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From: cosell@bbn.com (Bernie Cosell)
Newsgroups: comp.org.eff.talk
Subject: Re: Idea to help curb unwanted junk mail
Message-ID: <64702@bbn.BBN.COM>
Date: 17 Jun 91 11:16:08 GMT
References: <14713.28453476@fidogate.FIDONET.ORG> <MUFFY.91Jun16144401@remarque.berkeley.edu>
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muffy@remarque.berkeley.edu (Muffy Barkocy) writes:

}In article <1991Jun14.163229.13916@xn.ll.mit.edu> olsen@xn.ll.mit.edu writes:

}   What I read is that first-class mail (the PO's monopoly) has subsidized
}   the other classes for quite some time, and continues to do so.  The
}   law used to require each class to break even, but the PO routinely
}   ignored this requirement.  When someone took them to court in order
}   to force them to comply, they got Congress to change the law, removing
}   the requirement (or, actually, making it unenforceable).

}   This actually makes sense, from the PO's (and postal union's) point of
}   view.  If you have a legally-mandated monopoly, you should squeeze
}   every last penny you can out of it, even if you have to juggle the
}   books to do so.

}I don't understand this, though.  If the postal service is taking money
}they *make* on first class mail and *spending* it on junk mail, how are
}they squeezing more money out of the monopoly?...

}Can someone explain whether they're supposed to make a profit, what they
}do with any money they make, and how it benefits them to spend some of
}the money they make on subsidizing junk mail?

OK, I'll give it a try: the goal of the postal unions is to have as
many jobs for postal employees as possible.  Therefore, it is in their
interest to get folks to mail as much stuff as absolutely possible, and
use the USPS to do so, so as to keep as many people busy handling it as
possible.  By extracting money out of first class and using it to
subsidize the other classes, they can [artificially] lower the costs of
the other classes of mail, and this has two good effects [if you're the
postal union]:
  1) they will have a competitive advantage against other carriers
  2) they will be able to attract some customers who wouldn't mail 
     anything AT ALL if the costs were higher.
All of which turns into more postal jobs, bigger budgets and more prestige
for postal executives, etc.

  /Bernie\