Small magazines gird for postage hike

Marketplace Staff May 14, 2007

Small magazines gird for postage hike

Marketplace Staff May 14, 2007

KAI RYSSDAL: There’s a great lesson to be learned from the U.S. Postal Service today about the time value of money. Postage rates went up — 41 cents for a first-class stamp. But you can buy something called a Forever Stamp for that same 41 cents that’ll be good . . . forever. No matter how high postage rates rise. Spend now, save later.

The one rate that didn’t go up today but will in July is for mailing periodicals. The new rate structure for magazines is so complicated it’ll take that long to get all the software up to date.

From Washington, Jeremy Hobson reports that for some small magazines, it’s a welcome delay.

JEREMY HOBSON: Usually the liberal magazine The Nation and the conservative Weekly Standard don’t find themselves on the same side of an argument.But the huge postal rate increases they both face are enough to bring them together.Weekly Standard Publisher Terry Eastland says the new rates will either mean higher subscription fees or significant cutbacks.

TERRY EASTLAND: It is such a precipitous increase — coming with really such short notice, and with so little time in which to make adjustments — that it seems to me it becomes especially onerous.

At The Nation, President Teresa Stack says she’s looking at a half-million dollars a year in extra mailing costs, and she knows other small publications face the same pain.

TERESA STACK: Most of these magazines aren’t profitable to begin with, so how we adapt to that kind of increase is something we’re struggling with.

Small publications say they didn’t have enough time to figure out what the plan would do to their bottom lines before it was pushed through. Normally, the Postal Service sends its proposed rate structure over to the Postal Regulatory Commission, an independent government agency. The commission gives it the OK and sends it back so it can be approved. But this year, that didn’t happen.

The Postal Regulatory Commission rejected the Postal Service’s plan. And after a public comment period, the commission went with a version that Time Warner helped craft. It gives the best rates to publications that do more business with the Postal Service — like People and Time magazine, published by Time Warner.

Bob McChesney, who runs an organization called Free Press, is bringing small publishers together to challenge the new rates.

BOB MCCHESNEY: We have approved this dramatic rate change, this complete overhaul of periodical rates, it goes into effect in July. The Postal Service itself says it won’t know till June what the exact rates will be for publications. I mean, we might be driving off a cliff and no one knows.

But there are those who argue that it’s fair for companies who do more mailing to pay less. Especially when they engage in work sharing. Time Warner often does much of the Post Office’s job — they bundle, they sort, they transport. Everything except delivering the magazines to your door.

Gene Del Polito runs the Association for Postal Commerce, which represents companies including Time Warner.

GENE DEL POLITO: And all they’ve asked is that, “Look, since we’ve gone through these extra steps, understanding that postal costs are rising, isn’t it time that these efficiencies be reflected in the rates we are asked to pay?”

DAN BLAIR: You pay for what you use.

That’s how Postal Regulatory Commission Chairman Dan Blair sees it.

BLAIR: And if you’re going to use the full freight of the postal system, it’s gonna cost you more than if you can do a number of these things yourself.

Publishers of small periodicals argue that’d be fine if magazine mailing were competitive. But it’s not — the Postal Service has a monopoly. And small magazines have no other choice.

In Washington, I’m Jeremy Hobson for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.