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August
16, 2000 - Rel #00-69 - POSTAL SERVICE AMENDS RULE GOVERNING
COMMERCIAL
MAIL RECEIVING AGENCIES
FOR IMMEDIATE RELEASE
August 16, 2000
Release No. 69
POSTAL SERVICE AMENDS RULE GOVERNING COMMERCIAL MAIL RECEIVING AGENCIES
WASHINGTON — Striking a balance between consumer protection and the interests of small businesses, the Postal Service announced today it will permit the use of either "PMB" (acronym for "private mail box") or "#" in the address block for mail destined to a customer at a Commercial Mail Receiving Agency (CMRA). Although the new rule is effective immediately boxholders have until August 1, 2001 to comply.
The new standard amends an earlier rule requiring that mail addressed to a private mailbox at a CMRA must include a specific secondary address designation: "PMB" followed by a number assigned to the boxholder by the CMRA.
"The secondary address designation was intended to serve consumer protection interests," said Mike Spates, Manager Delivery Operations. "Our intention was to provide the public a means to be completely informed whether an address represented a physical location," said Spates.
Previously, postal regulations did not prescribe how mail to CMRA private mailbox holders must be addressed and it was commonplace for private mailbox holders to use a designation (e.g. "Suite," "Apartment," etc.) along with the address of the CMRA. This implied to senders of mail that the boxholder maintained a physical presence at that location.
The Postal Service proposed an amendment to the rule when it learned through meetings with industry representatives and small business interest groups, that the "PMB" designation might adversely affect small businesses.
"After reviewing the record and conducting discussions with CMRA industry representatives, we believe we have found the middle ground between consumer protection concerns and the interests of small businesses," said Spates. "We also have reached an agreement with the CMRA industry to jointly implement initiatives to ensure that consumers understand what "#" may mean and that they have access channels to determine whether a specific address is located at a CMRA," said Spates. ###
Postal Watch
April
27, 2001
Post Office Inspector General Criticizes Postal Regulations
Regulating Competitors Warrants a Higher Standard of
Rule-
Making
Procedures
(Washington D.C.) - The Postal Service’s Office of Inspector General (OIG) this month released a report critical of the process by which the Postal Service issued controversial 1999 regulations governing private mailboxes. The onerous rules required drastic government interference in private mailboxes and put Post Office competitors at great disadvantage relative to USPS.
Specifically,
the OIG’s new report indicates the Postal Service
did not:
… demonstrate the need for regulatory change
… show how the regulations would curb fraud
… assess the impact on receiving agencies and private
boxholders
… consider alternatives to revising the rules
The OIG also criticized Postal Service procedures in implementing the new rules, which the OIG estimated impact over 800,000 customers of the more than 10,000 private mailbox stores, such as Mail Boxes Etc., nationwide. The report also questions the validity of postal claims that the rule changes were necessary to prevent fraud, stating:
“In particular, the Postal Service did not demonstrate the need for regulatory change by presenting statistical or scientific data to support its claims of mail fraud conducted through private mailboxes.”
“In addition, it did not show how the regulations would curb fraud, assess the impact of the proposed rules on receiving agencies and private boxholders, or consider alternatives to revising the rules.”
“Some of the rules represented significant changes that could cost receiving agencies and their customers millions of dollars.”
It is widely held that the Postal Service enjoys exemption from the antitrust laws, Administrative Procedures Act, and other statutes requiring federal agencies to justify their regulatory actions including conducting economic impact studies and cost / benefit analyses prior to enacting regulations. On this issue the Inspector General said:
“The Postal Service was not legally required to perform a detailed analysis to justify proposed changes to regulations like most federal agencies.
However, considering that over 10,000 receiving agencies and their boxholders were impacted by the proposed revised rules, a better business practice would have been to take into account the concerns from all sources, including all competing businesses.
Enactment of the revised rules created the appearance that the Postal Service misused its regulatory authority to hinder competition and contributed to public perception that associated costs for implementing the revised rules were unnecessary and burdensome. “
The
Justice Dept. in 1979 ruled, in regulating competitors
the USPS is required to …
… demonstrate a problem exists
… consider competition impact of proposed regulations
… delineate the positive and negative effects on
completion
… create a full record available to sustain agency
action on appeal
The U.S. Department of Justice, Antitrust Division issued a letter of opinion on the Postal Service's “enforceable obligation to take competitive factors fully into account” when adopting new regulations affecting postal competitors in 1979. The opinion spells out Postal Service obligations when attempting to regulate competitors:
“A regulation perfectly reasonable and appropriate in the face of a given problem may be highly capricious if that problem does not exist."
"That the, Postal Service and the Board of Governors have an obligation under existing law to consider the competition impact of these proposed regulations. Such consideration must include delineating of the positive and negative effects on competition with substantial precision. This obligation is necessary to assure that a full record is available to sustain agency action on appeal.”
“The Board of Governors as the policy making agency in this context, and the Postal Service as well, however, must develop a record respecting the competitive impact of its proposed actions which will be sufficient to pass appellate court muster.”
“We believe, therefore, that it is incumbent upon the Postal Service to determine here with careful particularity the degree to which its proposed regulations might facilitate, or eliminate, specific kinds of competition.”
Victory for private mailboxes …
Rick Merritt, executive director of PostalWatch, a non-profit
advocacy group said, “This is a significant win for
private mailbox stores and their customers. The report
confirms what regulation opponents have been saying for
over two years: The Postal Service crammed these rules
down the throats of 10,000 of its competitors without
demonstrating any need for the rules or studying what
impact the rules would have on their competitors.”
Last November, several members of Congress and the Small Business Administration’s Office of Advocacy requested the Justice Department’s Antitrust Division look into the Postal Service’s private mailbox rule-making procedures. The Justice Department is expected to comment soon.
“Allowing the Postal Service to continue regulating competitors is like letting Amtrak regulate Greyhound or USAir. We just do not do this in the United States. Most can agree (excepting the Postal Service) that allowing any federal agency to compete with those it regulates is poor public policy. Moreover, it is directly contrary to our basic traditions -- in other words, un-American,” Merritt added.
“This should serve as a wakeup call for all of the e-commerce companies the Postal Service is starting to compete with,” Merritt said. “The bottom line, they don’t play fair.”
PostalWatch is a non-partisan, non-profit advocacy organization committed to a fair, efficient and accountable U.S. Postal Service. PostalWatch maintains a website at http://www.postalwatch.org/
