PUBLISHERS DISPUTE POSTAL ACTION

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As the U.S. Postal Service trudges through its latest reclassification case, the nation's two major magazine trade groups again find themselves at each other's throats over a postal issue.

If a measure now being considered for second-class mail is enacted, a new Publications Service Subclass will be created, entitling mailers that pre-sort at least 90% of their mail to a minimum of three ZIP code numbers to receive mailing rates that are around 14% lower that the existing rate. Magazines that do not qualify for the subclass would pay about a 17% higher rate.

The American Business Press, representing business-to-business publishers that tend to have smaller, targeted readerships, opposes the measure.

The Magazine Publishers of America, consisting of consumer magazine publishers such as Time Inc., Conde Nast Publications, Hearst Corp. and Meredith Corp., supports the reclassification measure.

Last week, the MPA tried to diffuse the notion that the latest battle is simply a matter of big vs. small magazines.

"Postal reform is just good business," President Donald Kummerfeld said during a news conference at MPA headquarters in New York.

He added: "The days when you could throw a half-dozen magazines in a mail sack and still have low rates are over."

"Magazines and catalogs are the least automated of all mail classes today," said Mr. Kummerfeld, and that has resulted in rapid second-class rate increases during the past decade-with more in store for the future.

"It's not the 55% increase since the mid-1980s that worries us," he said. "Postal costs are going to go up even faster in the future if we don't do something."

Mr. Kummerfeld urged publishers to take over a portion of the sorting and transport work by adapting the reforms as proposed.

"We want to drive as much of those costs out of the system as possible," he said.

The drawback, in the eyes of many ABP members, is that smaller publishers don't have enough volume to make pre-sorting economically feasible.

ABP executives say they support automation through bar coding and other methods-but not through the new subclass where large publishers could easily qualify for the discounts and the small publishers would not.

While the MPA advocates co-mailing for smaller mailers, the ABP claims even that system would be unwieldy and unworkable for many small publishers.

"We just can't do what Time and Reader's do," said Gordon Hughes, CEO of the American Business Press. Mr. Hughes said that added costs would be involved for small publishers that wouldn't be offset by savings, and small publishers that don't qualify would be forced to pay higher prices.

"That could force some of the smallest publishers out of business," he warned, "which is the exact opposite of what second-class mail is supposed to do."

Louis Bradfield, director of distribution for Cahners Publishing Co., said: "I don't see co-mailing as an impediment for monthlies, but it could be a very big impediment if weeklies had to wait even 24 hours to co-mail with someone else."

Even supporters of reclassification acknowledged it could also force publishers to do fewer targeted and selective-binding editions.

"The marketing people are going to have to take a back seat on this one," said George Gross, exec VP at the MPA.

The Postal Rate Commission has several months to consider the conflicting testimony, listen to cross-examination and finally submit a final recommendation to the Postal Board of Governors by late January.

After the governors receive the recommendation from the rate commission, a ruling will be handed down within 30 days, with implementation expected around July 1.

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