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GameFly Scores In Longstanding DVD Mailing Complaint

timothy posted about a year ago | from the everything-competes-with-everything-else dept.

Government 147

An anonymous reader writes "GamePolitics reports that the Postal Regulatory Commission has ordered [PDF] the U.S. Postal Service to equalize the rates paid by mailers who send round trip DVDs, and concluding (sort of) a dispute that has been underway for more than four years. The new postage rates take effect on September 30th. Some mailers, prominantly Netflix, send their round-trip movie DVDs as 'letters,' but GameFly's gaming disks are sent in slightly bigger envelopes as 'flats' to avoid breakage, and so GameFly has paid a much higher postage rate. GameFly argued that this was unfair discriminatory treatment because USPS was providing special hand-sorting treatment for Netflix disks without charging Netflix for the extra handling. But now there's a new twist: the Postal Service wants to reclassify DVD mailing [PDF] as a competitive product, where the prices would not be limited by the rate of inflation, because it says that mailed DVDs compete with the internet, streaming services, and kiosks such as Redbox. The regulatory agency is accepting responses [PDF] from interested persons until September 11th to the Postal Service's latest comments on its request [PDF]."

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The 2002 Barrack Obama - Updated (-1, Offtopic)

Anonymous Coward | about a year ago | (#44766565)

The 2002 Barrack Obama - Updated

                                What I am opposed to is a dumb war. What I am opposed to is a rash war. What I am opposed to is the cynical attempt by Richard Perle and Paul Wolfowitz Samantha Power and Susan Rice and other armchair, weekend warriors in this administration to shove their own ideological agendas down our throats, irrespective of the costs in lives lost and in hardships borne.

                                What I am opposed to is the attempt by political hacks like Karl Rove David Axelrod to distract us from a rise in the uninsured, a rise in the poverty rate, a drop in the median income - to distract us from corporate scandals and a stock market that has just gone through the worst month since the Great Depression. That's what I'm opposed to. A dumb war. A rash war. A war based not on reason but on passion, not on principle but on politics. Now let me be clear - I suffer no illusions about Saddam Hussein Bashar Assad. He is a brutal man. A ruthless man. A man who butchers his own people to secure his own power. He has repeatedly defied UN resolutions, thwarted UN inspection teams, developed chemical and biological weapons, and coveted nuclear capacity. He's a bad guy. The world, and the Iraqi Syrian people, would be better off without him.
                                But I also know that Saddam Assad poses no imminent and direct threat to the United States or to his neighbors, that the Iraqi Syrian economy is in shambles, that the Iraqi Syrian military a fraction of its former strength, and that in concert with the international community he can be contained until, in the way of all petty dictators, he falls away into the dustbin of history.

Aaaaand... (3, Interesting)

Anonymous Coward | about a year ago | (#44766583)

And regular mail doesn't compete with Email at all right?

Re:Aaaaand... (1)

jellomizer (103300) | about a year ago | (#44767077)

Exactly,
The USPS is loosing out to the Internet, for all the small stuff that it is really good at shipping to us. Letters, DVDs, and small packages. USPS can ship rather well. However most of these things is stuff the internet can do for less, and much much faster.

So their last breath is to try to make it easier for companies who are shipping media to ship stuff. As to keep their revenues going.

So $0.46 for a million DVDs is better then $1.00 for 25,000 DVDs. If they can keep these DVD sharing companies going strong, they can keep going for longer.

Re:Aaaaand... (4, Interesting)

hedwards (940851) | about a year ago | (#44767283)

Not really, sure people are sending less mail, but mail isn't the only thing that the USPS delivers. I keep hearing people declare the USPS dead because of the internet, and the only reason they're having financial problems at all is because they were given a decade to fund their pensions 100%, which is more than what even responsible companies do.

What's more, the internet can't do things like have proper signature requirements, there's no guarantee of privacy like there is with things mailed within the US.

I know it's popular to badmouth the postal service, but seriously, how are physical things going to be transported without something filling that niche? And the USPS is pretty much the most cost effective way of doing that in the US.

Re:Aaaaand... (1)

kelemvor4 (1980226) | about a year ago | (#44767481)

Not really, sure people are sending less mail, but mail isn't the only thing that the USPS delivers. I keep hearing people declare the USPS dead because of the internet, and the only reason they're having financial problems at all is because they were given a decade to fund their pensions 100%, which is more than what even responsible companies do.

What's more, the internet can't do things like have proper signature requirements, there's no guarantee of privacy like there is with things mailed within the US.

I know it's popular to badmouth the postal service, but seriously, how are physical things going to be transported without something filling that niche? And the USPS is pretty much the most cost effective way of doing that in the US.

There are plenty of private carriers that deliver physical things. UPS, FedEX, DHL, others. Typically the private carriers do a better job. In my opinion that makes private service worth paying more for. I haven't used USPS to send things for years.

IMO, using USPS is as much of a gamble as going to vegas - just with lower stakes.

Re:Aaaaand... (2)

aardvarkjoe (156801) | about a year ago | (#44767589)

There are plenty of private carriers that deliver physical things. UPS, FedEX, DHL, others. Typically the private carriers do a better job. In my opinion that makes private service worth paying more for. I haven't used USPS to send things for years.

This seems to depend an awful lot on the local post office. In my area, sending packages via USPS is very good -- much more reliable and timely than UPS, and on par with FedEx, though much cheaper. On the other hand, I know people in other places where USPS is so bad that it's completely pointless to use it -- packages and letters are "lost" or destroyed more often than not.

