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 www.stoppostalratehikes.com.
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 service.
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.