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Pushes to Privatize USPS Threaten the Oldest Universal Communications Network and Efficiency of Mail-in Ballots

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Photo of USPS mail being sorted by Ericka Woolever used with permission

August 3, 2020 — The economic fallout resulting from the COVID-19 pandemic has dramatically worsened the financial condition of the United States Postal Service, necessitating financial relief if it is to continue operating through fiscal year 2020.

Analysts predict that the agency will run out of money by spring.

As the Trump administration is in the midst of fierce negotiations over what should be included in an upcoming stimulus package, a call for federal aid backing USPS has amassed nationwide attention and support.

The bipartisan Postal Service Board of Governors has asked Congress to provide USPS with $25 billion in emergency aid to offset coronavirus-related losses. This proposal was included in the House Democrats’ HEROES Act.

“The HEROES Act includes $25 billion for USPS for revenue losses during the COVID-19 pandemic, $15 million for oversight of this funding and additional protections for USPS workers,” said Rep. Jennifer Wexton, D-Va. The act gives priority to the purchase of personal protective equipment for USPS employees, she added.

Yet the GOP proposed coronavirus relief bill, known as the HEALS Act, overlooks calls for federal funding to support USPS.

On Friday, House Speaker Nancy Pelosi, D-Calif., accused Republicans who are opposed to the funding of wanting to “diminish the capacity of the Postal System to work in a timely fashion.”

“The money that USPS needs for lost revenue and expenses is COVID-19 related,” said Judy Beard, legislative and political director for the American Postal Workers Union, in a recent Institute for Policy Studies webinar.

Beard noted that other companies “have gotten billions, while the postal service has gotten zero dollars” in federal relief.

Former Postmaster General Megan Brennan projected USPS will lose $13 billion in revenue due to the pandemic and subsequent economic hardship, which has resulted in fewer people and businesses sending mail this year.

Many believe more must be done in order to preserve USPS, and a recent poll revealed overwhelming bipartisan support of federal assistance for USPS, with 90 percent of Republicans and 96 percent of Democrats approving.

Potential for USPS privatization

However, many Republican members of Congress, as well as the Trump Administration, have continued to push for privatization of the service.

“Privatization could increase prices and would jeopardize the level of service for rural Virginians,” said Sen. Tim Kaine, D-Va., in a letter to Broadband Breakfast. “It would also ignore proposed reforms that would address the Postal Service’s financial challenges.”

Many rural Americans, especially small business owners, depend on USPS for competitive shipping rates.

According to panelists at the Institute for Policy Studies webinar, 70 million Americans live in areas where private carriers charge extra for package delivery. A privatized USPS could cherry-pick which homes get reliable and affordable service, leaving others behind, panelists warned?

“Why do people push for privatization?” Beard questioned. “Profit is the only reason.”

“Privatization is about making millionaires and billionaires even richer,” she continued, adding that the wealthiest one percent of Americans “forget about the public.”

The USPS was the first essential, universal communications network in the United States.

From the delivery of medications and household goods to stimulus checks, absentee ballots and census forms, the USPS continues to be an essential part of Americans’ everyday lives.

New postmaster, new policies

Louis DeJoy, a Trump campaign megadonor, was appointed Postmaster General by four Republicans and two Democrats serving on the USPS Board of Governors on June 15.

DeJoy wasted no time introducing new operational changes, including prohibiting overtime pay, shutting down sorting machines early and requiring letter carriers to leave mail behind when necessary to avoid extra trips or late delivery on routes.

While these decisions cut extra costs in overtime hours, transportation and more, they also promised to delay postal deliveries.

Traditionally, postal workers are trained not to leave letters behind, making multiple delivery trips throughout the day to ensure mail is delivered on time.

The new policies have resulted in a two-day shipping delay in centers across the country.

According to multiple postal workers and union leaders, letter carriers are manually sorting more mail, adding to delivery time. Meanwhile, bins of mail ready for delivery are sitting in post offices because of route changes.

Without the ability to work overtime, workers say the logjam is worsening, with no end in sight.

“You’d think that DeJoy would be pushing for the aid the post office needs,” said Beard, arguing that instead, the new Postmaster “has done things that are disturbing.”

DeJoy cut a deal with the Treasury Secretary to secure a $10 billion loan for USPS, instead of calling for the direct aid many believe USPS needs.

On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, which included a compromise that allowed USPS to borrow up to $10 billion from the Treasury if the USPS determines that, due to the COVID-19 emergency, it will not be able to fund operating expenses without borrowing money.

But accepting this aid would only work to put USPS further in debt.

“The agency said they were aimed at cutting costs,” said Sarah Anderson of the Institute for Policy Studies. The federal government is pushing USPS “to the brink of bankruptcy at a time when we need them more than ever.”

