Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, February 15, 1994                   TAG: 9402150105
SECTION: BUSINESS                    PAGE: C9   EDITION: METRO 
SOURCE: The New York Times
DATELINE: WASHINGTON                                 LENGTH: Medium

POST OFFICE COULD LOSE ITS BITE

Now private couriers and their customers - outraged that the postal service could abuse its monopoly position in an effort to win back some of the express-mail business - are fighting back.

Legislation has been introduced in Congress that stops the Postal Service from being able to investigate and intimidate companies into using the Postal Service instead of private couriers.

"This is a classic case of a government agency that is 30 years behind the curve," said Sen. Paul Coverdell, R-Ga., who introduced the measure in the Senate. "The entire subject should be moot. Are you going to fine people for using the fax machine?"

The legislation, which also has been introduced in the House, states that a nongovernmental person may use a private express for the private carriage of certain letters and packets without being penalized by the Postal Service.

The Postal Service has fined 21 companies for violating the 1872 law that established the Postal Service monopoly on mail delivery. A 1979 amendment to the law broke the monopoly on urgent mail, establishing as the definition of "urgent" mail that must arrive by noon the next day or lose its value. The Postal Service has the right to decide what is urgent and what is not.

Postal officials say they lose millions of dollars to private companies, and, without the ability to collect this revenue, they might have to raise first-class rates. The fines collected equal the amount the Postal Service would have earned if it had delivered the mail.

Since the crackdown began three years ago, teams of postal inspectors have audited and subsequently fined 21 companies. They also audited five federal agencies to find out how much nonurgent mail was being sent by commercial courier. Postal officials say they get $4 back in lost revenue for every $1 spent on enforcement.

The Postal Service cracked down on federal agencies after discovering that the General Services Administration had worked out a deal with Federal Express to deliver overnight mail for $3.75, well below the Postal Service's overnight rate of $9.95, and well below Federal Express' standard rate of $15.50.

The federal agencies did not have to pay lost revenue. Instead, postal officials have been pressing the agencies to train their mail-room workers in the art of determining what is - and is not - urgent.

But private companies such as Equifax Inc., a credit-reporting agency based in Atlanta, have not been so lucky. In September 1991, postal inspectors looked over their mail rooms.

In May 1992, Equifax paid $30,000 in fees, and since then, said David Mooney, Equifax public relations director, the company has made "minor adjustments" in its mailing policy.

But has Equifax stopped using commercial couriers? "Certainly not," Mooney replied.

Doyle Cloud, the Federal Express vice president for legal and regulatory affairs, a vociferous critic of the Postal Service's tactics, said the Postal Service "has far overstepped their boundary."

The Postal Service denies it has been using strong-arm tactics.

`There has been no bullying at all," said Lou Eberhardt, a Postal Service spokesman. He said each company agreed to be audited after it was approached by postal inspectors. But companies can say no and prevent the audits, Coverdell said.