January 29, 2023

Dear Members of the Alliance of Nonprofit Mailers:

Today we speak up in support of the rule set by Congress for calculating nonprofit preferred postage rates.

Background – USPS misdirection

During its Annual Compliance Review, the Postal Regulatory Commission asks the Postal Service about what it will do to counter the large decline in commercial Marketing Mail volume. USPS had reported: “Between FY 2022 and FY 2023, the proportion of Commercial mail decreased from 92.7 percent to 89.8 percent, while the Nonprofit proportion increased from 7.3 percent to 10.2 percent.” The regulator asks the operator to “discuss any plans and strategies that the Postal Service has for encouraging greater volumes and proportions of Commercial USPS Marketing Mail in FY 2024.”

Instead of a complete and direct response to the question, the Postal Service in a January 19 filing uses it as an opportunity to attack the formula for nonprofit preferred rates established by Congress 24 years ago. The rule requires that nonprofit rates be based on revenue per piece: “The estimated average revenue per piece to be received by the Postal Service from each subclass of mail under former sections 4452 (b) and (c) of this title shall be equal, as nearly as practicable, to 60 percent of the estimated average revenue per piece to be received from the most closely corresponding regular-rate subclass of mail.”

The Postal Service objects to the 60 Percent Rule by claiming that “’average revenue per piece’ is subject to the vicissitudes of changes in the mail mix” and characterizing it as “an unstable metric that drifts with changes in the mail mix.”

Alliance response

Because the Postal Service contends in its answer that the current rate relationship between nonprofit and commercial Marketing Mail is “not what Congress intended when it adopted 39 U.S.C. § 3626(a)(6)(A),”5 we are compelled to correct the record. We do so in our comments filed today at the PRC with a copy attached.

Congress enacted section 3626(a)(6)(A), in large part, to protect nonprofit mailers. Congressman John McHugh explained: “Simply put, this is an extremely important piece of legislation to ensure the financial viability and survivability of nonprofit mailers, the kinds of nonprofit mailers that all of us have and enjoy in our communities, churches, charitable organizations, educational publications, and so many others.”

We clarify in our comments that the 60 Percent Rule is exactly what Congress intended and that all the parties to the negotiations, including USPS, commercial and nonprofit mailers, knew how it would operate.

We conclude:

The Postal Service now suggests that it may be appropriate for the Commission to re-examine Section 3626(a)(6)(A) in another docket. We disagree. The Postal Service’s entreaty strikes us as yet another example of the operator chafing at Congressionally-imposed restraints on its pricing authority. The Commission should decline the Postal Service’s invitation to second-guess Congress’ will, and – particularly given the Supreme Court’s leanings in the Relentless and Loper Bright cases questioning the future validity of Chevron deference – should refuse to entertain any notion of rendering an agency decision that conflicts with Congress’ express language in section 3626(a)(6)(A).

Our succinct 4 pages are worth a read and are a great example of the Alliance as the guardian of nonprofit mailers.

Best, Steve