Concerns over mail in ballots and voter suppression

As states look to dramatically expand the use of mail-in ballots this fall, postal workers across the country are worried that DeJoy’s enforced operational changes could lead to chaos in November.

“Money to assist with vote-by-mail is desperately needed,” Beard said, adding that workers want to be safe and alert when carrying election materials.

Vote-by-mail boosts voting participation rates. When the service was introduced in the state of Maryland, voter participation immediately doubled.

Mail-in ballots are often utilized by low income individuals, who may not be able to make it to a polling center on election day due to conflicting work schedules.

“Preventing mail-in ballots disproportionately impacts low income people,” said Scott Klinger, senior equitable development strategist at Jobs with Justice.

In the upcoming election, it is predicted that 60 percent of votes cast will be via mail-in ballots, due to safety concerns surrounding the COVID-19 pandemic.

Yet in the past few weeks, President Donald Trump has continuously attacked the legitimacy of mail-in ballots via Twitter and spread unsubstantiated claims that the Postal Service cannot manage or be trusted to deliver voting materials.

Critics have claimed that Trump’s main grievance with the vote-by-mail system may be that it will hurt him politically, particularly in swing states.

Trump claimed via Twitter that vote-by-mail will make it impossible for Republicans to win in certain states.

“In an illegal late night coup, Nevada’s clubhouse Governor made it impossible for Republicans to win the state,” he tweeted. “Post Office could never handle the Traffic of Mail-In Votes without preparation. Using Covid to steal the state. See you in Court!”

Many have accused the manufactured USPS slowdown as being an act of voter suppression.

“We have an underfunded state and local election system and a deliberate slowdown in the Postal Service,” said Wendy Fields, the executive director of the Democracy Initiative, a coalition of voting and civil rights groups.

Fields argued the President was “deliberately orchestrating suppression and using the post office as a tool to do it.”

Panelists further voiced fears of what privatization would mean for the future of elections, arguing it would inherently undermine their legitimacy.

“I know I wouldn’t feel comfortable handing my ballot over to a private corporation,” Anderson said.

Hazard pay and the pandemic’s effect on workers

“Lack of funding and recent changes have been devastating to workers,” Beard said, noting that USPS does not have the option of laying off workers, as they often do not have enough.

The coronavirus has led to worsened staff shortages. According to Beard, 2,000 to 3,000 members have been diagnosed with COVID-19 and at least 25,000 have had to quarantine, while 15-20 percent of rural letter carriers have been unable to work due to illness or family care.

Beard depicted the fear frontline workers are continually experiencing as they are forced to wonder if they have been infected by the virus while working.

As USPS faces staffing shortages, new operational policies and higher rates of mail-in ballots, workers have only expressed increasing anxiety.

“I’m a little frightened,” said a postal employee in Pennsylvania. “By the time political season rolls around, I shudder to think what it’s going to look like.”

Beard maintained that employees need to be paid competitively in order to preserve an energized workforce, able to tackle demanding shifts.

If passed, the HEROES Act would provide hazard pay and protective equipment to USPS workers.

“Employees aren’t getting overtime because they want to pad their paycheck — they’re demanded to work overtime [due to the volume of work],” Beard said.

Suggestions for the future

Going forward, panelists argued that it is crucial that the federal government support innovations that will make USPS an even greater public asset for generations to come.

Klinger recommended that the government start by investing in funding for bigger vehicles.

“USPS vehicles are old and small,” he said. “New vehicles are already designed and ready to go — USPS just needs funding to buy them.”

“Many U.S. auto workers are out of work right now,” he continued. “Why not put them back to work building bigger vehicles for USPS?”

Klinger believed that USPS could do even more in terms of being a public asset.

He detailed his vision of future service, in which USPS would play a role in countering food insecurity, facilitating education and communication and closing the digital divide.

Globally, postal services play a wide variety of roles, he pointed out.

“Japan’s postal service has digital technology representatives that visit people’s homes to teach elderly populations digital skills,” Klinger said. “France’s postal service developed the watch-over-my-parents program, in which a representative checks on people’s elderly family members and provides a report on how they’re doing.”

USPS buildings could be an instrumental tool in closing the digital divide, Klinger said, if their fast and reliable internet service was used to facilitate hot spot connections and more.

Klinger said he came to understand what government was through the post office.

“It is not a service,” he said. “it is essential.”

The USPS should remain an independent establishment of the federal government, Klinger concluded, saying that America is “not a democracy without a postal service.”

12 Days of Broadband

How Long Will it Take Congress to Revamp the Universal Service Fund?

Critics urged the FCC to expand the fund’s contribution sources, but the agency chose to punt the decision to Congress.

