**USPS Governors Allow New Postage Rates Under Protest

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The Board of Governors of the U.S. Postal Service yesterday allowed under protest the overall 4.6 percent postage increase recommended by the Postal Rate Commission.

The board is sending the case back to the PRC for reconsideration of the decreases in the USPS' revenue request recommended by the commission in November. Specifically, the PRC cut the agency's contingency request by $1.7 million.

Meanwhile, the USPS is expecting the rates recommended by the PRC to take effect Jan. 7. There is no timetable for the PRC to reconsider its decision.

In a letter to members, H. Robert Wientzen, president/CEO of the Direct Marketing Association, said the DMA is "shocked and dismayed by this move on the part of the governors."

He said this decision "sends a clear message that the Board of Governors believes that the PRC's recommended rate increases are insufficient even though the proposed rates are detrimental to business and are above the rate of inflation, hitting some classifications of mail with rate increases as high as 16 percent."

The average increases for each class of mail are: 1.8 percent for First-Class; 9.9 percent for periodicals; 4.5 percent for regular standard enhanced carrier route; 8.8 percent for all other regular Standard-A mail; 2.7 percent for parcel post; 17.6 percent for bound printed matter; 16 percent for Priority Mail; 7.2 percent for nonprofit periodicals; and 4.8 percent for nonprofit standard.

In a separate action, the board rejected four classification changes recommended by the PRC. One concerns the establishment of a flat-rate envelope for Priority Mail at the 1-pound weight increment. Two involve proposed new classifications within First-Class mail -- one for mail sent with electronic postage and the other for courtesy envelope mail. The fourth item regards the minimum weight for Standard-A automation letter rates.
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