Responses to inquiry reveal growing opposition to Valassis NSA
More than 30 newspaper companies, representing thousands of daily and weekly newspapers, provided detailed responses to the Postal Regulatory Commission’s notice of inquiry on the proposed special postage-rate deal (or negotiated service agreement) for Valassis Direct Mail.
Newspapers’ responses yielded local market data that supported NAA’s comments on the notice. NAA’s comments also included results of an NAA-member survey on the proposed agreement’s potential impact on revenues of both newspapers and the U.S. Postal Service. In addition, the National Newspaper Association filed survey results expressing views from small-market newspapers, which addressed one of the commission’s questions regarding the NSA’s impact on small businesses.
While media reports have focused on the opposing viewpoints of the newspaper industry and the U.S. Postal Service and Valassis, the commission received several responses from other interested parties. For example, Geomentum noted that the NSA would place it at “an unreasonable and inequitable competitive disadvantage” that could potentially harm the marketplace for advertising/media services. The advertising agency added that the NSA provides pricing incentives to a select group of retail advertisers, while restricting access to other advertisers for “no other reason than they are not within an ‘approved’ category.” This will “create an unfavorable opinion of the USPS among advertisers who are excluded due to inconsistent pricing policies.”
Latin-Pak, the parent corporation of several direct-marketing companies that specialize in advertising to ethnic and special interest groups, also filed a response. Because Valassis would be the only company able to qualify for the postage discounts, Latin-Pak said, it would “give them an insurmountable advantage in competing for business in the advertising industry.” Latin-Pak also argued that this advantage would most likely reduce the Postal Service’s total net revenue, because Latin-Pak would find it necessary to move its direct-mail campaigns out of the postal system to cheaper delivery alternatives in order to offer advertisers the same discounts as Valassis would give under the special deal.
Once again, the PRC’s own public representative weighed in on the issue with answers to the notice. The public representative said that if Valassis captures the Sunday free-standing insert market from newspapers, “it will have been because it persuaded a government monopolist to rearrange the playing field in its favor.” The assessment of the NSA’s impact on direct competitors of Valassis such as Vertis and Latin-Pak was equally blunt: “It is plain as the nose on the Public Representative’s face that it will cause unreasonable harm to this marketplace.”
View all of the comments filed in this notice of inquiry. (Important note: In the “Docket No.” box, scroll to R2012-8 and click “submit.”)
The commission will receive a briefing from PRC staff on responses to the notice of inquiry when all comments have been analyzed. A decision is expected by the end of the month.
First Published: July 10, 2012