Vienna, Va. — Congress should establish a rigorous regulatory framework for our nation’s postal system so that mailers are protected from excessive rates and cross-subsidization, Newspaper Association of America President and CEO John F. Sturm said in written testimony submitted today before the Government Reform Committee’s Special Panel on Postal Reform and Oversight. The Committee is considering a proposal by the President’s Commission on the U.S. Postal Service to modernize and restructure the postal system.
In his testimony, Sturm noted that NAA members represent nearly 90 percent of U.S. daily circulation and are among the leading local users of postal services, spending more than $700 million annually. “Throughout our history newspapers have served as partners with the Postal Service in its mission to ‘bind the nation together,’” Sturm said. “Newspapers want a healthy and vibrant postal system to serve our needs — and the needs of the nation — for generations to come.”
While over the years the Postal Service has inappropriately picked sides in the market competition over advertising between two of its mail customers — newspapers and direct mailers – the newspaper industry has been encouraged by the actions of Postmaster General Jack Potter to refocus the U.S. Postal Service on its core mission of mail delivery, Sturm said.
However, he added, current law does not give the Postal Rate Commission “appropriate tools” to regulate the Postal Service effectively. For instance, the service’s failure to measure and allocate costs fairly has led to rising First-Class postage rates, while the price for telephone and Internet service have declined as costs have fallen, Sturm said.
“Ironically, the problem the Postal Service now faces is that decades of exploiting its monopoly may finally have killed the golden goose, as citizen and small business mailers increasingly explore alternatives to First-Class mail delivery.”
While the newspaper industry supports an appropriate amount of rate flexibility within an indexing regimen, Sturm said, the industry opposes special rates for individual mailers in the form of negotiated service agreements. “Government services ¾ here postal services ¾ should not be for sale on the basis of negotiating or lobbying skills.”
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