At an October 30 Congressional hearing, Congress members heard -- rather belatedly -- about the devastating effects of the recent Time Warner-designed restructuring of the postal rates for small and medium sized periodicals. Seven Congress members of the House Committee on Oversight and Government Reform subcommittee dealing with postal services attended, and several of them expressed concern about the impact of the change for political speech. However, as Victor Navasky, testifying on behalf of The Nation and The Columbia Journalism Review stated in his written testimony, it was rather a case of meeting "to lock the barn door after the horse has gotten out."
The new rates set by the Postal Regulatory Commission (PRC), which came into effect on July 15, represent the reversal of over 200 years of postal policy designed -- in the spirit of the First Amendment -- to foster a competitive and diverse press. The new rates, in contrast, reward the magazines with the largest circulation (such as those owned by Time Warner). Under the new system, public service goals have given way to a narrow pro-privatization and business-minded concern with rewarding economic "efficiencies." The winners under the new rates are the large corporate publishers who will be granted a larger share of the subsidy in exchange for taking advantage of economies of scale by pre-sorting their magazines and doing other work that would otherwise be performed by post office workers.
For years, Time Warner's efforts to restructure the postage rates had always been rejected by PRC. This time around, the United States Postal Service (USPS) unexpectedly accepted Time Warner's proposal. Now instead of the 11 percent rate increase originally recommended by the PRC, many of the corporate giants of the publishing industry will face less than 10 percent increases, and some may even see their rates reduced. Meanwhile, small- and medium-sized publications have seen their postal costs soar by 20 to 30 percent, and one periodical (the American Conservative) is even paying a whopping 58 percent more for postage. The Nation magazine reports that it expects to pay $500,000 more a year in print costs. Others will likely be driven into bankruptcy. And, to make matters worse, the new system's elaborate set of rates and deductions is extremely complex -- so much so that its implementation had to be delayed because the post office's computers could not cope with it, leaving organizations unable to accurately anticipate the new cost burden they would have to bear.
FAIR's magazine Extra! is a case in point. As a publication that accepts no advertising, the magazine relies on our subscriber base, who consequently, are also part of FAIR's largest pool of donors. The revenue generated through subscriptions funds a large part of FAIR's organizational expenses including staff salaries, research projects, etc. Even before the rate hike, postage was one of the magazine's highest costs, second only to printing. With the new postal rates, more revenue will have to be put into postage, draining our programming budget. The sudden introduction of the complex new rate structure posed additional difficulties because Extra!'s printers couldn't configure the new rates until shortly before going to press.
The postal regulators purport that the new rates were set through a public process. In reality, the new rate system appears to simply reflect the strength of Time Warner's lobbying efforts -- efforts with which no small or medium circulation magazine could hope to compete. These smaller publications had previously formed an Independent Press Association that hired a lobbyist to represent the interests of hundreds of independent periodicals in the decision-making process. But sadly, the association collapsed in 2006. Without a structure to pool resources, the cost of hiring a single lobbyist -- which runs at between a quarter of a million and a million dollars -- is completely prohibitive to the publications who will be most impacted by the rate change.
There has been strong opposition to the rate change. About a hundred thousand people signed a petition organized by the media reform organization Free Press in advance of the hearing. Meanwhile, testimony was presented from small and medium sized periodicals from across the political spectrum. But as for the pressing question of whether of the rate hike will be reversed anytime soon, Free Press does not seem overly optimistic. It will likely depend on whether the Congressional members of the Subcommittee on Federal Workforce, Postal Service and the District of Columbia manage to move their concerns about the First Amendment into legislative action.
Isabel Macdonald is FAIR's Communications Director and Hilary Goldstein is
FAIR's Development Director.