NAA DECRIES POSTAL SERVICE AD PLANS

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The traditional battle between newspapers and direct mailers over postal rates is turning to a new battleground, postal advertising.

The Newspaper Association of America has accused the U.S. Postal Service of planning to use $15 million to promote direct mail to the detriment of other media.

In comments filed with a House of Representatives panel, the association is asking that Congress step in to stop what the industry sees as the postal service using its ads to subsidize the rivals of newspapers.

"We don't think they should be favoring one form of media over other forms," said David Brown, NAA senior VP-public policy and general counsel. "We have been seeing a campaign in the last few months and it is obviously of concern.

CUSTOMER VS. CUSTOMER

"The language in the marketing report they made [last year] was that they wanted to take [advertisers'] money [spent on] preprints and have the money going into direct mail. We are also a customer and we don't think this is the right way for a government agency to handle one customer vs. another."

The complaints were made with the House Government Reform & Oversight Committee, whose chairman, John McHugh (R, N.Y.), is preparing postal reform legislation.

The postal service denies it's subsidizing one class of mail with revenues from another, Postmaster General Marvin Runyon reiterated in a speech last week to the National Press Club.

A postal service spokesman said that in going after direct-marketing accounts, the postal service is behaving no differently than any other company seeking new business, and fulfilling its directive to operate as a business.

NAA, however, said it was "not appropriate behavior for an agency of the federal government" to favor one medium over another, and also criticized the postal service for making sales calls with direct mailers to pitch customers who now use newspaper inserts.

MAILERS RAISE PROFILE

The newspaper group's complaint comes as mailers move to raise their visibility and the U.S. Postal Service Board of Governors nears naming a replacement for Mr. Runyon, who departs in June.

Also last week, United Parcel Service CEO Jim Kelly charged the postal service was "thumbing its nose" at free enterprise by systematically attacking private competitors.

"UPS is going head-to-head with the postal service to expose them for what they really are," said Mr. Kelly, who also criticized postal service advertising.

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