Google Scholar
  7. Copenhagen Economics. (2015). Study on the interchangeability of USO and non-USO services. Study prepared for The European Express Association, Copenhagen.Google Scholar
  8. Copenhagen Economics. (2018, March 7). Main developments in the postal sector 2013–2016. Preliminary Findings, Brussels.Google Scholar
  9. Eccles, R. (2011). State funding and cost sharing of the USO under the 2008 EU postal services directive. In M. Crew & P. Kleindorfer (Eds.), Reinventing the postal sector in an electronic age (pp. 152–162). Cheltenham: Edward Elgar.Google Scholar
  10. European Commission. (2000, December 21). Commission decision 2001/76 on new postal services in Italy with date or hour certain delivery. JOCE L/63 06/03/2001.Google Scholar
  11. European Commission. (2013, January 30). Case No COMP/M.6570 – UPS/TNT EXPRESS, C (2013) 431 final, Brussels. JOCE C/137 12/05/2015.Google Scholar
  12. European Commission. (2015, November 26). State aid SA.38869 (2014/N) – Poland Compensation of Poczta Polska for the net cost of USO 2013-2015. C (2015) 8236 final, Brussels. JOCE C/284 05/08/2016.Google Scholar
  13. Fehr, E., & Schmidt, K. (2006). The economics of fairness, reciprocity and altruism – Experimental evidence and new theories. In M. Ythier, S. Kolm, & L. A. Gérard-Varet (Eds.), Handbook of reciprocity, gift-giving, and altruism (Vol. 1, pp. 616–684). Amsterdam: Elsevier.Google Scholar
  14. Fratini, A. (2016). Compensation fund under EU law: A suitable solution for the postal market? In M. Crew & T. Brennan (Eds.), The future of the postal sector in a digital world (pp. 153–167). New York: Springer.CrossRefGoogle Scholar
  15. Gautier, A., & Wauthy, X. (2012). Competitively neutral universal service obligation. Information Economics and Policy, 24(3–4), 254–261.CrossRefGoogle Scholar
  16. Jaag, C. (2011). What is an unfair burden? Compensating the net cost of universal service provision. Review of Network Economics, 10(3), 7.CrossRefGoogle Scholar
  17. Jaag, C. (2013). Price regulation and the financing of universal services in network industries. Review of Law & Economics, 9(1), 125–150.CrossRefGoogle Scholar
  18. Jaag, C., & Trinkner, U. (2008). Pricing in competitive two-sided markets. In M. Crew & P. Kleindorfer (Eds.), Competition and regulation in the postal and delivery sector (pp. 136–151). Cheltenham: Edward Elgar.Google Scholar
  19. Musgrave, R. A., & Musgrave, P. B. (1973). Chap. 3, “The theory of social goods,” Efficient provision of social goods. In Public Finance in Theory and Practice (pp. 68–124). New York: McGraw-Hill.Google Scholar
  20. Oxera. (2007, January). Funding universal service obligations in the postal sector. London. https://www.oxera.com/wp-content/uploads/2018/03/Funding-the-USO-in-the-postal-sector.pdf
  21. Poste Italiane. (2018, February 27). Capital markets day delivery 2022, Milan. https://www.posteitaliane.it/en/capital-markets-day.html
  22. Stiglitz, J. (1999). The five characteristics of any tax system. In Economics of the public sector (pp. 456–614). New York: W.W. Norton & Company.Google Scholar
  23. Varian, H. (2010). Computer mediated transactions. American Economic Review, 10(2), 1–10.CrossRefGoogle Scholar
  24. Visco-Comandini, V. (2014, April 3–4). Google and multisided platform economics: what lessons for delivery services? Paper presented at the 8th bi-annual Postal Economics Conference on E-commerce, Digital Economy and Delivery services, IDEI, University of Toulouse.Google Scholar
  25. Visco-Comandini, V., Lintell, M., Gori, S., Pierleoni, M., & Tisdahl, B. (2009). Postal price elasticities and intermedia competition – A multisided market approach. In M. Crew & P. Kleindorfer (Eds.), Progress in the competitive agenda in the postal and delivery sector (pp. 163–183). Cheltenham: Edward Elgar.Google Scholar
  26. Wright, J. (2004). One-sided logic in two-sided markets. Review of Network Economics, 3(1), 42–63.CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  1. 1.University of Rome Tor VergataRomeItaly

Personalised recommendations