Sunday, March 23, 2008

Periodicals Postal Rate Hikes Confirmed

Periodicals Postal Rate Hikes Confirmed
Increase to take effect May 12.
By Joanna Pettas

The Postal Regulatory Commission has determined that the postal rate hike for Periodicals proposed last month-the first mandated to be tied to the Consumer Price Index-does not violate the new postal law and will go into effect on May 12.

Periodicals rates will increase on average about 2.72 percent according to the Postal Service, though David Straus, ABM Washington Counsel, estimates an increase of nearly 2.9 percent for almost all Periodicals, the difference being that a limited number of out-of-county pieces and in-county qualified publications now receive a discount.

According to the postal service, "Interested persons were given the opportunity to comment on the notice adjustment. Most of the comments focus on planned increases for specific rate categories or products. None claims that the planned increase for any class violates the price cap."

Under the Postal Accountability and Enhancement Act, the Postal Service may "bank" the difference between the CPI cap and the implemented price changes, which means that the .18 percent difference between the rate hike and the 2.9 percent CPI can be added to the CPI for rate hikes within the next five years.

Also under the new law, the Postal Service has extensive flexibility to vary rates within classes as long as the class average is CPI-limited. However, Straus says that the increases within the Periodicals class this time, at least, are very nearly across the board, with extremely small variations among different publications.

The Economist Seeks Termination of Printing Agreement with Quebecor World
Publisher looking to end contract, but says it is open to new arrangement.
By Jason Fell

The Economist is looking to terminate its contract with commercial printer Quebecor World, but says it is open to discussing how to continue the relationship, according to a statement filed jointly by the companies. Quebecor World filed for bankruptcy protection earlier this year.

According to a court filing, The Economist wants to terminate its print agreement at the expiration of the initial term in September. The printing agreement would continue to be valid until then.

The Economist argues that it is being harmed by some of the automatic legal protection that the printer has received under its bankruptcy agreement. According to the filing, the magazine "is not seeking to enforce a monetary claim against the debtors of their estates. The Economist merely seeks to exercise its contractual right to terminate the printing agreement."

"We understand and respect the decision taken by The Economist and we will continue to provide them with the top quality product and service they expect," Quebecor World Magazine Group president Doron Grosman said in the joint statement. "We will also work with them in the coming months to prolong and extend our mutually beneficial partnership."

A Quebecor spokesperson could not immediately be reached for further comment.

In the court filing, The Economist does not say why it is seeking a termination of the printing agreement. A spokesperson for The Economist declined to comment.

Quebecor World, one of the world's largest printers, announced its bankruptcy filing in January and its entering into a $1 billion financing deal with Credit Suisse and Morgan Stanley to help finance the company's operating needs. Earlier this week, the ailing printer said that, under bankruptcy protection, it would delay the release and filing of its 2007 financial statements until the end of April.

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