Many Questions, Few Answers

INQUIRING MINDS WANT TO know: Will R2006 be the last rate case mailers have to deal with under the present postal ratemaking system? Will we see an end to increases that go way beyond any reasonable calculation of the cost of inflation? And will the U.S. Postal Service ever bring its thinking more in line with the needs of mail-using businesses?

The last rate case? It depends whether postal reform is enacted before this Congress adjourns. If reform doesn't get to the president's desk, mailers will have to contend with current ratemaking procedures:

• Endless guessing about when the USPS will file.

• Ten months of costly and acrimonious litigation before the Postal Rate Commission.

• Anticipating the PRC's recommended decision.

• Waiting with bated breath to see if the postal governors will accept, challenge or reject the PRC's proposal.

• Running like crazy to make sure all business systems are ready to accommodate the higher rates…whenever they're supposed to take effect.

What if reform does pass? Both the House and Senate bills make it possible for the postal service to get one last shot at ratemaking under pre-reform rules. After that, rate cases will become rare occurrences, reserved mostly for when the USPS pleads for relief from a congressionally imposed inflation-based cap.

There also may be hope for some inflation-bounded limits to future rate hikes before or after reform. Any new postal law would require (better than that, motivate) the USPS to avoid tedious regulatory rigmarole by keeping rate changes reasonable.

Even without reform, inflation-based relief still could be possible: The postal governors and the postmaster general say they intend to hold future rate increases to small increments.

Finally, when will the postal service change its thinking? With reform, there'll be a greater incentive to become more market-driven.

And without it? Just the same old, same old.

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GENE A. DEL POLITO is president of the Association for Postal Commerce (PostCom) in Arlington, VA.