Computer & Communication Industry Association
PublishedApril 5, 2000


Cites Government Competition with Private Sector; Threat To Consumer Privacy

Washington, DC- The Computer & Communications Industry Association (CCIA) assailed the announcement by the United States Postal Service (USPS) of its further expansion into competition with private, commercial business. Earlier today, the USPS announced that it was forming a strategic alliance with CheckFree to offer electronic billing and payment, and other consumer financial services, as a new government service provided over the Post Office’s Internet website.

Ed Black, President and CEO of CCIA, described the announcement as “a direct government attack on private markets.” The government’s proposal to become a publicly funded market competitor with electronic commerce industries is a dangerous scheme,” Black stated. “Ours is not a centrally planned economy. The Postal Service’s plan would fundamentally change the role of government in private markets.”

“We are greatly dismayed that the Postal Service has decided to escalate its campaign to expand its services far beyond its historical mission to deliver the mail,” said Black. “While the incredible development of the Internet and electronic commerce has had an extraordinary impact in lowering the barriers to entry for new, innovative businesses in the marketplace, the Postal Service is clearly taking advantage of this opportunity to inject itself into competitive private markets in the New Economy. It is a completely inappropriate function for our government.”

“In addition,” said CCIA’s Black, “the idea of a consumer’s most private personal financial information residing in government server farms, whether directly in Federal office buildings or remotely under contract, is an egregious assault on Americans’ privacy. By this action, the government would routinely be in possession of personal information that was previously accessible only under lawful court order in a legal proceeding or law enforcement investigation. The government has no business being ‘inside the envelope’ in a citizen’s personal financial records or bills or payments.”

As part of the announced deal, CheckFree will partner with the USPS to offer a range of consumer financial services, including person-to-person payments with electronic cash transfers. The USPS also announced that will offer bill presentment services for USPS customers, and the Bank of America will provide cash management services as well.

“The Postal Service obviously sees itself as an Internet portal for e-commerce services, no different than Yahoo!, America Online, or Excite,” said Black, “and indeed is explicitly describing itself that way in its in-house communications with its employees. However, we reject the proposition that a government-sponsored agency should be in direct competition with private commercial businesses. In the burgeoning area of e-commerce, we can all debate whether government should regulate or tax, and if so how much. But there should be no debate about whether government should also be a market competitor. There is no ‘U.S. Government, Inc.’ commercial business plan authorized in the Constitution,” stated Black.

“The USPS appears to see no bounds to its ability to utilize its government-granted monopoly to leverage and fund its entry into new markets — we find this very disturbing. Today’s announcement is particularly troublesome in light of Federal government policy prohibiting such activities — namely Office of Management and Budget Circular A-76.”

OMB Circular A-76 was initiated by President Dwight Eisenhower and has been ratified by each successive Administration, including the current one. OMB Circulars apply to all Federal agencies, including the Postal Service. Circular A-76 states in part: “In the process of governing, the Government should not compete with its citizens.” The Circular also provides “financial and payroll services” as an example of a “commercial activity” beyond the appropriate mission of the government. “This Presidential policy directive is about as clear as it can get when it states that ‘a commercial activity is not a governmental function’,” said Black.

“We believe that the Postal Service and other government agencies should heed the Presidential directives of OMB A-76, and follow the principles of a vibrant market economy that have been central to America’s economic success for over 200 years. The private sector cannot and should not have to compete with the Federal government and the U.S. Treasury for customers and jobs. The government’s mission should not include displacing thriving private sector businesses with government-sponsored competitors, and we believe the Postal Service’s announcement today moves them further in this direction.”

“Perhaps most important of all,” said Black, “the American taxpayer, and the average citizen buying a U.S. stamp, should not be forced into becoming an unwitting financial underwriter for the government as it ventures into commercial business. It’s fundamentally wrong.”

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