DMA Files Comments on PRC's Ratesetting Reform Proposals

DMA’s Comments Reflect Members’ Input;

Final Rules Could Avoid Next Rate Case Under Old Law

Washington, DC, September 25, 2007 — In response to proposed rules issued August 15, 2007, by the Postal Regulatory Commission (PRC) for a new system of postal ratesetting as authorized by the Postal Accountability and Enhancement Act (PAEA), the Direct Marketing Association (DMA) yesterday submitted formal comments to the PRC that addressed a number of concerns about how direct mailers would be affected by the proposed policies.

“Now that the policies of long-sought postal reform law are being implemented, DMA remains vigilant in representing mailers’ concerns throughout the process,” said Steven K. Berry, DMA’s executive vice president for government affairs and corporate responsibility. “The comments we submitted to the PRC were very much a collaborative effort between DMA, its commercial and nonprofit members, and other mailing community groups. As the primary voice for direct mailers, DMA understands its profound responsibility to its members in representing their best interests before the commission as well as at the US Postal Service.”

Through its comments submitted yesterday, DMA sought to clarify ambiguities within the PRC’s proposals that related to market-dominant product prior to the issuance of the commission’s final rules.

In brief, DMA supports an overarching approach that provides the US Postal Service (USPS) with the flexibility it needs to stay competitive within the marketplace by providing it a less complicated means of setting postal rates and fees, while at the same time assures mailers the necessary rate stability and predictability from year to year through application of the Consumer Price Index (CPI) cap on rate adjustments at the class level.

“It’s important that these new rules give the Postal Service flexibility to adjust rates to meet market demands within the bounds of inflation,” said Jerry Cerasale, DMA senior vice president for government affairs. “However, as DMA stressed in its comments, the USPS cannot be allowed to shift costs to mailers and still raise postage rates by the inflation index. To do otherwise weakens the law, leads to lower mail volume, and ultimately undermines the financial foundations of the Postal Service.”

Berry added, “We are greatly encouraged by the wide range of participants in the series of conference calls that DMA held so that we could hear the specific concerns of individual mailers. We incorporated much of the information that we gathered through these calls in our comments filed yesterday at the PRC. We thank our members for helping ensure that our comments adequately reflected the concerns of the direct marketing community as a whole.”

DMA continues its tireless efforts to assist the PRC and the USPS to implement portions of the historic Postal Reform Act that was signed into law last December 21. DMA has played a prominent role in ongoing discussions at every level at both agencies.

Parties still interested in filling comments with the PRC may submit reply comments to the agency by October 9, 2007.

“We appreciate the PRC’s efforts to date,” Berry said, “and continue to hope that its final rules will be issued within the next month or so, which would enable the entire mailing community to avoid a potentially disastrous final rate case under the old, outdated system.”

About Direct Marketing Association (DMA)

The Direct Marketing Association (DMA) (www.the-dma.org) is the leading global trade association for business and nonprofit organizations that use and support multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable and appropriate offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents nearly 3,600 companies from dozens of vertical industries in the US and 50 other nations, including a majority of the Fortune 100 companies, as well as nonprofit organizations.

In 2006, marketers — commercial and nonprofit — spent $166.5 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures generated $1.93 trillion in incremental sales. Direct marketing in 2006 accounted for 10.3 percent of total US gross domestic product (GDP). Today, there are 1.7 million direct marketing employees in the US alone, whose collective sales efforts directly support 8.8 million other jobs. That accounts for 10.5 million US jobs.

The Power of Direct: Relevance. Responsibility. Results.

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