The Newspaper Association of America filed its initial brief today in its lawsuit against the Postal Regulatory Commission regarding that agency’s August 2012 decision to approve a negotiated service agreement between the U.S. Postal Service and Valassis Direct Mail. The lawsuit is being heard in the U.S. Court of Appeals for the District of Columbia Circuit.
Under the NSA, USPS granted Valassis Direct Mail discounts of 20% to 34% on new mail pieces containing advertising from national retailers.
“Through these discounts, the USPS has given one company a price incentive to move advertising inserts out of newspapers delivered to consumers’ homes,” the NAA said. “Advertising inserts comprise a critical revenue stream that supports the original reporting done by local newspapers in service to their communities.”
In its brief, NAA said that the commission’s decision is contrary to law, as well as arbitrary and capricious, because it does not consider the “impact of the agreement on competitors to the Postal Service, on competitors of its NSA partner, and mail users in general.”
When it enacted the Postal Accountability and Enhancement Act, Congress codified commission precedent establishing that assessing “unreasonable harm to the marketplace” requires evaluating and weighing harm to competitors of the Postal Service’s NSA partner.
The NAA also argues that the commission “interpreted ‘unreasonable harm to the marketplace’ to require only that the Postal Service is not pricing its products below cost.” The association said that “even though the Postal Service has the burden of ‘assuring an adequate record’ on the issue of ‘unreasonable harm to the marketplace,’” the commission did not require the Postal Service and Valassis to identify relevant markets in which the NSA will be implemented so that it could provide a proper analysis.