Proactive Investors - Ofcom has published its final determination following a dispute between Royal Mail (LON:IDSI) and Whistl over whether the terms offered by Royal Mail in response to a new access service request were fair and reasonable.
The regulator concluded that Royal Mail, which is owned by International Distributions Services PLC, can pass on some compliance costs to Whistl, a postal operator that sorts mail before it is delivered by Royal Mail.
Yet Ofcom has insisted that the UK’s oldest postal delivery service must comply with rules that prevent it from using new customer information to improve trading services, following the offer of a waiver that threatened to wipe out Royal Mail’s regulatory obligations.
Royal Mail operates the largest letter delivery network in the UK, though Ofcom rules allow other postal operators such as Whistl to collect and sort bulk mail before handing it over to Royal Mail to complete delivery.
Royal Mail has to offer other postal operators access to its network if they make a reasonable request to do so, but it is free to set the charges and conditions required to access its network services, as long as they are fair and reasonable.
The latest regulatory dispute sought to determine whether Royal Mail can pass on certain costs of complying with its regulatory obligations to Whistl, and whether Whistl can consent to a waiver that would mean the regulatory obligations on Royal Mail no longer apply.
While Ofcom concluded today that Royal Mail can pass on some compliance costs to Whistl, it has insisted that regulatory obligations still apply to Royal Mail.
Whistl argued that Royal Mail offered terms “that were not fair and reasonable”, raising concerns about its planned treatment of the costs associated with meeting its obligation not to disclose information obtained from new customers as a result of providing the requested delivery service.
It also complained about Royal Mail’s rejection of a proposed information disclosure waiver that it claimed would have allowed Royal Mail to avoid associated compliance costs.
At stake was whether access condition Universal Service Provider Access (USPA) 5.4(b), where everyone whose information might be used has consented in writing to such disclosure, would allow Whistl to consent in writing to Royal Mail using any information it obtained from providing the tracked large letter service.
If the partnership between the postal operators met the condition as a result of Whistl's written consent, this raised the question of whether other regulatory conditions such as USPA 5.3, under which the service provider should reasonably endeavour to ensure no information in its possession is disclosed for the benefit or use of trading, still applied.
In the regulator’s judgment, Ofcom said that although Whistl can consent in writing to the use of information obtained as a result of providing tracked large letter services, it concluded that USPA 5.3 rules apply.
These rules mean Royal Mail cannot use personal information in its possession as a result of delivering letters sorted by Whistl to benefit trading.