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Association for Postal Commerce

1901 N. Fort Myer Dr., Ste 401 * Arlington, VA 22209-1609 * USA * Ph.: +1 703 524 0096 * Fax: +1 703 524 1871

REGULATION IN THE EXTREME: HOW THE POSTAL SERVICE CRIPPLED PC POSTAGE

The following is a perspective by postal commentator Gene Del Polito. The opinions expressed are those of the author and do not necessarily reflect the views of the Association for Postal Commerce.

Since the founding of the republic, communicating by mail has been an integral part of the American experience. While most personal letter writing has been supplanted largely by use of the telephone, a substantial portion of today's B2B (business-to-business), B2C (business-to-consumer), and C2B (consumer-to-business) communications take place through the mail. With the increasing power and reach of electronic communication alternatives, there will be a significant change in even this element of day-to-day communication. Nonetheless, despite the "digitizing" of America, mail will remain an important communication vehicle, and the need for a universal mail delivery system will be enduring.

Surely, the manner in which Americans communicate and do business is changing. In today's Internet world, they expect their communication services to be timely, reliable, cost-efficient, and convenient. In other words, if mail is to remain a part of the American communication landscape, then anything that increases the value of mail and makes it more favorable is highly desirable.

Take, for instance, the purchase and application of postage. If you're operating a small or home-based business, the last thing you'll want to do in the course of a busy day is to subject yourself to the interminable lines that often are a part of a simple trip to the local post office. In addition, if you happen to be the Postal Service, the last thing you should want is the inordinate expense of staffing retail service windows if a more cost-effective alternative is available. And even though the Postal Service must reckon with the Internet as a cost-efficient competitor, there is no reason the Postal Service shouldn't strive to improve its own cost-efficiency by using the Internet as a substitute for labor when suitable circumstances permit it.

These are among the many reasons behind the creation of electronic PC-based postage systems such as those brought to market by Stamps.com, Pitney Bowes, and E-Stamps. An added driving force behind these ventures was the belief that replacing mechanical meters with a more tamper-resistant alternative could help the Postal Service avoid the cost associated with postage fraud. Furthermore, the use of an indicia that could carry an extraordinary amount of information would provide the Postal Service and its customers with a highly desirable value-added proposition.

Well, that's what you would have thought. Some who live within the bowels of the Postal Service's headquarters, however, seem more interested in turning PC-based postage into just another good idea that didn't pan out. Why? Because someone other than the Postal Service had the smarts to bring the concept to market. For reasons that can only make sense to a Byzantine bureaucrat, anything not "owned" by the Postal Service is looked upon less favorably or with suspicion. So if you can't own it, the Postal Service's answer is to regulate it – even if it means regulating it to death.

There's an old saying: "If your only tool is a hammer, everything looks like a nail." For the Postal Service, if your only effective tool is your regulatory authority, then every issue should be the subject to regulation – even regulation in the extreme.

When E-Stamp announced that it was abandoning the program, it was because CEO Bo Ewald said he simply could not run his business under the regulatory constraints presented by the USPS. Indeed, in a letter last August to Postmaster General Bill Henderson, Ewald complained that "barriers are impeding the success of the information-based indicia providers and therefore putting in question the investments that each company has made." Ewald protested that USPS had done little to promote the PC postage program and that "regulatory requirements" made Internet postage "less convenient for customers than necessary."

Nothing much has changed since E-Stamp's departure from the PC postage arena. In fact, today the Postal Service still has in place all the strictures that make the return of "spoiled" postage more of a headache than it's worth. Rather than facilitating refunds for wasted postage, which is bound to be a part of any PC-based scheme, the Postal Service simply continues to foist the headache on PC postage intermediaries. It seems the Postal Service is more intent on making the use of PC-based postage more a headache than a convenience.

This is a shame because there's a lot the Postal Service can gain by encouraging more of its home-based and small office customers to use a PC-based postage scheme as an alternative to stamps. Those who buy postage via the Internet don't lengthen the lines at postal retail facilities. Those who use the PC postage-based alternative must take all the requisite steps to ensure that the addresses on their mail are accurate and complete, and the mail is produced in an automation-compatible form. These steps improve the deliverability of the mail and reduce the cost of handling and distribution.

Some within the mailing industry have noted that the Postal Service should be encouraging PC-postage use by providing mailers with discounts that fully reflect the costs saved over other forms of single-piece mail. It's an idea the Postal Service should consider seriously. By not making the use of PC-based postage a wholly satisfying experience, the Postal Service will only hasten the day when consumers and businesses seek to bypass the mail by conducting even more of their business in some electronic form.