Tuesday, May 15, 2007

Stamp Out the Rate Hike


Stamp Out the Rate Hike: What's at Stake

"Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter."
-- Thomas Jefferson, Jan. 16, 1787

What's at Stake

Our nation's founders understood the First Amendment would be worth little without a postal system that encouraged broad public participation in America's "marketplace of ideas."

Thomas Jefferson supported this with calls for a postal service that allowed citizens to gain "full information of their affairs," where ideas could "penetrate the whole mass of the people." Along with James Madison, he paved the way for a service that gave smaller political journals a voice. Their solution included low-cost mailing incentives whereby publications could reach as many readers as possible.

Other founders soon came to understand that the press as a political institution needed to be supported through favorable postal rates. President George Washington spoke out for free postage for newspapers through the mail, and Treasury Secretary Alexander Hamilton -- no proponent of government deficit -- conceded that incentives were necessary to spawn a viable press.

The postal policies that resulted have lasted for more than 200 years, spurring a vibrant political culture in the United States. They have eased the entry of diverse political viewpoints into a national discourse often dominated by the largest media organizations.

Time Warner Rewrites History

All of this could change in 2007.

In an unprecedented move, the agency that oversees postal rates in the United States has quietly attempted to unravel much of what the founders accomplished. Earlier this year, the Postal Regulatory Commission (PRC) rejected a postal rate increase plan offered by the U.S. Postal Service. Instead they opted to implement a revised version of an extraordinarily complicated plan submitted by media giant Time Warner. (Click here to read the decision and click here for a timeline).

Although there was a formal review and comment process, the matter was so complicated and unreported that the public played no role whatsoever, and publications that could not afford significant lobbying and lawyer fees faced high barriers to effective participation.

Under the original U.S. Postal Service plan, all publishers would have a mostly equal increase (approx. 12 percent) in the cost for mailing their publications. This Time Warner plan is so complex that many publications are still unclear what their rate hikes will be if implemented; those smaller publications that have been able to do the math are finding shocking increases on tap, well above the 12 percent they had budgeted based upon the recommendation of the U.S. Postal Service.

The Time Warner plan overturned this level playing field to a system that by most indications favors large, ad-heavy magazines like People at the expense of smaller publications like In These Times and The American Spectator. It penalizes thousands of small- to medium-sized outlets with disproportionately higher rates while locking in privileges for bigger companies.

Fight Back: Tell Congress to Act

The PRC has aligned itself with a media giant with the apparent effect of stifling smaller media in America. The stunning move is an unprecedented abuse of the agency's discretion. Congress must now step in to protect smaller media from these unfair rate hikes.

The Postal Service should not be forced to use its monopoly power to favor the largest publishers and undermine the ability of smaller publishers to compete. The PRC and the postal authorities must be held accountable for a plan that could drive smaller publications to the brink of bankruptcy. With public involvement we can reverse the PRC decision and restore the postal system that has served free speech and freedom of the press in America so well.

Demand a formal and open accounting of why more than 200 years of pro-democracy postal policy was abandoned.


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Richard B. Kielbowicz, "Preserving Universal Postal Service as a Communication Safety Net: A Policy History and Proposal," Seton Hall Legislative Journal, Vol. 30, No. 2 (2006): pp. 383-436.

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Peters, John Durham. "The Marketplace of Ideas: A History of the Concept," in Andrew Calabrese and Colin Sparks, editors, Toward a Political Economy of Culture: Capitalism and Communication in the Twenty-First Century (Boulder: Rowman and Littlefield, 2004), pp.65-82.



May 2006: The USPS submitted an omnibus postal rate increase to the PRC. This rate increase proposal included a provision that would increase the periodical rate by 11.7 percent -- a cost increase that was supposed to impact all publishers more or less equally.

February 2007: After a 10-month comment and testimony review period, the Postal Regulatory Commission released its 758-page recommended decision to the Postal Board of Governors. To the surprise of many, the PRC rejected the USPS planned periodical rate scheme, and replaced it with a scheme based on a complex proposal submitted by Time-Warner.

March 2007: The USPS allowed just 8 business days for formal responses to the 758 page February 26th recommendations. The recommended Time-Warner periodical proposal was so complex that smaller publishers couldn't adequately assess how the rate change would impact their businesses. On March 19, the Postal Board of Governors issued the final decision, adopting the PRC's February recommendations.

July 15, 2007: Without public action the change in the periodical rates goes into effect.

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