Saturday, February 16, 2008

Postal Regulatory Commission Universal Service Obligation and Monopoly Study

In the next few weeks, the mailing community will be asked by the Postal Regulatory Commission to begin providing comments for its study of Universal Service and the Monopoly. The Postal Regulatory Commission’s study will look at a number of issues that are critical for business mailers that have never been examined in any economic or policy study to date. This study is critical for the mailing community as it will provide the framework for the next round of postal reform that will likely begin in the 111th Congress in 2009. The mailing community will have a limited window to provide input to the study this spring.

The scope of the study is quite broad and will generate a report that will cover:

  • Evolution of Universal Service Obligation, the delivery monopoly, and the mailbox monopoly since the creation of the Post Office Department;
  • Current definition of the Universal Service Obligation as it relates to both access to the postal network and delivery to addresses in the United States, the scope of the delivery monopoly and the scope of the mailbox monopoly as defined by law and regulation;
  • The cost of the Universal Service Obligation for delivery as defined by the study;
  • The cost of the Universal Service Obligation as it relates to retail access;
  • The value of the delivery monopoly and the mailbox monopoly as currently defined;
  • Evaluation as to whether either the delivery monopoly or the mailbox monopoly is required to sustain the universal service obligation for delivery and/or access;
  • Identification of geographic and economic communities as well as types of mailers whose service falls short of the universal service obligation;
  • Determination of what the mailing community, small business mailers, small non-profit mailers, as well as the general public wants in terms of universal service with a focus on determining how universal service should be defined by class of mail;
  • An examination of how foreign governments and postal administrations define universal service and the monopoly as well as how they determine the costs of universal service, the value of the monopoly and the scope of monopoly required to guarantee universal service;
  • Determination of options for the scope of universal and standards of universal service and the monopoly that will be required in the future (5 and 10 years out) including options that could be accomplished under current law, those that would require changes in law, those that are practical given existing postal operations, product costs, labor agreements, delivery density, local geography;
  • Identification of recommendations of changes to the current definition of universal service and the postal monopoly including recommendations related to the delivery of the various classes of postal products and access to the postal network for individuals, small businesses, small non-profits, large businesses, and large non-profits that:
    • Can be made within the scope of current law, and
    • Would be require changes in law;
  • For all recommendations identification of the effect on rates, financial condition of the Postal Service, service quality and the security of the mail; and
  • Identification of whether the monopoly is required to sustain the recommended definition(s) of universal service and if it is required whether the monopoly can sustain universal service.

Given that the results of this study will provide the framework for the next round of postal reform, all mailers need to begin thinking about what they may want to present to the Postal Regulatory Commission. In particular, mailers who regularly mail sufficient volumes to take advantage of work-sharing discounts should begin thinking about this issue as the Commission's contractor was only asked to study the opinions of the general public, small businesses and small non-profits. Larger firms and associations of mailers were expected by the Commission to use their own resources to provide information on how changes in Universal Service and the monopoly could affect their business.