The result is that if I have something being shipped to me, then I have the sender use USPS. If I'm shipping something myself, though, then unless I know that USPS is reliable for the receiver, I'll use another service.

Re:Aaaaand... (-1)

Anonymous Coward | about a year ago | (#44767359)

Hi, I'm an adult gamer past 12 and I'm a loser. I need to get up and get living and stop being said loser. And how can we talk about game fly when we have the worlds biggest Hypocrite John Kerry walking around and not in prison for the war crimes he admitted to in 1971? Not to mention BO, he is a liar of the biggest order, remember he's all for peace little school gamers out there.

Re:Aaaaand... (0)

Anonymous Coward | about a year ago | (#44767903)

And regular mail doesn't compete with Email at all right?

I have to call BS on this one. I only ever wrote paper letters when it was required by who I was sending them to (to cancel something for example). Although some of these can in fact be done online now most things involving legal matters must be physically mailed. The thing I am doing less of because of my use on email is making phone calls.

Re:Aaaaand... (1)

Zontar The Mindless (9002) | about a year ago | (#44767941)

I still send physical cards and letters to people from time to time.

In particular to my daughter, who lives on another continent. The least I can do to make up for not being with her full-time is to send her something of myself.

gamefly wins to lose (4, Insightful)

Dan667 (564390) | about a year ago | (#44766601)

sounds like in winning gamefly may have put the nail in their profit margin. Instead of adopting the Netflix mailer and accepting breakage as part of doing business everyone will now have to pay much much higher mailing. Ironically, this also will mean that dvd mailing services will probably start to die which hurts the USPS too.

Re:gamefly wins to lose (1)

WillgasM (1646719) | about a year ago | (#44766675)

Yep. I'm one of the few people I know that still uses Netflix for DVDs. I like the service, but it's already hard to justify the cost. If the price goes up, I imagine people will drop the DVD service en masse.

Re:gamefly wins to lose (0)

Anonymous Coward | about a year ago | (#44766751)

I like the service

I have found many of the the disks from Netflix (and previously Blockbuster) to be badly damaged. Between the scratches and mysterious gunk that I have to remove so it doesn't ruin my player the disks often won't play well. I've largely stopped ordering disks because of this.

Are you somehow not experiencing this?

Re:gamefly wins to lose (2)

Dan667 (564390) | about a year ago | (#44766777)

I just report a problem and send them back. I would only say 5% of disks have a problem and Netflix will immediately send a replacement so that has been good enough for me.

Re:gamefly wins to lose (1)

jandrese (485) | about a year ago | (#44767267)

I'm more like 2% of the disks won't play for me, although sometimes they are kind of dirty and I give them a quick wash with water and a soft cloth. I've had a couple that were outright cracked, but Netflix is really good about shipping replacements when you ask. It also depends on your player. Some players are better at handling marginal disks than others, thinks like DVD burners tend to be much more capable of dealing with iffy disks than cheapo standalone players.

Re:gamefly wins to lose (1)

WillgasM (1646719) | about a year ago | (#44766885)

I guess not. I've never gotten a broken disk. I've had one that was lost in the mail, but I'm pretty sure one of my neighbors grabbed it as it showed up on my door weeks later. I've had a couple that were fairly scratched, but nothing my BD player couldn't handle. My computer, however, usually doesn't recognize a DVD unless it's pristine, so I often have to wipe them down with a wet cloth and try several times before my PC will read them.

Re:gamefly wins to lose (1)

RoknrolZombie (2504888) | about a year ago | (#44767095)

Been getting around 5 disks from Netflix a month for a few years (sometimes more, sometimes less - their streaming service makes it so that the DVD service isn't as critical for me). During that time I've gotten 1 broken disk - had a crack from the edge almost to the center. I returned it, notified Netflix on their site, and was sent an extra disk from my queue in compensation while they rushed me a new copy of the broken disk.

There have been a few times when I've gotten a disk that was badly scratched...but only a couple, definitely well under the 1% mark.

As far as the "gunk"...yeah, I've gotten disks with jelly on them and other things, but again, not frequently. Maybe 1 out of 20 disks? Not terrible IMO considering the volume of disks that they're supposed to process every day.

Re:gamefly wins to lose (1)

suutar (1860506) | about a year ago | (#44766991)

indeed. The only reason I keep it is for the stuff that they don't have subtitled on streaming (or don't have on streaming at all), but more and more often, they have only half the discs in the series anyway. Pfui.

Re:gamefly wins to lose (1)

hedwards (940851) | about a year ago | (#44767333)

You mean drop Netflix in general, their online catalog is complete garbage. I literally spent an hour last weekend trying to find something to watch and wound up giving up because everything I wanted to watch wasn't available for streaming.

Sure it is cheap, but the selection online blows and if they increase the prices much more, you may as well take Redbox's offer of $8 a month for 4 DVD pickups and streaming.

Re:gamefly wins to lose (3, Insightful)

mog007 (677810) | about a year ago | (#44766683)

Breakage is not a big deal for Netflix because brand new movies are not that expensive to replace. Even if they have to pay retail prices, you're looking at 15-20 bucks. Brand new video games are easily more than quadruple that at 50-60.

Gamefly wouldn't be able to handle those losses.