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Graphic courtesy of Dmitry Kovalchuk / Adobe Stock

From the 12 Days of Broadband:

The Federal Communications Commission this summer waived away the issue of revamping the Universal Service Fund, pointing to the need for Congress to give it the authority to make changes to the multi-billion-dollar fund that goes to support basic telecommunications services to low-income Americans and rural communities. 

Up to this point, the agency had a virtual megaphone to its ear with critics saying that it needs to make the changes necessitated by the fact that the nearly $9-billion fund this quarter is supported only by dwindling legacy voice service revenues as more Americans move over to broadband-driven communications services. 

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Expert Opinion

Bjorn Capens: Strong Appetite for Rural Broadband Calls for Next Generation Fiber Technology

The first operator to bring fiber to a community creates a significant barrier to entry for competitors.

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The author of this Expert Opinion is Björn Capens, Nokia Fixed Networks European Vice President

In July, the Biden-Harris administration announced another $401 million in funding for high-speed Internet access in rural America. This was just the latest in a string of government initiatives aimed at helping close the US digital divide.

These initiatives have been essential for encouraging traditional broadband providers, communities and utility companies to deploy fiber to rural communities, with governments cognizant of the vital role broadband connectivity has in sustaining communities and improving socio-economic opportunities for citizens. 

Yet there is still work to do, even in countries with the most advanced connectivity options. For example, fixed broadband is missing from almost 30 percent of rural American homes, according to Pew Research. It’s similar in Europe where a recent European Commission’s Digital Divide report found that roughly 18 percent of rural citizens can only get broadband speeds of a maximum 30 Mb, a speed which struggles to cope with modern digital behaviors. 

Appetite for high-speed broadband in rural areas is strong

There’s no denying the appetite for high-speed broadband in rural areas. The permanent increase in working from home and the rise of modern agricultural and Industry 4.0 applications mean that there’s an increasingly attractive business case for rural fiber deployments – as the first operator to bring fiber to a community creates a significant barrier to entry for competitors. 

The first consideration, then, for a new rural fiber deployment is which passive optical network technology to use. Gigabit PON seems like an obvious first choice, being a mature and widely deployed technology. 

However, GPON services are a standard offering for nearly every fiber broadband operator. As PON is a shared medium with usually up to 30 users each taking a slice, it’s easy to see how a few Gigabit customers can quickly max out the network, and with the ever-increasing need for speed, it’s widely held that GPON will not be sufficient by about 2025. 

XGS-PON is an already mature technology

The alternative is to use XGS-PON, a more recent, but already mature, flavor of PON with a capacity of 10 Gigabits per second. With the greater capacity, broadband operators can generate higher revenues with more premium-tier residential services as well as lucrative business services. There’s even room for additional services to run alongside business and residential broadband. For example, the same network can carry traffic from four G and five G cells, known as mobile backhaul. That’s either a new revenue opportunity or a cost saving if the operator also runs a mobile network. 

This convergence of different services onto a single PON fiber network is starting to take off, with fiber-to-the-home networks evolving into fiber for everything, where homes, businesses, industries, smart cities, mobile cells and more are all running on the same infrastructure. This makes the business case even stronger. 

Whether choosing GPON or XGS-PON, the biggest cost contributor is the same for both: deploying fiber outside the plant. Therefore, the increased cost of XGS-PON over GPON is far outweighed by the capacity increase it brings, making XGS-PON the clear choice for a brand-new fiber deployment. XGS-PON protects this investment for longer as its higher capacity makes it harder for new entrants to offer a superior service. 

It also doesn’t need to be upgraded for many years, and when it comes to the business case for fiber, it pays to take a long-term view. Fiber optic cable has a shelf-life of 75 or more years, and even as one increases the speeds running on fiber, that cable can remain the same.  

Notwithstanding these arguments, fiber still comes at a cost, and operators need to carefully manage those costs in order to maximize returns. 

Recent advances in fiber technology allow operators to take a pragmatic approach to their rollouts. In the past, each port on a PON server blade could only deliver one technology. But Multi-PON has multiple modes: only GPON, only XGS-PON or both together. It even has a forward-looking 25G PON mode. 

This allows an operator to easily boost speeds as needed with minimal effort and additional investment. GPON could be the starting point for fiber-to-the-home services, XGS-PON could be added for business services, or even a move to 25G PON for a cluster of rural power users, like factories and modern warehouses – creating a seamless, future-proof upgrade path for operators. 

The decision not to invest in fiber presents a substantial business risk

Alternatively, there’s always the option for a broadband operator to stick with basic broadband in rural areas and not invest in fiber. But that actually presents a business risk, as any competitor that decides to deploy fiber will inevitably carve out a chunk of the customer base for themselves. 

