Such improvements to the postal industry would be music to the ears of many a customer. Second , basic notions of fairness imply that the cross-subsidy should be eliminated. To the extent that people make choices about where they live, they should assume the costs of that decision. Additionally, it is quite possible that the urban-rural subsidy results in wealth redistribution from poor to rich. Currently, for example, inhabitants of the South Bronx are among those who subsidize mail delivery to Aspen, Colorado.
Monopolies are always the most damaging when they are established in collaboration with government.
This magnifies the concentration of power, eliminates any hope of new competition, and stifles innovation. Third , there is no reason why the government monopoly is necessary to ensure service to sparsely populated areas. The government could easily award competitive contracts to private firms for that service. If rural delivery is indeed an important social concern, it can easily be addressed through contracting. Fourth , early concerns that rural residents of the United States would somehow become isolated without federally subsidized mail delivery today are simply unfounded.