Inside the Beltway : February 2010

ABM Working to Fight Expanded Powers for the FTC
New financial regulatory reform provisions could affect publishers

ABM has recently joined a new lobbying coalition to fight expanded powers for the Federal Trade Commission (FTC) within the newly proposed Consumer Financial Protection Agency. The FTC Reauthorization Coalition includes a number of different business, publisher and advertising groups and ABM will bring the b-to-b media voice to the table. 

The coalition is fighting provisions in the House-passed Financial Regulatory Reform bill that would grant the FTC the equivalent of extraordinary legislative powers. Specific areas of interest involve allowing less transparent rulemaking by the FTC on a host of issues, including: advertisements; granting the FTC new enforcement powers to go after companies such as publishers for “aiding or abetting” a violation of the FTC Act; and giving the FTC the authority to seek penalties not only for actual violations of the FTC Act, but also to deter potential violations without potential violators having the opportunity to change a practice or behavior before onset of civil penalties. 

ABM has already participated in meetings on the Hill with the FTC Reauthorization Coalition where the focus is on the Senate. Wile the House has passed its version of financial regulatory reform, the Senate has not. A new bipartisan draft of the legislation is due out next week and the coalition will continue to work to ensure that the expanded FTC provisions do not make it into the Senate bill. 

ABM will keep you posted on this developing issue.

USPS Announces Final Deflection Standards and Penalty Rates
Rate penalty deferred until October 3

ABM recently filed strong comments urging the Postal Service to reconsider at least some of its proposal to tighten its deflection standards and charge higher rates for those pieces that fail the “droop” test beginning in June, especially the excessive rate penalty proposed for carrier-route sorted pieces. The penalty for such pieces is about 10 cents per piece.

ABM and other mailers also asked the Postal Service to implement some sort of a pre-certification procedure. Mailers stressed that higher costs would be terribly damaging and that most printers do not yet have the capability to perform a quarter fold, which would solve the excessive deflection problem in most cases.  The printers agreed that the expensive, in-line equipment is hard to come by and that its availability will be delayed beyond June.

These last-minute pleas were no more persuasive than the 35 sets of written comments filed on the December proposal. The Postal Service issued a final rule on the deflection standards and explanation of its decision last week, which again gives no explanation for the large increase for carrier route sorted pieces. It also denies requests for a pre-certification procedure, although it says that it will encourage good communication between mailers and acceptance personnel to help mailers in this regard.

In addition, the Postal Service says that the only penalty rate relief it will give is for carrier route sorted pieces entered at the DDU (destination delivery unit), a change that will aid local newspapers but not many, if any, ABM members.

This result is disappointing, but not unexpected for ABM members. ABM hoped for some relief on the carrier route penalty, but it appears that the Postal Service believes that it has to get tough with Periodicals mailers, who produce revenues equaling only 76% of the costs directly attributable to processing and delivering Periodicals. A good bit of that shortfall is associated with jams and other problems on processing machines when pieces that are too flimsy are being handled.

This ruling is likely the last word on this issue, and not a good outcome for tabloids and other publications that simply have become too thin to pass the new droop test (at least until your printer can quarter-fold those who can be folded).

The good news, however, is that, while the Postal Service won’t back down from its final ruling, it has agreed to delay the rate penalty from June 7 to October 3. The new deflection standards will go into effect on June 7, but the implementation of postage consequences will be deferred until October. This change will hopefully provide enough lead time for more ABM mailers to adjust their product or obtain access to quarter-folding equipment.

If you have any further questions on this important issue, contact David Straus at dstraus@thompsoncoburn.com.

ABM, Mail Moves America Coalition Mobilize to Defeat Do Not Mail Measures 

ABM, Shield Law Coalition Continue to Lobby for the Free Flow of Information Act
Legislation still awaiting action in the Senate

After passing the Senate Judiciary Committee in late 2009, the Free Flow of Information Act (S. 448), or the reporter shield law, is still awaiting action by the full Senate. However, the Shield Law Coalition, of which ABM is an active member, is making the case for action now. 
 
At the end of January, the coalition held an "all hands on deck" meeting to identify and lobby every member of the U.S. Senate on the shield law. ABM has taken the lead with five individual Senators and is also participating in coalition meetings with other Senate offices in support of the legislation. With Senate floor time at a premium, it is still unclear when this legislation could come up for a vote, but ABM's lobbying as a part of the Shield Law Coalition is helping to ensure the votes will be there when the legislation comes to the Senate floor. 
 
ABM has been actively advocating for a federal shield law for several years, and the imminent passage of the bill would mark a long-awaited victory for the Association. The federal law would protect news reporters, including those of ABM members, from compelled testimony and disclosure of their source material.

The Senate bill contains exceptions that make the shield law inapplicable in certain matters of national security and terrorist activities, and strongly protects reporters and their sources, while also ensuring that the government can do its job of protecting its citizens.

The legislation also modifies the definition of a journalist to expand the class of individuals who are protected under the shield law. Any individual with the intention of disseminating news to the public is now covered under the bill, whereas previous drafts protected only those employed or freelancing with a news organization.
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ABM Files Reply Comments Opposing Increased Periodicals Rates

As some ABM members may be aware, the Postal Regulatory Commission (PRC) has a proceeding before it in which it is assessing the lawfulness of postal rates in FY 2009, most notably the Periodicals rates that failed by a wide margin to cover attributable costs. Last week, the PRC held a related session that was designed to more closely examine the Postal Service's overall financial situation and how it plans to get out of it. 

ABM filed comments at the PRC meeting responding to the repeated request in the initial comments of Valpak that rates for at least the "money losing" periodicals be increased to close the cost coverage gap. The deadline for submitting comments was February 23, so stay tuned for updates as this issue continues to unfold.

Rep. Rick Boucher to Keynote at ABM's 2010 Annual Conference

On Monday, May 3, during ABM’s Annual Conference in Charleston, SC, you’ll have the unique opportunity to hear from Rep. Rick Boucher (D-VA), chairman of the House Energy & Commerce Subcommittee on Communications, Technology and the Internet. As one of the foremost leaders on Capital Hill regarding digital issues, Rep. Boucher will discuss some of the issues facing ABM members, including database protection, behavioral advertising and net neutrality. 

ABM’s Annual Conference, taking place this May 2-5, will deliver strategies on how to capitalize on the next generation of b-to-b media and information services, straight from industry leaders and visionaries. Click here to view the full conference agenda, which is packed with fresh faces and brand-new content. 

Court Considers Google Book Settlement 

On February 18, U.S. District Judge Danny Chin heard from more than 30 interested parties, ranging from individuals to two European countries, regarding the proposed class action settlement involving the Google book scanning project. In addition to the parties to the lawsuit (including major book publishers, the Authors’ Guild and Google), the court heard from the U.S. Department of Justice (which opposes the settlement in its current form), major companies (including Microsoft, Amazon and AT&T, who are against the settlement), Sony (who is in favor of it), and an array of others, including law professors, public interest groups and the governments of France and Germany.  

It is now Judge Chin’s task to sort through the verbal arguments and the hundreds of pages of written comments and briefs, and decide whether the proposed settlement should be approved. For more information on the settlement and what it may mean to ABM members, contact Mark Sableman at msableman@thompsoncoburn.com.

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