The focus of our paper is on the competitive effects of the proposed VAT regime relative to selected alternatives. We also highlight the welfare effects of various VAT scenarios. While an exempt operator cannot reclaim VAT paid on inputs (relevant for non-labor inputs only) and therefore faces...

There is an increasing convergence between postal products and telecom applications which suggests the need for a co-evolution of regulation. But there is hardly any discussion in academia or in practice about the consequences for regulation. Relevant questions are: Which parts of current...

In this paper we set out a holistic approach that incorporates recent developments in assessing the net cost of the USO and presents a robust methodology for practical implementation. We analyse the issues relating to assessing the net costs of the USO with particular focus on the benefits...

We discuss the ongoing liberalization process in the market for addressed letter mail in Switzerland. The core of the paper is an assessment of the liberalization’s impact on the financial viability of various universal service obligations with and without access to the incumbent’s...

Market opening in the postal sector invites competition, but it may also present challenge to financing the universal service obligation (USO) currently in place. USO financing under entry is challenged both by the loss of revenues and scale economies in combination with the affordability...

In this paper we discuss an incumbent postal operator’s incentives to invest in an innovation in the face of upcoming liberalization and deregulation of the letter market. Our contribution is a short description of recent innovations in the Swiss mail market and their interpretation in light...

This paper relates to the current discussion about how to measure the net cost and unfair burden of universal service provision in network industries. The established profitability cost approach compares the profit of a universal service provider (USP) with and without a universal service...

The financing of universal service provision in the postal sector has traditionally relied on granting the universal service provider a reserved area. Together with growing electronic substitution, current liberalization policies promoting competitive entry may put the traditional universal...

In the past decades, several countries have introduced reverse auctions for allocating universal service or public mission subsidies in various industries. Examples include urban transport, air transport and telecommunications. Recently, such mechanisms have also been envisioned in liberalized...

The paper analyzes consumer preferences towards a potential two-part tariff in the postal sector. Based on the empirical results we analyze the welfare effects of a two-part tariff when applied in the Swiss letter market.