Potential Rate Discrimination against Nonprofits is Quickly Corrected

The Situation: Discrimination against nonprofit mailers with regard to their postage rates versus commercial rates was the primary driver of the formation of the Alliance of Nonprofit Mailers in 1980. Over 30 years later, the issue of discrimination continues to be monitored by the ANM and, when necessary, swiftly corrected.

The discrimination issue resurfaced again in late 2012. In its annual price change case for 2013, the Postal Service proposed several revised worksharing discounts for nonprofit Standard Mail that were smaller than the corresponding discounts for commercial mail. The USPS admitted that “the Nonprofit discounts are generally lower than the Commercial discounts,” but asserted—without any explanation—that making nonprofit discounts smaller than the corresponding discounts for the commercial subclasses “protects against over 100 percent passthroughs for both Commercial and Nonprofit.”

The Postal Regulatory Commission (PRC), after initially questioning the discrimination, backed down. In December 2012, it approved the rates proposed by the Postal Service, despite acknowledging that “disparities between commercial and nonprofit discounts are impermissible” under National Easter Seal Society “unless supported by a rational justification that the differential treatment is “specifically authorized” by another section of the statute.”

The Solution: In January 2013, the Alliance, through its general counsel David Levy, petitioned the U.S. Court of Appeals for judicial review. The Alliance also challenged the rate structure in Docket No. R2013-1, the PRC’s annual compliance review proceeding. These actions combined with a direct plea by the Alliance executive director to the Postmaster General led to settlement negotiations between the Alliance and the Postal Service. In March 2013, the Postal Service agreed to fix the discriminatory rate and to comply with more rigorous standards for compliance with the antidiscrimination restrictions of the law.

The Result: While the Alliance continues to monitor all rates to prevent discriminations against nonprofits, the Postal Service and the PRC are on notice that they will not be tolerated.

In September 2013, the Postal Service proposed its annual price adjustment for January 2014. Once again, the Postal Service proposed worksharing discounts for several rate categories in which the commercial discounts were deeper than the nonprofit discounts. The Alliance challenged in the PRC rate case proceeding the disparity as unjustified and unduly discriminatory. The Commission agreed. It ordered the Postal Service to equalize the discounts and eliminate the discrimination. The correction was swift and effective.