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Postal Regulatory Commission denies rate hike request

Contact: Tonda Rush, NNA Washington Office

The Postal Regulatory Commission on Sept. 30 unanimously refused to permit the United States Postal Service to implement a rate hike 10 times current inflation levels. For community newspapers, the increase could have been even more daunting -- more than 10 percent increases for the mailing of news- papers at Periodicals rates.

National Newspaper Association, as part of the Affordable Mail Alli- ance, this week filed comments with the Postal Regulatory Commission opposing the U.S. Postal Service’s request for a Jan. 2, 2011, rate in- crease that would hit all mailers with a 5.6 percent postage increase, and some periodicals mail by increases in the 10 percent range.

National Newspaper Association President Cheryl Kaechele, pub- lisher of the Allegan County (Mich.) News, applauded the Postal Regula- tory Commission for denying con- sent for an above-inflation postage increase that would have fallen due Jan. 2, 2011.

The rate hike was vigorously op- posed by the Affordable Mail Alli- ance, more than 1,000 businesses that use the mail. NNA is a member of the Alliance steering committee. The Alliance today commended the PRC, saying it “has helped countless businesses stay competitive and saved tens of thousands of jobs.”

Kaechele said NNA is pleased with the PRC action and believes it will help newspapers to remain in the mail. The proposed rate hike, she

said, was a bad idea at the wrong time as the economy continues to struggle to emerge from recession.

“The Postal Service remains a key delivery partner for newspapers. Our mail category has grown over the past several years. But the on- slaught of new regulations, threats of high rates and the possible loss of Saturday delivery leads many publishers to rethink their use of the mails. We have already seen some erosion in our mail volumes for that reason. I hope this decision helps us to reverse that momentum now.”

NNA Postal Committee Chairman Max Heath said NNA has invested heavily in a variety of actions to keep mail delivery affordable and timely. The proposed postage increase was seen by newspaper mailers as a potentially fatal blow in the USPS/ mailer relationship.

“We have had newspapers recently removing hundreds of thousands of dollars of business from the Periodicals mailstream. This is a very dangerous time in our world of mailers. The Postal Service simply must face up to the need for cost control and reform its old habits of passing along increases to mailers. The printing and publishing businesses have been disciplining themselves with cost controls for more than a decade. Our partner in the delivery supply chain must be in step if it is going to survive,” Heath said.

The PRC’s review was a 90-day ac- celebrated review of a proposed “exigency” rate request brought by USPS to exceed a legal inflation-based cap on rate hikes. It cited the recession and competition from the Internet as reasons for the request.

But the PRC objected to the premise of the request.

“The Postal Service has asked the Commission to find that volume declines resulting from the recent recession are an extraordinary or exceptional circumstance. The Postal Service also supported its request with a statement from its Chief Financial Officer that it is facing a cash flow crisis, and that without some assistance it will be unable to make Congressionally required payments in September and October of 2011.

“The documentation provided by the Postal Service demonstrated that the primary cause of the liquidity crisis was structural and related to an overly ambitious requirement for the Postal Service to prefund its future retiree health benefit premiums,” the PRC said.

National Newspaper Association Washington Office P.O. Box 5737 Arlington, VA 22205 703-237-9802

Fax: 703-237-9808 Website: www.nnaweb.org