On February 7, 2020, the Postal Regulatory Commission (PRC) issued Order Number 5422 – “Advance Notice of Proposed Rulemaking to Consider Regulations to Carry Out the Statutory Requirements of 39 U.S.C. 601”. It’s a brief document – only 10 pages – that opens up significant issues around the definition of “a letter”, the U.S. Postal Service’s (USPS) monopoly to deliver letters, and the universal service obligation (USO).
The order provides the context for the PRC’s notice and a brief background of the letter monopoly. Before the Postal Accountability and Enhancement Act (PAEA) of 2006, the USPS provided exceptions and delivered rulings on what was exempt from the rules around “letters carried out of the mail.” With the passage of the PAEA, the PRC holds the reins. Several rulings have been made in specific instances, and now the PRC is reviewing the legal and policy issues around the monopoly.
The specific topic being reviewed is a brief section of federal code that covers the USPS (Title 39 – Postal Service). Including the headings, the section (39 U.S.C. 601) uses only 244 words to describe the exceptions to the letter monopoly. However, those 244 words help protect over 50% of the revenue generated by the USPS.
As with most postal regulations, the laws describing and protecting the letter monopoly don’t reflect the current technology used to create and send mail – electronic and physical. While it will require Congress to change laws, the PRC can create the “regulations necessary to carry out” those laws.
In our response to the PRC, we pointed out that the current requirements are outdated and obtuse. Due to the interrelationships between differing sections of the Domestic Mail Manual, the US Code and the Private Express Statutes, a definition of a “letter” is more complicated than it appears. Further, changing the definition should include congressional action to streamline the contradictory sections of the US Code.
With an undefined Universal Service Obligation, the current monopoly protects important revenue for the USPS. A financially unstable USPS has a direct negative impact on the 7.3 million mailing industry jobs and the $1.58 trillion in sales revenue generated for the US economy (source: 2019 US Mailing Industry Economic Job Study, Envelope Manufacturers Association).
With the consistent decline of letters, any changes to the protections provided by the regulations will only worsen the financial condition of the USPS. As evident in the current pandemic, the USPS is a critical component of the country’s infrastructure and must be maintained.
We recommend that the PRC and the USPS Board of Governors appoint a joint panel of postal executives, commissioners and postal industry leaders to:
a. draft the definition of the term “letter”;
b. update the regulations that don’t require changes to the law; and
c. present recommendations for updates to the Private Express Statutes to the two congressional oversight committees.
Here’s a link to our response to the PRC that was filed on April 6, 2020.
We look forward to seeing what steps the PRC takes next.
