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Originally published August 20, 2012 at 4:33 PM | Page modified August 21, 2012 at 9:55 AM

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Corrected version

Stop the sweetheart deal for Michigan junk mailer

The Seattle Times editorial board argues against a discount of postal rates to Valassis Communications Inc.

Seattle Times Editorial

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THE U.S. Postal Regulatory Commission should reject the Postal Service's proposal to discount its junk-mail rates by up to 34 percent for one of the kingpins of junk mail.

The corporation lined up for this fat federal favor is Valassis Communications Inc., a New York Stock Exchange-traded company based in Livonia, Mich. Last year this "communications" outfit spewed out 3 billion pieces of junk mail -- 10 for every man, woman and child in the land. Under the proposed deal with the Postal Service, it promises to pile it higher and deeper.

We want to be clear about our opposition to this. Special rates for junk mailers is an issue in which newspapers, including The Seattle Times Company, have a direct financial interest. Junk mailers compete with newspapers. If this deal goes through, more ads will be delivered by mail and fewer will be inserted into Sunday newspapers.

That is a problem for us. We believe it is also of concern to our readers, because revenue from ads in Sunday papers support the writers, editors, photographers, circulation and delivery people who bring you this and other community newspapers. Junk mail from Valassis Communications supports a company in Livonia, Mich.

This deal is proposed as a way for the Postal Service, which expects to lose $14 billion this year, to earn $15 million -- one one-thousandth of its projected loss, thereby supporting your postal worker by a tiny amount.

The problem is that the Postal Service has entered into these sweetheart deals with junk mailers before. Between 2007 and 2011, it had eight such "negotiated service agreements" in effect -- and it lost $20.9 million. Chances are, this deal would not earn the Postal Service anything. It will be just another loss.

Ruth Goldway, chairwoman of the Postal Regulatory Commission, recently allowed that the Postal Service's record on these deals is "not very good." The Postal Service cannot discount its way out of a $14 billion deficit -- and it should not try to by undercutting America's community newspapers.

Corrected version


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