Pandora's Postal Box

Persons bored by legal matters may dismiss the PRC’s inquiry into the regulations implementing the Private Express Statutes as just more pointless inside-the-Beltway bureaucratic paper shuffling. Such an opinion, however, would seriously misunderstand the nature of the discussion being started.

The Private Express Statutes establish the Postal Service’s letter monopoly, so even raising the possibility of altering or weakening them, perhaps allowing the entry of private sector competitors in a mature market that’s essential to USPS revenue, can have serious and far-reaching consequences.

Even though First-Class Mail volume and revenue are suffering because of the diversion of messages to electronic media, adding competition for hard-copy messages would significantly undermine USPS revenue and challenge its ability to perform its duties under the Universal Service Obligation.

Marketplace complaints about Private Express exceptions or restrictions seldom surface. Private sector firms – like UPS, FedEx, and others – already generate significant revenue by carrying “urgent letters,” such as their overnight and two-day versions of the Postal Service’s Priority Mail Express and Priority Mail. Whether such carriers would want to carry the less urgent items now required to go as First-Class Mail would depend on a variety of factors related to their own business interests. Suffice to say, however, that any such competition would further weaken the Postal Service.

The Wrong Defense

Ironically, the Private Express Statutes are sort of a postal Maginot Line. After World War I, the French military built a defensive line along the German border to protect against another invasion. However, the advent of airpower, not a major factor in WWI, rendered the Maginot Line obsolete, as was later demonstrated. Analogously, the PES were established to protect USPS revenue from hard-copy being lost to other carriers but, since their establishment, electronic media have emerged that are not subject to the PES. While it’s true that hard-copy competition remains barred, the messages that once would be in hard-copy are now simply sent in electronic form and flow without restriction, circumventing the protections afforded the Postal Service by the PES.

The USO

As noted above, the perhaps equally important and related issue that the PRC touches only tangentially in its questions is the USO, and the Postal Service’s ability to underwrite those services if the traditional source of funding for that work is further weakened. Arguably, it would be only fair and reasonable that trimming either or both the letter and mailbox monopolies, which some conservative lawmakers advocate, would mean offsetting cuts to the burdens of the USO and other statutory restrictions on the USPS.

Whether such an end-game scenario would ever occur is speculative, but by opening discussion of the PES implementing regulations, the PRC may be pulling on the first thread that could unravel more of the fabric of the postal system than might be initially anticipated. 

It’s unclear why, after over five years, the commission has chosen to begin a rulemaking on a subject that’s provoked very little visible controversy. Moreover, it’s unclear why it’s chosen to explore only one of the interrelated elements, the PES, excluding both the mailbox monopoly and the related matter of the USO from its focus. Being more in the jet stream of Washington politics, the commission may be getting subtle (or not) pressure from conservative politicians to explore the topic, but that’s also unknown.

What is known is that the PRC, the USPS, and the mailing community might be starting down a path with a very uncertain destination.

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