NNA, mailers group says PRC erred by allowing postal rate increase

From National Newspaper Association

A broad national coalition of organizations representing users of the mail argued this week to the U.S. Court of Appeals that the Postal Regulatory Commission erred when it granted a $3.2 billion postage increase to the U.S. Postal Service last year.

The group, which includes National Newspaper Association fighting on behalf of community newspapers, said the PRC ignored inconsistencies in the Postal Service’s economic argument for the exceptionally high rates. Community newspapers in January faced increases of 7 percent to 9 percent, in a year when inflation hovered below 2 percent, because of the commission’s decision.

Attorney David Levy of the law firm Venable LLP. in Washington, told the court in the coalition’s brief that the Postal Service’s losses were not primarily created by the Great Recession but by the steady attrition of mail from Internet diversion. Levy and his legal team focused upon economic data analysis that the mailers considered flawed because it introduced variables inconsistent with the trends of the recession, recovery and accompanying Internet competition for messages. The PRC agreed with much of the mailers’ position that the Internet competition drove USPS financial losses, but granted the USPS request anyway.

“The commission’s decision to approve the $3.2 billion rate increase … is “rife with anomalies, any one of which is sufficient to justify a remand, and all of which, when considered together, demonstrate the commission was proceeding in a slapdash manner,” the brief said. The coalition asked the Court to return the case to the commission for reconsideration.

“NNA joined in this appeal because the commission’s decision is taking us irretrievably down the wrong road if we want a viable Postal Service,” said NNA President Robert M. Williams Jr., publisher of the Blackshear (GA) Times. “Instead of facing up to increased competition by restructuring critical costs, USPS resorted to first cutting services and then raising rates above inflation. Both of those strategies simply cut the throat of any sustainable plan for USPS to survive into the digital age. It is frustrating to many of us that at one minute USPS wants to talk about market share by competing with newspapers as if it were a private company, and then unilaterally raises its rates as if it were the unfettered government monopoly it really is.

“We sympathize with the challenges of facing a tough economy and a shifting communications paradigm. All of us in the industries that use the mail face all of these things every day. We know the pain of addressing them. We were extremely disappointed that the PRC, which is supposed to be the watchdog, got lulled into believing an extraordinary price increase was the right thing to do. Damage to an already-fragile economy could be severe.”

The commission’s decision was also appealed by USPS, which was denied the right to keep a 3.4 percent increase on its books indefinitely. Instead, the PRC ruled it would have to remove the 3.4 percent increase after revenues from the 2013 request had earned the $3.2 billion.