Some Concerned as Postal Reform Bill Is Reintroduced

While most postal industry insiders are happy with the postal reform bill, a few still want to see more discussion over some of its provisions. The bill was reintroduced this month by Rep. John McHugh (R-NY), House postal subcommittee chairman.

Last year, McHugh's subcommittee approved the measure, H.R. 22, and sent it to the House Government Reform and Oversight Committee, which oversees the postal subcommittee. The bill died in committee as the 105th Congress came to a close.

Mail Advertising Service Association, Alexandria, VA, which represents small direct marketing industry lettershops, printers, mailers and fulfillment operations, is concerned about the part of the bill permitting the U.S. Postal Service to create a private corporation to oversee its competitive products, allowing it to open lettershops and fulfillment warehouses that could compete with MASA's members.

“We are against allowing the USPS to create a private company for its competitive products and services,” said Barry Brennan, director of postal affairs at MASA. “Our efforts are to try to have them excise that from the bill, and then we can support the rest of the legislation as proposed.”

In addition, Deborah Wilhite, senior vice president of government relations at the USPS, proposed amendments to the bill last month surrounding pricing regulations for noncompetitive products and the definition and treatment of competitive products.

Meanwhile, McHugh is eager to see the bill move quickly through the subcommittee. However, even if it were enacted today, H.R. 22 would not be fully implemented until 2007. The bill is designed to give the postal service greater freedom to compete while establishing new rules to ensure fair competition and protect public interest.

“Congress needs to modernize outdated postal laws to give the postal service both the tools and the incentive to adapt itself to the demands of the 21st century,” he said.

McHugh pointed to trends that show declining market share in the postal service's main categories of mail, and based on the almost certain long-term declines in the carriage of letters, postal reform is almost inevitable.

Among other provisions, H.R. 22 would separate rate-setting into two categories: competitive and noncompetitive. Rates for competitive products would be set by using a price-cap regimen based on the Consumer Price Index, while noncompetitive products would be run by a newly formed private corporation that would set rates based on market conditions.

McHugh expects to fine-tune H.R. 22 through the amendment process in the subcommittee after a series of hearings he will hold, the first in February, and the second shortly thereafter. While witnesses have not yet been decided, those expected to testify include postmaster general William J. Henderson; leaders of postal worker unions; Ed Gleiman, chairman of the Postal Rate Commission; and executives from USPS' main competitors — United Parcel Service and Federal Express.

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