The U.S. Postal Service's growing involvement in electronic commerce was questioned in a report issued last week by the Computer and Communications Industry Association (CCIA).
In the 150 page report, the CCIA questioned whether the USPS's eBillPay program was an appropriate activity for a government agency to undertake since it competes with private businesses. For example, it competes with CheckFree.com, one of its partners in the electronic bill paying program, in addition to similar services provided by Yahoo!, Chase Manhattan, Wells Fargo, Charles Schwab, and Paytrust.com.
The report's authors -- Dr. Joseph Stiglitz, former chairman of the President's Council of Economic Advisors and former chief economist of the World Bank; Dr. Peter Orszag, former special assistant to the President for Economic Policy; and Jonathan Orszag, former Assistant to the Secretary of Commerce -- brushed aside USPS claims of there being plenty of room in the marketplace for the service. They rejected the justification since only individuals who have computers and access to the Internet can use it.
They also said that with private businesses providing "sufficient privacy and security protections, there is no need for direct government in that area."
The USPS developed the service out of concern that revenue lost from electronic diversion would affect its ability to subsidize its responsibility for universal service. The three authors said that "cross-subsidizing universal mail service by entering a commercial market does not necessarily represent sound public policy [and] may reduce competition in the electronic bill paying market."
EBillPay launched last April.
