White Paper Urges PRC Reform

In a paper released May 22, three individuals experienced in the regulatory environment urged reforms be undertaken to revitalize the Postal Regulatory Commission.
Authored by Tom Davis, who served in Congress from 1995 through 2008 and was chairman of the House Oversight and Government Reform Committee, David Williams, formerly USPS Inspector General and a Postal Service governor, and Michael Kubayanda, the current chair of the PRC, A Next-Generation, Proactive Postal Regulatory System focused on the “capacity gap” between the current resources supporting the PRC’s activities and the level that should be provided if the commission is to better fulfill its obligations and become more “proactive” in the future.

The authors start by describing the current situation and the criticisms the PRC is receiving:

“Recently, there have been concerns from a few quarters about the postal regulatory system. The dissatisfaction presents challenges as well as opportunities for improvement. The Postmaster General, for his part, wondered aloud whether the Postal Regulatory Commission is necessary. The comment may have been made in jest and to prod the Commission to act expeditiously, although he followed it up with scathing criticism of regulatory oversight during a Congressional hearing. The comments reflect the reality that Postal Service and stakeholder petitions must be considered by the Commission prior to implementation, an unwelcome interval for executives with private-sector experience in less regulated industries.

“The comments did call for a reminder that, in 1970, Congress coupled the creation of a corporate-like Postal Service with a public, sectoral regulator. Congress envisioned this regulated-utility structure as an alternative to the former model of legislative control over day-to-day postal affairs. Postal management enjoys greater latitude to manage the business than their pre-1970 counterparts, but at the same time, Congress has prioritized transparency and accountability for America’s postal operator. A dedicated expert regulator provides transparency and accountability with greater speed and certainty than the former oversight system.

“More frequently, and certainly not in jest, other stakeholders and observers have suggested that the Commission be ‘proactive’ in addressing economic and operational challenges created by changes in the postal system. This sentiment is worth considering as the system experiences a continued decline in mail volume, high inflation affecting the broader economy, aggressive redesign of the processing and delivery networks, and concerns about service performance.”

A gap

The writers explained their contention that the PRC lacks sufficient resources to oversee the USPS:

“There is a large overall gap in financial, human resource, and IT capacity between the Postal Service and the Commission. This gap contributes to limitations in the structure for overseeing the Postal Service, including a misalignment between information management capacity, and responsibility (or incentives) for providing transparency and data analysis among the federal postal agencies. The Postal Service is a large and sophisticated information user that must rely on data to run its internal operations as well as interactions with employees, customers, suppliers, and third-party intermediaries and mailing experts who help customers access the postal system. Yet it has little inherent incentive to make raw, unedited data easily available in usable formats, or to produce under-standable and cogent analyses on a significant scale for stakeholders, oversight bodies, and the general public. The Commission’s mission is to provide transparency and accountability of the Postal Service (and it has, on its own initiative, developed vehicles for doing so as well as requiring the Postal Service to publish information), but it has historically lacked the capacity to provide information transparency and analytics on a large scale.

“We see this misalignment of capacity and responsibility for infor-mation transparency in reporting on service performance, such as the new dashboard required by law. …

“Few facts better illustrate the overall capacity gap than the contrast of an 82-person Commission team working to oversee the over-600,000-employee, $80 billion Postal Service….

“Another example of insufficient infrastructure relates to the format and organization of postal data received by the Commission. While the Commission has collected information about the Postal Service going back to 1971 (and beyond), it resides in a voluminous body of PDF and Excel files scattered about the Commission website. It is difficult both for internal analysts and outside re-searchers to search this information. …

“Throughout the postal community, including at the Commission, there is renewed concern about the impact of massive, proposed changes to the network, which have the potential to affect services. The worry, however, needs to be paired with the information-gathering and analysis tools needed to address these operational changes in a meaningful manner. Without such tools, the skills and vision of the talented but stretched staff are underutilized, largely limited to technical review of cost coverages, compliance with rate caps and floors, and highly constrained re-active advice on service changes. Proactive analysis of service and efficiency issues, and creative methods of allowing the public to access regulatory data to support the mission of providing transparency and accountability, are limited. …”


The authors provided a plan to address these gaps:

“1) Phase One: Foundation of Information Infrastructure and Personnel. … This foundational phase is underway at the Commission and is starting to ramp up, though more slowly than appropriate … .
“2) Phase Two: Make Information More Accessible to Stakeholders and the Public. …
“3) Phase Three: Collaborative Regulatory Platform(s) …
“Observers might describe a Commission using modern infrastructure and systems in this manner as accelerating the continued evolution from the pre-2006 Postal Rate Commission, a regulator centered on all-consuming cost-of-service rate cases that took place every three years and could last several months. The post-2006 Postal Regulatory Commission presides over far more frequent, shorter rate proceedings and has the critical statutory authority to redesign price regulation. …
“The next-generation Commission should be better able to meet expectations in multiple ways:

  • Greater speed and agility, a common concern of the Postal Service and stakeholders. …
  • Better user experience and user interfaces, including the new website and new dockets system with enhanced searchability …
  • Collaborative, data-driven transparency as a supplement …
  • Better informed postal policy, both inside and outside of the Commission. …

The commission’s annual budget is a mere fraction of a percent of the Postal Service’s, so whatever could be done to improve that ratio, and to equip a modernized PRC with what it needs to execute its mission, would be welcomed in deed by ratepayers, though maybe not by the USPS.

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