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Postal service direct-mail rebates pit government, free enterprise

The newspaper business – both small and large papers – has sounded full-throated opposition this past month about a plan by the U.S. Postal Service to purposely entice advertising out of the newspaper so ads can be placed instead with its stakeholder Valassis Inc., a direct mail advertising company.
To newspapers that count on advertising to pay reporters and cover the news, this new venture is beyond alarming. This could create financial harm to our community newspapers.
People have a love-hate relationship with advertising, whether in the newspaper or in the mail. When advertising helps them find deals or shop smartly, they love it. When it doesn’t happen to scratch the shopping itch, they may not like it so much. But most people understand advertising drives the economy and it brings other intangible benefits, like the paying the bill for news coverage that keeps communities informed.
On every level advertising is very competitive. But now the Postal Service wants to pick winners and losers in the market. It is providing postage rebates to Valassis of more than 30 percent if it can divert more ad inserts into direct mail from newspapers.
Not everyone can play. The discounts can be offered by Valassis only to large national retailers. Newspapers cannot get the same discount for their own mail because they can’t sign one national postage contract, as the direct mail company did, with the postal service. Neither can a small clothing or bookstore or a hairdresser or auto parts shop. We – the newspaper and our area businesses – are all local. This deal is only for the big guys.
For the little guys, the Postal Service has another advertising plan that enables businesses to bring unaddressed advertising directly to the post office.
What’s wrong with this picture? It’s this: The U.S. Postal Service is owned by Uncle Sam. It exists to serve all. It shouldn’t be picking winners and losers in any marketplace. It shouldn’t be competing with and undercutting its stakeholders, which are all of us. It should deliver the mail that exists, promptly and affordably.
But we have to ask ourselves: should our government-controlled post office take advantage of its position to compete with private sector businesses and jobs?
This newspaper says no.

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