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 # 293  

 June 2000




Split Up the Postal Service, Not Microsoft

by David Ridenour

 

Microsoft is the victim of a double standard.

A federal court recently ordered the company to be split into two smaller companies.

But there is a real monopoly that no one seems to want to do anything about.

There's been no attempt to break up this company, despite the fact that it enjoys a 100% market share.

There's been no attempt to promote competition, despite the fact that the company offers poor service at inflated prices.

I'm talking, of course, about the U.S. Postal Service.

Believe it or not, there is something worse than a private company gaining market share by besting competitors: A public company that need not best anyone.

The American people have paid dearly for the U.S. Postal Service's monopoly over the years.

Since 1962, the price of a first class stamp has risen from four cents to 33 cents, a 725% increase.

By contrast, a gallon of milk has risen by just 194%. Even with the recent steep rise in prices, gasoline has risen by just 445% over the same period.

We've grown accustomed to postal rate hikes, but they haven't always been the norm. Maybe that's because the Postal Service hasn't always had its monopoly.

In the 19th Century, stage lines like Wells Fargo gave the Post Office stiff competition in mail delivery. That competition forced first class letter rates down from an average of 14.5 cents to three cents. Consumer choice was short-lived, however, as the Private Express Statutes of 1845 ended private mail service between cities and the Postal Code of 1872 barred private mail delivery within cities.

Free from the pressures of competition, the Postal Service has been free to raise rates ever since.

Now they want to add another penny to the price of a first class postage stamp early next year.

Perhaps such an increase could be justified if it meant better service. It won't.

The U.S. Postal Service is notorious for both surly employees and late deliveries. Nevertheless, it boasts a 93% on-time rate for first class mail and 85% for third class mail (of course, this begs the question, "on time according to whom?").

Excuse me if I'm just a little skeptical of the Post Office's statistics.

Scarcely a day goes by without my organization receiving mail belonging to others. The volume of such mail has been so heavy that we even had a special stamp made up to chide Postal employees for their poor performance. It reads, simply: "POST OFFICE: Despite our frequent requests, you continue to give us mail belonging to others. DELIVER TO ADDRESSEE."

I'd like to say the stamp has helped, but it hasn't.

Postal employees' repeated efforts to make three-day weekends into four-day vacations also make me a bit skeptical of the Post Office's on-time performance statistics. The day after the recent Memorial Day holiday, for example, we were informed that we would receive no mail delivery at all. We eventually did receive our mail, but only after repeated protests to a Postal supervisor.

Other times we haven't been so lucky. Over the past decade, postal carriers have skipped delivery of our mail at least a half-dozen times.

I've really come to believe the Post Office motto: "Neither snow nor rain nor heat nor gloom of night stay these couriers from the swift completion of their appointed rounds." Many Postal Service employees don't need that kind of adversity to abandon their duty.

Even if the Postal Service's on-time performance statistics are correct, they are hardly something to crow about: They fail to deliver seven out of 100 first class and 15 out of 100 third class pieces of mail on time. Can you imagine the reaction if Microsoft applications failed to work up to 15% of the time?

One of our more amusing experiences with the Post Office occurred when we tried not once, but three times to send a parcel to Guatemala City. Each time we tried to mail the package, the parcel was returned to us by the Post Office with a stamp indicating there is no such address in Texas.

Of course, we knew that. That's why we paid the international rate and stamped "AIR MAIL" on the envelope to send it to Guatemala. The third time we mailed the package, we even drew a map on the package showing the Postal Service where Guatemala is located - to no avail. Eventually, we asked a friend who was flying to Guatemala to deliver the package by hand.

More recently, several Christmas cards we mailed came back to us due to bad addresses. But they weren't last year's Christmas cards. They were our 1998 Christmas cards.

I can only assume that others have had similar experiences.

I had always assumed that Postal employees who "go postal" do so because they snap under the pressure of the job. But you know, they're not only postal employees, they're also customers. Something to think about.

But irregular delivery hasn't been the only problem. The Post Office's Washington D.C. Capitol Station recently tried to reject 3,000 pieces of our outgoing mail, claiming they weren't set up for bulk mail. The mail in question was first class.

If you can't mail your first class mail at a the U.S. Postal Service's showcase post office, the place where tourists from all over the country come to visit the U.S. Postal Museum, where can you mail it?

The experience prompted me to ask one postal supervisor, "If you don't accept outgoing first class mail, and you're not too keen on delivering, precisely what service are you providing for 33 cents?"

The only response was dead silence.

Despite all these problems, the federal government has seen fit to give the Post Service regulatory power over companies competing with the Post Service in those limited areas where competition is allowed - packages, overnight mail and the like.

Let's review: The Post Office has a 100% monopoly over first class mail delivery, provides poor service at inflated prices and has the power to regulate competitors. Microsoft should be so lucky.

Let's not break up Microsoft, let's break up the Postal Service.

# # #

 

David A. Ridenour is Vice President of The National Center for Public Policy Research, a non-partisan think-tank in Washington, D.C., where he oversees its environmental and regulatory programs. Comments may be sent to [email protected].




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