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Newspapers Urge Postal Reform, Fair Treatment For All Mailers

Monday, March 15, 2004

Press release from the issuing company

Washington, D.C. – A representative of America’s newspapers – together, a $700-million customer of the U.S. Postal Service – today urged postal reform legislation that would not allow “large influential mailers to get special deals for themselves.” Gary B. Pruitt, chairman, president and CEO of the McClatchy Company, Sacramento, Calif., testified before a Senate Committee on Governmental Affairs hearing on postal reform. He spoke on behalf of the Newspaper Association of America, which represents about 2,000 newspapers accounting for nearly 90 percent of the U.S. daily circulation. Pruitt told the panel, “Newspapers do not believe that the Postal Service – an agency of the federal government – should take sides in the marketplace competition between one mail customer and another.” He encouraged the panel to be wary of the Postal Service’s plea for “pricing flexibility,” saying, “There’s a big difference between improvements that benefit all mailers by making the process of changing rates simpler, more efficient, and more predictable,” and certain changes that would allow the service to enter into special negotiated service agreements (NSAs) with the nation’s largest mailers. “Government services – here postal services – should not be for sale based on negotiating or lobbying skills,” Pruitt said. Instead of NSAs, he said newspapers favor “work-sharing arrangements that are available to all mailers – both large and small – that meet predetermined criteria for discounted rates based on cost savings.” Describing the type of pricing flexibility newspapers support, Pruitt said the Postal Service should be able to set rates within limits established by an enhanced Postal Regulatory Board, without going through the current lengthy Postal Rate Commission process. But, he stressed that the revised system must allow mailers “the opportunity to challenge postal rates before they are implemented, upon a complaint that a particular rate is flawed or discriminatory.” Finally, in order to “ensure that the Postal Service operates properly as a public service,” Pruitt urged the Senate to follow the recommendation of the President’s Commission on the U.S. Postal Service and give the service “enhanced oversight.” He said an enhanced regulatory body should, in a separate proceeding, “establish the methodology used for calculating and allocating costs, and should be given the necessary tools to compel the Postal Service to produce cost data that currently does not exist.” This recommendation alone would not only increase the financial transparency and accountability of the Postal Service, it will protect First Class Mailers from having to pay a disproportionate share of the postal system’s overhead costs. Pruitt said a fairer and more accurate system for measuring and allocating costs should be “prerequisites” for any revised postage rates, adding, “I know of no private business that sets prices without a firm understanding of its costs—surely nothing less should be expected of the Postal Service.”

 

 

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