Re:gamefly wins to lose (4, Insightful)

MozeeToby (1163751) | about a year ago | (#44766729)

They almost certainly almost never have to replace broken movies. Look at the shelves at the local brick and mortar rental store next time a big release comes out, see the hundred or so copies? 2 weeks later it's 50, 2 weeks after that it's 10. In a year there's only a handful. So Netflix has their stock of the new release which, even taking into account how long it used to take to get some new releases, is much larger than the stock they will need just a few weeks down the road. Breakage gets written off, so long as it doesn't outpace the drop in demand (which I suppose it will one movies are old enough, but that isn't the majority of the business) you never need to worry about it.

Re:gamefly wins to lose (4, Interesting)

OverlordQ (264228) | about a year ago | (#44766747)

> Look at the shelves at the local brick and mortar rental store next time a big release comes out, see the hundred or so copies? 2 weeks later it's 50, 2 weeks after that it's 10.

Having worked in a video rental store, you'd be surprised how much those DVDs actually cost from the distributor. And yes, it's more than what you'd pay if you went out to buy it.

Re:gamefly wins to lose (1)

CODiNE (27417) | about a year ago | (#44766971)

I haven't heard of this before, thanks for the info. They know you can't get the bulk you need anywhere else so they charge whatever they want for them?

Re:gamefly wins to lose (1)

suutar (1860506) | about a year ago | (#44766995)

They charge more for the ones that are licensed to be lent/rented (even if they don't bother to change the fbi warning).

Re:gamefly wins to lose (2)

lgw (121541) | about a year ago | (#44767315)

There is no license needed to rent DVDs. It's a persistent urban legend. At least in the US, anything but "phonorecordings" can be rented out with no particular license.

The old scam used to be that video tapes and early DVDs would sell for triple the "normal" price for the first 2-3 weeks. Since rental places would compete to offer popular titles as early as possible, they'd "volunteer" to get gouged.

Some rental places do get special licensing, even though they don't have to. I believe Netflix does licensing that lets them print their own DVDs in whatever quantity they need, plus the licensing games for streaming rights sometimes include making Netflix pay more for rentals as well.

Re:gamefly wins to lose (1)

suutar (1860506) | about a year ago | (#44767773)

Ah, good to know. I had thought (based on legend and the existence of disc versions specifically intended for rental) that there were licensing issues. Thanks for the clarification :)

Re:gamefly wins to lose (1)

CODiNE (27417) | about a year ago | (#44767923)

That was my thinking, right of first sale should permit whatever use the owner of the disc wants. But as with software titles the "purchase" is really more of a rental with an implied license that's never agreed upon by the buyer yet in full legal force.

I'm surprised DVD rental places haven't tried challenging this, or maybe they did and lost?

Re:gamefly wins to lose (0)

Anonymous Coward | about a year ago | (#44767101)

My guesses would be licensing for them to legally be able to rent videos, or perhaps they're tied to a distributor for old releases in order to get new releases in store on release day. Regardless, I remember seeing video stores costs around $80 for a VHS title when they were more like $15-$20 new in a regular store -- and that was even for older films.

Re:gamefly wins to lose (1)

cpt kangarooski (3773) | about a year ago | (#44767049)

Well, in the US, at least, it's perfectly legal to rent ordinary retail DVDs. There are good reasons to go with a distributor, such as early access to copies so that they can be on shelves and ready to go ASAP, but if you're not getting prices lower than if you just got discs retail, and worse if you're locked into a requirements contract which precludes you from shopping around, I don't know if its worth it.

In any event, it seems to be a mostly moot point now.

Re:gamefly wins to lose (5, Interesting)

Anonymous Coward | about a year ago | (#44767239)

As an ex video store owner I concure that yes when you're a little mom and pop shop you get reamed. But Netflix is like blockbuster. They buy in bulk and get much better rates than we do. In 1992 we were typically paying about $85 for a new release, and customers expected us to have multiple copies. Meanwhile, blockbuster was selling them to consumers at $45. Eventually we went to a model where we'd buy 1 from the distributer (so we'd have it on the release date), and then buy a couple more from blockbuster to backfill our inventory as soon as we could. Even still at $4.00 / day for a new release it takes a while to recover those costs. The averge interest didn't typically last more than a month, so even with all 3 coppies out at 4 / day (and that doesn't always happen) we'd make a max of $360, of which $175 is purchase costs. Now add into that equation the bad VCR that wrecks a tape, the overhead of running a brick and morter business, payroll, etc. We went out of business shortly after Blockbuster got big. We just couldn't compete.

Re:gamefly wins to lose (0)

Anonymous Coward | about a year ago | (#44767711)

You missed his point, and that is as time goes on you don't need such large stocks of each title. The demand drops significantly after a new movie is no longer the new thing. If 20% of DVDs end up busted over a year, so what? At least 60% of the stock has already been sold because the demand has moved elsewhere.

Re:gamefly wins to lose (2, Insightful)

Anonymous Coward | about a year ago | (#44766847)

1. Movies which come out to rental stores prior to general Sale copies cost a holy shitload. I'm talking several hundred bucks a copy.
2. This doesn't happen much any more, most companies are starting to release all at the same time.

But more important than anything else:
They are different products. Just because the physical disk shares the same physical dimensions does not mean the product has the same value. Gamefly is running a business where they can't accept as many busted disks as Netflix can, so they're trying to find a scapegoat to distract their investors from the fact their business model is starting to fail. They have the choice to either accept higher loss rates with more broken disks, or pay more for the shipping and send it in different packaging. I fail to see why the USPS should be involved at all in this.

