Postal Rate Debate Continues p. 14

By: DEBRA GERSH HERNANDEZ THE RECENT POSTAL reclassification case was "but one small skirmish in a bigger war," according to Postal Rate Commission chairman Edward J. Gleiman.
The "barrage of rhetoric from the Postal Service about reform" is now being heard on Capitol Hill, and the "fallout could be worse than your worst nightmare you had when you saw the reclassification proposal," Gleiman told those at the National Newspaper Association's annual Government Affairs Conference in Washington, D.C.
Postal Service proposals for rate reclassification would have led to a significant increase for the majority of second-class mailers. The Postal Rate Commission rejected that plan and was backed by the board of governors. Newspapers breathed a sign of relief (E&P, March 16, p. 36).
In third class, however, the PRC approved ? and again was backed by the board of governors ? Postal Service recommendations for new subclasses, which would reward large-volume mailers. Newspapers were not so pleased with that result.
"We all want a healthy Postal Service," Gleiman said, "but why do they feel it can only be achieved at your, or someone else's, expense?"
Although Gleiman believes the chances are "slim to none" that postal reform will be able to make its way through the congressional pipeline before the end of the session, he also noted that he has "learned never to say never regarding Postal Service legislation."
Gleiman warned of the "inherent dangers" in the pricing flexibility proposed by the Postal Service, pointing out that each discount to a large mailer has to be made up somewhere else.
"Are you going to be able to run with the big dogs?" he asked, quoting a popular T-shirt. "Or will you fall prey to some back-door deal?"
The Postal Service, in its last rate reclassification proposal, "has already shown who would get hit: the smaller mailers, who don't have enough volume to get the discounts," Gleiman said.
The heads of the major newspaper associations recently testified to that effect, among other things, before the Senate Government Affairs Committee's Subcommittee on Post Office and Civil Service.
Hearings were held the same week in the House by the Government Reform and Oversight Committee's Subcommittee on the Postal Service, but only government and postal officials, including Gleiman, testified there. Newspaper representatives were heard by the House committee last year.
At the Senate hearing, NNA president and CEO Tonda F. Rush outlined the three principal concerns of community newspapers: universal service, a strong Postal Rate Commission, and Postal Service competition in the private sector.
"We believe favoritism to large postal customers is not only inconsistent with the Postal Service's federal ownership, but we note that in the zero-sum game of postal rates, whenever someone gets a discount, someone by necessity gets an increase," he added.
In addition, recalling Postal Service proposals from 1994 and 1995 that, respectively, would have led to a 34% increase in in-county rates and a 17% increase for out-of-county rates, Rush pointed to the importance of the Postal Rate Commission in defeating those measures.
"You would have a very hard time persuading most community newspaper publishers that the Postal Rate Commission should be weakened in 1996, after what we have experienced in 1994 and 1995," she noted.
Rush called Postal Service's Neighborhood Mail plan for small business advertising ? which was dropped after a storm of protests ? a "real shot across the bow."
"It awoke the community press to the problems potentially created when USPS decides to compete with the private sector," Rush said. "We will watch any future forays with great concern."
Newspaper Association of America president and CEO John F. Sturm also testified before the Senate subcommittee. He was accompanied by Knight-Ridder marketing director William Wilson.
The Postal Service, Sturm said, is at a turning point.
"One direction would continue the public service function of the Postal Service," he noted in his prepared remarks. "A second direction, that some seem to prefer, would create powerful economic incentives for the institution to abandon, if it can, and seriously downplay if it cannot, service to rural areas and the public functions that distinguish our present system."
Sturm called it "a distressing commentary that the Postal Service has already pushed its way past the starting point of this second, and we believe fundamentally mistaken, direction ? and has done so behind closed doors and without a public debate."
?(I's a distressing commentary that the Postal Service has already pushed its way past the starting point of this second, and we believe fundamentally mistaken, directon-and has done so behind closed doors and without a public debate." (Caption]
?(-John F. Strum, Newspaper Association of America president and CEO) [Photo & Caption]