[Congressional Record Volume 143, Number 111 (Thursday, July 31, 1997)]
[Senate]
[Page S8571]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  DOUBLE POSTAGE RULE ELIMINATION ACT

  Mr. COVERDELL. Mr. President, I am today introducing the Double 
Postage Rule Elimination Act of 1997. This legislation will protect 
consumers by eliminating the double postage rule under which the Postal 
Service requires its competitors to charge above market prices.
  We have in effect today laws known as the Private Express Statutes or 
PES. These laws make it generally unlawful for any person other than 
the Postal Service to send or carry letters over postal routes for 
compensation, with some exceptions. Under the PES, private delivery 
companies must set their two-day delivery rates at twice those of the 
Postal Service for similarly sized items.
  In addition, the PES gives the Postal Service the right to impose 
fines on businesses that use private delivery companies to deliver 
time-sensitive mail rather than using the Postal Service. Current 
regulations permit a business to choose a private carrier--such as UPS, 
Federal Express, or others--if the business feels that the message is 
urgent. The catch is that the Postal Service feels it alone can 
determine if a message is truly urgent, not the consumer.
  Currently, the Postal Service charges $3.00 per item for its Priority 
Mail, which is advertised as reaching the recipient in two days, though 
that isn't guaranteed. This means the lowest price a private competitor 
can offer for two-day delivery is $6.00. If the Postal Service raised 
its rate by $1.00 to $4.00 an item, a private delivery company offering 
$6.00 service would have no choice but to impose a $2.00 increase, to 
$8.00.
  As you can see, the law gives the Postal Service great power to 
control the rates charged by its private competitors and limit 
competition. Combine that with the Postal Service's ability to second-
guess a consumer's decision to use a private carrier and you have a 
very uneven playing field.
  The Postal Service has displayed a willingness to use its 
governmental powers for competitive advantage. In 1993 it was reported 
that the Postal Service had audited corporations and fined them as much 
as $500,000 in back postage fees for using UPS and Federal Express when 
the Postal Service inspectors thought those choices were not warranted.
  More recently, the Postal Service spent over $200 million on an 
advertising campaign for Priority Mail. The campaign was based on the 
Postal Service's lower price--$3.00 for Priority Mail versus $6.00 for 
UPS and $8.00 for Federal Express. Of course, the ads left out the fact 
that the private companies were prohibited by law from matching the 
Postal Service price--or charging anything less than $6.00 a letter.
  Mr. President, the bill I am introducing today does one simple thing 
to level the field of competition. It replaces the double postage rule 
with a ``two-dollar'' rule. Under my bill, private companies will be 
able to legally charge any rate above $2.00 for their second-day 
products. If they want to match the Postal Service at $3.00, they may. 
The law will no longer impose an artificial ``double postage'' rule 
forcing private companies to charge above market rates.
  This legislation will stop government intrusions into private 
consumer decisions and will increase competition in the area of 
delivering urgent letters. I urge support for the Double Postage Rule 
Elimination Act of 1997.
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      By Mr. MOYNIHAN (for himself and Mr. D'Amato):
  S. 1108. A bill to designate the Federal building located at 290 
Broadway in New York, New York, as the ``Ronald H. Brown Federal 
Building''; to the Committee on Environment and Public Works.

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