Time-Warner Rewrites USPS Postal Rules and Rates

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For the first time ever in the history of the US, The Postal Regulatory Commission ignored a plan by the US Postal Service in favor of a rate-increase plan submitted by an outside corporation: Time-Warner, which involves a super-complicated scheme to allow their own publications to avoid paying higher postage, while sticking it to smaller publishers.

Go democracy!

Our nation's founders understood the First Amendment would be worth little without a postal system that encouraged broad public participation in America's "marketplace of ideas."

Thomas Jefferson supported this with calls for a postal service that allowed citizens to gain "full information of their affairs," where ideas could "penetrate the whole mass of the people." Along with James Madison, he paved the way for a service that gave smaller political journals a voice. Their solution included low-cost mailing incentives whereby publications could reach as many readers as possible.

Other founders soon came to understand that the press as a political institution needed to be supported through favorable postal rates. President George Washington spoke out for free postage for newspapers through the mail, and Treasury Secretary Alexander Hamilton--no proponent of government deficit--conceded that incentives were necessary to spawn a viable press.

The postal policies that resulted have lasted for more than 200 years, spurring a vibrant political culture in the United States. They have eased the entry of diverse political viewpoints into a national discourse often dominated by the largest media organizations.

Our free press did not happen magically; it was built on the foundation of postal policies that encouraged small publications and dissident ideas to spout and flourish. The postal system is based on policies of public service and democratic values.

All of this could change in 2007.

In an unprecedented move, the agency that oversees postal rates in the United States has approved a plan that would unravel much of what the founders accomplished. Earlier this year, the Postal Regulatory Commission (PRC) rejected a postal rate increase plan offered by the U.S. Postal Service. Instead they opted to implement a modified version of an extraordinarily complicated plan submitted by media giant Time Warner.

Although there was a formal review and comment process--to be fair, the PRC did everything by the book--the matter was so complicated and unreported that the general public played no role whatsoever, and publications that could not afford significant lobbying and lawyer fees faced high barriers to effective participation.

Make no mistake about it, this is a public issue. We all lose if the media system loses numerous small publications due to massive postal rate hikes and if it becomes cost prohibitive for new magazines to be launched in the future. This is not an issue that should be determined exclusively by the owners of magazines, with the biggest owners having the loudest voice.

This year's rate increase was somewhat inevitable, as the postal service struggles to meet its costs. The method of rate hikes was hotly contested. Postal rates for magazines are basically a zero-sum game. Lower rates for some magazines, and others must pick up the cost. The USPS offered a plan to the postal Commission that featured relatively equitable increases for all magazines. Most magazines were budgeting for a 10-12 percent increase. The Time Warner plan proposed higher costs for small publishers and discounts for big publishers. The Time Warner plan is so complex that many publications are still unclear what their rate hikes will be if implemented; those smaller publications that have been able to do the math are finding shocking increases on tap, as high as 25-30 percent.

The Time Warner plan represents another step (albeit a giant step) in the gradual reversal of the Founders' public service principles of supporting democracy through the postal service. It is the latest, largest move towards abandoning these public service priorities and permitting a system that no longer favors low-advertising, political speech--like In These Times and The American Spectator--over ad-heavy magazines like People and Cosmo. The practical result of this move is not only the decline of a democratic mission, but a rate shock for small and medium size magazines even as big publishers are getting a break.

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