At Post Office Of the Future, Lots of Bytes But No Dogs

For 220 years, the world's largest postal service has slogged through snow, weathered increasing competition, and dodged the occasional dog bite. Now, on the brink of the 21st century, it's skipping into cyberspace.

The move comes none too soon. The United States Postal Service is losing business to other delivery methods. Critics want Congress to allow even more competition in mailing services - a move that could cause the USPS serious problems, according to a recent General Accounting Office report.

By tapping into the Internet, the postal service hopes to capture a market with huge potential revenues. True, it's unlikely that these cyberspace experiments will give any major near-term boost to the $54 billion-a-year bottom line. Still, if its plans succeed, the USPS will give customers a range of new services and a new look. The post office of the near future could be:

A network of 24-hour kiosks. Already being tested in Atlanta, the kiosks could do for the postal service what automatic teller machines did for banks. But the modular units, placed in malls and other public locations, will let consumers do far more than buy stamps at midnight. Individuals will be able to log onto the Internet to do everything from applying for a passport to buying merchandise on-line.

A government gateway. To streamline the process of filling out government forms, the postal service is introducing a new Internet service called WINGS (Web Interactive Network of Government Services). Citizens fill out all the information once, and it goes to all the appropriate agencies. The change-of-address from a retired veteran, for example, would be routed to the USPS, the Department of Veterans Affairs, and the Social Security Administration.

Even state and local governments can hook up. In Charlotte, N.C., the USPS is already linking WINGS to the city's on-line system (called Charlotte's Web), which would eventually allow local residents to use the same system to, say, buy a local dog license and contact the US Internal Revenue Service. Residents without a computer could use the city's public-access machines or the postal service's kiosks. (To try the system, log onto the Internet's World Wide Web and go to http://www.wings.usps.com.)

An on-line marketeer. WINGS will also make it far easier for government agencies to sell goods to the public. Want that commemorative set of US coins? How about one of the 7,000 CD-ROMs put out by the Agriculture Department or that cute key chain from Nebraska's tourism bureau? These agencies would pay the postal service to market these goods on-line, take the order, collect the money, and wrap and ship the packages.

"The phone is ringing off the hook," says Susan Smoter, program manager of WINGS. "We have 50 agencies that are waiting to get the work going." Private companies are interested in signing up, too. At its trial kiosk in Atlanta, the USPS has already signed up four catalog companies to offer their wares during the holiday season.

The notary public of cyberspace. On-line, people can forge their identities and alter documents. So the USPS has developed an electronic postmark and is working on a digital signature. That way, people will be able to "sign" their names to on-line contracts and documents, and the post office will ensure that they are who they say they are and that their documents have not been altered.

According to current plans, each electronic postmark would cost 22 cents; the annual fee for using a digital signature would be $10 to $12. The system will be first marketed to firms wanting to conduct business on-line. (Go to http://www.aegisstar.com to try out the system.)

The postal service, which is testing these services and could begin introducing them formally in the next several months, has several advantages in cyberspace. It has a "brand name" that people know and trust, despite frequent complaints about service, observers say. It also has the size and reach that most Internet companies can only dream about. To sign up for a digital signature account, for example, a customer would simply walk into a local post office and show some identification.

The USPS also wants to move into cyberspace because it is losing ground in some of its traditional markets.

"There's lots of changes going on with the Internet and the World Wide Web," says Paul Raines, program manager of electronic commerce services for the USPS. "The postal service either has to adapt to those changes in the marketplace, or I think we are going to be in trouble."

For example, nearly 60 cents of every dollar the USPS earns comes from first-class mail. But competitors are beginning to steal that market away. Between 1991 and 1994, the USPS's share slipped from 68 percent to 62 percent - and it expects further erosion.

A big reason is that much of that first-class mail is bills - transactions that credit-card companies, utilities, and others are increasingly allowing customers to do electronically. The USPS is striking back with hybrid mail- and electronic-delivery systems, which would speed up companies' billing. But several observers are skeptical it will catch on.

Meanwhile, some competitors are beginning to wonder whether they want a $54-billion giant competing in the still-emerging marketplace of electronic commerce.

"Many banks see a role for themselves providing the very same services that the USPS is proposing," the American Bankers Association wrote in a recent letter to the postal service. "The involvement of a government entity is likely to impede rather than promote competition and innovation."

Others worry that the Internet will prove to be a costly diversion for the USPS. "Few companies have made money within the electronic area," says Gene Del Polito, president of the Advertising Mail Marketing Association in Washington. "If they're wildly successful, we conjecture they would make $100 million. Wouldn't it make more sense to improve your services rather than chasing this $100 million?"

But many observers are taking a wait-and-see attitude. "It's sort of a showdown whether the postal service can adapt to this new electronic environment in which it's going to have to operate," says Gary Arlen, president of his own Bethesda, Md., research company specializing in interactive services. "They can come out holding their own. But I don't see how they could be a big winner."