The Post Office Gets Its Day in Court


The post office as a national institution will soon have its day in court, and the verdict could be a matter of life or death. 

Yesterday, the Postal Service announced that it will request an Advisory Opinion from the Postal Regulatory Commission about its plan to study 3,600 post offices for closure.  On July 26, the Postal Service will release the list of postal facilities under consideration for discontinuance—about 2,800 post offices and 800 stations.  The day after, the Postal Service will present its plan to the PRC, which will embark on a review period that will last several months. 

The PRC process is similar in many ways to a courtroom proceeding, and there will be lawyers, arguments, counter-arguments, expert testimony, cross examinations, rebuttal testimony, witnesses, and, if necessary, subpoenas.  Maybe there will be some courtroom drama as well.

At the end of the process, the PRC will issue its Advisory Opinion.  That Opinion could determine the future of the brick-and-mortar post office.


What a difference a week makes

The Postal Service is required by law to seek such a PRC Advisory Opinion before it embarks on a program that could have a significant impact on its service to the nation.  Although it has been clear for some time that it had begun a program to close thousands of post offices, the Postal Service has been claiming for months that it had no such plan. 

It was just last Thursday (July 14) that the Postal Service released its revision of the Rule describing changes to the closure process (published in the Federal Register on Friday).  The Rule, like the earlier version released in March, states explicitly that the Postal Service had not developed “a program to study the discontinuance of large numbers of retail facilities that [has] the potential to effect a nationwide or substantially nationwide change in service.”  In fact, the Postal Service wrote that “unless and until such a program is developed and presented to the [Postal Regulatory] Commission,” concerns about its impacts “are speculative and premature.” (Rule here; see section N)  

Now we know that these concerns were not so “speculative and premature” after all.

Earlier that same day, at an open session of the PRC, Chairman Ruth Goldway indicated that she had received what she hoped was a “comprehensive list” of post offices being studied for closure, and she said the PRC would make the list available “so that the public will better understand what the Postal Service is now engaged in in terms of post office closings and then very shortly what their future concepts are for adjusting the retail network.”  That made it seem like something had to happen soon.  And it did.

On Tuesday came word from Goldway that “Postal Service has indicated that it intends soon to file a request for an Advisory Opinion on a nationwide plan to review post office facilities for closure.” 

On Wednesday, the Postal Service confirmed that it would be releasing a list of post offices to be studied for closing and that it would be initiating the process for an Advisory Opinion.  At the same time that it releases the list and its closure plan, the Postal Service will be unveiling “a new concept” for replacing post offices.  

While all that was going, the PRC also decided on two appeals, and in both cases, Chairman Goldway dissented from the majority’s rulings on behalf of the Postal Service.  On Tuesday the PRC denied a request to suspend the closing of the Lafayette Postal Facility in Freehold, New Jersey, while an appeal was being considered, but Goldway said the post office should stay open while the appeal went forward.  The next day, the majority upheld the Postal Service’s decision to close a postal station in Fort Smith, Arkansas.  Again, the chairman dissented, this time because of “material flaws” in the Postal Service’s case.

Yesterday, Thursday, the national media joined the conversation with articles in the Washington Post and New York Times about legislation making its way (or not) through Congress and about the closure plan to be announced by the Postal Service. 

It’s been quite a week.  And did I mention, it's hot out there.


The potential impact of the Opinion

In about three months (it could take longer), the PRC will conclude its review of the Postal Service’s plan with an Advisory Opinion.  The Opinion will examine the details of the Postal Service plan, review what the witnesses have said, and discuss relevant laws and regulations.  The Opinion will be complex and nuanced, but it will essentially be a statement about whether or not the Postal Service’s plan to close thousands of post offices complies with the Postal Service’s universal service obligation under Title 39.   

If the PRC decides that the Postal Service is within its rights to adjust its retail network as it sees fit and the mass closings do not affect nationwide service in a significant way, it will probably mean the end of the post office.  The Postal Service will proceed with its plan to close 3,500 post offices, and that will only be the beginning. 

