[Opinion] A consumer’s right to choose

Nearly four years after the EU single market came into force, there is still no internal market in postal services, as contentious proposals to create it have languished on the table due to political wrangling between EU member states.

The express delivery industry is one of the key areas which does not fully benefit from a single market in Europe. A level playing-field - and equal rules for the game to be played on it - have not yet been achieved.

I remain optimistic that despite all the obstacles still standing in our way, UPS will achieve its goal of becoming the lead player in the 6.3-billion-ecu European express delivery market.

But our biggest challenge at EU level still remains that of achieving an internal market for our services.

For this reason, we support the published version of the draft directive on postal services, as well as the draft notice on the application of Union competition rules to the postal sector which was drawn up by the European Commission last year.

National post offices in most countries, and their political masters in the shape of telecoms or postal ministers, have repeatedly thrown spanners in the works of this proposed legislation.

Since the Green Paper on postal services was published in 1992, the debate has alternated between bursts of frenetic energy and administrative sloth.

I believe that the post offices continue to view private express carriers as their main enemy. We are referred to as cherry pickers or cream-skimmers, and are cited as the most important threat to employment in the public postal sector.

In fact - and this has been borne out by various studies - it is not the private operators who are the main threat to post offices, but rather the post offices' own unwillingness to face the reality of modern communications. Indeed, a recent NERA study showed not only that liberalisation in the postal industry would bring benefit to the economy as a whole, but also that employment in the sector would grow.

It seems that the reluctance of some post offices to invest in the communications technology of the future and their continued resistance to change means that they are their own worst enemies. We are not the threat.

The fax machine and e-mail are the consumer's ultimate weapon against the often erratic service which post offices offer, especially for cross-border mail (ie mail which is sent from one country to another).

We continue to hope that EU telecoms ministers at their 'last chance' meeting on 28 November will reach agreement on a common position which is not a watered-down compromise, but is closely in line with the already modest Commission proposal on the table.

Competition Commissioner Karel van Miert confirmed at a conference organised by European Voice earlier this month that if they do not, he will press ahead with the publication of the draft notice, which simply lays out in a transparent manner how the Commission will apply the EU competition rules which already exist to the postal sector.

I hope that the directive will be acceptable to all parties, but strongly believe that the notice is indispensable to ensure that the rules for business activity in the non-reserved (ie competitive) sector of postal services (including express services and parcels) will be equal for all players, both public and private.

We do not fear, and never have feared, honest competition. It holds down prices for the consumer and keeps service providers on their toes. It is important to note, however, that UPS is not against a sensible reserved area to support a universal postal service.

What we cannot accept are unfair competitive advantages for the players who are already dominant in national markets and who often resort to providing cross-subsidies from their monopolies to prop up loss-making services in areas already open to competition.

We have joined in several complaints filed with the Commission and the European Court of First Instance over the post offices' abuse of their dominant position and over cross-subsidies.

Indeed, just this summer, the European Court ruled that logistic and other services - ie de facto cross-subsidies - provided by La Poste to Chronopost, one of its 'private' subsidiaries, could be construed as illegal state aid.

This was a landmark ruling which will serve as a precedent - especially if the EU institutions do not forbid cross-subsidies outright.

Progress is slow, however. The express industry has several other matters pending before the Commission, one of which has been there since 1988.

A further example of the danger of cross-subsidy can be found in the take-over of the Australia-based multinational TNT by the Dutch post office KPN.

Naturally, we were invited to comment on this take-over by the Merger Task Force.

It would be untrue if I told you that we welcomed this move with open arms. But, similarly, it would be incorrect to say that we tried to prevent it from happening.

We did, however, draw attention to the fact that revenue from the legal monopoly which KPN enjoys in the Netherlands for letter mail, even though it is a private company, would be used not only to finance the purchase of TNT but might also be used to keep future services outside the monopoly afloat.

We suggested to the Commission that certain conditions be attached to this merger, but it was nevertheless approved with only a vague 'undertaking' on the part of KPN not to cross-subsidise from reserved to non-reserved activities.

Once the Netherlands' national pride has become a little more subdued, I wonder whether the Dutch consumer will begin to ask him or herself: 'Now why did KPN not use that money to reduce the cost of a stamp?'

At the end of the day, the postal debate is not really about deregulation or even liberalisation. It is about fair competition.

Fair competition will offer choice to customers, which has been shown to be an important concern among postal service users across the Union.

Even in those countries where consumers are more or less happy with their postal service, they attach significant importance to the availability of choice.

Experience in the telecommunications sector shows that where there is competition, prices fall, quality and customer responsiveness improve, and consumer choice and the range of innovative services on offer increase.

Fair competition would also oblige postal authorities to invest in their product and improve their services in general - simply because customers would be able to vote with their feet by going elsewhere if the quality, price, or speed of services offered were inadequate. A monopoly or price-fixing cartel which gives no access for alternative providers to the cross-border market will not serve the individual consumer.

One of the intentions of the single market should be to make a high-quality cross-border service available to everyone. Additional competition in the postal sector will lead to a better service for consumers, particularly with respect to cross-border mail.

Efficient, fairly priced cross-border communications will not only bring coherence to the internal market, but will also bring Europeans at all levels and in all walks of life closer together.