DMA in DC: DMA Members Hear from USPS, PRC, and FTC

March 29, 2010 — Last Week, DMA member companies from across the US came together to hear directly from key representatives from the United States Postal Service (USPS), Federal Trade Commission (FTC), and Postal Regulatory Commission (PRC). In addition to the perspective provided by these policy makers, DMA's own government affairs team spoke about the most pressing public policy issues facing the marketing community.

Discussions during the day-long session ranged from upcoming online privacy legislation and the FTC's updated "Guides for the Use of Environmental Marketing Claims," to the viability of the USPS and state activity on nexus and affiliate taxes.

PRC Chairman Ruth Goldway outlined the many proceedings pending and expected at the Commission, including a CPI cap busting rate filing, a review of the Postal Service Inspector General’s report of a $75 billion overpayment for retiree pensions, five-day delivery review, calculation of retiree health benefits, the summer sale, and the compliance report on Postal Service rates and services.

Responding to questions, Goldway discussed the role of post offices in small communities and the public’s lack of distinction among post offices and stations and branches. Concerning postage increases, she reiterated that the Postal Service is in financial distress and that several postal products do not cover their costs. However, she said she was interested in suggestions that the Polstal Service and the PRC review the entire mailing activity of a company to determine whether or not the company’s mailings covered their costs. She said that has not seen any data in that area. DMA will be discussing these suggestions with members looking for data to present to both the Postal Service and the Commission.

Mary Engle, associate director for advertising practices in the FTC’s Bureau of Consumer Protection focused her remarks on the FTC’s recent guidelines on endorsements and testimonials. She reminded attendees that FTC guidelines are administrative interpretations of the law, and that the FTC will investigate practices under the guidelines that could bring enforcement actions. If you have any questions about the new guides, please contact the DMA’s Washington Office staff.

Jessica Rich, deputy director of the FTC’s Bureau of Consumer Protection discussed the FTC’s request for more authority to create rules, access civil penalties, enforce rules against companies that aide and abet fraud, and to seek judicial review without conferring with the Department of Justice. She explained that the FTC wants to “go after the bad guys” not legitimate marketers. DMA is opposed to this vast expansion of FTC authority in light of the significant abuses of similar authority by the FTC in the 1970s.

Rich also explained that the FTC is concerned with the abuses of negative option marketing and is reviewing its current rule. She announced that the FTC had issued a call for comments in its review of Children’s Online Marketing rule. In addition, she said that the FTC is encouraged by the work DMA has led on self-regulation of online behavioral advertising. Finally, she reiterated FTC’s endorsement of self-regulation.

USPS Chief Financial Officer Joseph Corbett outlined the financial situation of USPS and its plans to climb out of this financial hole by 2020. His presentation covered the plan that DMA reported in Direct from Washington in the March 3, 2010 special edition.

During the question period, CFO Corbett expressed interest in new approaches to pricing postage. In particular, he said that he thought that contract rates between a mailer and the USPS, in which the mailer guaranteed to mail a specific number of pieces and to pay postage for that volume whether or not mailed by the mailer, warranted further consideration. DMA will be conferring with members on this and other pricing ideas.

In conjunction with Wednesday’s “DMA in DC” event, member companies also joined DMA’s Government Affairs team for a series of Capitol Hill meetings on Thursday, advocating directly on the issues of greatest importance to their businesses. Among other meetings, member companies met with both Chairman of the Senate Homeland Security and Government Oversight Committee Joe Lieberman’s (I-CT) office and the staff of the House Subcommittee on the Postal Service to discuss proposed changes to the struggling USPS. They shared concerns about the effects of an “opt-in regime” with Senator Diane Feinstein’s privacy counsel and illustrated the potential cooling effect that an expansion of the FTC’s rulemaking authority would have on Internet innovation in Senator Barbara Boxer (D-CA) and Senator John Kerry’s (D-MA) offices.

To learn more about “DMA in DC,” or receive copies of presentations from the event, please contact Rachel Thomas, DMA’s vice president of government affairs.

# # #