Implications of Electronic Mail and Message Systems for the U.S. Postal Service

44 . Implications of Electronic Mail and Message Systems for the U.S. Postal Service

Table 9.-Sensitivity Analyses
USPS-delivered mail volume would be reduced compared to
the baseline projections if:
* Growth in underlying mainstream were 1 percent-
Unlikely, except in event of economic depression.
" EFT growth rate doubled from 20 percent (in 1985) to 40
percent-Unlikely.
* Generation Ill EMS were accelerated by 3 years from
1987 (for 5 percent penetration) to 1984-Unlikely.
* Significant reduction in USPS delivery of private sector
Generation II hardcopy output occurred-Unlike/y
under current USPS interpretation of Private Express
Statutes (PES); however, FCC and some private firms
believe that hardcopy output falls within the jurisdic-
tion of the Communications Act, not the PES.
* Significant diversion of second-/third-class mail to
alternative delivery occurred-Possible; some diver-
sion known to be occurring, but second-class has re-
mained essentially constant over last 10 years and
third-class has increased by 52 percent. USPS rate in-
creases may accelerate use of alternative delivery.
USPS-delivered mail volume would be increased compared
to the baseline if:
* Growth in underlying mainstream were 4 percent-
Unlikely over the long-term, although short-term
growth spurts of 4 percent are possible.
* EFT growth rate were halved from 20 percent (in 1985)
to 10 percent-Possible due to marketing, competitive,
and regulatory uncertainties.
* Generation Ill EMS were delayed by 3 years from 1987
(for 5 percent penetration) to 1990-Possible due to
marketing and competitive uncertainties; however,
sales of home computers, computer games, and small
business computers look very strong.
* Stimulation of additional Generation II EMS volume
occurred-Possible given that other electronic tech-
nologies (e.g., telephone, computer conferencing) have
generated additional message volume; however,
whether experience with all-electronic technologies
applies to hybrid forms (such as Generation II EMS) is
unknown.
* Growth in underlying mainstream were 3 percent-
Quite possible given the historical growth trends dur-
ing periods of relative economic prosperity.
SOURCE Office of Technology Assessment
results of the market penetration analysis for
high but plausible Generation II EMS growth,
assuming 100 percent stimulation of EMS
traffic. This means that for each message
diverted from conventional mail to Generation
II EMS, a new Generation II EMS message
is generated,.
Under this assumption, USPS delivered
mail would peak at about 127 billion pieces in
1990 and decline to a little over 100 billion
pieces in 2000. USPS delivered mail volume
would exceed present levels through about
1998, although the conventional mail volume

would drop below the present level by 1990.
Generation II EMS volume would grow much
faster and sooner, and would outpace Genera
tion III EMS at least through about 1995. By
comparison, in both the base case and the
3 percent underlying growth case, Generation
III EMS would overtake Generation II EMS
as early as 1990. Overall, a 100 percent stim
ulation of Generation II EMS traffic would
result in a higher projected USPS delivered
mail volume than the base case, but not as
high as the 3 percent underlying growth case.
There is, however, a question as to whether
the 100 percent EMS stimulation assumption
is realistic.
Generation III EMS Three Years Sooner.
Generation III EMS involves end to end elec
tronic service; that is, electronic delivery of
mail as well as electronic sending and trans
mission. Electronic delivery requires that both
senders and receivers of mail have the neces
sary terminal equipment. In developing the
market penetration model, OTA made a num
ber of assumptions about the growth of Gen
eration III. For example, OTA projected that
in 1987 home computer terminals (or their
equivalent) would achieve a 5 percent share of
mail segments involving the household as
either sender or receiver. While this was
OTA's best estimate based on economic, mar
ket, and technological conditions at the time
of the study, the timing and rate of home com
puter development is a subject of considerable
debate.
In order to test the sensitivity of the base
line market penetration results to Generation
III, the model was run with all Generation III
timing estimates advanced by 3 years. That
is, 3 years were subtracted from all estimates
of the year of 5 percent penetration for a par
ticular Generation III technology and market
segment. For example, the time to 5 percent
penetration for home computer terminal pen
etration of household to household corre
spondence was changed from 1987 to 1984.
Under the base case, Generation II volume
would be greater than Generation III volume
through about 1990. With 100 percent EMS

United States. Congress. Office of Technology Assessment. Implications of Electronic Mail and Message Systems for the U.S. Postal Service. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc39480/. Accessed August 27, 2014.