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

would be most conducive to growth of Generation II traffic (and hence USPS
mail volume).
* Potential Contribution to USPS Finances.- While Mailgram apparently
provides both a substantial avoidance of conventional USPS mailstream
costs and a significant contribution to covering USPS fixed costs, it is not
clear whether E-COM would do likewise at current rates and in its present
configuration. All parties, including USPS, agree that the original E-COM
cost estimates prepared in 1978 for the Postal Rate Commission are now
outdated. A comprehensive cost review of E-COM is needed if its contribu
tion to USPS finances is to be understood.
SImpact on USPS Labor Force. USPS labor force requirements are sensi
tive to mail volume. Any significant decline in mail volume for whatever
reasons (e.g., diversion to EMS and EFT, competition from nonelectronic
alternative delivery services, reduced demand due to general economic reces
sion) would translate into labor force reductions beyond those that may
be needed as a result of higher worker productivity.
USPS participation in Generation II EMS would have two effects on
USPS labor requirements. A small number of new jobs would be created
to carry out EMS related activities, and a considerably larger number of
jobs would be required in traditional USPS activities to process and deliver
the resulting hardcopy. Thus, USPS participation could offset, or at least
defer, some of the reductions in the existing labor force that might other
wise be necessary. The need for sizable reductions from the present level
of employees is not likely to be felt until the late 1980's or early 1990's.
* Size and Nature of the E COM Market. OTA concluded that prior
estimates of the Generation II market have probably been high, and that
prudent planning should be based on a mature market (20 years hence) in
the range of 7 billion to 17 billion messages annually, rather than 25 billion
as previously estimated by RCA (for comparison, conventional mail in 1981
totaled 110 billion pieces). Even the lower estimate depends on mailer ac
ceptance and successful institutional marketing strategies. Several modifica
tions to E COM have been proposed that deserve consideration, such as
1 day guaranteed delivery rather than 2 day, flexible letter formats, and
the use of telecommunication carrier and mailer logos to personalize the
E COM output and provide incentives for aggressive marketing. A full
review of the E-COM market should include governmental as well as private
sector mailing needs.
SImpact on Competition. USPS believes its participation in E-COM is au
thorized by the Postal Reorganization Act mandate to use new facilities
and equipment to improve the convenience, efficiency, and cost effectiveness
of mail service. However, various telecommunication and computer firms
view E-COM as: 1) the entry of a Federal agency into competition with pri
vate industry; 2) possibly subject to the Communications Act as well as
the Postal Act; and 3) raising questions about the fairness and legality of
a USPS role in EMS in general. The applicability of the Private Express
Statutes to delivery of Generation II EMS hardcopy output has also been
challenged.
*Regulatory Jurisdiction. The E COM case has surfaced disagreements over
the division and extent of regulatory jurisdiction by the Postal Rate Com-
mission and Federal Communications Commission. As a result, USPS
brought suit against both commissions and the Department of Justice
brought suit against USPS all on jurisdictional grounds, not on the merits
or faults of E COM. Some private firms believe this demonstrates the dif

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 September 3, 2014.