For most of us there is hardly a day that goes by when we check our mailboxes that we don't find items addressed to the other entity that lives with us: Current Occupant.
Of course, there is always that collection of unsolicited material actually addressed to us urging us to enter a sweepstakes for great fortune or fabulous material prizes, the generosity and largesse of some unfamiliar commercial enterprise.
Most people call this "junk mail" and immediately relegate it to the trash or a recycling bin.
The money enterprises pay the U.S. Postal Service to deliver this stuff is an important revenue stream for the financially troubled federally regulated service, and we in the newspaper industry, which also heavily relies on the distribution of advertising do not begrudge the USPS its customers.
However, as it casts about trying to put its financial house in order the USPS is proposing a sweetheart deal with Valassis, a national advertising mailer, giving Valassis a 22 to 36 percent discount on "new" advertising pieces from certain national retailers.
While survey data show that the Valassis deal will cause American newspapers to lose about $1billion in revenue a year, what you are about to read is not a complaint about unfair competition, but rather a warning that the proposal is counter-productive to the goals of the USPS.
The proposed Negotiated Service Agreement (NSA) will force newspapers to divert their mailings to less expensive delivery methods in an effort to recoup some of those loses. According to the Newspaper Association of America, as much as $200 milllion annually will leave the mail as newspapers react to the NSA, almost six times as much revenue as the Postal Service hopes to gain in the agreement.
To his credit, Congressman Mike Kelly has expressed these issues in a letter to the Postal Regulatory Commission. He also expressed his concern that the NSA will "severely and unreasonably harm the marketplace and will result in a drastic revenue loss to the Postal Service."
"Because of the potential to cause unfair competition in the marketplace and a loss of revenue to the Postal Service, I strongly urge the Commission to reject this NSA," Kelly wrote.
Needless to say, we agree.