Besides, most operators are not purely profit-driven; they too recognize that prolonging the current situation in underserved communities is not great. High-speed broadband makes areas more attractive for businesses, creating more jobs and stemming population flows from rural to urban centers. 

But rural broadband not only improves lives, but it also decreases the world’s carbon emissions both directly, compared to alternative broadband technologies, and indirectly by enabling online and remote activities that would otherwise involve transportation. These social and economic benefits of fiber are highly regarded by investors and stockholders who have corporate social responsibility high on their agendas. 

With the uber-connected urban world able to adopt every new wave of bandwidth-hungry application – think virtual reality headsets and the metaverse – rural communities are actually going backwards in comparison. The way forward is fiber and XGS-PON. 

Björn Capens is Nokia Fixed Networks European Vice President. Since 2017, Capens has been leading Nokia’s fixed networks business, headquartered in Antwerp, Belgium. He has more than 20 years of experience in the fixed broadband access industry and holds a Master’s degree in Electrical Engineering, Telecommunications, from KU Leuven. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Expert Opinion

Johnny Kampis: Federal Bureaucracy an Impediment to Broadband on Tribal Lands

18% of people living on Tribal lands lack broadband access, compared to 4% of residents in non-tribal areas.

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The author of this expert Opinion is Johnny Kampis, director of telecom policy for the Taxpayers Protection Alliance

A new study from the Phoenix Center finds that as the federal government pours tens of billions of dollars into shrinking the digital divide in tribal areas, much of that gap has already been eliminated.

The report, and a second from the U.S. Government Accountability Office, are more indications that regulations and economic factors that include income levels continue to hamper efforts to get broadband to all Americans.

The Infrastructure Investment and Jobs Act of 2021 allocated $45 billion toward tribal lands. This was done as part of a massive effort by the federal government to extend broadband infrastructure to unserved and underserved areas of the United States.

George Ford, chief economist at the Phoenix Center for Advanced Legal & Economic Public Policy Studies, wrote in the recent policy bulletin that while there is still plenty of work needed to be done in terms of connectivity, efforts in recent years have largely eliminated the broadband gap between tribal and non-tribal areas.

Ford examined broadband deployment around the U.S. between 2014 and 2020 using Form 477 data from the Federal Communications Commission, comparing tribal and non-tribal census tracts.

Ford points out in the bulletin that the FCC has observed several challenges for broadband deployment in tribal areas, including rugged terrain, complex permitting processes, jurisdictional issues, a higher ratio of residences to business customers, higher poverty rates, and cultural and language barriers.

Ford controlled for some of these differences in his study comparing tribal and non-tribal areas. He reports in the bulletin that the statistics suggest nearly equal treatment in high-speed internet development.

Encouraging results about availability of broadband in Tribal areas

“These results are encouraging, suggesting that broadband availability in Tribal areas is becoming closer or equal to non-Tribal areas over time, and that any broadband gap is largely the result of economic characteristics and not the disparate treatment of Tribal areas,” Ford wrote.

But he also notes that unconditioned differences show a 10-percentage point spread in availability in tribal areas, which indicates how much poverty, low population density, and red tape is harming the efforts to close the digital divide there.

“These results do not imply that broadband is ubiquitous in either Tribal or non-Tribal areas; instead, these results simply demonstrate that the difference in availability between Tribal and non-Tribal areas is shrinking and that this difference is mostly explained by a few demographic characteristics,” Ford wrote.

In a recent report, the GAO suggests that part of the problem lies with the federal bureaucracy – that “tribes have struggled to identify which federal program meets their needs and have had difficulty navigating complex application processes.”

GAO states that 18 percent of people living on tribal lands lack broadband access, compared to 4 percent of residents in non-tribal areas.

The GAO recommended that the Executive Office of the President specifically address tribal needs within a national broadband strategy and that the Department of Commerce create a framework within the American Broadband Initiative for addressing tribal issues.

“The Executive Office of the President did not agree or disagree with our recommendation but highlighted the importance of tribal engagement in developing a strategy,” the report notes.

That goes together with the GAO’s dig at the overall lack of a national broadband strategy by the Biden Administration in a June report. As the Taxpayers Protection Alliance reported, the federal auditor noted that 15 federal agencies administer more than 100 different broadband funding programs, and that despite a taxpayer investment of $44 billion from 2015 through 2020, “millions of Americans still lack broadband, and communities with limited resources may be most affected by fragmentation.”

President Biden has set a goal for universal broadband access in the U.S. by 2030. These recent reports show that the federal bureaucracy under his watch needs to do a better job of getting out of its own way.

Johnny Kampis is the director of telecom policy for the Taxpayers Protection Alliance. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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