June 2, 2025
Dear Alliance Members:
We at the Alliance and many other customers of the United States Postal Service have been saying for some time that the Postal Regulatory Commission erred when it assumed that the USPS sometimes would make judgment calls to use less than the full rate authority granted by the regulator. The last five years have proven beyond a doubt that absent effective regulatory incentives and potential penalties, USPS leadership always will extract all the monopoly revenue it can from captive mailing customers even if it damages the long-term viability of the enterprise. The only way for the regulator to ensure rates are not raised to the detriment of captive users and the agency is to enforce limitations, incentives, and penalties.
The PRC seemed to realize this fact in the comments it included in its ruling last week to allow another massive postal increase. Yet the regulator continued to suggest that the USPS exercise discretion that five years of concrete actions demonstrate that the monopoly mail agency lacks.
“Although the price adjustments proposed in this proceeding are
consistent with applicable law and the Commission has no legal
basis to reject the proposed changes, the Commission remains
concerned about the substantial declines in Market Dominant
volumes, overall service performance for Market Dominant prod-
ucts, and the Postal Service’s overall financial situation, issues
that have all remained significant, if not worsened, since the cur-
rent Market Dominant ratemaking system went into effect. In re-
sponse to these conditions, the Commission opened Docket No.
RM2024-4 to consider whether the current ratemaking system is
achieving the objectives of 39 USC § 3622(b), taking into account
the factors of 39 USC § 3622(c). Although Docket No. RM2024-4
remains pending, the Commission encourages the Postal Service
to consider the issues raised by stakeholders when exercising its
business judgment to determine the frequency and magnitude of
future Market Dominant price adjustments.
“The Commission notes that the regulations permit the Postal
Service to forgo the usage of available rate adjustment authority
and bank it for future use, subject to certain limitations outlined
in the regulations. Participants in this proceeding presented a
number of reasons why rate increases below the legal limit may
be appropriate for business and public policy reasons. The Com-
mission recommends that, in exercising its discretion, the Postal
Service heed the concerns of stakeholders, particularly in light of
the facts that: (1) since the ratemaking system was modified in
Docket No. RM2017-3, rate increases have generally occurred
more frequently than occurred previously (and than may have
been expected by stakeholders); and (2) service performance and
efficiency have declined, adding to the stress on the mail market.”
The question now is whether the PRC will take action to solve the problem in the new proposed rate rules that we expect it to issue soon. It is time for the regulator to regulate rather than delegating that role to either USPS senior management or the presidentially-appointed Postal Service Governors. The employees and Governors of USPS have demonstrated an unwillingness or inability to raise rates anything less than what the regulator allows. The Alliance of Nonprofit Mailers and several other participants in the PRC rate review rule-making have provided ample evidence and suggested solutions for the PRC to act on.
Again, it is time for the Postal Service regulator to regulate.
Sincerely,
Stephen Kearney
Executive Director
Alliance of Nonprofit Mailers
2021 L Street, NW, Suite 101-248
Washington, DC 20036
Tel: 202-360-3776
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