Draft Postal-Reform Bill Draws Industry Reaction

By: Todd Shields

A draft postal-reform bill circulating here is drawing wary reactions from newspaper industry figures, with some saying the measure could undermine newspapers while boosting their direct-mail competitors.

Coming weeks could see preliminary votes on the 170-page bill drafted by Rep. John McHugh, R-N.Y., who chaired a postal subcommittee in the last Congress.

The National Newspaper Association (NNA), which mostly represents community newspapers, supports McHugh’s underlying goal of “postal reform in a balanced way,” said NNA Vice President Senny Boone. But, she noted, “We still have some questions” about McHugh’s proposed rate-setting mechanism.

At present, the U.S. Postal Service (USPS) can adjust rates only after a months-long process overseen by the independent Postal Rate Commission. McHugh would let the USPS itself adjust rates so long as its revenue remains within certain limits.

McHugh believes that would create incentives to reduce costs and earn a profit. In the current system, the USPS simply passes costs along, rather than seeking to lower rates.

Others say McHugh’s reform could let the USPS grant favored treatment to its biggest customers, mass-market mailers, which compete with newspapers for advertising. Said Paul Boyle, a vice president of the Newspaper Association of America, which mostly represents daily newspapers, “It’s likely rates for favored mailers would go down or stay steady — and rates for [other] mailers would go up.”

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