SOME FIRST, HALTING, UNSTEADY STEPS INTO THE BRAVE NEW WORLD OF POSTAL REFORM

The following is a perspective by postal commentator Gene Del Polito for the PostCcm Bulletin.

Well, the Postal Regulatory Commission (PRC) sure created quite a stir by issuing the recommendation that it did concerning a proposed negotiated service agreement (NSA) between the U.S. Postal Service (USPS) and Bank of America (BofA). To make a long story short, the recommended opinion reads as if the PRC had to hold its nose as it passed off final decision authority to the Governors of the Postal Service as to whether this NSA should be implemented. For the PRC, it was a first, and it left many a veteran of past postal wars scratching his or her head as to why the Commission acted in this manner.

The Commission went to great pains to express its concern about the NSA, but did not actually oppose its implementation. Unfortunately, the redaction of so much critical information made it impossible to judge independently whether the PRC's concerns were justified. Whether it meant to or not, the PRC has put the USPS in a tough spot with its Governors by having to explain why the NSA should be implemented despite the PRC's foreboding.

Buddhists believe in reincarnation. Once one dies, his or her soul moves on to enliven a new being. You can think of it this way. The Postal RATE Commission has expired, but its soul has moved on to animate the Postal REGULATORY Commission. In rare instances, the newly incarnate might be able to recall some memories from a previous life. With those rare exceptions, everything must be learned anew.

The tentative nature of the PRC's action on the Bank of America NSA suggests that the newly incarnate Postal Regulatory Commission is trying to take its first steps into its brave new world, but some memories of its prior life are causing those steps to be halting ones.

How do I mean that? Well, it was clear the PRC didn't want to embrace a proposal that it believed was not going to be a slam-dunk winner. Not wanting to be accused of being asleep at the regulatory switch, the PRC made absolutely sure that it voiced whatever reservations it had about the proposal. Nonetheless, the Commission wanted to reflect fully its new-born realization that the days of the rate commission are over, and that Congress clearly intended the USPS be granted a greater measure of discretion over things such as NSAs.

The PRC's concerns have been described by some as being based on some worst-case scenario--one that would have only the remostest chance of being actualized. Ultimately, it will be up to the Postal Service to prove whether the PRC's reservations are well-founded or overblown. At the very least, however, the Postal Service should take some comfort in the PRC's signaling that it had no intention of second guessing to a premature death any novel contracting ideas that had the potential to reduce postal costs or increase postal revenues. Now, we'll have to see whether the postal Governors themselves have the guts to trust in management's belief that the NSA makes good business sense.

This issue was discussed at some length at a recent meeting of the PostCom Board of Directors, and the unanimous opinion was that the Governors, in the case of this particular NSA, should give postal management the benefit of the doubt. Whether the Postal Service ever succeeds as a business, or acts like a business, depends upon whether the PRC or the Governors opt to forsake possible rewards simply to avoid standard business risks.