NNA seeks to keep cap on postage rates

Mar 25, 2017

By Tonda F. Rush

Public Policy Director | NNA


eep an inflation cap on postage, the National Newspaper Association argued to the Postal Regulatory Commission in March.

PRC is in the midst of a decennial review of the price cap on postage imposed by the Postal Accountability and Enhancement Act and of other aspects of that 2006 law. The PRC was charged in 2006 with looking back in 2017 on the law’s effectiveness over the decade and taking such actions as it deems necessary. NNA argues for preservation of the price cap and suggests changes that would improve Periodicals Class Mail service.

The scope of the PRC review carries enormous impact for users of the mail, according to NNA President Matthew Paxton IV, publisher of The News-
Gazette in Lexington, VA.

“Although we have suffered a lot in our mail service since 2006, one key aspect of PAEA has been a great success: it kept postage rates from escalating drastically,” Paxton said. “This review is complex and, for small mailers like NNA members, quite hazardous. The PRC could decide to release the price cap entirely and go back to the old days when we could see double-digit postage increases every couple of years without really seeing an improvement in service.”

NNA told the PRC that although the U.S. Postal Service’s balance sheet looks grim, most of the losses have occurred because of the Great Recession and by the decision of Congress to require prepayment of retirees’ health benefits into a federal government fund.

“The PAEA decade has been a rough one for the postal community. NNA’s newspapers have possibly suffered more than most, given the importance of timely delivery and the unique distribution of newspaper mail. One might expect an organization of so many seriously threatened small businesses to argue that PAEA has been a failure. But overall, NNA argues here that the law has worked. By stabilizing rates, it has enabled mailers to plan for their futures, and has kept universal service in place despite many hazards that had to be negotiated along the way. It would be an error for the commission to focus primarily upon the Postal Service balance sheet and to attempt to alter PAEA in ways that might drive more mail away faster than it otherwise would go. Rather, a steady and continuous oversight over a recovering system is the correct path,” NNA said.

NNA Postal Committee Chair Max Heath said NNA decided last December that it must participate in the PRC review to highlight two concerns: continuous improvement of Periodicals Mail service and preservation of the price cap.

“The problem the PRC faces is that the Postal Service usually argues that the only way to improve service is to charge more money, so they want to raise rates. We expect USPS in this case to fight to remove the price cap altogether. Although we have to keep a big spotlight on the delivery problems we face across the nation, we also recognize that throwing a lot of money against the problem is not the right solution.

“The old processing plants are not going to reopen. What we need is the continued Postal Service management focus on spotlighting problems and fixing them.”

The commission is expected to review comments from the Postal Service, labor force organizations, members of the public and the mailing industry. It is scheduled to decide by fall whether it will keep the current pricing scheme or recommend a new one.

A copy of NNA’s comments is available here.