INQUIRING MINDS (REDUX)

Inquiring minds want to know. Is R2006 going to be the last rate case mailers will ever have to face under the present postal ratemaking regime? Will we finally see an end to increases that go way beyond any reasonable calculation of the cost of inflation? And when can we finally begin to see the Postal Service recalibrate its thinking to become more in line with the needs of mail-using businesses?

So, will this be the last rate case? Well, that all depends. It depends on whether postal reform is enacted before this Congress adjourns sine die. If postal reform fails to find its way to the President's desk, then mailers will have to contend with ratemaking in its current form. Endless guessing on when the Postal Service will file. Ten months of costly and acrimonious litigation before the Postal Rate Commission. Sitting precariously perched on a thin high wall waiting for the PRC to offer its "recommended" decision. Waiting with bated breath to see whether the postal Governors will accept, challenge, or reject whatever the PRC recommends. And then running like crazy to get all business systems ready to accommodate the higher rates...whenever they're ordered into effect.

What if reform does pass? Well, both the House and Senate versions of the postal reform bills make it possible for the Postal Service to have one last bite at the ratemaking apple under pre-reform rules. After that, however, rate cases (at least as they are known today) will become rare occurrences reserved mostly for whenever the Postal Service might plead for relief from a congressionally imposed inflation-based cap. In fact, under rate-cap relief rules, the procedure the USPS would have to follow may be quite different from what it is today.

As for inflation, there may be some hope for some inflation-bounded limits to future rate increases both after enactment of any reform or under the current legislative and regulatory regime. Any new postal law would require (better than that, motivate) the Postal Service to avoid tedious regulatory rigmarole by keeping rate changes within inflationary bounds. Even without reform, however, inflation-based relief still might be possible. For the Govenors of the Postal Service and the Postmaster General have affirmed their intention to to keep future rate increases to small increments in line with the nation's inflationary experience.

Lastly, when will the Postal Service "recalibrate" its thinking? If reform passes, the incentive to become more market-driven will intensify. If reform doesn't...well, it's be the "same ole, same ole."