Editorial: For USPS, the Bad News

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All is not as rosy at the U.S. Postal Service as it sounds, but we should take whatever we can get. First, the good news: The USPS lost less than $1 billion in fiscal year 2002. Just after the one-two punch of 9/11 and the anthrax scare, officials were warning of a $4.5 billion loss. Even better news: The USPS actually projects a $600 million profit for fiscal year 2003, though this hinges on mail volume increasing 3 percent. And the best news: The USPS will hold off its next rate increase until "well into 2004," postmaster general John E. Potter told mailers at last week's National Postal Forum.

Officials have been able to reduce the postal work force by 23,000 through attrition. They're also laying out plans to close unneeded processing facilities and money-losing post offices around the country.

However, don't dig out your dancing shoes just yet. Though postal managers have reined in costs, they have two big obstacles. One is the erosion of First-Class mail, the USPS' most profitable mail category. Thanks to e-mail -- especially e-payments -- First-Class volume is declining. The other is the cost behind the postal service's retirement benefit program, which will increase from $8 billion last year to $16 billion by 2010, according to the General Accounting Office. That's quite an albatross around Potter's neck.

Blame 'Pop-Up Video'

The "I Hate Pop-Ups" Movement continues to grow even as their use tiptoes into the biggest medium of all. EarthLink added a feature this summer letting subscribers block pop-up ads, while iVillage banned them from its network of sites entirely. Also, firms like Blazing Logic sell software to block pop-ups. Too bad marketers find pop-ups more effective at driving response than other Web advertising. Now, along comes a report in last week's Wall Street Journal saying that TNT and Court TV have toyed with pop-up messages from American Express and Planters nuts during regular programming. Networks are against the notion at the moment, but as the ability to zap through commercials becomes even easier -- thanks to digital recorders like TiVo -- will that resistance remain or will the pop-up's allure become too great?

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