Re:gamefly wins to lose (1)

AliasBackslash (2719011) | about a year ago | (#44766981)

USPS is involved because, if you read TFS, they were giving special handling treatment to Netflix DVDs during sorting for no extra charge while GameFly wasn't given such treatment and therefore had to pay for special packaging to avoid breakage.

Re:gamefly wins to lose (0)

Anonymous Coward | about a year ago | (#44767003)

sounds like in winning gamefly may have put the nail in their profit margin. Instead of adopting the Netflix mailer and accepting breakage as part of doing business everyone will now have to pay much much higher mailing. Ironically, this also will mean that dvd mailing services will probably start to die which hurts the USPS too.

That was part of the problem though, Netflix dvd's were receiving special handling by the USPS but not paying for it. GameFly DID NOT have that option.

Re:gamefly wins to lose (0)

Anonymous Coward | about a year ago | (#44767121)

sounds like in winning gamefly may have put the nail in their profit margin. Instead of adopting the Netflix mailer and accepting breakage as part of doing business everyone will now have to pay much much higher mailing. Ironically, this also will mean that dvd mailing services will probably start to die which hurts the USPS too.

The difference is that gamefly takes a much larger hit to breakage than netflix does. Dvd price us $15.00 on average. Games price us $50.00 on average. So the netflix mailing schema is not really an option.

Re:gamefly wins to lose (0)

Anonymous Coward | about a year ago | (#44767205)

Sounds about right for a quasi government organization. We should just allow UPS and FedEx access to mail boxes and let them cut a deal with netflix & gamefly.

Re:gamefly wins to lose (1)

hedwards (940851) | about a year ago | (#44767367)

Except that UPS and FedEx are usually more expensive than the USPS is and the breakage isn't necessarily going to be lower.

What's more, the USPS is an amazingly efficient organization over all. How do you think that the USPS keeps their prices from increasing as quickly as inflation? I'll give you a hint, they take automation and efficiency very seriously.

Then again, I'm guessing you hate all the other services that the US government provides, because being cheated by a corporation adds to the benefits of overpaying and generally being treated poorly.

Re:gamefly wins to lose (1)

hedwards (940851) | about a year ago | (#44767301)

They tried using a regular mailer like Netflix, but the breakages were substantially higher. What's more, Netflix was supposed to be paying for the special treatment as the envelopes wouldn't work with the automated machinery.

As a result of that, Gamefly started using better envelopes to avoid the substantial losses due to breakage in mail.

Had the USPS charged Gamefly the same as Netflix and provided the same level of service, this would never have gotten to this point.

Re:gamefly wins to lose (1)

Dan667 (564390) | about a year ago | (#44767605)

result for gamefly is still the same. Mortal wound.

that's silly. (1)

swschrad (312009) | about a year ago | (#44766651)

if you pack your stuff to survive the mail/UPS/FumblesRus, then it will be bulkier and should cost more.

another blow to common sense. can't they argue they have added value and get it on the back end?

Re:that's silly. (1)

Russ1642 (1087959) | about a year ago | (#44766813)

You can't even RTFS. They were treating Netflix discs with gentle loving care for nothing extra but were charging GameFly extra for packaging their stuff so it didn't break when the post office treated it like trash. They should not only have won their case within minutes but had every penny of over-payment returned.

Re:that's silly. (1)

jandrese (485) | about a year ago | (#44767293)

Didn't Netflix spend years working closely with the Post Office to refine their DVD mailing business down to an art? It's not like the Post Office volunteered to put all of that extra effort into it.

E5P!? (-1)

Anonymous Coward | about a year ago | (#44766657)

Ridiculous (2, Insightful)

Hatta (162192) | about a year ago | (#44766693)

The postage rates should be based on the size and weight of the package, the origin and destination, and nothing else.

Re:Ridiculous (1)

Russ1642 (1087959) | about a year ago | (#44766709)

I can't believe the post office fought this one. They should have given in immediately considering it was such a plainly apparent claim.

Re:Ridiculous (4, Insightful)

jd.schmidt (919212) | about a year ago | (#44766875)

Basically that is the problem, the prices do not reflect true delivery costs by government mandate. The USPS is mandated to provide certain types of services at a certain cost no matter what.

Effectively Netflix got low prices because they knew how to get their packages classified as protected mail. Also they really DID work very hard to make their packages as easy to sort and deliver as possible. They spent a lot of time working closely with the USPS to make a package that was easy for them to sort, they even went so far as to hire a bunch of USPS personnel to consult on how to do this.

One more point, CDâ(TM)s are super cheap, the costs are controlled by the publishers, so they can make or break Gamefly and Netflix.

Re:Ridiculous (1)

hedwards (940851) | about a year ago | (#44767375)

No, they didn't. Netflix envelopes have been hand sorted for most of their existence. I think they did eventualy change the format to go through the machines, but they weren't designed specially to reduce costs. The USPS just chose not to charge the cost of the hand sort.

Re:Ridiculous (0)

Anonymous Coward | about a year ago | (#44766945)

Regulating the methods a business may choose for pricing its services seems like a strange position for an anti-regulation person to take.

Re:Ridiculous (1)

Guppy06 (410832) | about a year ago | (#44767015)

"Nothing else" means "no special handling." Sorting equipment for letter-class mail expects paper, which unlike DVDs can be curved and bent with no ill results.

