DMA Catalogers Meet Top Federal Policymakers in DC

April 20, 2009 — Representatives from DMA’s Catalog Segment convened in Washington, DC for a daylong meeting on the policy issues most pressing for the catalog community. During the course of the meeting, sessions allowed for frank discussion with the leading policymakers in a personal setting.

Opening the day, Postal Regulatory Commission (PRC) Chairman Dan Blair and PRC Vice Chair Nanci Langley spoke with the group on the difficult times facing the Postal Service and stressed the need for the postal community to come together for the survival of the community as we know it.

In addressing the role of the PRC, Blair discussed the fine line between regulator and operator that the Commission must try to not micromanage in completing its mission to ensure accountability and transparency of the Postal Service.

Since the concept has been introduced, the idea of a “Summer Sale” of reduced rates on additional volume entering the mail stream for the top 4,000 mailers from their previous year figures has been a subject of discussion stretching across the entire mailing community. The catalog group conveyed the importance of timing in instituting such a sale, as based on required lead times the community would need to have the sale in place as soon as possible in order to be able to take advantage of the discount and accomplish the additional volume goal behind it.

Lead time is particularly important if the Postal Service plans to limit the sale to the period of July through September, emphasized through one cataloger’s note that production has already been determined through June. Along these lines, the procedural block to the quick implementation of a discount program due to the 45 day PRC review process was cited as a limiting factor to the success of such a program. On the other side, Blair and Langley discussed the potential problems were the review period shortened and a formal complaint was issued with the Commission on the grounds that the Commission failed to follow its rules and failed to give interested parties adequate time to present their views.

As the US Postal Service has not yet officially filed the required documents with the PRC for the institution of the Summer Sale, Blair and Langley noted that no review could take place until that time, but were receptive to the catalogers’ insights and urged all stakeholders to file official comments once the docket is opened so that the views of the community can be formally referred to in any following determinations. Regulators need to have written comments on the record, and can only rule on the comments that are in the record and in front of them. DMA will file such comments as appropriate, urges every member who uses standard mail to file their views with the Commission, and is available to assist any members to prepare and file individual comments as well.

Immediately following the session with the PRC, top Congressional staffers from both chambers joined the group to discuss potential legislative solutions to the economic crisis at the Postal Service. John Kilvington, aid to Senator Tom Carper (D-DE) and Robert Taub, chief of staff to Representative John McHugh (R-NY), focused on the potential of HR 22, a DMA supported bill introduced by McHugh to allow the United States Postal Service to pay its share of contributions for annuitants' health benefits out of the Postal Service Retiree Health Benefits Fund, and provided insight on the intricacies of Capitol Hill policy and the importance of Congressional Budget Office (CBO) determining the effect of any bill on the Federal deficit (known as “scoring”).

Although HR 22 currently has 252 cosponsors and will not require any funding from the Federal budget, a CBO determination that the implementation of this legislation would reduce the cost-cutting measures of the Postal Service results in the CBO finding that the measure would in fact cost the government over the life of the legislation. While multiple members of Congress have met with the CBO, the staffers stressed how these theoretical costs can slow the passage of legislation, particularly at this time with significant budget deficits projected for this year and the future.

As the CBO scoring for the current year reduces as the time remaining in the year passes, the chances for passage may improve – however there is a fear that based on continuing losses at the Postal Service the bill may not be enough at that time. Whereas HR 22 has not yet been introduced in the Senate, Kilvington noted that the hope is to introduce companion legislation in the next few weeks.

Additional topics of discussion between the staffers and the catalogers included the possibility of 5 day delivery, plans for continuing universal service, and the physical location of post offices, and the session provided a medium for productive back and forth discussion between the policymakers and the industry stakeholders on all topics. The staffers addressed that the view of Congress has been that six day postal delivery should remain intact, and is, in fact, required by the appropriations law, as well as the value of current studies on universal service for potential future legislation and the importance of flexibility in physical locations for the Postal Service as society continues to advance and shift with the 21^st century.

In order to encompass the entire sphere of issues impacting the catalog segment while in Washington, Mark Eichorn, Consumer Protection Counsel to Federal Trade Commission (FTC) Chairman Jon Leibowitz, joined the group for a lunch discussion on behavioral advertising on the Internet. Eichorn tracked the progression of policy regarding this issue to the current call for industry self regulation. The FTC goal for any regulation in this space is not to kill behavioral advertising, but rather to increase transparency and choice on the part of the consumer.

Jerry Cerasale, DMA Senior Vice President, Government Affairs, addressed the current cross-industry efforts for self regulatory principles and the progress on their creation and implementation. The group stated that the community is answering the call sent by the FTC. Facing potentially over-bearing legislative regulation filling this space without effective self regulation, Cerasale noted the importance of such measures being implemented. Eichorn added the sooner the better.

In the last session featuring the input from guest speakers, the catalogers were joined by Sharon Daniels, Manager of Shipping and Mailing Services, and Tom Foti, Manager of Marketing Mail, both of the US Postal Service. Both addressed the increased attention paid by the USPS to individual segments, and the importance of the Postal Service understanding their customers, such as catalogers, in order to offer the appropriate services and rates as well as maintain a balance between costs and response rates for the catalog. In an effort to develop this catalog expertise, the representatives expressed openness to industry input and continuing communications going forward. This call was met with a willingness to help from the catalog segment, which applauded the USPS for such initiatives.

The session concluded with talk of the upcoming summer sale and potential particular perimeters that may be covered. Without disclosing when the documents for a summer sale would formally be filed, the Postal representatives noted that the sooner the better.

Overall, the daylong meeting effectively brought together leaders from the catalog segment, opened communication dialogue with the top policymakers in Washington, and allowed for the open airing of new and innovative ideas in the Postal space.

If you wish to participate in such events in the future, please contact Neil O’Keefe at nokeefe@the-dma.org.

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