Postal Regulatory Commission Busy With Studies Mandated by Postal Reform

July 11, 2008

The Postal Regulatory Commission has been holding a series of hearings, both in Washington and around the country, to gather information for use in preparing a report to Congress on the scope and standards of the Postal Service’s universal service obligation (USO) and its monopolies on the delivery of letters and access to the mailbox.  As required by postal reform, the Commission must submit a report to Congress by the end of this year that will include PRC-recommended changes, if any, to the USO and postal monopolies.

Field hearings were held in May and June in Arizona, Minnesota, and New Hampshire.   Representing the magazine industry at the hearing in Portsmouth, New Hampshire on June 19 was MPA member Jamie Trowbridge, President and CEO of Yankee Publishing. 

In addition to the hearings, the Commission requested written comments from mailers on potential changes to the USO and monopolies.  In comments filed June 30, MPA echoed many of the themes expressed by Mr. Trowbridge at the Portsmouth hearing.  Namely, MPA explained:

·        Given the importance of magazines to the nation, delivery of periodicals should be included as a universal service that the Postal Service is required to offer;

·        The existing scope of universal service provided by the Postal Service—in terms of geographic coverage, frequency of services, cost, service performance, and range of products—is generally consistent with the expectations of magazine publishers;

·        Given the threats and uncertainties now confronting the Postal Service—a stagnant economy, rising energy prices, decreases in mail volume and the still-incomplete implementation of PAEA—the Commission should refrain at this time from mandating changes in universal service, restricting the flexibility of the Postal Service to right-size its network, or modifying the postal monopolies; and

·        The Commission should focus its report to Congress on an assessment of the costs and benefits of the current arrangements.

The Commission and Postal Service have also begun to prepare for another study mandated by the Postal Accountability and Enhancement Act, this one on Periodicals costs.  USPS, in conjunction with the Commission, is to analyze whether periodicals costs are being measured correctly, what changes to postal operations and mailer preparation might help contain and reduce periodicals costs, and whether changes are needed to the periodicals rate structure to provide incentives to drive costs from the postal system.

In anticipation of the periodicals study, on May 27, MPA held a joint postal committee meeting with American Business Media – the trade association for business-to-business magazines -- to discuss what could be done to improve postal operations and mailer preparation to reduce periodicals costs.  MPA has been an active advocate for the growth of worksharing strategies to reduce costs – in particular comailing and copalletization – and one purpose of the meeting was to discuss how to overcome obstacles to comailing and copalletization and how to reach small magazines that don’t belong to either trade association to provide information on these worksharing opportunities. 

Then on July 9, MPA and ABM met with the Commission and Postal Service staff tasked with the periodicals study to learn more about the likely timeframe and scope of the study and to describe the measures that MPA and ABM believe would be helpful in educating periodicals mailers about comailing and copalletization.

In other postal activity, on May 30, MPA submitted its second set of comments to the Postal Service regarding proposed standards for implementation of Intelligent Mail barcodes (IMB).  The comments expressed our appreciation for the Postal Service’s decision to delay implementation to May 2009, but we noted that even the delayed schedule will be challenging to meet.  MPA encouraged the Postal Service to work closely with industry in developing final IMB requirements and to be flexible in enforcing the requirements in the early stages of the transition.  Under the proposal, the Postal Service will establish a new discount in May 2009 for mail entered under the “full-service” IMB option and MPA urged USPS to announce as soon as possible the magnitude of the discount to help publishers decide whether to invest the resources required to qualify for the full-service discount.  Starting in May 2010, mailers will be required to use IMBs to qualify for automation discounts.