Postal network may hold profit

The U.S. Postal Service may own the world's largest electronic communicationsnetwork. The challenge is finding ways to profit from it.

Finding commercial uses for the Postal Service's communications infrastructureis part of a technology strategy Postmaster General William Henderson saidhe intends to put into operation before he leaves the top job at the PostalService in May.

USPS has satellite communications capability at 10,000 post offices,and it has phone lines connected to 30,000 more. Its network includes someof the most sophisticated transmission devices in the world, Henderson saidduring a press conference Thursday.

The network has been upgraded to transmit video and audio signals aswell as digital data, he said. At present, it is used as an internal communicationsystem for the Postal Service, but it could be used as a commercial transmissionnetwork, he said.

With operating losses projected to reach $480 million this year, thePostal Service is looking for new ways to generate revenue. It is experimentingwith several electronic services, such as electronic bill paying, certifiede-mail and NetPost Mailing Online, a service that e-mails messages to aprint shop near their destination, where they are printed and then deliveredthrough the regular mail.

Henderson called the experiments "very interesting" because they areteaching the Postal Service about e-commerce, but he said it is uncertainwhether they will prove profitable.

One optimistic economic development: The recent collapse of many Internetcompanies has slowed the shift from paper mail to e-mail and electronicfunds transfer, Henderson said. In the short run, that is expected to slowthe decline in first-class mail, which is the Postal Service's most importantsource of revenue. Last fall, the Postal Service identified electronic communicationas a serious threat to its future financial self-sufficiency. Since then,however, "the euphoria around the Internet has subsided somewhat" and beenreplaced by "a certain cynicism," leaving consumers more reluctant to acceptor pay bills via the Internet, Henderson said.

Disenchantment with the World Wide Web has also caused advertisers'spending to shift back from the Internet to advertising that is mailed,he said.