Today we filed comments on behalf of Valpak Direct Marketing Systems, Inc. and Valpak Franchise Association with the Postal Regulatory Commission (“PRC”). These comments related to the Postal Service’s Annual Compliance Report, filed each year. After considering those comments, the PRC issues its Annual Compliance Determination, which is expected by the end of March 2017.
These comments focus on the deliberate underpricing of certain Market Dominant Products — particularly Standard Mail Flats — whereby all Standard Mailers are required to subsidize mailers who send catalogs in the approximate amount of 10 cents for each catalog sent. In FY 2016, the Postal Service deliberately lost $602 million from this one product. Such “underwater” pricing of products by the Postal Service is illegal under the Postal Accountability and Enhancement Act of 2006, but the PRC has yet to do its duty to order the Postal Service to raise prices sufficiently so that prices for catalogs above the level of marginal cost, so that Standard Flats are no longer a drain on the Postal Service and all users of Standard Mail.