Groups Challenge Legality Of Postal Hike

Five associations representing groups from across the mailing spectrum filed public comments yesterday challenging the legality of the Postal Regulatory Commission’s (PRC) proposed rate increase but also warning of the harm that it would do to their industries as well as the United States Postal Service (USPS).

The Association of Magazine Media (MPA), the Alliance of Nonprofit Mailers (ANM), the Association for Postal Commerce (PostCom), Idealliance and the American Catalog Mailers Association (ACMA) submitted a 137-page filing yesterday, the final day for public comments. Reply comments are due by March 30 and the PRC is expected to deliberate the proposal over the coming months.

“The PRC proposal effectively eliminates rate stability from the statute,” according to the filing, and is the “antithesis of rate stability,” with increases of as much as 40 percent or more, and 30 percent above inflation over five years. The rate increase is part of a process under the Postal Accountability and Enhancement Act (PAEA) in which the PRC conducts a 10-year review of the postal ratemaking process.

The PRC filed a notice of proposed rulemaking in December. The proposed changes would retain a cap on rate increases equal to the current rate of inflation but also could add other increases: A 2-percent surcharge on all mail for the next five years; 1 percent if USPS meets certain goals related to efficiency and service; and, 2 percent for products that are consider “underwater,” or not covering their costs. “Underwater” categories tend to be periodicals and Marketing Mail, formerly called Standard Mail flats, such as catalogs and calendars.

The filing argues that the PRC’s proposed “non-compensatory products” surcharges would provide little financial benefit to the USPS and do little to advance the commission’s objectives. Decreased volume from the proposed rate increases would offset any positive financial benefits of the rate increases, the associations claim. They also point to nine objectives that the PRC must take into account when determining rates and not just the financial stability of the Postal Service.

“The PRC conflates rate stability and rate predictability, and rates that increase this much faster than inflation are not stable,” said Linda Thomas Brooks, president and CEO of The Association of Magazine Media (MPA). If approved, rate increases would force some magazines to cut back on issues and circulation or put them out of business entirely, she said, and do nothing to improve USPS finances.

ANM Executive Director Stephen Kearney fears that the PRC’s plan would shift dollars away from nonprofits and others, decimating programs and outreach. “The nonprofits we represent don’t just use the Postal Service to communicate with their members, they rely on the USPS for their financial survival,” he said.