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

Overview

Advances in communication and computer technology provide new ways to
convey messages and carry out financial transactions. These are called electronic
mail and message systems (EMS) and electronic funds transfer (EFT) systems.
Commercially offered EMS and EFT will increasingly compete with portions of
the traditional market of the U.S. Postal Service (USPS). While there is disagree
ment on how fast EMS and EFT may develop, it seems clear that two thirds or
more of the current mainstream could be handled electronically, and that the volume
of USPS delivered mail is likely to peak in the next 10 years. Any decline in the
volume of mail has significant implications for future postal rates, USPS service
levels, and labor requirements.
A key policy issue requiring congressional attention is how USPS will par
ticipate in the provision of EMS services, both in the near term and in the longer
term. If USPS does not attract and keep a sizable share of the so called Genera
tion II EMS market (electronic input and transmission with hardcopy output)
and conventional (especially first class) mail volume declines, USPS revenues will
probably go down, with the likelihood of an unfavorable impact on rates and/or
service levels. If USPS does develop a major role in the Generation II EMS market,
and if Generation II EMS costs are low enough, the effect on USPS rates and/or
service could be favorable.
Two of the major factors influencing USPS labor demand are total mail volume
and worker productivity. Regardless of whether USPS participates in Genera
tion II EMS, improving worker productivity and eventually declining conventional
mail volumes could lead to considerably lower labor demands in the future. If USPS
does participate successfully in Generation II EMS, this potential decline in labor
requirements could be deferred or partially offset.
USPS is already involved in EMS to a limited extent. For example, it delivers
some industry EMS hardcopy, provides a portion of Western Union's Mailgram
service, and in January 1982 introduced a domestic service called "electronic com
puter originated mail" or E COM. (In E COM, USPS accepts letters in electronic
form, converts them to hardcopy, including printing and enveloping, and delivers
them.) The role of USPS in EMS activities is already controversial, and it is like
ly to become more so if its role expands.
As a result of technological advances, historical (and legal and regulatory)
distinctions between conventional and electronic mail have blurred, along with
the application of the the congressional mandates embodied in the Postal and Com-
munications acts. Absent congressional action to provide a clear direction for USPS
and to clarify or redefine regulatory boundaries, the controversy over the USPS
role in EMS is likely to continue indefinitely and Generation II EMS opportunities
for USPS, private telecommunication carriers, and mailers may be lost.
OTA identified a number of areas related to USPS participation in EMS that
warrant congressional consideration:
* Potential Contribution to USPS Mail Volume. A USPS role in Genera
tion II EMS has the potential to provide a volume "cushion" to partially
offset reductions in conventional mail. Since private firms are neither will
ing nor able to duplicate the nationwide physical delivery infrastructure
of USPS, any large scale Generation II EMS service depends on the par
ticipation of USPS. There is, however, little consensus on what USPS role

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 July 11, 2014.