The discussion document below seeks to raise awareness of the development of long run incremental cost (LRIC) estimates for the postal sector.  It does not speculate on what might be the regulatory framework from 2012 as that will be taken forward by Postcomm in Spring 2011, but LRIC estimates might inform or be part of that framework.  Hence our document seeks to take the subject of LRIC forward and has been discussed with Postcomm.

In the document, we explain what LRIC is and the reasoning behind its development by Royal Mail.  We also provided an overview of the main components that are involved in Top Down LRIC model estimation and highlight some areas of consideration that are specific to the postal sector.  

We invite discussion and comment on this document by 11 February 2011