Postal regulators Thursday denied requests by the U.S. Postal Service to raise postage rates in January beyond the rate of inflation, ruling that the mail agency’s recent financial woes were caused by a flawed business model and not the recent recession.
The Postal Service in July requested the right to raise postage rates on first-class mail, periodicals and other services beyond the rate of inflation. A 2006 law allows USPS to file an exigent — urgently necessary — case to raise prices beyond the rate of inflation if it can prove that “exceptional or extraordinary circumstances” warranted the increase.
Though the recession and recent mail volume declines qualify as “exceptional or extraordinary circumstances” that could justify a rate increase, the Postal Service’s long-term structural problems were causing recent budget shortfalls, the Postal Regulatory Commission said in the first ruling of its kind.
The Postal Service could however file another exigent rate case using different arguments, regulators said.
Continues at: Federal Eye – Postal rate hike request denied.
