1. Class 17 Network Industries, Spring, 2014 The Post Office
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Class 17 Network Industries, Spring, The Post Office
Randal C. Picker
James Parker Hall Distinguished Service Professor of Law
The Law School
The University of Chicago
Copyright © Randal C. Picker. All Rights Reserved.

2. U.S. Post Office Testimony (Mar 13, 2014)
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U.S. Post Office Testimony (Mar 13, 2014)

3. U.S. Post Office Testimony (Mar 13, 2014)
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U.S. Post Office Testimony (Mar 13, 2014)

4. November 30, 2018
GAO Report (July 2013)

5. U.S. Post Office Testimony (Mar 13, 2014)
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U.S. Post Office Testimony (Mar 13, 2014)

6. 11/30/2018
Source:
First-Class Mail Volume, Historian, United States Postal Service, Feb 2014
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7. Communications Economics
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Communications Economics
Hypo
A wants to send B a message
A values having B receive the message at $2; B values receiving the message at an additional $2
Social cost to transmit message is $3
Who should pay? A? B? Both?
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8. Key Point Communications Externalities
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Key Point
Communications Externalities
Both A and B may benefit from the message
If A or B bears the full cost of the message, may have too few messages sent
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9. Key Point Simple Example
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Key Point
Simple Example
If we charge sender or recipient full-cost of message, if they can’t compensate each other, message won’t be sent even though doing so increases welfare
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10. Moving this to the Real World
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Moving this to the Real World
Issues
Symmetric benefits
To what extent do we think sending and receiving are symmetric?
Personal letters?
Advertisements by businesses?
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11. Moving this to the Real World
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Moving this to the Real World
Counting Costs
How much more expensive is it to charge both senders and receivers as compared to just charging one or the other?
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12. Literature See (but hard)
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Literature
See (but hard)
Hermalin & Katz, Sender or receiver: who should pay to exchange an electronic message, 35 Rand J Econ 423 (2004)
Loder, Van Alstyne & Wash, An Economic Response to Unsolicited Communication, 6 Adv Econ Analysis & Policy 2 (2006)
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13. U.S. Constitution Art. I, Sec 8:
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U.S. Constitution
Art. I, Sec 8:
The Congress shall have Power … To establish Post Offices and post Roads
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14. Post Office Act of 1789 (1 Stat 70)
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Post Office Act of 1789 (1 Stat 70)

15. 11/30/2018
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H. Rep. Report 477 (May 15, 1844)

16. H. Rep.: Cross-Subsidization
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H. Rep.: Cross-Subsidization

17. H. Rep.: Competitive Provision of Mail
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18. H. Rep.: Gov’t losses and Competitive Provision of Mail
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19. H. Rep.: Gov’t monopoly required
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H. Rep.: Gov’t monopoly required

20. H. Rep.: Gov’t monopoly required
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H. Rep.: Gov’t monopoly required

21. Post Office Act of Mar 3, 1845: Sec 9: Gov’t Monopoly
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22. Post Office Act of Mar 3, 1845: Sec 10: Gov’t Monopoly: Can’t use mail routes for other purposes
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23. Post Office Act of Mar 3, 1845: Sec 1: General Pricing
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24. Historian, U.S. Postal Service, Aug, 2008
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Source:
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Historian, U.S. Postal Service, Aug, 2008

25. Historian, U.S. Postal Service, Aug, 2008
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Source:
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Historian, U.S. Postal Service, Aug, 2008

26. H. Rep.: Prices and Elasticities
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H. Rep.: Prices and Elasticities

