'The Nairobi Strategy' Takes Shape, Reports DMA's Prescott Live from Berne at POC s Annual Meeting

May 2, 2007 — DMA’s Vice President for Global Knowledge Network Services Charles Prescott reports from Berne, Switzerland, where he has been taking part in the annual meeting of the Postal Operations Council (POC). Prescott presents an informative update on developments and discussions that have taken place thus far, regarding issues affecting the Universal Postal Union (UPU) and its future.

Prescott Reports

The Universal Postal Union is now halfway through the annual meeting of the Postal Operations Council (POC), which is responsible for the operational issues and regulation of the international postal network. Alongside of the POC meetings, some very significant meetings of the Council of Administration (CA) are also occurring, notably those of the work groups charged with planning the future structure of the UPU and the UPU strategy for the next four years.

A major task during this two-week meeting is to finalize plans for the last year’s work before the next Congress of the UPU in August of 2008. This quadrennial meeting will set the emphasis and work agenda of the UPU for the following four years, just as the Bucharest Congress of 2004 did for this current period. It may also enlarge the possibilities of the private sector participating even more deeply in UPU activities.

As with Bucharest, the sentiment from within the various study and work groups here in Bern is one of evolution, rather than revolution and dramatic change, although there are a few whiffs of possibility of some more profound changes.

For example, the Consultative Committee (CC) represents the private sector companies and organizations with interest in international postal traffic. Since the UPU is an intergovernmental body, only governments have the right to vote on important matters. Even so, the membership has been extremely reluctant to admit individual companies to membership, regardless of the fact they can not vote.

Why? We believe it is a combination of government hostility to business, especially among the more traditional post and telecom ministries from Africa and Europe, and competitive concerns by the major European posts who are now competitors in their liberalized market.

However, in a series of discussions during the CC’s semi-annual plenary meeting on April 25, the chairman of the CA, which governs the CC’s membership requirements, stated that he would not be opposed to admitting individual companies to membership in the CC in the near future in certain circumstances where they bring special expertise.

Igor Syrtsov, chairman of the Strategic Planning Group and director general of the Russian Post, also expressed the view that individual companies would help broaden the viewpoints in UPU discussions, and because there would only be a limited number who would be interested, this could be easily controlled.

This would be a dramatic change and vastly increase the CC’s resources, influence, and reach. Of course the proposal was immediately opposed by a number of posts, including Great Britain and Germany, fearful of their new competitors’ finding voices in the UPU debates.

CC Strategy and Planning:

The Consultative Committee is very involved in the strategic discussions and planning. The CC, which is chaired by DMA’s Charles Prescott, and has created a sub-group chaired by Pitney Bowes’ Jean-Philippe Ducasse and IMAG’s Richard Miller to follow these developments very carefully

Most of this work takes place in the Nairobi Postal Strategy Team, part of the Strategic Planning Group. Now in its third draft, the strategy will have four objectives. Beneath these objectives, there will be clearly articulated action plans specifying the actions to be taken by the UPU and member countries to achieve them.

These objectives now read as follows:

1. Improve the quality, accessibility, security, interoperability and efficiency of the national and international postal network.”

Loaded words, all of them, and it is easy to be too ambitious when dealing with “quality” and “interoperability.” The private sector has its own needs in that list: we want an international electronic money order system with the USPS as a participant; we want an internationally accessible change of address and delivery point validation system; and we want it world-wide.

And security is something that can not be ignored. The threat of terrorism is felt worldwide, and it is possible for the postal system to be exploited for terrorist purposes (as happened in the US in October 2001 with anthrax). Postal and customs officials worldwide all have security agendas that must be coordinated, or we will fragment and destroy the international postal network.

2. Develop the economy of the postal sector.

Here, pricing and remuneration and standardization of systems will be important. Pressure must be maintained to spread statistical and accounting systems worldwide, in order for the system to continue to progress to a cost-based terminal dues system, as was committed to in Bucharest. Much work remains.

3. Promote the appropriate regulatory framework for providing universal postal services and ensuring access to them.

This will be a surprisingly contentious issue and will bear watching. There is no international agreement on what constitutes “universal postal service,” or how to fund it.

In Africa, it is often considered self-evident that universal service includes telephone service. In Europe, there is fierce debate on the topic in the context of the liberalization requirement of the postal sector now being further refined in debates of the Third Postal Sector which envisions totally open competition in postal services by 2009.

It is impossible that the European Parliament will come up with one definition of “universal service” even if it had the political will, which it does not. The term is considered to be one of “subsidiarity”, or to be decided at national level. So far, Germany is saying delivery to little villages in the islands and mountains is not within the term, and Belgium is saying delivery of newspapers to homes in Belgium before 7:30 a.m. is within the term. Multiply all those interests by 25.

4. Stimulate an environment for promoting growth in the postal market.

Here we shall see the private sector continue to support the Direct Mail Advisory Board of the UPU in its work to promote direct mail and skills in the Posts.

We will also continue to urge regulators in developed markets to require posts to share with the market important data needed by direct mailers and DMA’s to make media choices and to prove to policymakers the importance of this sector.

This data -- mail volumes by class, trends, etc. -- has dried up as European posts have liberalized and begun competing. This is short-sighted. The posts think their competitors will use this data to their detriment. On the other hand, the mailing community thinks that the lack of this data makes it harder to convince agencies and advertisers that the mail is a valid and widely-used medium.

DotPost

We hope to have further news later this week on developments of the single most exciting project today at the UPU – dotPost, the development of a top-level domain on the Internet that will be totally secure, with access controlled and restricted by national posts around the world.

The Electronic Products and Services Group has developed an action plan and budget, in order to move toward completing negotiations with the Internet Corporation for Assigned Numbers and Names (ICANN).

And these negotiations must move forward quickly. ICANN has made it known that it won’t wait much longer, as there has been much interest from other commercial interests in establishing this domain. This would be truly tragic, as only the Posts have the credibility and trust necessary to ensure that this experiment in a secure, safe Internet will succeed.

About the Universal Postal Union (UPU)

Established in 1874, the Universal Postal Union (UPU) with its Headquarters in Berne (Switzerland), is a primary forum for cooperation between postal-sector players and helps to ensure a truly universal network of up-to-date products and services.

With 191 member countries, this specialized agency of the United Nations fulfils an advisory, mediating and liaison role, and renders technical assistance where needed. It sets the rules for international mail exchanges and makes recommendations to stimulate growth in mail volumes and to improve the quality of service for customers.

As a non-political organization, it does not interfere in matters that fall within the domestic domain of national postal services. For example, Posts set their own postage rates, decide which and how many postage stamps to issue, and how to manage their postal operations and staff.

The UPU’s objective is to develop social, cultural and commercial communication between people through the efficient operation of the postal service. As an inter-governmental institution, the UPU is called upon to play an important leadership role in promoting the continued revitalization of postal services.

About the Postal Operations Council (POC)

The Postal Operations Council (POC) is the technical and operational body of the UPU and consists of 40 elected member countries. It deals with the operational, economic and commercial aspects of the international postal service.

About the Consultative Committee (CC)

Created on 16 September 2004 by the 23rd Universal Postal Congress in Bucharest, the Consultative Committee is the youngest body of the UPU, giving postal stakeholders other than public postal operators and regulators a voice in the organization's deliberations. The Consultative Committee represents the interests of the wider international postal sector, and provides a framework for effective dialogue between postal industry stakeholders.

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