US postal rate increases and small publications

Posted by ryan griffis | Wed May 9th 2007 4:05 p.m.

remember our roots.
Disseminate Information, Protect Democracy


[from the May 7, 2007 issue]

The following is a shortened version of a letter drafted by Nation
president Teresa Stack and signed by her and her counterparts at more
than a dozen independent journals, including National Review, The
American Spectator and Mother Jones. To learn what you can do to
help, go to

James C. Miller III
Chairman, Postal Board of Governors

We write to you today on a matter of great urgency. The recent
decision of the Postal Service Board of Governors (BOG) to accept the
startling periodical rate recommendations of the Postal Regulatory
Commission (PRC) undermines the historic foundation of our national
mail system. These new rates will have grave consequences for
disseminating the very type of information our Founding Fathers
strove to protect and foster when they established the public postal

As the publishers of small national magazines that focus primarily on
politics and culture, we share a common mission of providing the
information essential to a flourishing democracy. We struggle to
inform the national dialogue in a way the Founders believed essential
to the health of this country. As journals of opinion and ideas, we
do not do it for the money; we do it because, like the Founders, we
believe it to be a public good.

As you know, in May 2006 the United States Postal Service proposed a
rate increase for periodicals of about 11.7 percent, an increase that
would have affected all periodicals more or less equally. Instead, in
February the PRC recommended a version of the rate proposal put
forward by Time Warner, which had previously been rejected by the PRC
and strongly opposed by the USPS. This proposal would have a
disproportionately adverse effect on small national publications
while easing the burden on the largest magazines.

The decision was followed by an industry "comment period" of only
eight working days, an impossibly short time for small publications
to digest changes so complex that to this day there is no definitive
computer model to fully assess them. Nonetheless, the new rates are
scheduled to take effect July 15.

We now know that small titles will be devastated. According to an
analysis by McGraw-Hill (but not, inexplicably, done by the PRC or
BOG), about 5,700 small-circulation publications will incur rate
increases exceeding 20 percent; another 1,260 publications will see
increases above 25 percent; and hundreds more, increases above 30
percent. Some small magazines will no doubt go out of business.
Meanwhile, the largest magazines will enjoy the benefit of much
smaller increases and in some cases, decreases. To make matters even
worse, editorial content charges will now be based on distance. The
system of charging one price however far editorial content travels,
which has existed since our country's founding, seems to have been
summarily dismissed by the PRC, and then by the governors, with
little thought of its future impact.

These increased postal rates will also raise barriers for prospective
new publishers, thus destroying competition in the periodicals market
and locking in the privileged positions of the largest firms. While
it is understandable that Time Warner would relish the idea of making
it more difficult for new competitors, there is no reason to think
that it is in the interest of the American people or the market economy.

Since its inception, the US Postal Service has recognized small
magazines like ours as serving a vital function in the American
political system. And while the realities of the marketplace no doubt
require some adjustments to postal costs, the PRC's new rates turn
the ideals of Jefferson and Madison on their head. These ideals have
been eloquently defended in all previous rate cases. Instead, we will
now have an entirely cost-based system.

Even if the argument can be made that such a system trumps all other
interests, the USPS remains in effect a government monopoly. We are
small businesses, and to raise costs so dramatically without our
input and with no recourse is devastating. Comments were heard only
from companies that could afford to provide them, via expert
testimony and top-notch legal advice. No one considered how a small
business would accommodate a 30 percent increase in one of the most
expensive items in its budget.

The PRC has managed to take a historically preferred class of mail
and turn it into the most complex, cost-based and bureaucratically
burdened of all mail classes in the span of a single rate case.
Periodical rates ought to be the least cost-based, because that class
exists for content.

In accepting the Time Warner rate plan, the PRC and the governors
have allowed the cost-based proposal of one of the country's largest
mailers to prevail over public and small business concerns. Small
magazines that have historically contributed to the diversity of
voices and opinions and have an outsized effect on our public
discourse are now potentially silenced so that the likes of Time
Warner can mail People more cheaply.

We appreciate that costs increase and mail technologies change.
However, the mail system is a public system, and the dissemination of
small magazines remains a public good. Accordingly, any changes
should be implemented gradually and on a cost-averaged basis so as
not to threaten the very existence of small magazines. We ask that:

1. the Board of Governors move quickly to delay the implementation of
these new rates, allowing an additional period of public comment;

2. a full assessment and justification of the new rates and their
impact on the public good be completed, and if the new rates cannot
be adequately assessed and justified, that the decision of the BOG be
revised and the new rates revoked;

3. whether the Postal Service exercises its right to file for another
rate increase under the old postal reform law or moves directly to
the new law's provisions, during the next rate case the Postal
Service will shift some of the added burden away from the small-
circulation publications that have survived until then.
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