US Postal Service/The last monopoly. Despite the growth of electronic mail, most postal experts agree that households will still receive print mail at the turn of the century.But will it be brought to the door? And who will bring it? Mail in the 21st century

I am compelled to regard the Post-office, next to Christianity, as the right arm of our modern civilization. -- Edward Everett, ``Mount Vernon Papers'' For my part, I could easily do without the post-office. I think that there are very few important communications made through it. -- Henry David Thoreau, ``Walden'' Part 3 Railroads, oil companies, the telephone company -- one by one the great American monopolies have fallen. Is the United States Postal Service next on the list?

``I think the handwriting is on the wall,'' says A. Lee Fritschler, a Brookings Institution scholar and former Postal Rate Commission chairman. ``It's the last national monopoly.''

Already, much of its monopoly status has been eroded. Private package-delivery companies like United Parcel Service have spirited away much of the business once handled by parcel post. Private couriers using vans, motorbikes, and bicycles zip about city streets delivering time-sensitive mail. Federal Express and other companies, offering overnight nationwide and international mail services, compete directly with the Postal Service's Express Mail.

But the so-called ``private express statutes'' -- the body of law that makes it illegal for anyone except postal officials to deliver most kinds of addressed mail or to use residential mailboxes for nonpostal purposes -- are still the backbone of the USPS. And first-class mail, providing 60 percent of postal revenues, is still the Postal Service's big moneymaker.

Yet most discussions with members of the postal community about the future of the post office finally turn to one overriding issue: Can it, and should it, retain its monopoly?

Even the Board of Governors is divided on the issue. While most favor continuing the monopoly, governor John L. Ryan told a congressional oversight hearing July 9 that ``I am in favor of the repeal of the private express statutes.''

Given the stakes -- an ever-expanding $28 billion business in mail delivery -- there are plenty of private companies hungry to see the monopoly eroded still further:

Newspapers, struggling with inconsistent delivery schedules, would be happy to see better means of private distribution.

Utility companies could save millions by equipping meter readers with mini-computers that would print out the customer's bill on the doorstep -- if only they were allowed to stick the bill in the mailbox.

Private mail-sorting companies, sometimes proving themselves more efficient than the USPS in presorting mail for large commercial clients, stand ready to take up other kinds of sorting.

``The private sector in the information age realizes they've got a bonanza in there,'' says Moe Biller, president of the American Postal Workers Union (APWU), whose organization is opposed to any changes in the private express statutes.

``The most serious threat in the next 10 years that faces the Postal Service,'' says Washington consultant Michael F. Cavanagh, ``is the fact that the American people, perhaps the rate increase after the next one, are going to . . . recognize that these costs are out of control and demand that the private express statutes be repealed.''

Similar views can be heard at postal headquarters.

``If our costs do remain out of control, I think the people are going to ask [Congress] to repeal the private express statutes,'' says postal governor Peter E. Voss. ``That's the biggest danger that we have.''

The ``danger,'' many observers say, arises from the fact that the Postal Service, as a quasi-governmental agency stripped of monopoly protections, would be poorly designed to respond rapidly to a quickly changing competitive marketplace.

It cannot adjust its rates without a lengthy regulatory hearing.

It cannot set its own cost-saving policies -- for example, by deciding to close down some little-used rural post offices -- without goring some of Congress's most sacred cows.

It cannot hold over its unions the final bargaining ultimatum: the threat of being driven out of business.

It cannot, because of government pay scales, provide adequate pay incentives to managers who prove to be innovators and risk-takers.

It cannot even offer additional services -- such as copying machines in Post Office lobbies -- without raising howls of protest from nearby private firms.

So its survival, say many longtime students of postal issues, has come to depend on its monopoly status. That status has been jealously guarded by Congress, fearing that any move to deregulate the Postal Service would result in a ``creaming off'' of the most lucrative routes and poor or nonexistent service on the rest.

According to that argument, any number of companies would jump into such heavy-traffic routes as Chicago-to-Los Angeles, Ariz. Few, however, would be willing to deliver Aunt Minnie's Christmas card five miles up a mountain road in Vermont -- even if the stamp cost much more than 22 cents.

On one thing most observers agree: that the survival of the Postal Service depends on the continuation of the private express statutes -- and that their continuation, in turn, depends on how well management can control its costs.

So the current struggles to contain the postal deficit -- including the postmaster general's recent call for cuts of $282 million in the field and $111 million at headquarters, as well as his moves to cancel training programs, fill only essential vacancies, reduce advertising, reduce overhead, and impose pay cuts on top managers -- are more than just another chapter in a continuing battle against inflation.

They are widely seen as a test of whether the post office, as now structured, is in fact manageable.

Is there a way forward?

One of the much-discussed ideas involves ``contracting out'' various services -- allowing private companies, on something like a franchise basis, to take on certain operations (such as mail sorting or rural delivery) or to take over full responsibility for certain geographical areas. Vigorously propounded by John Crutcher, a member of the Postal Rate Commission, such a plan could ultimately reduce the Postal Service to a much leaner, more centralized organization that would select private companie s and insist they maintain acceptable standards.

Mr. Crutcher would like to see management ``start a wide range of experimentation with contracting out'' as soon as possible. The resulting competition, he says, would be ``the only real club that management has over the unions.''

Critics of the idea, however, see numerous flaws. ``What are you going to contract out -- the losses?'' asks APWU president Biller rhetorically. ``You've got to contract out the profits,'' he says -- implying that the Postal Service would surrender all its lucrative routes and be stuck with nothing but expensive money-losers.

Other observers point to congressional resistance. John T. Tierney, a Boston College political science professor and postal scholar, says that ``it's hard to imagine that Congress would not step in and stop any proposal for contracting out. The power of the combined interests would be sufficient to keep the current arrangement in effect for a long time.'' Among those interests: the National Association of Letter Carriers, whose powerful political-action committee ranked ninth in contributions to candida tes for federal office last year.

And still others point to the need for a national agency in time of war, and to the failure of some of the best private companies -- particularly in the restaurant and hotel business -- to maintain common standards among thousands of franchised operations.

Postal governor Voss, however, sees promise in some limited forms of contracting out work. Looking ahead to the future of the Postal Service, he says, ``I see it being a combination of a private-sector [and] quasi-government operation'' -- one that works so well that ``the American people will not be concerned about repealing the private express statutes, because we'll be doing our job.''

Asked the same question, Michael Cavanagh has a different view.

``I think that 25 years from now we are going to have a strong, national hard-copy delivery system,'' he says. But, he adds, ``I'm skeptical that that hard-copy delivery system will be the US Postal Service -- because I'm not entirely sure that it can adapt to change.''

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