The Postmaster General has already said he plans to close 16,000 post offices over the next six years, and by then the network of alternative channels will have expanded yet further, so there will be little reason, at least in the mind of the Postal Service, not to close even more post offices.  If you think that can’t happen here, just look at Great Britain, where they closed 8,500 post offices of their 20,000 in just a few years—and they’re looking to close more.

If, on the other hand, the PRC decides that the Postal Service plan is not consistent with Title 39, the post office could be saved.  The Postal Service would probably double up on its lobbying efforts in Congress to get the law changed so it can close post offices legally.  The Issa-Ross Postal Reform Act would form a commission that closes them instead of leaving it to the Postal Service.  Other more moderate bills, like those proposed by Massachusetts Congressman Stephen Lynch and yet another by Delaware’s Thomas R. Carper and Maine’s Susan Collins, though better in many respects, would also give the Postal Service considerable leeway in closing post offices.  But Congressional help on closing post offices could be tough to get if the PRC has accumulated a large docket of arguments about why mass closures would hurt the country.  It’s thanks to Congress that post offices are so hard to close to begin with.

Potentially the Postal Service could ignore the Advisory Opinion, and then the PRC would face a decision about what to do.  As the regulatory agency for the Postal Service, it does have the power to order the Postal Service to comply with the law when it issues its annual compliance report.  According to 39 U.S.C. § 3662, the PRC can even levy fines on the Postal Service. 

It’s going to be an interesting few months, and the PRC is going to be very busy.  It is still working on an investigation into emergency suspensions, and there are a number of closure appeals in the docket.  They definitely have their hands full.

It doesn't help matters that the Postal Service will be initiating the Advisory Opinion process at the end of July, peak summer vacation time.  The process is supposed to be completed in 90 days—the Postal Service can start implementing its plan even if the Advisory Opinion isn't done yet—so the timing will make it difficult to get off to a good start.  And all the news about the closing of post offices will conveniently get conflated with the headlines about the fight over raising the debt ceiling, as if they're closing post offices to help deal with the country's deficit..  


Looking back to the 2010 Advisory Opinion

To get a preview of what we may be in store for, we can look back to the PRC’s 2010 Advisory Opinion on the Postal Service’s 2009 Stations and Branches Optimization and Consolidation Initiative.

That Initiative was in many ways a dress rehearsal for what the Postal Service will present next week, and the process went about as well as the preview performances for Julie Taymor's “Spiderman.”  The Postal Service kept changing the plan by decreasing the number of post offices it planned to close—from over 700 to just 162—and it even tried to stop the Advisor Opinion process midway. 

And when the reviews came in, what a disaster.  The PRC criticized just about everything in the plan—public comments weren’t being sought until after the initial decision to close the facility had been made, the USPS methodology for calculating savings from closures was flawed, and the whole process lacked transparency.

USPS executives are surely hoping they have their act together this time around.  They certainly have been busy.  They’ve commissioned a slew of “optimization” studies, they’ve got themselves a new computer program, they’ve rewritten the closing procedures to streamline the closing process, and they’ve hired a real estate company to help sell post office buildings.

In the 2010 hearings before the PRC, the Postal Service was represented by administrators who explained the closure process and the rationale for the optimization plan.  They noted, as the Postal Service has been saying over and over again, that “customer mailing patterns” have changed over the past few years.  People are turning to electronic media to transmit messages, they’re making fewer visits to the post office, and many “alternative access channels have emerged”—the Postal Service’s website, non-postal retail locations, privately-operated approved shippers, automated postal centers, stamps by mail, etc. 

Other points of view were represented by a wide array of witnesses, both in DC and in hearings around the country.  The PRC heard from mayors and state senators, bulk mailers and postal lessors, postal worker unions and postmasters associations, university associations and experts on subjects like the role of a post office in a community.  Most of the witnesses were “stakeholders”—people representing organizations that have a direct interest in postal matters, like the Association of U.S. Postal Lessors, whose members lease space to the post office (three-fourths of post offices rent space).  To represent the interests of the general public, the PRC also appointed “Public Representatives” to participate in the process.

