Postal regulator backs rural post office, junk mail plans

The Postal Service’s regulator has backed the agency’s plan to shorten hours at potentially thousands of local post offices.

USPS said in June that it would examine whether to reduce hours at roughly 13,000 rural post offices as it shifted away from a plan to shutter some local branches. 

The agency filed the proposed change with the Postal Regulatory Commission (PRC) shortly after it announced the move. Ruth Goldway, the commission’s chairwoman, said in a Thursday statement that she believed the proposal would ensure sufficient postal access nationwide.

“The Commission is pleased that the Postal Service has been responsive to the suggestions we have been making in regard to community input and maintaining universal service in all communities,” Goldway said. 

Postmaster General Patrick Donahoe has said the move would save the service roughly $500 million a year, through both the shorter hours and reduced benefits costs, and that USPS would defer any changes until after Labor Day. 

An agency spokeswoman said Thursday that USPS was pleased with the regulator’s decision and would move full speed ahead on implementing the service changes. 

In a separate decision, the PRC also gave its support to a USPS plan to give a discount to a prominent direct mailer. 

Under the three-year deal with Valassis, the company will get a discount on additional pieces sent. 

Goldway acknowledged Thursday that newspapers were upset with the proposed deal, but said that the discount given to Valassis would not give the company an unfair advantage. 

“The Commission understands that both newspapers and the Postal Service are experiencing declining revenues as new technologies based on the Internet grow in popularity,” Goldway said. “Today’s decision affirms that fair competition between these two important institutions is consistent with the law.”

Dave Partenheimer, a USPS spokesman, applauded the second PRC decision, which the regulator says could generate up to $15 million in new revenue.

“Given our financial situation, continued e-diversion, and increased competition from alternative delivery services, this is one example of how the Postal Service is pursuing innovations and new products to increase the value of mail and retain our business customers,” Partenheimer said.

But The Newspaper Association of America said it was “stunned” by the decision and would take it to court.

“NAA believes this decision is contrary to law, and will challenge it immediately and vigorously in the U.S. Court of Appeals for the District of Columbia Circuit,” said James Moroney, the group's chairman and publisher of The Dallas Morning News.

In all, the savings and new revenue that could get from the changes discussed Thursday could account for just a fraction of the $22.5 billion that Donahoe says needs to be cut from the annual budget by 2016.

Donahoe has also called on Congress to quickly wrap up work on a postal overhaul bill. But while the Senate passed a plan in April, the House has yet to schedule a vote.

USPS lost $5.2 billion in the most recently completed quarter, and defaulted at the first of the month on a $5.5 billion payment that it owed the Treasury for future retiree healthcare.

For his part, Sen. Tom Carper (D-Del.), a sponsor of the Senate postal bill, continued to urge the House to move on postal reform when it returns from August recess. 

“Given these dire circumstances, the Postal Service's leadership needs to do what it can to reduce costs with the limited tools at its disposal,” Carper said about the PRC decision on the rural post office plan. “I have long supported the Postal Service's efforts to streamline its operations while preserving customers' access to critical postal retail services and I believe this cost-cutting measure does just that.”

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