No paper requirement, no bending requirement (0)

Anonymous Coward | about a year ago | (#44767363)

Sorry, but no. There is no requirement for letter-class mail to be paper nor be bendable.
At least no requiment on the sender. The USPS may want it that way for THEIR OWN convenience.

Re:No paper requirement, no bending requirement (2)

Guppy06 (410832) | about a year ago | (#44767455)

Sorry, but no. There is no requirement for letter-class mail to be paper nor be bendable.

http://pe.usps.gov/text/dmm300/101.htm#1039555 [usps.gov]

Reclassify as a competitive product? (5, Funny)

SirGarlon (845873) | about a year ago | (#44766705)

So, the Postal Service says DVD mailing competes with Internet streaming and ... that means they want to charge *more*?

"Competitive." You keep using that word. I do not think it means what you think it means.

Re:Reclassify as a competitive product? (1)

Anonymous Coward | about a year ago | (#44766761)

Bandwidth of a postal truck loaded with DVDs is still more than what is available to most people... the latency is measured in days but the throughput is crazy high.

Re:Reclassify as a competitive product? (1)

alexander_686 (957440) | about a year ago | (#44766841)

Here are some hard numbers. It is for FedEx but I suspect that USPS numbers would be similar.

http://what-if.xkcd.com/31/ [xkcd.com]

Re:Reclassify as a competitive product? (1)

Em Adespoton (792954) | about a year ago | (#44766879)

Bandwidth of a postal truck loaded with DVDs is still more than what is available to most people... the latency is measured in days but the throughput is crazy high.

Yes, but how many games do you play in a week? How many movies do you watch in a week? It doesn't matter if the throughput is crazy high if the demand fits inside the bandwidth available for instant gratification. "You could rent 500 movies and play 60 games through us in 3 days, versus only 5 movies and 2 games online, so we need to charge more for the service" is not going to work.

And what does this do to non-returnable optical disk deliveries?

Seems to me that if businesses really want to keep going on this model, the solution is simple: switch from large breakable optical media to SD/microSD cards and rent customers the appropriate player if needed.

Re:Reclassify as a competitive product? (1)

hedwards (940851) | about a year ago | (#44767395)

For me, the time it takes to download a new game is not much less than the time it takes to ship a game from the next town over. What's more, while I'm waiting for the game to arrive, I'm not having to deal with the increased load on the network. What's more, I'm lucky enough not to have a cap, for those on a cap, the download size makes a difference.

I feel for those that have 1.5mbps connections around here as their only option. I'm lucky enough to have one that's nominally 5mbps, even though it doesn't feel like it.

Re:Reclassify as a competitive product? (1)

alexander_686 (957440) | about a year ago | (#44766803)

Reading the summary, but not the article, I got the impression it would be less. The USPS has a monopoly on letter delivery and can charge whatever price they want. In areas where they don’t have a monopoly – like next day mail – they have to charge a lower “competitive” price to match FedEx, et. al.

Re:Reclassify as a competitive product? (1)

RoknrolZombie (2504888) | about a year ago | (#44767185)

Reading the summary, but not the article, I got the impression it would be less. The USPS has a monopoly on letter delivery and can charge whatever price they want. In areas where they don’t have a monopoly – like next day mail – they have to charge a lower “competitive” price to match FedEx, et. al.

If this were even remotely true then the USPS going bankrupt a few years back is bullshit. Since they were in fact going bankrupt and since they had to get Congressional approval to raise their rates, I would say that calling them a "monopoly" is disingenuous at best. Their prices are fixed, their costs are not. They have an expectation to provide a service at a rate that is significantly lower than FedEx or UPS - this is what has been causing them so much grief in recent years. UPS and FedEx are making money hand over fist and still are able to come close to the price of USPS with far better service. If the USPS raises their rates, they lose even more money.

I'm no supporter of Government programs by and large, but the USPS is one of the most well designed Government programs in existence. If only we could have maintained that standard with literally ALL of the other Government programs, we wouldn't (as a country) be broke right now.

Re:Reclassify as a competitive product? (2)

alexander_686 (957440) | about a year ago | (#44767271)

Are you trying to say “Monopolies” are a synonym for “Bloodthirsty pirates who are only interested in booty?” because that is not what monopoly means. There are a lot of monopolies out there that lose money.

Case in point, USPS. In exchange for a monopoly they are heavily regulated. I am a free marketer and I think the USPS service does a decent job for the money. There are a lot of other cases out there like that.

Re:Reclassify as a competitive product? (1)

RoknrolZombie (2504888) | about a year ago | (#44767385)

Are you trying to say “Monopolies” are a synonym for “Bloodthirsty pirates who are only interested in booty?” because that is not what monopoly means. There are a lot of monopolies out there that lose money.

No, actually, I was correcting you where you were wrong. Namely when you said "The USPS has a monopoly on letter delivery" - which is demonstrably false. You can send your letters via FedEx and UPS if you like. Also "and can charge whatever price they want", which is also demonstrably false since the USPS has to petition Congress in order to raise rates. I could have corrected you on this: "In areas where they don’t have a monopoly – like next day mail – they have to charge a lower “competitive” price to match FedEx, et. al." but figured I didn't need to bother...stamps cost the same price, regardless of what city/state in the US you're in.

