USPS chief plans his exit

Postmaster General William Henderson says that before he leaves the U.S. Postal Service's top job in May, he intends to put in place ways to "leverage" the agency's electronic infrastructure for commercial purposes as part of its overall technology strategy.

With satellite communications capabilities at 10,000 post offices and phone lines connected to 30,000 more, the Postal Service already owns what is likely the world's largest electronic communications network. The question is, How can the agency profit from it? In one vision of the future, the agency evolves into a major conduit for the transmission of digital video, audio and data files.

The Postal Service network includes some of the most sophisticated transmission devices in the world, Henderson said. At present, the network is used as an internal communication system. But its capability to transmit video and audio signals as well as digital data might be useful commercially, he said.

With operating losses projected to reach $480 million this year, the Postal Service is eyeing new ways to generate revenue. It is experimenting with a number of electronic services, such as electronic bill paying, certified e-mail and "NetPost Mailing Online" — a service that e-mails messages such as advertisments to a print shop near their destination, where they are printed and then delivered through the mail.

The experiments are "very interesting," Henderson said, but it remains to be seen whether they will prove profitable.

One optimistic economic development has surfaced: The recent collapse of many Internet companies has slowed the shift from paper mail to e-mail and electronic fund transfers, Henderson said. In the short run, that should slow the decline in first-class mail, the Postal Service's leading revenue source.

"The euphoria around the Internet has subsided somewhat," replaced by "a certain cynicism" that makes consumers more reluctant to accept or pay bills via the Internet, Henderson said. Last fall, the agency said electronic communication was a serious threat to USPS' future self-sufficiency.

Disenchantment with the World Wide Web has also caused spending on advertising to shift back from the Internet to regular mail, Henderson said.

Henderson, 53, became postmaster general in May 1998, after serving as chief operating officer. He took over at a time when the Postal Service faced growing competition from private package delivery companies and electronic technology.

Henderson set about adjusting the agency's "products, offerings and business model" to operate better in the competitive arena where it once enjoyed a monopoly, said William Kovacic, a postal expert and law professor at George Washington University.

He "encouraged the top Postal Service management to think of itself more as a competitive enterprise and less as [a] public utility," Kovacic said.

But more must be done, he said. The agency "is a doomed enterprise" unless there are "fundamental changes" in its operation, probably including privatization, Kovacic said.

Henderson agrees. "The posts of the world are privatizing," he said. Ultimately, the U.S. post will likely also be privatized, he added, but such a move is far into the future.