American Business Media has struggled in the first year of the Obama administration to get Congress to pay close attention to its key messages concerning postal rates, behavioral targeting and intellectual property rights, a lobbyist for the association said Tuesday during an Executive Forum session titled “Politics, Policy and Your Pocketbook.”
Tom Carpenter, VP of Wexler & Walker, ABM's lobbying firm, said the administration, trying to take advantage of the president's high approval ratings upon taking office, has proposed an ambitious legislative agenda addressing health care, climate change and financial regulation. With the focus on these three topics, Congress has little time to consider other issues, he said.
“There's not much oxygen in the room,” said Carpenter, who predicted Congress would pass financial reform legislation by Christmas.
Nevertheless, there was news to report about postal rates and other issues directly affecting ABM members. David Straus, a partner at Thompson Coburn, ABM's law firm, offered the good news that postal rates will not be raised in the 2010 fiscal year that started Oct. 1.
The lack of a rate hike only became a reality, because Congress—during a brief period when it was not preoccupied with other legislation—authorized the U.S. Postal Service to forgo a $4 billion payment into a retirement health care fund, Straus said. Without this move, the average publication with a circulation of 50,000 would have paid an extra $15,000 in annual postage, he said.
In the coming years, Straus said, ABM members and other mailers of print magazines should expect new battles over periodical postage rates. Mail volume has declined from 212 billion items in fiscal 2008 to 175 billion in fiscal 2009. The USPS lost $2.8 billion in fiscal 2008 and $3 billion in fiscal 2009, Straus said.
Straus also said that while handling first-class mail generates about twice as much revenue as it costs the USPS, periodicals lose money for the organization. Magazines only generate about 84% of the revenue it costs to mail them, he said, adding that the USPS doesn't make full use of its automated capability to handle periodicals. If it processed magazine mailings with automated equipment, it would approach the break-even point, he said.
Mark Sableman, another partner at Thompson Coburn, addressed the looming issue of behavioral targeting. He said two congressmen, U.S. Reps. Rick Boucher (D-Va.) and Bobby Rush (D-Ill.), are putting together legislation that would regulate behavioral targeting in online advertising.
Sableman divided online advertising into four basic categories: contextual, first party, third party and deep packet inspection. The Federal Trade Commission has little problem with contextual advertising or with first-party advertising, which occurs, for example, when ESPN.com serves a hockey-related ad to an end-user because the user regularly visits the site to check hockey scores, he said.
Widespread support for behavioral targeting becomes less enthusiastic when third parties—that is, ad networks—serve ads that follow an end-user around the Internet. Similary, deep packet inspection advertising, which occurs when an Internet service provider shares its customers' activities with advertisers, represents the toughest issue.
Behavioral targeting is primarily an issue for consumers. ABM is fighting regulation in the b-to-b sector by arguing that end-users want the advertising because it helps them do their jobs and stay abreast of developments in their industry.
Cynthia Braddon, VP-government affairs for McGraw-Hill Cos., addressed intellectual property issues to close the panel. She said the Internet has made databases, product lists, directories and similar products more vulnerable and in greater need of legislative protection to guard against piracy. M