Now, if you're talking specifically about "special pricing" for major companies, I know that this has historically been the case. Sears and Monky Wards catalogs, for example, used to cost the USPS an absolute fortune in shipping due to mass and weight. IIRC there were "special prices" for them because they were driving the economy - essentially, Government blessed. I don't see how the Netflix (or GameSpy) models are relevant in regards to that, as the circumstances as well as the difficulties in shipping are vastly different...apples to oranges. Did Netflix get special pricing? I don't know, but IIRC the last time the USPS was in front of Congress asking for money they had stated that one of the only reasons they were even able to CONTINUE doing their work was because of the amount of money they were getting from DVD rental services. I could be wrong on some of these points though - memory is a funny thing...

Case in point, USPS. In exchange for a monopoly they are heavily regulated. I am a free marketer and I think the USPS service does a decent job for the money. There are a lot of other cases out there like that.

I'm not sure what point you're actually trying to make here, but if you read the last paragraph of my last post you'll see that I agree with you on this point.

Re:Reclassify as a competitive product? (1)

alexander_686 (957440) | about a year ago | (#44767537)

Namely when you said "The USPS has a monopoly on letter delivery" - which is demonstrably false. You can send your letters via FedEx and UPS if you like.

Let us look at this closer. What do you mean by “letter”.

FedEx and UPS offer “express mail” or package shipments, but I can’t find a non-urgent letter service – which is what the USPS has an explicit monopoly on. Court cases have been fought over this and you cannot directly compete with the post office on plain vanilla service – it must be differentiated in some way – such as being “express”.

As to the point that I was trying to make – you argued that the USPS can’t be a monopoly because it is losing money and well run. My point is that neither of those conditions defines what a monopoly is – is the ability to offer a exclusive product or service. (And how you define what category a service belongs to is a always evolving argument.)

Re:Reclassify as a competitive product? (0)

Anonymous Coward | about a year ago | (#44767857)

I am a free marketer and I think the USPS service does a decent job for the money

For rural deliveries, UPS and Fedex use USPS for the last leg because it's cheaper than sending a truck themselves.

Re:Reclassify as a competitive product? (1)

hedwards (940851) | about a year ago | (#44767407)

The reason for the USPS financial problems is that the congress mandated that the pensions be 100% funded within 10 years. The reason for that was to protect the competition that wasn't able to compete on price or service.

And they have a monopoly, it's just on the use of mailboxes. They're the only ones that can legally leave things in mailboxes, everybody else has to use their own box or leave it on the doorstep.

Re:Reclassify as a competitive product? (1)

alexander_686 (957440) | about a year ago | (#44767901)

Huh – that is an interesting point that I have not thought about.

Checks UPS financials, find pension obligations are overfunded. Checks FedEx financials, find them overfunded as well.

So maybe not.

I will admit 2 points. First, I suspect UPS an FedEx use define contributions (401(K)s) while the USPS uses define benefits (traditional pensions). Second the USPS uses good accounting for it’s pension liabilities which cannot be said for many – either private or public.

But I think the point still stands. Pension liabilities are real costs and should be accounted for. Better to account for it now rather than use fake accounting hide them.

Re:Reclassify as a competitive product? (1)

Guppy06 (410832) | about a year ago | (#44766947)

"Competitive." You keep using that word. I do not think it means what you think it means.

It means they can comply with the order without overcoming the financial/regulatory inertia involved in juggling funds earmarked for "market dominant" services. Otherwise the USPS will have to provide special services now with money they won't be able to touch for at least a year.

Re:Reclassify as a competitive product? (1)

youngatheart (1922394) | about a year ago | (#44766985)

From TFA:

by reducing the price for a two-ounce First-Class flat-shaped round-trip DVD mailer to the price of a one-ounce mailer First-Class letter-shaped round-trip DVD mailer

They see the DVD mailing as competing with the internet option, therefore giving them cause to support DVD mailing by discounting the price.

I'll tell you the truth and its up to you to live with it.

Re:Reclassify as a competitive product? (1)

suutar (1860506) | about a year ago | (#44767213)

Sounds like they deal with two categories of stuff: things for which there's a market (e.g. parcel delivery), with competition, and for which they're allowed to set their prices as "what the market will bear", and things for which they're the sole supplier (first class letters) but which have regulations limiting what they charge (and which may be subsidized by their other operations). Getting DVDs moved from 'first class letter' to something with competition may raise their pricing ceiling.

o man (1)

Laxori666 (748529) | about a year ago | (#44766867)

Why this need be regulated? Just pay people to send your packages. If they are charging too much then find someone who is doing it for cheaper. If nobody is doing it for cheaper, and it is possible to do it for cheaper, then someone will start doing it because there will be profit motive.

Re:o man (0)

Anonymous Coward | about a year ago | (#44766923)

Because a *government* agency is giving a *private* company preferential treatment. Surely someone who's as in love with the free market as you are should see why this is Bad.

Re:o man (1)

Laxori666 (748529) | about a year ago | (#44766967)

Aye, my point was to have this not be a government agency. Or at least make it legal for private companies to compete in this market.

Re:o man (0)

Anonymous Coward | about a year ago | (#44767147)

Private companies already can - they just can't use the mailbox that you set out for the USPS. If you want to start your own mail carrier, you are allowed. You just have to have a completely separate system.

There's nothing stopping UPS from delivering letters to your door, just not to your mailbox.

Re:o man (3, Interesting)

lgw (121541) | about a year ago | (#44767525)

No, the USPS has a government-enforced monopoly on non-urgent letter delivery, and they've gone to court to enforce it before. IIRC they've even sued random businesses for sending non-urgent mail by FedEx, because that violates their monopoly (this was a story from the early days of /.).

