NCPA - National Center for Policy Analysis

Postal Service Wants It Both Ways

June 15, 2000

The U.S. Postal Service is pushing Congress to allow it greater freedom to set rates and enter into new businesses to help it "commercialize" itself. At the same time, however, Postmaster General William Henderson wants the service to retain its government-enforced monopoly over first-class mail.

That would make the Postal Service a half-competitive, half-monopoly hybrid.

Many analysts say the competition of electronic systems threatens the post office monopoly, regardless of its legal status:

  • E-mail -- which is expected to increase sevenfold in the next five years -- is undercutting the very reason for its existence.
  • An estimated 20 percent of households will opt for e-payment of bills and statements in five years -- chopping the Postal Service's 49 billion pieces of bill-related mail by 20 billion pieces a year.
  • Experts forecast online catalog sales will allow retailers to cut mailings by 1.5 billion copies this year -- saving them $500 million in paper, printing and mail costs.

The USPS enjoys several important legally-conferred protections against private competition -- chief among them being its exclusive right to deliver first-class mail. Current and potential competitors would like to see those protections withdrawn.

Source: Duane Freese (Lexington Institute), "Unfetter Rivals for Mail Service," USA Today, June 15, 2000.


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