Re: Government competition

["Eric M. Bennett" <ericb@pobox.com>]

Joseph Moore wrote:

>It has been suggested that governments should not be in direct competition
>with private sector businesses.  I was wondering how the US Postal service
>fits in with this view, particularly with respect to its agressive ads
>comparing its priority mail service with FedEx, and UPS.
>
>Should the government shut down the post office?

The post office is *protected* *from* *competition* by some rather silly
laws.  At the very least these laws should be repealed if they haven't
already.

Kudos to DejaNews for doing its usual superb job in helping me find this
usenet post on the subject:

=========================================
Author: Donald Brown
Email: don.brown@cesoft.com
Date: 1998/06/01
Forums: alt.fan.bill-gates, alt.destroy.microsoft, comp.sys.mac.advocacy,
               comp.os.linux.advocacy, comp.os.ms-windows.advocacy


When I mentioned that I remembered a news report about the USPS sending a
raid to some companies to see if they were keeping to the USPS monopoly,
I was told I must be wrong.  When I put my personal word behind it, I was
told that was insufficient.

Well, I finally found it on the Washington Post website.  Associated
Press story, December 20th.

I've spent ten dollars on this search.  Those who question my veracity
are invited to donate a similar amount to the chairity of their choice
and we'll call it even.


ENFORCING ITS MONOPOLY TO THE LETTER AT USPS
AUDITS COVER FIRMS' USE OF PRIVATE SHIPPERS

By Associated Press
Column: THE FEDERAL PAGE
Monday, December 20, 1993 ; Page A23
ATLANTA -- ATLANTA -- A visit by postal inspectors taught Equifax Inc.
the hard way that bypassing the mailbox in favor of a private express
carrier can be a costly mistake.

The U.S. Postal Service was acting on a century-old law that gives it a
monopoly on first-class mail. After auditing the company's use of private
shippers like Federal Express for such "non-urgent" correspondence as
routine letters and financial statements, the service levied a $30,000
penalty.

"They requested the amount {of money} they would have collected had we
used the Postal Service," said Dave Mooney, spokesman for the Atlanta-
based credit reporting company.

The authority to conduct such audits is a relatively unknown and rarely
used power of the Postal Service. But anyone who bypasses the mails for
routine items such as letters and financial statements is subject to an
inspection and, possibly, prosecution.

The law was enacted long before overnight shippers were even imagined,
but was revised in 1974 to reflect their emergence and clarify the
government's definition of a letter.

The majority of U.S. companies probably violate the law routinely out of
simple ignorance. The Postal Service says the most common violation
occurs when businesses bundle items going to one address.

The audits are "a classic example of government intrusion," said Sen.
Paul Coverdell (R-Ga.), who recently introduced legislation that would
prevent the Postal Service from penalizing anyone who uses a private
carrier.

"I have spoken to any number of audiences and asked how many use Federal
Express and virtually 90 percent raise their hand," Coverdell said. "Then
I ask, 'Do you know it has to be urgent or you're subject to an audit?'
Well, they're just stunned."

The Postal Service says the inspections are not only legal, they're also
necessary.

"The Postal Service was established to give universal service to
everybody at the same rate, whether you're in the bush country of Alaska
or the bottom of the Grand Canyon," said spokesman Paul Griffo. "In order
to provide that service you can't have people skimming off lucrative
areas of our revenue."

Federal Express, based in Memphis, and a leading player in the express
delivery service, considers the audits a form of bullying.

"It's simply unfair for a quasi-governmental agency to send its police to
your office and say what service you can use," said A. Doyle Cloud Jr.,
vice president for regulatory and governmental affairs at Federal
Express. "When you're faced with a policeman, you basically do what he
says."

Most countries give their post office some degree of monopoly, with the
justification that it is necessary to make the mails affordable to
everyone, said Van Seagraves, publisher of the newsletter Business
Mailers Review.

"You can get arguments about the validity of that rationale," Seagraves
acknowledged. "People will say, if the Postal Service ran more
efficiently it could meet the competitors."

Griffo said postal inspectors conducted 12 audits in the past year and
identified $312,000 in potential lost revenue, compared with two audits
the previous year in which $98,000 in lost revenue was identified. He
refused to identify the targets.

The inspectors seek reimbursement only for items that are on site during
the audit, packaged and ready to be shipped by another carrier, Griffo
said. The audits, however, can last several weeks, accounting for the
large sums some must pay.

Equifax has changed its shipping practices to comply with the postal
regulations, Mooney said, but the company still smarts from what it
considers meddling.

"We think we are the best judge of what is urgent in our correspondence
and what is not," Mooney said. "I don't think it's up to the Postal
Service to make that determination."
==============================


I do not think the post office is any sort of model for how the government
should "compete" with business (by outlawing competition).  Your suggestion
of shutting down the post office is clearly ridiculous, but I think
completely spinning the post office off from the government might not be a
bad idea.  (There would probably have to be government oversight, but I
don't see why we can't have private companies running this just like we
have them running other essential services.)



--
Eric Bennett (http://www.pobox.com/~ericb/)
Cornell University, Field of Biochemistry, 377 Olin Chemistry Lab

I am a Macintosh loyalist and a happy user of Microsoft software.  Thus,
99.7% of everybody even remotely involved with computers has reason to find
fault with me.
-Mark Lincoln