The Magazine Publishers of America – the consumer magazine industry association – and roughly 700 other companies together filed a motion on Monday to dismiss the United States Postal Service’s proposed rate hike.
Earlier this month, on July 6, the Postal Service proposed a hike of 2 cents on first-class postage to 46 cents, and postcards to 30 cents, part of a plan to close the gap on what it projects will be a $238 billion shortfall in the next decade. The proposed hike would take effect on January 2, 2011.
In its motion, the collective group -- the Affordable Mail Alliance – argued that, “at this time of a shaky economic recovery, this is the functional equivalent of a tax increase on every American postal customer, whether individual or business. If this takes effect January 2, 2011, and American businesses and consumers will be spending more on postal services, there will be less money for investment, payrolls, and business growth.”
AMA added: "Punishing customers with higher prices is not the way to make the Postal Service solvent.
MPA president and CEO Nina Link called the U.S.P.S. plan an “unlawful attempt to shatter the price cap.”
Among the 700 supporting the AMA: Condé Nast, Bonnier and New York magazine.
Magazines aside, one of the businesses most affected by any sort of postal hike would be Netflix.
An analyst told Barron’s earlier this month that such a hike would the increase the video rental service’s costs by $18 million to $30 million a year. The MPA said the hike would cost members – already trying to forge a comeback following a crippling advertising recession -- millions more.
Yet Netflix has come out in support of the U.S.P.S.’ “Action Plan for the Future,” announced in March, which includes a rate hike and five-day delivery schedule. A spokesperson for Netflix told TheWrap that the company does not support any one individual action proposed by the Postal Service, but supports the plan “in totality.” (This stance seems to mirror Netflix's steady migration away from sending members DVDs to streaming them -- the company recently boasted 61 percent of its customers have tried streaming movies on-demand.)
The Postal Rate Commission has until October 4 to rule on the U.S.P.S. proposal. Stay tuned.