The Newspaper Association of America filed an initial brief Feb. 11 in its lawsuit against the Postal Regulatory Commission on behalf of its member newspapers.
The action regards the 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 agreement, the Postal Service granted Valassis discounts of 20 percent to 34 percent on new mail pieces containing advertising from national retailers of durable and semi-durable goods.
Through these discounts, the Postal Service has given one company a price incentive to move advertising inserts out of newspapers delivered to consumers’ homes.
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 notes that the commission’s decision is both contrary to law and arbitrary and capricious because it does not consider the impact of the agreement on competitors to the Postal Service, on competitors of its negotiated service agreement 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 negotiated service agreement partner.
NAA argues that the commission interpreted unreasonable harm to the marketplace to require only that the Postal Service is not pricing its products below cost.