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DMA Signs Onto USPS Settlement Case
NEW YORK, January 3, 2002 – The Direct Marketing Association (The DMA) today signed a compromise agreement to settle the case that the United States Postal Service’s (USPS) has made before the Postal Rate Commission (PRC) for an increase in the price of postage. The USPS modified its settlement proposal by accepting The DMA-led offer of delaying, by 28 days, the date on which the new postage rates will be implemented.
The delay of almost one full month means nearly $500 million in savings for the American mailing public. This figure does not measure the additional savings that will accrue to other segments of the economy from the implementation postponement. The DMA-led settlement also avoids the need for the Postal Service to update its request to the PRC for even higher rates – potentially a double-digit increase in September 2002.
"We have been leading the way and working with other groups to achieve a settlement of the rate case. It is in everyone’s best interest to achieve consensus," said H. Robert Wientzen, president & CEO, The DMA. "To the extent that we can help mitigate the costs our members pay for postage, in spite of the increase, it is a win-win, both for our members and their customers."
Representing the nation’s largest mailers, their employees and consumers, who generated an estimated $580 million in direct mail sales in 2001, The DMA reversed its position to oppose the settlement when the USPS agreed to delay the implementation date for the
increases in postage. The original date proposed for implementation was June 2, 2002. The new date to which The DMA agreed is June 30, 2002.
"The settlement is a fair and logical solution to the financial problems facing the Postal Service," added Wientzen. By accepting The DMA’s offer, he noted that the USPS will realize an increase in revenue sooner than if the rate case process – which takes 10 months at the PRC – had been allowed to proceed.
"But we also want to sound a note of caution," said Wientzen. It is imperative that policymakers on Capitol Hill and in the Administration understand that there is a serious structural problem with the way the Postal Service is allowed to operate. And, absent needed legislative reform of the 1970 law that governs postal operations, its deficits will keep mounting, its market share will keep declining and our postage rates will keep rising. This is not conjecture. It is pure and simple economic reality."
The DMA is the leading and largest trade association for businesses interested in interactive and database marketing, with almost 5,000 member companies from the United States and 53 other nations. Founded in 1917, its members include direct marketers from every business segment as well as the nonprofit and electronic marketing sectors. Included are catalogers, Internet retailers and service providers, financial services providers, book and magazine publishers, book and music clubs, retail stores, industrial manufacturers and a host of other vertical segments, including the service industries that support them. According to a DMA-commissioned study, direct and interactive marketing sales in the United States exceeded $1.7 trillion in 2000, including $110 billion in catalog sales and $28 billion in sales generated by the Internet. The DMA's Web Site iswww.the-dma.org and its consumer Web site is www.shopthenet.org.