Aug. 29, 2012 — America’s newspapers and the U.S. Postal Service (USPS) have been joined at the hip since the birth of this great nation.
The founding fathers made it clear that the free press is critical to the security and well being of a free nation.
As a result, newspapers and magazines have enjoyed special, cheaper mailing rates as a means of helping inform the electorate. Print media carry advertising as well as news, of course.
In an example of wrongheaded logic, the U.S. Postal Regulatory Commission (PRC) voted 4-1 last week to grant deep postage discounts to the direct mail company Valassis Inc. for the weekend distribution of advertising circulars.
To qualify for this sweetheart deal, Valassis must develop a weekend insert package that will compete with newspapers.
Despite the opposition of the newspaper industry’s two largest trade groups – National Newspaper Association and the Newspaper Association of America – the PRC said newspapers have a “de facto monopoly” on the weekend advertising by national retailers.
The PRC said further:
“The commission understands that both newspapers and the Postal Service are experiencing declining revenues as new technologies based on the Internet gain popularity. Today’s decision affirms that fair competition between these two important institutions is consistent with the law.”
The PRC also said that USPS had not competed effectively for the weekend business but added that newspapers had not proven why they should protected from such competition.
To an industry struggling to remain financially viable, the PRC offered the simplistic suggestion that newspapers could lower advertising and/or delivery rates to compete with the Valassis deal.
No where does the PRC decision explain why the newspaper industry should have to compete with its own government.
Neither does it say how forcing newspapers to reduce distribution by mail, thereby cutting USPS revenue, will help solve the post office’s financial crisis.