The Postal Service Board of Governors approved a higher postage rate yesterday for timely newspapers and magzines that receive special expedited postal service, a move that threatens to drive some publishers from using the fast service or the mails entirely.
The board of governors' decision will raise the mail rate by 1.2 cents per piece for "red tag" mail which is given faster second-class service than other mail which doesn't need fast delivery. "Red tag" mail includes Time Inc. magazines, Newsweek magazine and the Wall Street Journal, according to a Postal Service spokesman.
The red tag designation originated from the color of the tag placed on sacks of second-class publications that received fast delivery, the spokesman said.
Non-red-tag mail, mostly monthly publications, will receive a reduction of 1.1 cents per piece as part of the Postal Service's action. The major proponent of this measure was Readers' Digest, which is expected to benefit from it.
The governors, in a 4-to-3 decision, accepted the recommendation of the independent Postal Rate Commission, which in an unusual move initiated the rate change. The board of governors usually starts such rate proceedings.
During debate on the proposal, some governors warned that they were being forced to decide between two good groups of customers and that the red tag users might retreat from the expedited service or the mails altogether. The Postal Service, which still is projecting a deficit by the end of the year of more than $500 million, would lose a lot of needed revenue if the red tag users withdrew, the governors said.
Two newspaper trade groups and Dow Jones & Co. last year unsuccessfully sued to prevent the rate commission from considering the special rates.