The law stops UPS from delivering letters to your door.

Re:o man (4, Insightful)

SirGarlon (845873) | about a year ago | (#44766935)

Tell that to Congress. They're the ones micro-managing the Postal Service and setting arbitrary rates. Those rates, BTW, are not sufficient to fund the Postal Service pension system at the level Congress demands, which is why the Postal Service is in crisis.

Re:o man (3, Informative)

serviscope_minor (664417) | about a year ago | (#44767217)

Those rates, BTW, are not sufficient to fund the Postal Service pension system at the level Congress demands

Quite. For those who missed it, the rates are entirely fine to find the pension scheme. Naturally government run stuff has to be bad (for some reason) so they mandated the most insane pension scheme ever (funding pensions for people quite a few years away from being born) just so the USPS would "fail". Even so, due to the strength of it the crisis is not terminal, which does go to show how good it was.

I'm assuming that congress is wrecking the USPS for the same reason Parliament is wrecking the Royal Mail, namely so they can prove their flawed ideology that all government run stuff must be bad and use that as an excuse to sell it off to some of their cronies.

Re:o man (1)

ImprovOmega (744717) | about a year ago | (#44767475)

I'm assuming that congress is wrecking the USPS for the same reason Parliament is wrecking the Royal Mail, namely so they can prove their flawed ideology that all government run stuff must be bad and use that as an excuse to sell it off to some of their cronies.

Except you can't sell off the USPS without a constitutional amendment or a revolution because, you know, supreme law of the land and all that.

Re:o man (2)

SirGarlon (845873) | about a year ago | (#44767541)

The Cato Institute (a conservative think tank, for those who don't recognize the name) disagrees with your assessment [cato.org] that the Constitution gives the Federal government a monopoly on postal service. If what you say were as simple as that, wouldn't FedEx have been shut down by the real Feds?

Re:o man (2)

nedlohs (1335013) | about a year ago | (#44767841)

Not at all.

The constitution empowers Congress "to establish Post Offices and post Roads" but it does not require them to do so.

If you think it does then you must also think these debates about Syria are silly, since the same section empowers Congress "to declare War" so they have to do so, right?

Re:o man (1)

Laxori666 (748529) | about a year ago | (#44767599)

No, far more practical than ideology. I suspect they are wrecking the USPS because they can make money that way. They can use the money supposedly being saved for the pension scheme today, or borrow more money using the pension scheme as collateral.

Well, not entirely.... (1)

King_TJ (85913) | about a year ago | (#44767811)

From a Huffington Post article on the subject last year:

"Much of the red ink in 2012 was due to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion."

So pension issues aside, the USPS was BILLIONS in debt in 2012 anyway. Potentially fixable? Sure ... but let's not pretend it was a well managed and profitable business until Congress came along with the crazy pension idea. That was just an attempt to drown it for good, which hasn't quite worked yet.

Re:o man (1)

lgw (121541) | about a year ago | (#44767551)

Yup, the Post Office really needs to be released from government control. The problem is: it has a monopoly, and so like a utility company needs some regulation. The monopoly is probably a reasonable trade-off for offering mail delivery to sparse rural areas, and the overall good for dependable mail delivery to everyone is certainly worth some subsidy, but something needs to be done to let the post office set whatever price it wants for stamps.

Would anyone be unhappy if the price of postage went up to the point that bulk spam mail stopped? I'd happily pay extra for each bill and Netflix DVD for that tradeoff!

Re:o man (1)

Laxori666 (748529) | about a year ago | (#44767609)

The only reason it has a monopoly is because it's illegal for anybody besides the USPS to deliver first class mail. Raise the legal restriction and you can bet that FedEx, UPS, DHL, etc., will rush in to fill the gap.

Re:o man (1)

lgw (121541) | about a year ago | (#44767667)

The only reason it has a monopoly is because it's illegal for anybody besides the USPS to deliver first class mail

That's the definition of "monopoly", not the reason for it. The reason for it is that rural mail costs more to deliver than urban mail, but we want the same postage rate for all first class mail. Without the monopoly, someone could offer cheaper urban-only service making the whole thing fall apart.

But I do think we could have the regulation without the monopoly.

Re:o man (1)

Laxori666 (748529) | about a year ago | (#44767909)

No, you can have a monopoly without it being illegal to have competitors. If you're the first person to produce a new kind of product then you have a monopoly on that product until someone else joins the market.

If the USPS made money before the ridiculous pension fund thing came into play, then a private company would also make money charging the same rate for all mail. Maybe they would do it that way. Or you'd have some companies doing urban-only, some doing rural, etc. Besides why is it such a big deal for rural mail to cost more, if it would get to that? it'd be something to factor in to the cost of living in a rural area.

lay down with dogs, get up with fleas (0)

Anonymous Coward | about a year ago | (#44767819)

The privately owned USPS deserve what ever ill comes from Congress. They put Lysander Spooner's competing service out of business by getting their friend's in Congress to make it illegal for any one else to deliver "regular mail". The USPS asked Congress to step into their business, and ruined other people's business as a result. What goes around, comes around.

Re:o man (1)

alexander_686 (957440) | about a year ago | (#44766937)

Because the US Constitution gives the USPS a monopoly over letter delivery (in exchange for universal service) so it does not matter if you could do it cheaper or better. Ergo no profit motive. (Unless you bypass the USPS by delivering the movies over the internet, hence the move to make it "competitive".) Hence the regulation.

