Commentary on Sections Financial support for universal postal service Section 45: Fairness of bearing burden of universal service obligations
215.This section requires OFCOM, where they have concluded from a section 44 review that universal service obligations impose a financial burden on a universal service provider, and published that conclusion, to determine whether they consider it would be unfair for that provider to bear the whole or part of the burden.
216.OFCOM must determine whether the burden would be unfair for a provider to bear or continue to bear, and the extent (if any) to which the burden would be unfair, in accordance with regulations they have made under subsection (3). They must publish the determination.
217.If OFCOM make such a determination, they must submit a report to the Secretary of State with a recommendation for what action (if any) they consider necessary to deal with the burden. The report may make recommendations about the order in which action should be taken and whether certain actions should be contingent on other actions. The recommended action may consist of one or more of: a review under section 34 (review of minimum requirements); requiring contributions to be made in accordance with section 46; and making a procurement determination.
218.Subsection (9) sets out that a procurement determination is a determination by OFCOM as to whether any particular postal operator or operators (including the provider) could meet the universal service obligations in such a way that would mean no unfair burden or less of an unfair burden than the burden identified in OFCOM’s determination in subsection (6). Any such determination must be made in accordance with regulations made by OFCOM. Subsection (14) prevents OFCOM from making a procurement determination within ten years from the day that this Part of the Act comes into force, unless the universal service provider agrees to such a determination.
219.After receiving the report, the Secretary of State must determine what action (if any) ought to be taken to deal with the burden and can then direct OFCOM to take that action.