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  UNIVERSAL SERVICE OBLIGATION                )   Docket No. PI2008-3

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**TESTIMONY OF JAMIE TROWBRIDGE**

**June 19, 2008**

My name is Jamie Trowbridge. I am the President and CEO of Yankee
Publishing, Inc., which is headquartered in Dublin, New Hampshire. I
appreciate this opportunity to testify before the Commission.

Yankee was founded in 1935 by my grandfather Robb Sagendorph, a
frustrated freelance writer who had a vision of a magazine that was to
be \"the expression of our great New England culture.\" Yankee was not
very successful at first, but Robb bought the rights to publish The Old
Farmer\'s Almanac in 1939, and things started looking up financially.
The Almanac is America\'s oldest continuously published periodical. It
was started by Robert B. Thomas in 1793, when George Washington was
still in his first term as President. Yankee still publishes both
titles. We have 55 employees \-- 45 at the company headquarters in
Dublin, New Hampshire, and 10 at a sales office in Boston. The company
is still family-owned.

Today, we use the Postal Service quite extensively to distribute Yankee
Magazine to our 325,000 subscribers. Yankee Magazine is \"New England\'s
Magazine,\" the essential resource for people who want to know and enjoy
the New England way of life today. Our readers live in both rural and
urban areas, and about half live outside New England. The \"outsiders\"
use the magazine as a way of staying in touch with the region they love.

In January 2007, we cut our publishing frequency to six issues per year
and reduced our circulation in an effort to recast the magazine's
publishing economics. Reducing our frequency and our rate base was a way
to reduce our production and distribution expenses. At the same time, we
increased the physical size of the magazine. Increasing trim size not
only provided a better visual experience for our readers but gave
readers more content per issue. Some of our readers were disappointed by
the changes, but many were pleased.

Changing the size of Yankee magazine from digest size to a more common
size allowed us to join the comail pool of our printer, Quad Graphics.
Through comailing, we are able to qualify more than 80 percent of our
copies for Carrier Route rates and over 90 percent of our copies for
destination entry rates.

In addition to distributing Yankee magazine to subscribers through the
Postal Service, we also use the Postal Service extensively to support
subscriptions (sending acknowledgements, invoices, and renewal notices)
and to attract new subscribers (sending promotions and special offers
for magazines and related products).

The Postal Service is extremely important to Yankee because mail serves
as our primary means of contact with our readers. While we do sell
copies on newsstands, subscriptions comprise more than 90 percent of our
circulation. We expect that the subscription channel will continue to be
the major component of our magazine's circulation for the foreseeable
future. All subscription copies are delivered by the Postal Service.

Given the large increase in recent years in the costs of producing and
distributing magazines, as well as changes in media consumption
patterns, Yankee magazine has established a successful companion
Internet site, YankeeMagazine.com, where we serve about 90,000 unique
visitors per month. We are focusing our investment resources on our Web
sites, as we expect are many mail users, as businesses in general
continue to explore ways in which technology can facilitate quicker,
less expensive, and more effective communication with customers.

While we don't expect circulation of our hard copy magazine to grow much
in the future, we do believe the magazine will continue to publish in
print for a long time to come. I have been told that magazines and other
mailed periodicals have been called an anchor of the mailbox -- eagerly
awaited by consumers -- and I feel confident that is true for Yankee's
subscribers. There is a good reason that mail with "educational,
cultural, scientific, and informational" value, such as magazines and
newspapers, have received special treatment under postal law throughout
the years.

Ever-increasing production and distribution costs may force magazines to
raise prices for consumers and advertising customers. Unfortunately, our
subscribers and advertisers are more focused on their costs than ours
and they are very price sensitive. Realistically, the only way we can
accommodate increased costs is by cutting back the least profitable
parts of our business as they turn unprofitable. That decreases the
volume of our business and the volume of the USPS. Thus begins the
downward spiral. To keep our businesses viable, we need a viable,
reliable and affordable Postal Service now and in the future.

I wish to offer the following observations in response to the
Commission's questions regarding universal postal service.

-   Maintaining a universal postal system is in the national interest.
    Facilitating nationwide distribution of the printed word was a
    fundamental justification for the original establishment of
    America's government-sponsored postal system. More than 200 years
    later, magazines still make a difference in people's lives, and in
    the life of the nation.

-   What does universal service mean? Several features of universal
    service are particularly important to Yankee and magazine publishers
    in general:

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-   Postal rates must remain affordable. Consistent with the
    recently-enacted postal reform law, this can be achieved by
    constraining Periodicals rate increases to inflation. As a small
    mailer, I can tell you how hard it is to absorb increasing business
    costs, paper, fuel, health insurance, and postage.

-   As the only truly universal service provider, the Postal Service
    should continue delivery to each and every business and residence as
    it does today.

-   Six day per week delivery should be continued. Certain magazines may
    be best received just prior to or on the weekend when readers have
    more time to devote to perusing the magazine. Other magazines may be
    best received early in the week to provide useful information a
    reader can utilize during the workweek.

-   The Postal Service should provide reliable service, with clearly
    articulated service standards, a service measurement and reporting
    system, and avenues of recourse if the standards are not met. We
    believe that current service levels provide adequate service for
    magazines and should be maintained.

-   The Postal Service must continue to deliver the variety of mail that
    publishers (and other mailers) want to send. Publishers use the
    Postal Service to distribute a broad spectrum of magazine formats --
    ranging from ounces to pounds; from digest size to tabloid size;
    from unwrapped to polywrapped.

-   I realize that potential declines in mail volumes could make funding
    universal service more challenging in the future. It is likely that
    the Postal Service will need to look internally for cost reduction
    opportunities. I understand that one such opportunity is for the
    Postal Service to streamline its processing network to reach an
    optimal configuration. The Postal Service should be given
    substantial flexibility to do so as long as it continues to meet it
    universal service obligation.

I wish to offer the following observations in response to the
Commission's questions regarding postal monopoly laws.

-   One reason the Postal Service is able to pay for its nationwide and
    truly \"universal\" network of carriers delivering mail to each and
    every business and residence in the nation is through the monopolies
    it has been granted over the delivery of letters and access to
    mailboxes. This seems to be a reasonable approach. The Commission
    should not recommend changes to these monopolies that could
    jeopardize universal service.

-   I understand that magazine publishers have tested alternate delivery
    options and have concluded that efficient and affordable delivery
    requires large quantities of mail. Allowing new entrants to
    "cream-skim" the Postal Service's most profitable mail volume could
    deprive the Service of the volume and revenue needed to underwrite
    the cost of the universal service obligations.

Thank you for your time and attention. I would be pleased to answer any
questions you may have.