U.S. Postal Service proposes ill-conceived sweetheart deal

As a newspaper, we sympathize with the U.S. Postal Service in its attempt to survive in a changing world, a world in which centuries of traditional methods of communication are being rapidly replaced by electronic media that could only be imagined a short time ago.

And we have argued several times over the last year that the Postal Service should find some relief from the onerous burdens of the Postal Accountability Enhancement Act of 2006. That law requires the postal service to prefund its pensions for 75 years, in effect requiring the postal service to set aside money now for employees that haven’t yet been hired — and may never be hired. That provision of the 2006 bill adds an estimated $5.4 to $5.8 billion to the postal service’s annual operating costs.

We supported U.S. Sen. Sherrod Brown’s fix for that bill, called the Postal Service Protection Act.

But we’ve never suggested that the Postal Service should be given carte blanche in seeking ways to save itself from oblivion, and, indeed, it isn’t free to make any deal it wants in an effort to possibly reduce its crippling losses.

Specifically, the Accountability Act prohibits the Postal Service from offering special deals to selected customers if they cause “unreasonable harm” in the marketplace, or if those deals do not promise a net financial benefit to the nation’s postal system.

The Postal Service has proposed a special deal to one national customer that we believe clearly represents a threat to today’s marketplace and, we believe, would result in a net loss of business from thousands of local customers who would be forced to pay higher rates than their competitors.

A special concern

We will acknowledge that this proposed deal is of special interest to us because those on the losing end would be the thousands of daily and weekly newspapers throughout the United States that are now Postal Service customers. The solitary winner would be Valassis Direct Mail, a national competitor of local newspapers that targets retail outlets. Valassis would get a 22 to 36 percent discount on “new” advertising mail pieces beyond what it mails now, and its lower rate would allow it to attract some of that “new” business from the “old” advertising providers, newspapers.

The Valassis proposal has been submitted to the Postal Regulatory Commission, which has the final say over approval. We would urge the commission to reject the proposal if for no other reason than it violates the Accountability Act. We would urge the USPS to pull the proposal before it is even necessary for the Regulatory Commission to act because this was an ill-conceived idea from the get-go. It is clearly a bad business plan to alienate a collective that represents some of your largest and most loyal customers or to unnecessarily encourage those customers to begin looking for alternatives to using your services.

We have recognized the unique role that the Postal Service holds in the commerce and culture of the United States, dating to the drafting of the Constitution 225 years ago. The Postal Service should recognize the role that newspapers have played in forming and protecting a free nation for even longer. And the continuing positive role that thousands of individual newspaper customers would represent to the Postal Service’s bottom line.