One of the government's top antitrust officials urged Congress yesterday to lift the U.S. Postal Service's special antitrust status that has given the post office a monopoly over delivery of first-class mail.
Federal Trade Commission Chairman James C. Miller III, in testimony before a Joint Economic subcommittee, said that the introduction of competition for mail delivery could help consumers by improving service and lowering postal rates.
Under law, private firms can deliver packages and overnight letters, but are banned from handling first-class mail.
Speaking for himself--and not the FTC--Miller charged that the post office has used this law to protect itself and hurt competitors and consumers. "There is a long list of private entrepreneurs who have tried to deliver low-cost first-class mail but were driven out of business by the USPS--not by head-to-head competition--but through repeated USPS court actions to enforce its monopoly," Miller charged.
Miller was joined by the president's top communications adviser, Bernard Wunder, assistance Commerce Secretary for communications. Although the Reagan administration has not taken a position on changing the law, Wunder said that personally he believed that "competition will best serve the public and I am aware of no factual basis" for retaining the monopoly.
U.S. Postmaster General William Bolger expressed strong concern about the quality of mail service should the post office's monopoly be lifted. Bolger questioned how letters would be exchanged between different domestic companies serving different parts of the United States, how Americans who moved would get their mail forwarded, and how letters would be delivered to and from foreign countries.
Miller acknowledged that with the elimination of the post office's monopoly, some rural post offices could be closed. However, he added, "it is extremely unlikely that the postal service would ever be ended in those areas. More likely, mail delivery in rural areas would continue but residents would have to travel farther to purchase stamps and to undertake other transactions at a post office."
If Congress wanted to guarantee that good service be maintained for rural residents, it could adopt a special subsidy--which would cost consumers far less than the current monopoly rates do, Miller charged.
Miller is not the first antitrust official to urge the repeal of the post office's monopoly. More than five years ago, the Justice Department called for similar action.
The Justice Department has also been opposed to post office's entry into the electronic mail business, arguing that there are plenty of private companies eager to provide the same service.
At a minimum, Miller said, the post office should be required to write a detailed report justifying why its monopoly should continue. If Congress agrees with the report, then it should, at the least, make the post office more accountable in its rate decisions by increasing congressional oversight and giving the Postal Rate Commission greater power to investigate rates.