Postal Service rethinks Internet offerings

The U.S. Postal Service has extended to Jan. 11 the deadline for companies to express interest in taking over two Web-based postal services — secure electronic messaging and electronic postmarks.

The two services are among five e-commerce undertakings that have failed to generate revenue for the financially beleaguered Postal Service.

Faced with staggering financial losses, USPS is in the midst of restructuring and hopes to outsource services "where it makes sense for this organization," said spokeswoman Sue Brennan.

But contractor interest in taking over the services is questionable. The financial risk is high, said Thomas Anokye, a Texas-based technology support vendor who unsuccessfully tried to interest a major U.S. corporation in jointly bidding on the services.

Anokye said the venture still might prove profitable if the services could be performed by foreign companies with cheaper labor rates.

For USPS, shedding unprofitable operations is critical. The agency suffered $1.7 billion in operating losses in 2001 and as much as $5 billion in losses because of the October anthrax attacks and Sep.tember terrorist attacks.

Under those circumstances, "we need to focus on better and fewer things," said Charles Chamberlain, the Postal Service's manager of secure electronic services.

So USPS is seeking private companies to take over PosteCS, its secure electronic messaging service, and its Electronic Postmark service. Vendors are to supply "labor, supervision, equipment, facilities and supplies necessary to operate" the two services, USPS officials said.

PosteCS is a Web-based file-delivery service that lets users send electronic files that are too large for most commercial e-mail systems, Chamberlain said. The service also allows senders to protect the files with passwords and provides a return receipt that notifies the sender that the recipient has received the file.

Commercial and government customers use the service, Chamberlain said.

With its Electronic Postmark, USPS hoped to create a service for those who deal with electronic documents that must be delivered on time, such as legal documents and tax forms.

Verification of time, date and place of filing can be attached to documents with an electronic postmark. The postmark process also involves "hashing" the document contents, which calculates a numerical value for the contents that can be compared to the numerical value of the received document to determine whether its contents have been changed.

When it was unveiled in 2000, the Electronic Postmark program was touted as a starting point for more advanced electronic services, such as smart forms.

Decisions about outsourcing other electronic services have not yet been made, Chamberlain said.

The outsourcing effort comes amid controversy about whether the Postal Service should be dabbling in e-commerce. The Progressive Policy Institute, for example, has called for USPS to get out of online ventures, which range from selling clothing to offering online billing and bill-paying services.

"While it is completely understandable that USPS executives would rather focus on fun and exciting Internet ventures than on the mundane task of moving stacks of paper, USPS is an organization particularly ill-suited to the task," the institute said in a study calling for massive Postal Service reform.

But Bill Robertson, senior vice president of business development for NETdelivery Corp., an electronic document management company, said a USPS move away from Internet services is a bad one.

NETdelivery has helped Canadian and Swedish postal agencies establish Web-based services that provide businesses and postal customers with secure e-mail, bill paying services, online marketing, electronic forms and online government services.

Rather than get out of electronic services because of financial difficulties, USPS should be getting further into them, Robertson said.

During the next three to five years, "a lot of paper mail is going to convert to electronic mail," and if the Postal Service cannot deliver it, someone else will, and probably for a profit, he said.

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