NAA, NNA Oppose Postal Service Discount for Time Inc. Mailer

By: E&P Staff The federal Postal Rate Commission (PRC) should block a deal that would give a big postage discount to a single large mailer, the Newspaper Association of America (NAA) and the National Newspaper Association (NNA) said Thursday.

In a jointly filed brief with the PRC, the two associations argue that volume-based postage discounts for single mailer customers are "inherently discriminatory," and should not be permitted.

Specifically, NNA and NAA are trying to derail a United States Postal Service (USPS) application to create special Standard -- or bulk -- mail rate discounts up to 3-cents per letter for Bookspan, a book-marketing partnership of Time Inc. and Bertelsmann AG.

Under the plan, Bookspan would get the discounts if it mails more than 120 promotional letters annually. It would get smaller discounts for smaller volumes of mailings.

This so-called Negotiated Service Agreement (NSA) is "inherently unfair because no other bookseller is likely to qualify for such special rates," the associations stated Thursday.

They also argue that the USPS "does not obtain any cost savings from the proposed arrangement."

Previous NSAs -- private contracts between USPS and a single large mailer to encourage increased mail volumes -- have included cost-savings components to encourage delivery efficiency. The Bookspan deal would be the first to offer a volume incentive without cost-savings components, according to the newspaper associations.

The discounts must be approved by the PRC before they can be implemented.

NAA is the biggest U.S. newspaper association, representing about 87% of daily newspaper circulation, while NNA members are generally weeklies and small dailies that often depend on the United States Postal Service (USPS) for delivery. Both associations have long argued against postage breaks for big direct mailers, believing they are subsidized by increases in the Second Class rate used by newspapers and other classes of mail.

"Local mailers in a market are just as efficient as national mailers, and are equally important customers to the U.S. Postal Service," NAA President and CEO John F. Sturm said in a statement. "It is inherently unfair for a government sanctioned monopoly to grant large mailers special rates, while small mailers continue to see their rates increase. All Americans should have the ability to obtain the same governmental service at the same price."

NNA President Jerry Reppert, publisher of the Gazette-Democrat in Anna, Ill., said NSAs are being promoted as available to all mailers in similar circumstances -- but that few will ever equal Bookspan's situation.

"Certainly, a community newspaper interested in a special incentive to increase mail volume in its own mail class would be in no position to come to Washington and work out a deal like this," Reppert said. "The Postal Service must recognize its unique responsibilities as monopoly providers of universal service. These NSAs cannot be allowed to morph into bargain basement rates for a favored few among postal customers."

The associations said a recommendation from the PRC is expected in late winter.