Re:o man (1)

Laxori666 (748529) | about a year ago | (#44766977)

Aye, my point was to remove that government-enforced monopoly (the only kind of monopoly that ever lasts). Aren't monopolies supposed to be bad?

Re:o man (1)

AnotherAnonymousUser (972204) | about a year ago | (#44767073)

There's plenty of cases where a well-regulated monopoly performs better than independent competition, usually when there's a particular resource in question that needs to be exploited or perform at a consistent level, and plenty of circumstances arise where you'd rather that control not be a purely profit-driven organization.

Re:o man (1)

alexander_686 (957440) | about a year ago | (#44767075)

Look up “Natural Monopolies”. There are quite a few cases where monopolies can last forever. Or if not forever then for decades. I have strong free market tendencies but I do recognize that there are market failures and those need to be regulated.

I do think the Post Office makes a strong argument for a monopoly in exchange for universal service.

Re:o man (1)

Anonymous Coward | about a year ago | (#44767129)

Why this need be regulated? Just pay people to send your packages. If they are charging too much then find someone who is doing it for cheaper. If nobody is doing it for cheaper, and it is possible to do it for cheaper, then someone will start doing it because there will be profit motive.

This needs to be regulated to ensure universal service. If UPS had to deliver letters, it's unlikely that they would drive to every house every day. Many times the price of the stamp nowhere near covers the cost of shipping. Doesn't it boggle your mind that someone in Orlando can send a letter to remote northern Alaska for less than 50 cents?

The free market system doesn't work, unless you don't value universal access to mail delivery or near everyday service regardless of the volume of mail you receive.

How Long Before Postal Services Die Out? (2)

wrackspurt (3028771) | about a year ago | (#44766915)

Canada Post has seen drastic drops in volume. How much longer before federal governments just pull the plug and let postal services die and be replaced by private business. What reasons are there for federally funded postal services to be continued?

Re:How Long Before Postal Services Die Out? (1)

alexander_686 (957440) | about a year ago | (#44766975)

Universal Service.

I know that is important for rural USA. I would think it would be even more important for Canada which is even more rural. (Urban areas are a different ball game.)

Re:How Long Before Postal Services Die Out? (0)

Anonymous Coward | about a year ago | (#44767251)

I think that's what the GP is saying: Get rid of rural service and we can finally let those dumb country people either die out or get with the program and move closer to civilization, meaning all the cool, trendy people in urban areas won't have to live in fear of ever having to visit flyover country and all their stupid cows and horses and boring agriculture junk. Then the world would be so much more awesome, and there can't possibly be any negative long-term effects they didn't think of!*

*: THIS POST IS SARCASTIC.

Re:How Long Before Postal Services Die Out? (1)

Russ1642 (1087959) | about a year ago | (#44767111)

If they targeted parcel delivery properly they could stay afloat. How about offering services we want such as simply holding my packages at the post office and emailing me when they arrive so I can pick them up on my way home from work? Instead, they try to deliver to an empty house and then you can't pick up the package until late the following workday. It's ridiculous. They complain about a changing market affecting their business but they've done very little to try to keep up with the changes.

Competitive advantage (0)

Anonymous Coward | about a year ago | (#44766965)

Netflix develops a mailer that gives them an advantage, so instead of adopting a better model GameFly sues and then screws it up for everyone. I hope GameFly is bankrupt within a year.

Re:Competitive advantage (0)

Anonymous Coward | about a year ago | (#44767165)

Netflix develops a mailer that gives them an advantage, so instead of adopting a better model GameFly sues and then screws it up for everyone. I hope GameFly is bankrupt within a year.

Well duh.

That's what happens when governments (and government agencies like the Post Office) get big and powerful enough to pick winners and losers.

Remember what happened here the next time you want the government "to solve a problem". Or even better, the next time you're in a voting booth.

What happened to common carrier? (0)

Anonymous Coward | about a year ago | (#44767153)

It should be based on weight and distance, what business is it of the USPS what is in there?
As long as it is not hazardous.
Will they charge more for new games, than for movies that are out of copyright?
Will they enforce copyrights or Pr0n restrictions?

Re:What happened to common carrier? (0)

Anonymous Coward | about a year ago | (#44767463)

It should be based on weight and distance, what business is it of the USPS what is in there?
As long as it is not hazardous.
Will they charge more for new games, than for movies that are out of copyright?
Will they enforce copyrights or Pr0n restrictions?

Are they going to open the envelopes?
Is this the beginning of a wet dream for the NSA?

A can of worms? (0)

Anonymous Coward | about a year ago | (#44767439)

...because it says that mailed DVDs compete with the internet, streaming services, and kiosks such as Redbox.

If the DVD isn't available (legally) at a streaming service, a (legal) mailed DVD isn't really competing with the internet, is it?

How are the USPS planning on checking whether all those mailed DVDs are available for streaming or not?

Who cares (1)

TheSkepticalOptimist (898384) | about a year ago | (#44767771)

I get my movies through a tube. That's right, a Senator Ted Stevens reference, Altavista that biatch. It's about as current and relevant as a DVD mailer company complaining about the cost of postage stamps for hand delivered snail mail.

they never change (much) (0)

Anonymous Coward | about a year ago | (#44767925)

Yes! Let's jump on board soon to be obsolete technology!

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