POSTAL REFORM AND A FAIR SHARE OF THE MARBLES

The following is a perspective by postal commentator Gene Del Polito for Direct magazine. The views expressed are solely the author's.

It's been fascinating to watch the postal Governors and the Postal Rate Commission trade barbs over what they believe is good or bad about pending postal legislative reform. It's like watching two kids arguing in a school playground over what constitutes his fair share of the marbles.

Determining who should do what under a reformed postal legislative framework isn't rocket science. The roles and responsibilities of either a Board of Directors or a third-party regulator should be relatively straightforward.

Directors direct; regulators regulate. No one wants a PRC crafted in the mold of the U.K.'s postal regulator, but no one wants a postal monopolist embued with unfettered powers. To put things succinctly, here is what is needed for postal reform to work:

The incentives that underlie this system must be structured to provide a risk-reward system akin to a competitive private sector rather than a governmental-bureaucratic model.
 

To keep the postal system in step with the nation's changing needs, the Postal Service must be given as much discretion as possible over the structuring of postal products and systems.

Quite frankly, it will be impossible to make postal reform work if the Postal Service is not given as much control as possible over the design and operation of what we call its network, which includes not only its physical facilities but also its use of capital and personnel. Likewise, the Postal Service, not the Postal Regulatory Commission, should have sole responsibility for determining the structure of its services. The days of mail classification as a shared responsibility of the Governors and the PRC should be over. Once that structure is defined, however, the responsibility for determining the legality of postal rates should be given to the Postal Regulatory Commission, not the Board. The regulator should oversee the rate setting process but it should not be empowered to dictate its eventual outcome. When rates and rate adjustments fail to comply with the law, they should be rescinded or denied. The regulator should send the provider back to the drawing board to get things right.

The tragedy is that if the Postal Service (including the Governors) had handled postal reform differently, a reform measure already would have been enacted into law. Instead of demurring, it should have told Congress early and often what it needs from reform to make the postal system work. Let's hope it'll get on with doing just that.