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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.”

Rural

Local Governments Provide Valuable Information for Rural Infrastructure Builds

Rural communities vary in broadband needs, making community engagement essential for breaching the digital divide.

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Photo of Scott Woods, Josh Seidemann, Jerry Kuthy and Bob Knight (left to right) by Teralyn Whippe

WASHINGTON, May 11, 2022 – A critical first step to delivering on the Infrastructure Investment and Jobs Act for rural communities at a local level is community engagement and understanding, panelists said at a Tuesday event of the Local Initiative Support Corporation.

As a local leader in a rural community “the first thing to do is a community survey,” said Josh Seidemann, vice president of policy at NTCA – The Rural Broadband Association.

Seidemann and other panelists provided advice on what local communities need to do to be successful in applications under the IIJA. The process is expected to kick off upon release of rules from the Commerce Department’s National Telecommunications and Information Administration. The agency must release rules under the IIJA by May 16.

A community survey will help “determine and evaluate where your community needs broadband the most,” said Seidemann. Such a survey is “going to inform and illuminate the type of network that will best meet your needs.”

Community needs can vary due to topography and existing infrastructure available for use. “Make sure your network meets your community needs,” added Bob Knight, CEO of public relations agency Harrison Edwards and a local government official in Connecticut. He is co-chair of Fiber Broadband Association’s public officials group. “The best projects have an element of community engagement.”

Jerry Kuthy, Program Officer at Cameron Foundation, urged local leaders to create a mapping system of their individual geographical broadband needs.

The Virginia Department of Housing and Community Development launched an interactive broadband coverage map in April of 2022. Kuthy said the map will help local leaders in Virginia roll out funding for rural broadband infrastructure.

Mapping areas of focus for broadband projects has long been the focus for state and regional leaders, in part because so many people have expressed disappointment at previous FCC broadband mapping efforts.

LISC is an intermediary non-profit that connects public and private resources with underinvested places. The role of Community Development Financial Institutions was also discussed at the event.

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Rural

Community Development Financial Institutions Funds Prepare for Broadband Infrastructure Funding

CDFI funds are responsible for rural Wyoming broadband and may offer a solution to rural areas across the nation.

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Photo of Brian Vo

WASHINGTON, May 11, 2022 – A Treasury Department program that is bringing capital to disadvantaged communities is helping drive key money into broadband infrastructure builds in rural America, some of those recipient institutions said at an event Tuesday.

The department provides grants to and certifies institutions such as banks, credit unions, loan funds, microloan funds, or venture capital providers as Community Development Financial Institutions that provide financial services in low-income communities and to people who don’t have access to financing, according to the government website.

The program is also helping build much-needed broadband connectivity, as seen in rural Wyoming, where the Midwest Minnesota Community Development Corporation has already utilized CDFI funds to finance a project to run fiber optics networks to rural Wyoming.

“We believe that there’s capital available for rural broadband,” Gary Franke, managing director of the communications group at CoBank, said at the Local Initiative Support Corporation event on Tuesday.

LISC is an intermediary non-profit that connects public and private resources with underinvested places. CoBank, however, is not a CDFI.

Such deals “typically will involve partnerships with state, local, or federal programs in addition to private equity,” he said.

Suzanne Anarde, CEO at Rural Community Assistance Corporation, a CDFI, said Tuesday that CDFIs must “find out what our individual niche is and how we can build capacity that makes us viable.”

Brian Vo, chief investment officer at Connect Humanity said that his organization could work with CDFIs in the future to fund their holistic approach to digital equity.

Photo of Brian Vo (right) by Teralyn Whipple

LISC alleges that the large national financial institutions are not interested in making investments to improve rural broadband expansion across the country. The organization states on its web site that “rural broadband is lacking in many areas because the large national providers are not interested in making the investment.”

“We see a lot of opportunity out there. With the right capital and the right funding programs, there’s a lot more to come,” Franke said.

There are currently more than 1,200 CDFI funds operating across the nation, many of which are now focusing on crossing the digital divide by providing funds for rural broadband infrastructure.

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Universal Service

Universal Service Fund in Need of Reform, Said Panelist at Broadband Community Summit Event

The Universal Service Fund’s base is shrinking.

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Photo of Carol Mattey speaking.

HOUSTON, May 3, 2022 – As funding for the Universal Service Fund continues to fall year over year, the Federal Communications Commission is evaluating options to reform it.

During Broadband Communities Summit 2022, Principal Consultant for Mattey Consulting LLC, Carol Mattey anticipated what kind of changes to the Universal Service Fund that stakeholders could expect in the coming years.

The Universal Service Fund is responsible for funding several high-profile financial benefits including the Rural Digital Opportunity Fund, the Connect America Fund, E-Rate, the Lifeline Program, and the Rural Healthcare Program.

The USF is funded through compulsory service provider contributions. Though those contributions have historically been based on providers’ interstate and international telecommunications service revenues, critics of the program argue that providers are increasingly able to dodge these contributions by reclassifying their sources of revenue.

A common misconception for dwindling contributions is cord cutting, Mattey said. As more people drop landlines, there is simply less voice revenue – but that is only part of the issue.

Mattey said that while information revenues have increased through consumer use of the internet, voice revenues have fallen. This disparity has caused the telecommunication contribution to skyrocket and could be nearly 30 percent in 2022.

Mattey explained that most companies simply bill their consumers to offset that amount, and as a result, the contribution has been disproportionately burdened by the elderly who are more likely to use landlines.

When addressing potential reforms, Mattey pointed to three most likely possibilities being considered: broadband internet access revenue, a flat fee per voice and broadband connection, and a flat fee per phone number.

“Any reform needs to be simple and must be able to be audited,” she said. “The current system is not equitable.”

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