MPA Advocates for Healthy U.S. Postal Service, Opposes Massive Postal Rate Increases
By Rita Cohen
MPA, its members, and other mailers depend on a healthy U.S. Postal Service. Every month more than 230 million magazines are mailed to subscribers throughout the U.S. Print magazines remain a core contributor to the industry’s success, innovation, and relationship of trust with consumers. In 2018, more than 191 print magazine brands appealing to range of interests launched with a frequency of quarterly or greater.
A pending proposal from the Postal Regulatory Commission would threaten the vibrancy of magazine media publishers and would undermine the stability of the U.S. Postal Service itself.
Because the Postal Service is a regulated monopoly, Congress enacted a system of regulation to protect mailers from the abuse of that power, including limiting excessive rate increases and service declines, while providing incentives for the Postal Service to reduce costs and operate efficiently.
In 2006, the Postal Accountability and Enforcement Act was signed into law to modernize the system for regulating postal rates. As required, the Postal Regulatory Commission initiated a review ten years after enactment to assess whether the rate regulation system was achieving the collective objectives of the law. Rather than revising the system to better achieve all of the objectives of the law, the Commission’s review moved away from the law’s objectives and would eliminate the incentive provided by the
inflation cap for the Postal Service to operative efficiently and improve productivity. The proposal would authorize a cumulative 41 percent rate increase on magazines and periodicals over five years that will cost mailers about $8 billion per year.
MPA joined a coalition of the Postal Service’s largest, longest-tenured, and most loyal customers to share our perspective as part of the ten-year review and subsequent rulemaking process. In our comments, we have explained that the current system of ratemaking has allowed the Postal Service to maintain financial stability, and with smart management actions and sensible regulation by the Commission, maintaining the inflation price cap mandated by Congress will provide the Postal Service with the best opportunity to improve its financial position going forward. We have asked the Postal Regulatory Commission to withdraw the proposal to dramatically increase prices, preserve the inflation- based price cap as required by law, and focus on solutions that will actually lead to a more efficient and successful Postal Service.
We have encouraged the Commission to require the Postal Service take actions similar to those that have contributed to the success of magazine media publishers and other thriving businesses. The Commission's proposal’s reliance on excessive price increases fails to require the Postal Service to pursue solutions that any non-monopoly business would implement, including right-sizing its operations, abandoning wasteful investments, providing better quality service, restructuring pricing and discounts,
and offering products better suited to its customers’ needs. If the Postal Service had simply limited its cost growth to the average growth in costs throughout the economy, it would have earned a profit in the era following enactment of postal reform legislation.
The Postal Regulatory Commission should withdraw this misguided and harmful proposal and focus on a comprehensive approach that will allow the Postal Service and its customers to thrive for years to come.