Selective Rate Discounts To Preserve First-Class Mail Volume

David M. Levy
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David M. Levy: Sidley Austin Brown & Wood LLP

Chapter Chapter 14 in Regulatory and Economic Challenges in the Postal and Delivery Sector, 2005, pp 277-294 from Springer

Abstract: 5. Conclusion The growing competitive threat to the Postal Service’s role as a medium for electronic bill presentment and payment (“EBPP”) is similar to the competitive challenges that other regulated network industries—including the transportation, energy, and telecommunications industries—have faced from intermodal competition. Unlike other regulated industries, however, the Postal Service has not tried to meet this threat by offering targeted rate reductions aimed at stemming the loss of this high-margin business. The inaction appears to stem from the belief, widely shared in the postal community, that volume-retention discounts constitute undue discrimination, or are otherwise inconsistent with the Postal Service’s common carrier status. This paper has argued that volume-retention discounts of this kind, if reasonably calibrated to the competitive threat from the Internet, would be consistent with established legal standards for price discrimination.

Keywords: Contract Rate; Marginal Cost Price; Federal Energy Regulatory Commission; Common Carrier; Interstate Commerce Commission (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:spr:topchp:978-0-387-23637-7_14

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DOI: 10.1007/0-387-23637-6_14

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