Copyright 2000 The Washington Post
The Washington
Post
January 19, 2000, Wednesday, Final Edition
SECTION: OP-ED; Pg. A23
LENGTH: 785 words
HEADLINE:
The Postal Service: One Hot Property
BYLINE: Ruth Y.
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 a consumer advocate and liberal
Democrat push to privatize the Postal Service with its 900,000 government
employees? Simple: Because it would be the best way to save the institution 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 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 of the
Postal Service's overhead, postage rates will have to rise dramatically within a
few years to make up for lost revenue. Unless the Postal Service can change its
product mix and adapt to the rapidly changing world of electronic commerce,
consumers will be paying substantially 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. A win-win solution is to give postal employees stock in the new
corporation--say 10 percent--and let them have the management voice they've
always wanted. Employee ownership should spur productivity (which has been
flat), make employees more amenable to technological innovation and encourage
reasonable contract settlements. Unionized employees would have the right to
strike once the letter monopoly was abolished.
Consumers would benefit
from lower prices and better services, such as more retail outlets and expanded
hours and days of operation. And business users would be able to 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 would also make the
Postal Service subject to the same laws that regulate other
companies. Consumers would have more protections than now, because the Postal
Service finally would be subject to truth-in-advertising, antitrust, local
zoning and parking laws.
The industry would be regulated by a strong
regulatory commission, perhaps the FCC, which would 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 all around
the world. Numerous countries have reduced or eliminated their postal
monopolies, turning national posts into semi-private or private corporations,
and permitting or even encouraging 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?
The writer
is a member of the Postal Rate Commission.
GRAPHIC: ILL,,TIM
BRINTON
LOAD-DATE: January 19, 2000