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Magazine publishers are enraged over postal plan

Proposal calls for 15% rate increase in cost of mailing subscriptions

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NEW YORK — Magazine publishers and chief executives of media companies are using words like "passion," "devastation" and "death" to describe a proposed postal rate increase that would raise the cost of mailing subscription copies of magazines by 15 percent.

To fight the proposal, magazine publishers have spent millions of dollars lobbying Congress for relief.

Publishers estimate the proposed increase would cost their industry $300 million in the next two years.

"This could be potentially devastating for many magazines," said Nina B. Link, the president of the Magazine Publishers of America.

The Magazine Publishers of America plans to spend $10 million this year lobbying Congress on the issue, while companies like Time Warner, the parent company of Time Inc., have put their own lobbyists to work on the case as well.

The Magazine Publishers, a trade group to which more than 1,020 of the largest consumer magazines belong, has placed ads in trade journals stating that the proposed increase is twice the average increase the U.S. Postal Service usually proposes, is three times the rate of inflation and is double what the Postal Service actually needs to cover the projected costs of processing magazines.

But economists for the Postal Service say that while the service is willing to negotiate the proposed increase, it is not only necessary — it is mandated by federal law. The Postal Reform Act of 1970 mandates that every class of mail must cover its own mailing costs.

This latest rate proposal comes at a tense time for the industry: newsstand

sales are sinking, subscriptions are down for many consumer magazines, and several smaller but high-profile magazines have closed this year.

And some publishers still remember the last time such a large postal increase went into effect for the magazine industry — in the early 1970s, when the added financial burden contributed to the demise of even some venerable publications like the old weekly Life.

"Small magazines are the ones that will be most devastated because they have smaller margins," Link said. "This will hurt them the most. And it will be hard for other magazines with larger circulations that don't have much wiggle room."