The post, the founding fathers, the indies and the Republic

I don’t cover the US postal service, as a rule. I’m sure it’s interesting, but it’s no Royal Mail. This story, however, is both interesting and well-presented:

Postal Service Says Killing Small Periodicals Is a “Win-Win”

Cummings said. “You got a lot of businesses that put out publications that are saying that this is going to affect them in a negative way…. I’m asking you a simple question. If they go out of business, is it a win-win?”

“I would say if they cannot cover their costs, it is a win-win situation,” said Miller. “Let me tell you why I think that. Because other classes of mail would be covering their costs.” He went on to explain that every American letter writer pays 200 percent of the cost of shipping his or her letter because small magazines and periodicals don’t pay their fair share.

Neat. Apparently there’s a very good reason for why ‘we’ pay more than we need to – and it’s for precisely the purpose of cross-subsidisation of small periodicals.

Since the 1970s, all classes of mail have been required to cover the costs associated with their delivery, what’s called attributable cost. But periodicals, as a class, get favorable treatment: They don’t pay overhead, meaning that they don’t foot the bill for the Postal Service’s infrastructure, employees, and so on.

That’s a tradition that goes back to the origins of the nation. The founding fathers saw the press as the lifeblood of democracy—only informed voters could compose a true democracy, they believed—and thus created a postal system that gave favorable rates to small periodicals. (George Washington actually supported mailing newspapers for free.) For 200 years, small periodicals and journals of opinion were given special treatment.

Good for George Washington.

The 2007 rate hikes, which went into effect this summer, changed that. Now, periodicals are still expected to cover attributable costs and pay no overhead, but because the cost of delivering mail has gone up, rates within the class have gone up as well. In advance of the rate hike, the Postal Service submitted a proposal to the Postal Regulatory Commission that would have raised the rates in the class more or less evenly. The PRC rejected the proposal in favor of a rate package put forward by Time Warner that, unsurprisingly, hands small periodicals much steeper rate hikes than their large counterparts.

Small periodicals in some instances face a rate hike of up to 50 percent.

Mother Jones magazine, of course, has a vested interest in this debate – being a periodical themselves. So smaller periodicals still do not contribute to overhead, etc., but it seems they are not benefitting as much big periodicals. This would explain why the article also points at Bush appointeeship as a contributing factor (it’s like they already heard about, say, almost every other policy over the last however many years – but I suspect they’re being kind to Democrats in their soft implication that only Republicans would act like this).



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