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A U.S. Postal Service proposal to raise rates is bringing somewhat muted cries of anger from marketers and media, with the biggest objection coming from publishers of trade magazines.

The Main Street Coalition for Postal Fairness accused the postal service of purposely setting a modest increase to lull smaller mailers and the public into a sense of well-being, just as it goes to Congress asking to be allowed to negotiate rates with its biggest mailers.

"It is clearly crafted to lull the public into believing that all is well," said Jack Estes, executive director of Main Street, an association funded by newspaper groups, greeting card companies and the American Business Press.


"What we have before us is what appears to be an arcane postal rate hike proposal, when in fact it is part of a revolutionary approach," Mr. Estes said. "They are attempting to recast the postal service in a way that they can negotiate flexibility for large-volume mailers and the costs be pushed onto other mailers."

The 4.5% postal rate increase, if approved by the Postal Rate Commission, would take effect next May at the earliest. It includes a 1-cent increase in the first-class stamp, but the effect on businesses varies.

The postal service said coded mail commonly used for monthly statements would rise 4.6%; commercial magazines, 5.4%; and local newspapers, 3.5%.

Media and direct mailer groups, however, said the postal service had made some changes in the way it calculates rates so some mailers would see bigger rises while others would enjoy lower rates.

While the Newspaper Association of America said it is still evaluating the increase, President-CEO John Sturm noted heavier advertising mail would decrease in price.

"I am concerned when some heavyweight junk mail would decrease in price while Mr. and Mrs. America would pay another penny for first class," he said. "What bothers me from a competitive sense is whether the post office is favoring direct mail partners and everyone else pays the freight."


The American Business Press, consisting of trade magazine publishers, said proposals that offer higher rates for magazines but bigger discounts for titles dropped off at regional distribution sites would benefit big titles at the expense of small publications.

"They have tilted the rate," said David Straus, an attorney for the group. "It looks like they are taking it disproportionately from the small magazines."

Mr. Straus said ABP and the Magazine Publishers of America also question whether the postal service is correctly figuring the cost of delivering magazines.

"With all the bar code and other steps we are taking, the costs should have gone down," he said.


Yet Mr. Straus and others also said the rate isn't as bad as feared.

"Everybody is happy that this is a minimalist rate case," said George Gross, MPA exec VP-government affairs, though cautioning that he still had to analyze the effect. "It is less than the 6.2% that had been expected."

Gene DelPolito, president of the Advertising Mail Marketing Association, said the rate hike is within reason.

"No one likes rate increases, but this is less than the rate of inflation and in single digits," he said. "The postal service is finally coming to a realization that raising rates is harmful to its business and for the first time is looking over its shoulder at a changing market over which is has no control."

Mr. DelPolito said that while private companies would hope to keep rates down, "anytime the government can operate within the rate of inflation, it's pretty good news."

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