27. Post Office Act of Mar 3, 1845: Sec 1: Franking
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28. Post Office Act of Mar 3, 1845: Sec 2: Newspaper Pricing
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29. Post Office Act of Mar 3, 1825: Sec 30: Newspaper Pricing
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30. Post Office Act of Mar 3, 1845: Sec 3: Magazine Pricing
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31. Post Office Act of Mar 3, 1845: Sec 3: Letter mail fast lanes?
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32. Strong Non-Neutralities
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Strong Non-Neutralities
Neutral Pricing
Key to distance and weight
Not type of content
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33. Strong Non-Neutralities
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Strong Non-Neutralities
1845 Act
Newspapers completely free if within size and distance limit
Magazines have lower rates compared to letters for same weights; rates independent of distance
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34. Strong Non-Neutralities
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Strong Non-Neutralities
Discrimination in Quality of Service
Sec 4 contemplates different levels of quality of service of newspapers and magazines relative to regular letter service
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35. Post Office Act of Mar 3, 1845: Sec 22: Paying for it
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36. Post Office Act of Mar 3, 1863: Sec 11: Creation of Local Delivery
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37. Post Office Act of Mar 3, 1863: Sec 12: Creation of Local Delivery
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38. Bundling and Unbundling Mail Delivery
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Bundling and Unbundling Mail Delivery
General Delivery v. Location (Home) Delivery
Move to “free” service effectively bundles local and long distance mail delivery
Before long distance done by post office (esp. given statutory monopoly (see Sec 9 of 1845 Act)), but could have local competition
Move to free should kill off local delivery services
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39. Post Office Act of Mar 3, 1863: Secs 21 & 22: Postage Stamp Pricing (Distance Dropped)
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40. November 30, 2018
Pricing: 1863 Forward

41. U.S Post Office Annual Report 1914
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U.S Post Office Annual Report 1914

42. U.S Post Office Annual Report 1914
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U.S Post Office Annual Report 1914

43. Obstruction of Correspondence
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Obstruction of Correspondence
18 USC 1702
Whoever takes any letter, postal card, or package out of any post office or any authorized depository for mail matter, or from any letter or mail carrier, or which has been in any post office or authorized depository, or in the custody of any letter or mail carrier, before it has been delivered to the person
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44. Obstruction of Correspondence
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Obstruction of Correspondence
18 USC 1702
to whom it was directed, with design to obstruct the correspondence, or to pry into the business or secrets of another, or opens, secretes, embezzles, or destroys the same, shall be fined under this title or imprisoned not more than five years, or both.
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45. Destruction of letter boxes or mail
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Destruction of letter boxes or mail
18 USC 1705
Whoever willfully or maliciously injures, tears down or destroys any letter box or other receptacle intended or used for the receipt or delivery of mail on any mail route, or breaks open the same or willfully or maliciously injures, defaces or destroys any mail deposited therein, shall be fined under this title or imprisoned not more than three years, or both.
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46. Letters and writings as nonmailable
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Letters and writings as nonmailable
18 USC 1717(a)
Every letter, writing, circular, postal card, picture, print, engraving, photograph, newspaper, pamphlet, book, or other publication, matter or thing, in violation of sections 499, 506, 793, 794, 915, 954, 956, 957, 960, 964, 1017, 1542, 1543, 1544 or 2388 of this title or which contains any
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47. Letters and writings as nonmailable
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Letters and writings as nonmailable
18 USC 1717(a)
matter advocating or urging treason, insurrection, or forcible resistance to any law of the United States is nonmailable and shall not be conveyed in the mails or delivered from any post office or by any letter carrier.
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48. Letters and writings as nonmailable
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Letters and writings as nonmailable
18 USC 1717(b)
Whoever uses or attempts to use the mails or Postal Service for the transmission of any matter declared by this section to be nonmailable, shall be fined under this title or imprisoned not more than ten years or both.
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49. Postage unpaid on deposited mail matter
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Postage unpaid on deposited mail matter
18 USC 1725
Whoever knowingly and willfully deposits any mailable matter such as statements of accounts, circulars, sale bills, or other like matter, on which no postage has been paid, in any letter box established, approved, or accepted by the Postal Service for the receipt or delivery of mail matter on
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50. Postage unpaid on deposited mail matter
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Postage unpaid on deposited mail matter
18 USC 1725
any mail route with intent to avoid payment of lawful postage thereon, shall for each such offense be fined under this title.
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51. November 30, 2018
H. Rep No (Feb 13, 1934)

52. Managing the Mail Box Hypo
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Managing the Mail Box
Hypo
I have a driveway leading up to my house
At the end of the driveway, on my land, I install a mailbox purchased by me for the delivery of mail
Who owns the mailbox? Me? The U.S. government?
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53. Managing the Mail Box Suppose I attach a sign to the mailbox
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Managing the Mail Box
Suppose I attach a sign to the mailbox
“Intended for delivery of official US mail; also available for use for anyone wishing to drop off material to this house”
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54. Managing the Mail Box Questions Consistent with ownership rule?
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Managing the Mail Box
Questions
Consistent with ownership rule?
Is a contrary rule consistent with First Amendment?
What do we learn from Greenburgh Civic Associations, 453 US 114 (1981)?
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