Copyright 2000 Chicago Sun-Times, Inc.
Chicago
Sun-Times
January 21, 2000, FRIDAY, Late
Sports Final Edition
SECTION: EDITORIAL; Pg. 39
LENGTH: 692 words
HEADLINE:
Selling Postal Service would deliver it from ruin
BYLINE: Ruth W. Goldway
BODY:
I have a proposal that would allow both the government and the people to
benefit greatly from the stock market's growth. United Parcel Service's
record-breaking IPO demonstrated that the company's market value was more than $
80 billion. The U.S. Postal Service should be sold as well.
Why would I,
a consumer advocate and liberal Democrat, push to privatize the Postal Service
with its 900,000 government employees? Simple: It's the best way to save it from
oblivion and put government resources to their most efficient and socially
responsible use.
Only the market can determine what price the Postal
Service could bring. But if UPS, with about one-third the revenue, is a
benchmark, then we can estimate that federal coffers would benefit by more than
$ 100 billion from the sale of the Postal Service. While it may not have the
same reputation for profitable performance as UPS (by law it can only break
even), the Postal Service's assets include real estate in the best parts of
every city, a universal delivery network and a solid brand name.
In
recent years, the Postal Service has improved its service standards, polished
its image and positioned itself to capture a significant share of the growing
"e-tail" package delivery business. Although it would face stiff competition,
its current monopoly position gives it "first mover advantage."
If, as
now seems likely, the computer and banking industries implement integrated
online bill-paying, the Postal Service could lose up to 30 percent of its mail
revenues. Because this financial correspondence revenue pays for much overhead,
postage rates will have to rise dramatically within a few years to compensate.
Unless the Postal Service can adapt to the rapidly changing world of electronic
commerce, consumers will pay much more for first-class stamps.
But under
current law, any Postal Service idea for new, improved service takes up to 10
months to get approved (by the commission, of which I am a member), and in all
rate proceedings, the Postal Service's costs and competitive
strategies are laid bare for its competitors to see.
Privatization would entail political trade-offs. The
postal unions cling to the job security the mail monopoly gives them, but to
give the Postal Service the freedom to compete it would have to give up its
letter monopoly.
Consumers would benefit from lower prices and better
services, such as more retail outlets and expanded hours and days of operation.
Business users could easily contract for special services.
In addition
to the one-time windfall, federal and state treasuries would have more funds for
social programs. The new postal corporation would be subject to the federal
corporate income tax (reaping about $ 1 billion annually) and state corporate
and sales tax laws (about $ 3 billion annually).
Privatization also would make the Postal
Service subject to the same laws that regulate other companies.
Consumers would have more protections because the Postal Service finally would
be subject to truth-in-advertising, antitrust, local zoning and parking laws.
The industry could be regulated by a strong regulatory commission,
perhaps the FCC, which could oversee fitness standards for postal operators to
ensure privacy and security of the mails and mail depositories, and be empowered
to provide funds for subsidizing and guaranteeing universal service if that
should prove necessary. The Postal Service's historical properties could be
preserved as well.
This proposal is in step with the deregulation of
other utilities and of postal services worldwide. Numerous countries have
reduced or eliminated their postal monopolies, turning national posts into
semi-private or private corporations, and permitting diversification into
related businesses such as logistics and transportation.
We can look
upon the government-owned Postal Service as money Americans have been saving for
a rainy day. After decades of investing billions in this non-interest-bearing
account, isn't it time to put these resources to work in better ways?
Ruth W. Goldway is a member of the Postal Rate Commission. Distributed
by the Washington Post.
LOAD-DATE: January 24, 2000