[PLUG] Spam law update

Dylan Reinhardt plug at dylanreinhardt.com
Mon Oct 21 18:05:30 UTC 2002


>Less volume makes the system less efficient, and, in turn, cost more.

Perhaps.  Or the inefficiency might come from the other business ventures 
they're plodding in to.  USPS, a *federal agency*, is one of the largest 
advertisers in the US.  Why is it necessary to advertise a service that you 
hold a legally granted monopoly for?  Because they are actively branching 
out into other domains, and that is simply not what they are good at, nor 
what they have been created to do.


>>   And that junk mail is subsidized *by* us, it's not a subsidy *to* us.
>
>How do you figure? The USPS doesn't get one penny of taxes. It's supported 
>entirely by postage fees.

Yes, the USPS is funded through our postage.  Bulk rates are significantly 
cheaper than other kinds of delivery.  There may be *some* efficiency to 
bulk mail, in that it sorts faster or is pre-sorted.  But the real expense, 
delivery, presents few economies of scale.  Every time we pay postage, 
we're paying not only for the delivery of *our* mail but for the delivery 
of *junk* mail.


>The only monopoly the USPS "enjoys" is sending first class mail. UPS, 
>FedEx, Airborne, all of them, are able to move anything else. Even then, 
>you can send correspondence through FedEx, they even call it a letter.

That little, insignificant monopoly is a $60+ billion business.

>You want FedEx et al to pick up at your doorstep daily?

Why not?  Seems like they're here daily anyway.   :-)

More to the point, who says that a competitor would try to do exactly the 
same thing?  The value of competitors is that they will try *different* 
things.   Seems to me that one of the big cost factors in the USPS model is 
that they are burdened with the expectation of daily home visits to every 
address in the country.  Talk about inefficiency!  Eliminate the bulk mail 
and the daily at-home pick-up and you've got a far cheaper model to work 
with.

Would it really be such a bad thing if first class delivery happened only 
three times a week or if you had to put your mail in the box at the corner 
if you needed same-day pickup?  There's *lots* of room for innovation, but 
the USPS won't be able to make it fly... only a private competitor will.


> From what I understand, the big package movers don't want the letter 
> business.

They don't want the "replicate the USPS business model" business.  If they 
were allowed to deliver first class mail, they'd find a better way of doing 
it.  There are tens of billions at stake, of course they want a piece of 
that business.  They just don't want to play be the same rules as the post 
office and I don't blame them... the USPS doesn't want to play by those 
rules either.  Problem is, they're stuck with them.

The problem here is not that all government agencies or monopolies are evil 
or inefficient.  It's that when you ask customers to declare their 
requirements up front, they usually over-specify... when you offer a range 
of services at varying prices, *then* they show what they'll really pay for.

The USPS is in much the same problem as the Apple Newton (trying 
desperately to make this a little on topic).  When Apple did their 
research, what they heard was that handwriting recognition would have to be 
a *key* component of any PDA device.  And they did it, and nobody bought 
it.  What Palm proved was that focus groups are often misleading... making 
a product that worked more reliably and cheaply by *not* giving customers 
handwriting recognition proved to be a much more successful proposition.

We constantly tell the USPS that daily home visits are at the very heart of 
our most basic expectations.  We endow that expectation with the force of a 
legal mandate. But I suspect that if daily visits were put side-by-side 
with a service offered a different model, we would see what people are 
actually willing to pay for pretty quickly.

Dylan

(if you'd like to continue this, I'd be happy to move over to plug-talk)





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