Post office to favor big mags, spike rates for small pubs

Small periodicals across the country will see their mailing costs swell thanks to new postage rates written by a major media conglomerate and adopted by the US Postal Service (USPS). The rate-increase plan, approved by the USPS in March, will go into effect on July 15. The increase was recommended by the Postal Regulatory Committee (PRC), an agency independent of the Post Office, and is a modified version of a rate structure proposed to the Committee by the media giant TimeWarner. The Postal Service had asked the PRC for recommended rate increases for all mail in May 2006 in order to raise an additional $4 billion in annual revenues. TimeWarner submitted its proposed rate structure to the PRC during public hearings. Several publications with relatively small circulations, including progressive magazines The Nation and Mother Jones, are protesting the increase, saying that the new rates favor larger-circulation periodicals. Despite the outcry, there is currently no reliable data showing how exactly the mailing costs of different types of periodicals will change. The rate change is so complicated, the USPS says new computer software will need to be written in order to calculate mailing rates. Nevertheless, critics of the rate changes are predicting a "crippling hike" that, in the words of the media reform organization Free Press, "could push many smaller magazines into bankruptcy and make it almost impossible to launch a new independent publication." In a joint letter to the Post Office, smaller publications cite an analysis ordered by the publishing company McGraw-Hill, which opposed the TimeWarner recommendations and measured the implications of the new rate structure on 259 periodicals. According to the analysis, 19 percent of the periodicals sampled–most of them small and medium-sized publications–would incur rate increases of more than 20 percent. But a lawyer for McGraw-Hill would not release the methodology used for the analysis to The NewStandard. Along with the fear that the new rate structure could hurt them financially, small magazines have joined media reform activists in protesting the plan because of the involvement of TimeWarner, which publishes several of the country's most popular magazines. The Nation's circulation is a little over 186,000, while Time Warner's People magazine has a circulation of 3.8 million. "Small magazines that have historically contributed to the diversity of voices and opinions and have an out-sized effect on our public discourse… are now potentially silenced so that the likes of TimeWarner can mail People more cheaply," the dissenting publishers said in their joint letter. In the past, companies mailing periodicals outside of their county were only charged by a "piece-pound" structure, meaning rates were derived out of how many pieces were in a mailing and its total weight. Under the new structure, additional criteria will also be used to determine mailing rates, including where the periodicals are going and how they are sorted into containers, including pallets, bundles and sacks. The smallest publications–those with circulations of less than 10,000–will not be subject to the new rate structure, but will see a rate increase based on the old piece-pound structure. The USPS said postal rates are expected to increase overall by an average of 11.7 percent for periodicals. Carrie Witt, a classification specialist for the USPS, said some periodicals could see even higher increases, but said she was unable to give any specifics. Witt said in an interview that while the rate structure is the same for all periodicals, bigger mailers will receive larger bulk discounts. She added that bigger periodicals may be able to reduce costs through a "work-share" process. "The whole idea behind work-shared mail is, if you have a high-volume of mail, and you can do some of the work that we would normally do, we'll give you a discount on that," Witt explained. For instance, she said, companies will get a discount for trucking their own mail to a certain state to drop it into the mail stream, rather than relying on the USPS to truck it. "Some smaller mailers might not have as much of an opportunity" to take advantage of the bulk discount, Witt added. Although work-sharing was allowed under the old rate structure, Witt said the new structure gives more incentives to publications that are able to mail their periodicals more efficiently, which many small publications are unable to do. Teresa Stack, president of The Nation magazine, said in an interview the new rate structure is a "serious issue" for small publications. "Small magazines operate on the economic edge as it is," she said. "I think The Nation will survive, but it's certainly going to make our job a lot harder." The Nation joined 13 other relatively small publications spanning much of the political spectrum to oppose the new rates in a letter sent to the Postal Service's Board of Governors last week. The signatories included Mother Jones, In These Times, The American Prospect, National Review and American Spectator. Free Press has also launched a "Stamp out the Rate Hikes" campaign, asking the public to write Congress demanding a halt to the increases. "Before any increases occur, we must ensure they don't imperil small and independent publications and stifle public discourse in America," the Free Press letter says. The USPS's Board of Governors, in its decision to accept the PRC's recommendations, expressed "some reservation about the wide variations in rate changes… that different publications face." The Board noted that "some publications face substantial rate increases even though they have limited options to become more efficient or to mitigate the increase." The adopted rates contradict the rates that were recommended by the USPS, which was an 11.4 percent increase with no change in the rate structure. On behalf of the Postal Service itself, Witt said the rate structure was adopted to "more accurately capture the costs associated with processing and handling this mail." The USPS would not comment on why the Board of Governors or the PRC accepted a structure written in part by TimeWarner. The PRC did not respond to an interview request. Stack, of The Nation, said that in the end, the Board of Governors adopted an "industry proposal by the largest publisher in the country, and it benefits them, and it hurts us."