Wednesday, July 20, 2011

Post Office Monopoly - It's a Good Thing?

Chloe Lutts writes on the Cabot Wealth Advisory website, "I recently learned (not through experience) that it is illegal to send non-urgent mail through any service other than the U.S. Postal Service. At first I was surprised. I was even more surprised when I read that this law is actually enforced: Equifax was fined $30,000 in 1993 after a raid determined that the mail it had been sending through FedEx was not actually 'extremely urgent.'"

According to Lutts, "The monopoly is essentially a funding mechanism that allows the USPS to fulfill the universal service obligation. If a private company were allowed to compete with the USPS, it could cherry-pick the most profitable delivery routes and undercut the Post Office, leaving the USPS without crucial revenue to support less profitable services."

"Opponents argue that if the monopoly were removed, private companies would step in to serve all customers, and rural customers would simply have to pay their true cost of delivery," Lutts says.

"Residents of more populous areas would also pay their true cost of delivery, which might be less, eliminating the cross-subsidy to rural residents. In my mind, this argument makes sense to the extent that people who choose to live in the backcountry should be prepared to bear the full costs of that decision."

To read the entire article, click here.
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posted by Don Schilling at 12:01 AM