Thursday, July 17, 2003

Antitrust News: Postal Service Must Be More Businesslike, Panel Says

This from Reuters:

The U.S. Postal Service should be overhauled to be more businesslike, and needs to close some facilities and accelerate outsourcing to the private sector, a presidential commission said on Wednesday.

"We believe that the only way this business is going to survive and prosper is if it learns from the commercial business world," said Harry Pearce, a panel co-chairman and chairman of Hughes Electronics Corp., as he released a summary of the group's findings.

The commission was appointed by President Bush last year to examine how the 228-year-old service can further modernize as it faces challenges from electronic mail and package delivery companies.

The bipartisan commission, which includes senior business executives, rejected options for privatization and concluded the postal service should retain its monopoly over collecting and distributing mail to 140 million homes and businesses.

But it said the postal business model, which it said was steeped in bureaucracy and patronage, must become more efficient in everything from setting rates to selling stamps.

The postal service is a company overseen by government that receives federal benefits unavailable to corporate America. For example, it does not pay taxes. The service earned $224 million in the third quarter and is on track to post a profit in 2003. Cost cutting has offset stagnant mail volume.

The commission proposed that the board of governors be replaced by an 11-member corporate-style board of directors.

The panel also sought oversight changes and unprecedented flexibility for management to set postal rates and quickly respond to market changes without political interference.
So the Postal Service should be more businesslike. That will be the day. And aren't monopolies bad for consumers?

I wonder what the commission's take was on USPS v. Flamingo. There, the USPS was being treated just like a business, and the Post Office was none too happy about that.

You can read CAC's amicus to the US Supreme Court on the Flamingo case here.

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