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Affordable Mail Alliance Calls on Postal Regulatory Commission

Wrong on the Law, Wrong on the Policy, Wrong on the Economy, Wrong on the Jobs:

Affordable Mail Alliance Calls on Postal Regulatory Commission to Dismiss Postal Rate Hike Request

National Newspaper Association today joined a nationwide alliance of nearly 700 companies and associations that use the United States mail to call for the Postal Regulatory Commission to promptly dismiss a request for a major postage rate increase.

The Affordable Mail Alliance, representing NNA members and many other mailers’ organizations, told the PRC today that the Postal Service must not be permitted to hike rates beyond inflation.

"Allowing the Postal Service to raise prices above the Consumer Price Index in this case would nullify the single most important safeguard for mailers and the public in the Postal Accountability and Enhancement Act of 2006 ("PAEA"),” AMA argues in its motion.

Senator Susan Collins (R-ME), an author of the 2006 law, has already said the proposed increases do not qualify for an exception under the standards established by Congress.

The Alliance comprises NNA, the Magazine Publishers of America, the Direct Marketing Association, the Alliance of Nonprofit Mailers, several major printing companies and others. For a full list see www.affordablemailalliance.org.

The Postal Service in July requested an “exigent” rate increase, beyond levels permitted by inflation-capped federal laws. It seeks rates to go in effect in January that can be as high as 10 percent for some newspaper mail, and that average around 5.6 percent. It told the PRC that it needed the extra money because of the effects of recession and the impact of the Internet upon the mail.

But the Alliance argues that more is afoot than recession. It directs the PRC to consider “excess capacity” and “premium labor rates” that it believes have driven USPS costs beyond inflation.

NNA’s President Cheryl Kaechele, publisher of the Allegan County (MI) News, said that small business jobs are at stake.

“Postage is the major distribution expense for most community newspapers. USPS costs, including labor costs, continue to rise faster than inflation while the recession has squeezed local economies. Newspaper publishers and their staffs are working with tight belts to make sure they hold onto their own jobs and help the community businesses reach their own customers through the advertising columns. We are doing more with less to get the news out. Newspapers simply cannot afford to support a labor force that is not held to fiscal discipline,” she said.

AMA argues that the postal service has not met the exceptional test required for a “exigent” increase.

“The result has been devastating,” the AMA motion argues. “In Fiscal Year 2009, when prices in the overall economy actually declined, the Postal Service costs per unit of output increased by more than six percent. Had the Postal Service merely held its costs to the level of inflation in the general economy, the Postal Service would have made a profit in 2009.”

NNA Postal Committee Chairman Max Heath, consultant to Landmark Community Newspapers, Inc., said NNA had taken a tough position to oppose the exigency rates.

“We invested more than a decade in helping to craft legislation with a price cap, so we could operate with the assurance postal costs would remain in line with inflation. Now the price cap may be blown sky high, and be gone forever. The postal service will be allowed to continue to punish customers with an average rise of ten times the rate of inflation,” Heath said.

NNA urges concerned newspaper executives to visit www.nnaweb.org for information on how to fight the rate increase.