USPS Projected Deficit is a Result of Misguided Priorities

BY CCIA Staff
April 4, 2001

Washington, DC- The recent announcement by the Postal Service (USPS) that it is projecting a shortfall of 2 to 3 billion dollars can be partially explained by its unfair and anticompetitive forays into the e-commerce marketplace. The Computer & Communications Industry Association (CCIA) welcomes today’s hearing by Chairman Dan Burton and his efforts to determine where the USPS can control future costs. CCIA hopes Congress will be skeptical of the USPS’ professed “need” to move into electronic commerce, and is greatly concerned that USPS will use its mismanagement as an excuse to move more aggressively into the e-commerce marketplace.

The USPS has recently misspent tens of millions of dollars launching competitive ventures in commercial business. While this figure may not account for the entire deficit being projected, it is being used to fund its vision as an Internet Portal, in direct competition to such companies as Yahoo!, AOL Time Warner, and Excite. The USPS has already begun to offer e-bill pay services from its website, putting it in direct competition with banks, credit card companies, and other financial services companies. These companies, heavy users of USPS mail service, are forced, through USPS statutorily-imposed monopoly, to fund their own competition.

The impact of these activities is magnified since USPS believes that only as a competitive entrant into the e-commerce marketplace can it move out from under its current malaise. “Clearly, this is a misguided attempt by this government agency to bring in new forms of revenue to fund universal service. We believe that the Postal Service, should not engage in non-postal activities and services, private sector e-commerce markets, or inject itself into competition with established, competitive commercial industries,” said Ed Black, CCIA President & CEO.

Black continued, “The efforts of the Postal Service to redefine itself as an e-commerce company is misguided and dangerous. The Postal Service has a government-imposed monopoly that it is leveraging to the hilt in order to move into areas that go beyond its federal mandate to deliver the mail. We hope that Congress will see the motives behind these activities and the hazards of allowing the Postal Service to continue on its current path.”

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