YOU ARE HERE: LAT HomeCollectionsBusiness

Going good postal

With the Postal Service planning to end Saturday mail, it's time for reform. It should be in charge of organizing universal access to high-speed Internet. And it could stand to be more like Starbucks.

February 06, 2013|David Lazarus
  • Postmaster General Patrick Donahoe announces plans to end Saturday mail delivery amid mounting losses.
Postmaster General Patrick Donahoe announces plans to end Saturday mail… (Win McNamee, Getty Images )

The U.S. Postal Service, in its latest bid to save a few billion bucks, plans to stop delivering mail on Saturdays.

It's not enough.

The ugly truth is that the Postal Service's commitment to universal mail service is no longer financially viable in the age of email, text messages, Facebook and Twitter. As currently configured, it will never again be able to meet its legal obligation to pay its own way.

To survive, the Postal Service will need to reinvent itself for the digital age. I have a few ideas on how to do that, which I'll get back to in a moment.

First, let's look briefly at how we got into this mess.

A big part of the problem is a 2006 law requiring the Postal Service to pay about $5.5 billion a year into a health-benefit fund for retirees. No other government agency faces such a requirement.

Then again, the Postal Service isn't like any other government agency. Many people might not know it, but the Postal Service isn't supported by tax dollars. It has to cover its own nut, yet is unable to do anything without Congress' say-so.

Until now, the agency was able to scrape by because it was allowed by federal law to borrow up to $3 billion a year from the Treasury Department. But its debt couldn't top $15 billion, and the Postal Service maxed out its credit card last year.

That caused it to default for the first time on its payments into the retiree fund and caused the agency to start racking up losses of nearly $36 million a day. The Postal Service's net loss for last year hit a staggering $15.6 billion.

By 2016, if things continue as they're going, the service estimates its annual losses will reach about $21 billion.

Even did better than that.

So here we are. On Wednesday, Postmaster General Patrick Donahoe said that Saturday delivery of letters would stop in August, though weekend delivery of packages will continue. This would save about $2 billion a year.

Meanwhile, the Postal Service will continue a massive restructuring that aims to cut its workforce by 193,000, or 28%, and consolidate more than 200 mail processing locations.


"The Postal Service has a responsibility to take the steps necessary to return to long-term financial stability and ensure the continued affordability of the U.S. mail," he said.

I don't care how many packages stream through post offices. It'll never be enough to cover the huge expense of meeting a federal obligation to deliver mail to every home in the country.

Here's the bottom line: The total volume of first-class mail plunged to 73.5 billion pieces of mail in 2011 from about 102 billion in 2002. That's a 28% decrease.

Video killed the radio star. The Internet is killing letters.

Privatizing mail delivery isn't realistic. I've spoken with both FedEx and UPS. They say they're open to dropping off people's letters and catalogs and stuff, but they don't want the responsibility of having to deliver everywhere.

So what's the solution? In an earlier column I floated the idea of forgoing mail delivery to some rural areas, restoring the old-fashioned notion of people coming to the post office for their deliveries.

Here's another idea: Capitalize on the Postal Service's commitment to communication and have it spearhead efforts for universal access to high-speed Internet service. The Federal Communications Commission already has declared this a national priority, so let's put the Postal Service in the driver's seat.

America's broadband infrastructure now relies primarily on the whims of private telecom companies such as AT&T and Verizon. They decide the reach of their networks and how much people have to pay to go online.

As a result, the United States ranks 12th worldwide in broadband adoption and ninth in broadband speed, according to a recent report from the tech company Akamai. Who's No. 1 in both categories? South Korea.

It's no secret how the Koreans do it. On the one hand, the nation's dense population makes it more economically feasible for companies to roll out broadband services. But the government also keeps a firm regulatory hand on the tiller.

Korean telecom companies may be required to extend their networks to certain communities. Competition is also promoted by requiring bigger telecom providers to make their networks available to smaller rivals.

So how about the Postal Service engineering a nationwide broadband network? Think of it as the public option for high-speed Internet access.

The Postal Service could build and run broadband lines reaching communities now bypassed by the big telecom firms. Phone and cable companies would be required to extend their high-speed service to these outlying areas using the agency's network — and paying the Postal Service for use of its system.

The agency also could run lines into cities and lease them to smaller rivals looking to compete with the bigger players. In an emergency, its lines also would form a backbone that would keep government offices, police departments, hospitals and schools online.

Meanwhile, let's overhaul our antiquated post offices.

Follow the Starbucks example. Convert them into coffee shops that allow people to go online whenever they please. Sure, you could still mail a package or buy stamps. But you could also get a decent cup of government-brewed java and kick back with your tablet or laptop.

In the 21st century, "going postal" shouldn't be pejorative. It should be cool.

It's not such a farfetched idea.

David Lazarus' column runs Tuesdays and Fridays (and occasionally in between). He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to

Los Angeles Times Articles