The people who will be most affected by the Postal Regulatory Commission review of pricing this year, the customers, respectfully asked for a couple of changes to the process and additional information. The monopoly provider, USPS, objected vehemently, and the monopoly regulator, PRC, went along in denying all customer requests.

Procedures

To recap, the Alliance and other mailers asked that the first phase of comments ask only about whether the current system of pricing regulation is working well and meeting objectives set by Congress, taking into account several factors. PRC had included a question on what new system would you recommend.

Before the PRC starts thinking about changes to the current system it must first by law determine whether it is working. We do not want to muddy the waters of the first important decision by starting the possibly unnecessary debate on what to replace it with. We also don’t want to bias the evaluation of the current system by looking at shiny, new hypothetical replacements.

We also asked that there be a comment period after the initial comments to allow all parties to respond to and possibly correct things that others say in the first round. This is especially important because after the comments, the PRC will go into seclusion and make its landmark decision whether the current system is working without any more input.

Unwilling to consider working with its customers, the Postal Service disagreed with everything we asked for. This antagonistic relationship with customers is something unique among all the suppliers that nonprofits deal with, and part and parcel of a regulated government monopoly. Likewise, the PRC denied the requests based more on legal procedures and getting this done this year than on the needs of the people who will be impacted.

Transparency

We also asked, as customers invited to participate in our future ability to use the postal system, that we be provided certain information that is necessary to intelligently and usefully comment on the whether the objectives are being met. We filed a second request for information a week later.

The information we asked for is a matter of transparency and equal access by all. The fact that USPS reacted so strongly makes us wonder what they have to hide. We asked for data related to: “the valuation of the Postal Service’s future liabilities to retirees, valuation of the Postal Service’s real estate, the pay comparability requirement, and the Flats Sequencing System (FSS).”

We believe that the valuation of the largest USPS assets and liabilities, the determination of 80 percent of their costs (labor), and their largest recent capital investment in mail processing are central to the PRC stated goal of “fixing the Postal Service balance sheet.” Before anyone tries to fix postal finances entirely on the backs of customers, we believe it is critical that all parties fully examine the determinants of the financial condition and the alternative solutions.

The PRC denied all of our information requests. Our motion for reconsideration filed February 6, along with MPA-The Association of Magazine Media, described the stakes in denying full transparency before the PRC makes its critical decision:

The undersigned parties do not seek reconsideration of this ruling lightly. Without obtaining the requested information and making it available to interested parties for comment, however, the Commission cannot make legally valid findings on whether the current regulatory system will allow the Postal Service to earn revenues that satisfy the objectives of 39 U.S.C. §§ 3622(b)(1), (5), and (8). Without discovery, any Commission findings in phase 1 on this threshold issue will likely need be relitigated later. The resulting duplication of effort would waste the resources of the Commission and the parties before it and delay the ultimate resolution of this case, thus conflicting with the Commission’s Postal Regulatory Commission Submitted 2/6/2017 4:27:00 PM Filing ID: 98961 Accepted 2/6/2017 – 2 – stated “needs in conducting this important review, including key time considerations and resource constraints.” Order No. 3766 at 7.

Another customer group representing a wide swath of USPS ratepayers, the Association for Postal Commerce (Postcom) joined our call to be transparent about the main drivers of postal finances other than pricing:

The information MPA and ANM seek is critical to the Commission’s review of the Postal Service’s performance under the current system of ratemaking, and informed decisionmaking requires that the Commission obtain this information and allow parties to comment on it, whether through the requested information requests or other means. PostCom therefore respectfully requests that the Commission reconsider Order No. 3763.

The Alliance and its allies will keep our customer-members informed and involved in this proceeding that will impact our continuing ability to use mail to meet our goals and missions.