Major Parties Agree to Rate Case Plan

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The U.S. Postal Service likely will file its rate case settlement proposal with the Postal Rate Commission by Monday, said Dan Foucheaux, chief counsel for the USPS and settlement coordinator, after major mailing groups and companies signed on to the proposal this week.


Twenty-six of the 60 parties involved in the settlement talks have agreed to the increase. Many of the others have not been active in the discussions, Foucheaux said, and are not expected to oppose the plan.


The proposal would increase postal rates 8.7 percent as of June 30. The postal service had wanted the increase to take effect June 2, but pushed that back to June 30 late last month after strong opposition from many business groups.


Groups that have agreed to the proposal include the Direct Marketing Association, the Alliance of Nonprofit Mailers, the Magazine Publishers of America, McGraw-Hill Companies Inc. and Dow Jones & Co.


"The economic situation has changed since the postal service filed its case in September, and the postal service needs more money," said Jerry Cerasale, senior vice president of government affairs at the DMA.


The USPS has threatened to file for a much higher rate increase that likely would take effect in September or October if the settlement proposal were not approved. Cerasale said the postal service likely would seek a rate increase of 12 percent to 15 percent if the settlement did not go through.


"This was unconscionable to us, so we decided to move forward and see if we could get the settlement," he said.


The DMA also decided to go along with the proposal, Cerasale said, after postmaster general John E. Potter said the USPS would not ask for additional rate increases before October if the settlement proposal went through. Potter left the possibility of an earlier increase open a crack, however, saying that a final decision was up to the Board of Governors. That has left some groups wanting further assurances.


"We are on board," said Neal Denton, executive director at the Alliance of Nonprofit Mailers, "but subject to a positive statement by the Board of Governors that they do not intend to file [another rate increase proposal] again until the end of the fiscal year (which is in September)."


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