http://www.msnbc.msn.com/id/46381619/ns/business-us_business/
"There's still a real digital divide between rural and urban America"
By Cezary Podkul and Emily Stephenson
Postal officials were blunt in December when they stood before 120 residents in Dedham, Iowa, to tell them why their town's post office has to close. The Internet, officials said, was killing the U.S. Postal Service.
"Well, I have no Internet," resident Judy Ankenbauer said at the meeting. Like many of Dedham's 280 residents, Ankenbauer said she still relies on the post office to buy stamps and send letters and packages.
Dedham is hardly alone in its dependence on the Postal Service. Some of America's poorest communities - many of them with spotty broadband Internet coverage - stand to suffer most if the struggling agency moves ahead with plans to shutter thousands of post offices later this year, a Reuters analysis found. Nearly 80 percent of the 3,830 post offices under consideration are in sparsely populated rural areas where poverty rates are higher than the national average, demographic data analyzed by Reuters shows.
Moreover, about one-third of the offices slated for closure fall in areas with limited or no wired broadband Internet, Reuters found.
"We're not the ones in the big cities who are just emailing everything to everybody. We're the ones that are actually still sending our Christmas cards and our birthday cards," said Sarah Clyden, who runs a feed store in Oakwood, Okla., where the agency is considering closing the post office.
Federal law requires the Postal Service to provide "a maximum degree of effective and regular postal services" to rural areas and small towns. Today, with 32,000 retail locations and 150 million delivery points, the Postal Service has a larger footprint in the U.S. than McDonald's, Starbucks and Wal-Mart combined, according to its website.
Even so, the rise of email, a drop-off in first-class mail, onerous labor costs and the growth of shippers such as UPS and FedEx have left the Postal Service hemorrhaging money. By fall, postal officials have warned, they may not be able to borrow money.
The Postal Service is not studying the economic impact on communities where post offices are slated to close, spokesman David Partenheimer said. But in the 3,004 rural communities across 48 states where post offices may close, many residents fear the impact will be pronounced.
About 2.9 million people live in the rural communities where the post office that may close is either the only one or one of two post offices serving their zip code area. For many rural residents, that would translate into longer drives to mail packages, pay bills or buy stamps.
Like all of the post offices on the closure lists, the post offices in Dedham and Oakwood wouldn't close until mid-May, thanks to a temporary moratorium on closings put in place in December. The moratorium was intended to give Congress a window to pass legislation offering the Postal Service some relief. But with lawmakers still deeply divided over how to address the Postal Service's financial woes, state and local government officials worry thousands of closings are on the way.
"The Postal Service is supposed to be a universal service available to people wherever they live in America," said Iowa Gov. Terry Branstad, who pushed hard for the moratorium. "What they're doing is going against that premise."
'Drop in the bucket'
The Postal Service chose post offices for possible closure based primarily on revenue. Two-thirds of the 3,830 post offices slated for closure earned less than $27,500 in annual sales, postal data show. Nearly 90 percent of these post offices are located in rural areas, where shrinking populations and dwindling businesses mean the post offices simply cost more to operate than they earn.
"These offices are decreasing in revenue year after year after year," said Dean Granholm, the Postal Service's vice president for delivery and post office operations.
Despite a request under the Freedom of Information Act, the Postal Service declined to provide data on revenues for individual post offices. But the Postal Service did provide Reuters expense data for all post offices. The statistics show that closing all of the post offices under consideration would save about $295 million a year - about four-tenths of 1 percent of the Postal Service's annual expenses of $70 billion.
"That's a drop in the bucket," said William Henderson, who served as Postmaster General from 1998 to 2001. Then he corrected himself: "That's not even a drop in the bucket. The bucket won't ripple."
The Postal Service says the closures are necessary because Americans increasingly are turning to the Internet to send email and pay bills, resulting in plummeting mail volume and revenue.
"We've lost our business to the, you know, online communications," Kent Gochenour, an Iowa postal official, told residents at the town hall in Dedham.
To match the falling demand, the agency says it needs to cut $20 billion in operating expenses by 2015. Restructuring healthcare programs, eliminating jobs, ending Saturday delivery and closing post offices are among the moves being considered, though some of these would require permission from a Congress that remains deeply divided on how to address the Postal Service's woes.
"When you deal with billions, there's nothing that you should ignore, even if it's only a couple percentage points of your total operating costs," Postmaster General Patrick Donahoe said during an October interview.
But for many in the communities where post offices are slated to close, doing business online is not an easy option. Trinchera, Colo., a rural town near the New Mexico border, lacks wired broadband. Carlos Sandoval, a local rancher, said he relies on the post office for everything except groceries. He said he only uses a computer when he visits his daughter "in town" - Trinidad, Colo., about 15 miles from his home.
Like Sandoval, about a third of the 110 people served by the Trinchera post office have no Internet access, according to Gene Caldwell. The 82-year-old began mustering statistics last fall to share with postal officials during a community meeting on the post office .
Many residents live as many as 50 miles from the nearest town, and to get there, they have to travel mostly on unpaved roads, Caldwell said. They rely on the Postal Service for livestock vaccinations and medicines, notices of livestock sales, trade newspapers and other items.
More than half of the 58 Colorado post offices on the closure list fall in areas that, like Trinchera, have limited access to broadband Internet.
Nationwide, about 1.7 million people live near post offices slated for closure in areas with limited or no broadband Internet service, Reuters found.
"We're targeting the wrong people," said Mark Strong, president of the National League of Postmasters. "We probably should have taken a look to see if first of all they have Internet accessibility in their communities."
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