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Internet gaining ground on snail mail

The Postal Service's coming rate increase might cause some post office regulars to embrace electronic alternatives.

"All you need to do is ask your colleagues how they pay their bills these days," said Gene Del Polito, president of the Association for Postal Commerce, an Arlington, Va., trade group. He predicted the rate increase would drive more consumers to pay bills via the Internet, and more businesses to demand it.

A report issued last month by the General Accounting Office, the investigative arm of Congress, concurred. "Raising rates may cause mail volumes to decrease and encourage mailers to shift more mail to electronic and other delivery alternatives," the agency wrote.

Electronic diversion of mail is already happening, the GAO added. In the U.S. Postal Service's fiscal 2001, which ended shortly before the Sept. 11 terrorist attacks, the volume of first-class mail grew just 0.1 percent, the lowest rate of increase in 25 years. Postal officials attributed it to a slowing economy and the Internet, including e-mail and instant messaging services.

"The prospect is for future declines over the long run," the GAO wrote.

Even the Postal Service has tried to seize on the Internet boom. Among its offerings are an online bill payment service called eBillPay, and a hybrid service in which a letter typed online by consumers is put on paper and mailed by postal carriers. So far, the initiatives have met with minimal success: revenues of just $2-million in fiscal 2001, versus expected revenues of $104-million.

But many types of postal service users cannot go electronic. Louis Mastria, spokesman for the Direct Marketing Association in New York, said there is no real alternative yet to paper catalogs and other high-gloss advertising.

"It is still very difficult to transmit some of the high-resolution photographs that consumers demand when they're buying, say, clothing," he said. "It's bad enough that you can't feel the clothing."

Most direct marketers use the Internet to complement their paper advertising, not replace it. Catalog users, for example, are increasingly making orders over the Web rather than the telephone.

"E-mail penetration is not what everyone kind of assumes it is. It certainly isn't 100 percent like the Postal Service is," he said. "Neither is PC penetration. So saying that you could take your entire hard-paper business to the Web is a little bit of an overstatement."