Copyright 1999 The Seattle Times Company
The
Seattle Times
December 09, 1999, Thursday Final Edition
SECTION: NEWS; Pg. C5
LENGTH: 526 words
HEADLINE:
INTERNET MAY STAMP OUT CHUNK OF POSTAL REVENUE
BYLINE:
MARK LIBBON; NEWHOUSE NEWS SERVICE
DATELINE: WASHINGTON
BODY:
WASHINGTON - Every bill paid over the
Internet means another 33 pennies that don't go into the pocket of the U.S.
Postal Service. Multiply that cost of a stamp by the explosive use of personal
computers. Factor in a culture that gradually is embracing electronic commerce.
Pretty soon - within three years, experts say - the volume of
first-class mail handled by the Postal Service will begin to decline for the
first time. The corresponding loss of revenue - $ 17 billion is at risk - could
force the Postal Service to radically change the way it does business.
"The Postal Service may be nearing the end of an era," the General
Accounting Office concluded in a recent report to Congress.
Backers of
legislation to modernize the Postal Service say a failure to act could have
serious consequences. The price of a first-class stamp could nearly double.
Deliveries to 130 million addresses could be cut back from six days a week to
five, or even four days in some places. Many of the 38,000 post offices across
the country could be closed.
"The challenges we thought were perhaps a
decade off are much closer than we imagined," said Rep. John McHugh, R-N.Y.,
chairman of the House subcommittee on the Postal Service. "We thought the wolf
was in the woods. It looks now, if he's not at the door, he's coming up the
front steps."
McHugh has been working for four years on a bill that
would give the Postal Service the flexibility it will need to do business in the
next millennium.
"Right now," McHugh said, "you have a system that is
expected to operate as a modern, efficient business and yet, on the other hand,
has none of the natural incentives and requirements."
Postmaster General
William Henderson supports the basic reform elements included
in the Postal Modernization Act of 1999:
Price caps.
The Postal Service would have greater flexibility to set rates,
but a formula would hold increases below the rate of inflation. Separate rates
could be negotiated for various products, depending on the volume of material
and the amount of work done in advance by the mailer.
Private company.
The Postal Service would be forced out of the business of selling nonpostal
products such as T-shirts, ties, coffee mugs and mouse pads. Instead, the Postal
Service could create a separate, private corporation that would pay the same
overhead, taxes and costs of doing business as its retailing competitors.
Parcels pay their way. The Postal Service no longer would be allowed to
use money from first-class business to subsidize delivery of parcels and urgent
letters. Instead, revenues from those competitive products would contribute to
the overhead costs of providing first-class service.
The Postal Service
currently is in good shape, having earned record revenues in 1999 while handling
record mail volume and achieving its best performance ever in first-class mail
delivery.
In lieu of a crisis, that record makes it difficult to stir
Congress to take action.
"It's frustrating," McHugh said. "People go to
that mailbox every day. It's part of life. And they cannot believe in their
hearts that it would ever change."
LOAD-DATE: December
10, 1999 
