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To: Estimated Prophet who wrote (6077)	6/7/1999 7:17:00 AM
From: Benny Baga	Respond to of 20297

Postal Service Getting Wired June 7, 1999 Inter@ctive Week -- Say the words "monopolist " and "Internet" in most tech circles, and one company springs to mind. Now, some say the government itself may join the list. For even as Microsoft battles what it says is a high-tech lynching in the courts, the U.S. Postal Service is cultivating at least two dozen new business lines -- from wiring money to presenting bills electronically -- all of which could get a boost from the cash flow produced by its monopoly in conventional mail. "They're not going to be on an even playing field with us," says Nancy Saucier, lobbyist for the Washington, D.C.-based American Electronics Association. The 157-page Postal Modernization Act would change all that by splitting the Postal Service into two separate lines of business. One would continue to supply postal services. The other would take over jobs that aren't clearly part of the Postal Service's mission. "The thrust . . . is to give postal employees the tools to adapt, grow, compete and survive in the face of enormous challenges caused by changing technology and a dynamic communications marketplace," said sponsor Rep. John McHugh, R-N.Y., before an April 29 vote that moved the bill from subcommittee to the full Government Reform committee. "The Postal Service lost a total of $85 million [on new businesses], showing a profit on only one of these many services. Who do you think paid for that? The Postal Service consumer." New business lines include everything from e-mail-to-hard copy services that convert e-mail to hand-delivered letters overseas to prepaid phone cards, money transfers and overseas priority-package delivery. Retail products alone, such as neckties and mugs, made $5 million on sales of $31.5 million in the nine months ended June 30, 1998. The Postal Service (www.usps.gov) took its biggest losses on its plans to offer online authentication and security; from 1993 to 1997, it spent $20.3 million to develop an "electronic postmark" service that would secure and authenticate e-mail. Development efforts ended in November 1997. That hasn't deterred the Postal Service. At a May 17 speech in San Antonio, Texas, Postmaster General William Henderson sketched out an aggressive plan for e-commerce. The post office, he said, will adapt to the changes in communications technologies by embracing them. Soon, he said, the Postal Service will offer nimble delivery services to keep up with the growing tide of goods ordered online and delivered to the home. It will roll out online payment mechanisms in competition with those available from CheckFree and the like. The service will correlate a unique e-mail address to every physical address in the nation. Critics say the private part of the service would begin its life with access to an as-yet undefined credit from the U.S. Treasury. The Postal Service also would be expected to transfer equipment and capital sufficient to keep the new businesses running, and no more. But Congress could be tempted to bail out the new unit. "What happens if this company does not compete efficiently? Will taxpayers foot the bill?" asks Ed Hudgins, a fellow at the libertarian Cato Institute. Yet, for all the potential difficulties, Federal Express lobbyist Jim Campbell says: "The whole purpose of this is to force the Postal Service to be competitive without putting so much out there we're forced not to let it go down." At a Glance: The new Postal Service Backed by the U.S. Postal Service and Federal Express but opposed by much of the technology industry, the Postal Modernization Act would: Split the Postal Service into two units: a regulated postal monopoly for first- and third-class mail and a private company that behaves like other private businesses. SET up a Postal Service Competitive Products Fund, which in turn would buy shares of the new corporation. Accelerate the postal rate-setting process. Give the new private sector company freedom to enter any businesses it wants, from electronic bill payment to phone cards. <<Inter@ctive Week -- 05-31-99>> [Copyright 1999, Ziff Wire]