There's an arcane communications issue out there that involves Time Warner and a two-lane highway mandated by a communications gatekeeper -- but has nothing to do with the internet.
Stumped?
This story is about what it costs to mail a magazine using the U.S. Postal Service. There's only one mail service, so the USPS is a gatekeeper of sorts when it comes to postal mail.
For years and years, newspapers and other publications were charged especially low postal rates -- dissemination of knowledge and all that. These rates have gone steadily up, but periodicals were able to plan for the higher rates. Indeed, this year most people expected that periodical mailing rates would increase by about twelve percent across the board, for everyone. (That's what the Postal Service itself suggested back in May 2006.)
But then Time Warner submitted an elaborate plan (described here) that in effect created two classes of service: one for the large conglomerate publishers that could afford to do things like pre-sort their mail and drop it off at convenient centralized locations, and the other for all the little publications that couldn't afford those sorts of moves.
The group that accepted the TW plan is called the Postal Regulatory Commission. It makes recommendations to the Postal Service Board of Governors. (Isn't this interesting? I had no idea.) The Board of Governors has in turn accepted the PRC recommendation.
I heard today that the plan was so complicated that no one could figure out how much its implementation would cost small publications. But it appears as if it will create rate hikes of 20 percent and up (way up) for the littler guys.
The little guys just simply could not afford to lobby the way TW did. TW put enormous energy behind its plan, and got it through. It will save TW money because they will be able to take advantage of discounts for the pre-sorting etc. that they do. The littler guys now will be making editorial content decisions based on distance -- historically, they had faced a flat fee no matter how far within the US the content traveled. That's no longer the case.
That's the story. It's apparently a done deal. The smaller magazines don't have the funds to reverse the decision. They've been out-lobbied for access to what should be a resource managed in the public interest: the US Mail.
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Comments
Re: Going postal
In fact, there is a GAO´s paper ("US Postal Service: Key Reasons for Postal Reform") that put as one of the main areas that needed addressing by the Congress the following:
"Flexibility and Oversight: Congress needs to balance increased flexibility for the Service—through streamlining the rate-setting process and allowing a certain amount of retained earnings—with appropriate oversight by an independent regulatory body to protect postal customers against undue discrimination, restrict cross-subsidies, and ensure due process. In addition, the Service needs additional flexibility to rationalize its infrastructure and reshape its workforce. Any such additional flexibility should be accompanied by appropriate safeguards to prevent abuse, along with mechanisms for enhanced transparency and accountability." (sorry for the long citation) Worldwide, postal service operators are streamlining their cost structure, eliminating cross subsidies and prepairing for increased competition. As sorting is one of the main cost factors in postal operations, it makes sense to reflect this in smaller tariffs for big operators that pre-mail their correspondence (I´m reasoning in abstract, since I didn´t read the real plan). By the way, with all the hype around the diminishing of distribution costs using internet, I bet that many of these smaller publications would profit of moving to internet-based only publishing. Re: Going postal
Small mailers may benefit by using the Internet, but remember Time Warner is one of the main first-mile ISPs for the Internet, and has just spent quite a bit of money lobbying these postal mail rate changes.
A little digging turns up the underlying philosophy of these changes, as expressed by the Chairman of the Postal Board of Governors: "Each party pays the cost of service it consumes, not less, and does not bear the cost of others’ consumption." Such a philosophy produces per-piece charging and has no place for producers or the common good. What if it also gets applied to the Internet? http://riskman.typepad.com/peerflow/2007/06/none_should_be_.html -jsq |
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