Two California-based computer companies yesterday won the right to sell postage over the Internet, a revolutionary process that will allow the public to use personal computers and laser printers to print stamps.
It is the first major change in the way stamps have been produced since postage meters were developed 80 years ago. "We think it's going to be wildly successful," said Pam Gibert, the Postal Service vice president who oversaw the project.
It was not a happy day for postage meter king Pitney Bowes Inc., which has accused both companies--E-Stamp Corp. of San Mateo and Stamps.com of Santa Monica--of infringing on its patent for a process it calls "Click Postage."
The E-Stamp system requires purchase of a $49.99 "stamp vault" that is attached to a personal computer and functions as a repository for the postage purchased by the user from the E-Stamp Web site. Stamps can then be printed without going online, an advantage that E-Stamp says should make its system more user-friendly than Stamps.com.
To use Stamps.com, a publicly owned firm whose directors include former postmaster general Marvin T. Runyon, the consumer must remain online, connected to a Web site with special software that prints the postage on an envelope.
Both systems will provide postage at a price roughly 10 percent above the face value of the stamps printed.
Two other companies, Neopost Inc. and Pitney, are awaiting postal service approval for their systems.
The U.S. Postal Service's announcement that E-Stamp and Stamps.com could begin selling their service immediately was muted by Pitney's insistence that senior postal officials not mention the approval during a news conference yesterday. So the announcement was made in a news release and officials confined their remarks to proclaiming the merits of the Postal Service's own project, "PC Postage," the umbrella program under which the private companies will operate.
Postmaster General William J. Henderson and Gibert referred only to the competition among four companies, all of whom were invited to the ceremony and allowed to display their systems.
In their comments, neither Henderson nor Gibert referred to the coup that the two younger companies had scored over Pitney. Asked about the omission, Henderson said that the agency had announced the approvals at the bottom of a two-page release and that no further remarks were necessary.
Both Henderson and Gibert said that the federal agency did not want to appear to endorse any of the four Internet rivals. "We have to play the role of a regulator and have a level playing field," Gibert said.
A lawyer who represented Pitney Bowes said after the ceremony that it was handled just the way the firm, which has dominated the postage meter field for decades, wanted.
The two early winners had come to Washington armed with novelties touting the end of trips to the post office to buy stamps. E-Stamp gave out boxed Yo-Yos that proclaimed, "Amazing what you can do now that you don't have to go to the post office."
Stamps.com handed out baseball caps that declared Aug. 9, 1999, would be noted for "freedom from running out of stamps."
Both E-Stamp and Stamps.com officials were privately miffed that they were forced to share the limelight with the two other firms, whose systems are still undergoing testing. Both winning firms have launched ad campaigns to sell their services and said they hope their early approval will be helpful.
Spokesmen for Pitney and Neopost of Hayward, Calif., a French-owned firm that is the fourth competitor, said they hope to have their systems approved for sale by the end of the year.