Most of the Advisory Opinion focused on things the Postal Service should do to improve the process it was using to close post offices—how to improve opportunities for community input, how to make the process more rational, etc..  And the new procedures published in the Federal Register last week will go a long way toward making those improvements in the process.

But process aside, with respect to the crucial question of whether the Postal Service could close a large number of post offices without having a significant negative impact on nation-wide service, the Advisory Opinion was more ambiguous.


The issue of “alternate retail channels”

One crucial issue in the 2010 Advisory Opinion was how to read PAEA section 302(d).  The Postal Accountability and Enhancement Act (PAEA) of 2006 turned the Postal Rate Commission into the Postal Regulatory Commission and gave the Commissioners a broader scope and new powers to regulate the Postal Service, including the subpoena power.  

Section 302(d) of PAEA is about the Postal Service’s network of “alternate retail options”—internet, vending machines, private businesses that have USPS products, etc.  The Postal Service argued that this section of the Act in no way “immunizes postal facilities from consolidation or closure.” 

But the Public Representative, speaking on behalf of postal patrons and American citizens, took a different view.  He argued that “reliance on alternative access channels as a means to justify the replacement of station and branch post offices does not comport to the policies of Title 39. . . .  PAEA section 302(d) shows congressional intent to use alternative access channels as a supplement to stations and branches, not as a replacement” (my italics). 

The Public Representative also contended that the “alternate access channels are far from perfect substitutes for retail window and post office access for a number of services” and relying on them “degrades service to certain customer groups.”  Moreover, said the Public Representative, the true costs of these alternate channels had not been accurately represented by the Postal Service.

In its Opinion, the PRC tried to find a middle ground.  It commended the Postal Service for increasing the availability of alternative access channels and said the Postal Service should continue to innovate in this area.  “For the typical customer, alternative access channels augment, and sometimes may even eliminate, visits to postal facilities,” wrote the PRC. “The Postal Service is encouraged to make these alternative access channels available and transparent to customers.”

However, the Commission also found “that in many instances, the alternative access channels that the Postal Service promotes can not replace an actual visit to a post office. Certain important services, such as money orders and parcel pickup or mailing, may not be feasible except at a staffed retail facility.”


Do we need post offices?

Ultimately, all the legal complexities, arguments, and counter-arguments may come down to a simple question: Does the country need post offices? 

It is one of the sad ironies of postal history that the leaders of the Postal Service have apparently answered in the negative.  In their view, we have come to a point where we do not need post offices.  All those alternative access channels are just as good, even better, and a lot cheaper to maintain.  As John Potter, the previous Postmaster General, said last year, "In an ideal world, that's what we'd like our retail outlet to be — a computer. That, I believe, is the future.  Being locked into brick-and-mortar is not a healthy situation."

"Brick-and-mortar."  As if a post office were just made of building materials.  As if it were just real estate to unload. 

You would think that the leaders of the Post Office, as our postal system was known before it was turned into a business, would be the post office's greatest defenders.  Their predecessors in previous decades built beautiful post offices—out of brick and mortar—and the country took pride in them.  The post office helped make the nation, and every post office, from the grandest to the most humble, is a part of history and a place with soul.  How could the leaders of the Post Office forget this?  How could they themselves become the enemy of the post office?

One thing seems certain.  The country cannot depend on a few pro-post-office stakeholders to save the post office.  If the American people want post offices, they’re going to have to fight for them.  Already over 80,000 people have signed a Tea Party petition supporting the Issa-Ross Postal Reform Act, which will close post offices faster than the Postal Service could ever dream of.

It’s time for supporters of the post office to be heard.  Your post office may not show up on the closing list next week, but it will be there on the next list, or the one after that.  If you care about your post office, write a letter to the editor, hold a rally in front of the post office, start a "save my post office" page on Facebook, find a celebrity to take up the cause.  Go to your post office, buy some stamps, and start writing letters to your elected representatives.  Flood the offices of the Postal Regulatory Commission with letters telling them why you need your post office, why America needs its post offices—the old-fashioned kind of letters, the kind you drop in a box at the post office. 

(Photo credit: Katherine Hepburn in Adam's Rib)