USPS is an independent establishment of the executive branch with a mission to bind the nation together through the personal, educational, literary, and business correspondence of the people. The Postal Reorganization Act of 1970 reorganized the former U.S. Post Office Department into the United States Postal Service. USPS’s current legal framework requires it to break even over time and intended it to be self-supporting requires it to provide a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sustaining; and prohibits it from closing small post offices solely because they are operating at a deficit, it being the specific intent of Congress that effective postal services be insured to residents of both urban and rural communities. USPS’s mission and role, and the processes used to carry out mail delivery and retail services, have evolved over time with changes in technology, transportation, and communications. Key events in postal history are listed in table 1. Most customers in the early development of the national post office had to pick up their mail from a post office. The first step toward universal delivery service was taken in 1863 when Congress declared that free city delivery would be established at post offices where income from postage was sufficient to pay all expenses of delivery. Mail delivery service was gradually extended to smaller cities and was later extended to rural areas in 1902. Advances in the delivery of mail coincided with transportation improvements. Various transportation modes developed throughout history have been used to transport mail, ranging from stagecoaches in the 1700s; steamboats, trains, and the Pony Express in the 1800s; and finally by airplanes, automobiles, and trucks in the 1900s. Furthermore, advances in transportation were particularly important in rural areas; rural delivery helped stimulate road improvements to these areas because passable roads were a prerequisite for establishing new delivery routes. Throughout the nation’s history, the post office has been a key component in the provision of postal services. Post offices proliferated throughout the 1800s as the United States’ territory grew and new postal routes were established. At the turn of the 20th century, the number of post offices reached its peak with nearly 77,000 offices, which was an average of 1 post office for every 1,000 residents in the country (see fig. 1). The number of post offices per capita declined throughout the 20th century, to an average of 1 post office for every 10,000 people in 2000. As transportation improved, it became easier for rural carriers to deliver mail to a wider area, which decreased reliance on post offices for being the primary delivery and collection point. Furthermore, rural carriers provided retail services as part of their routes, so customers did not have to travel to a post office for these services. Providing mail delivery and access to retail postal services is central to USPS’s mission and role. According to USPS officials, all USPS customers are eligible for free mail service and most receive delivery 6 days a week. Furthermore, all customers have access to retail services provided through the postal network, including the ability to purchase stamps from post offices or other retail facilities. Differences exist, however, in how USPS provides these services, particularly in where, when, and how customers receive the mail and have access to the postal network. These differences have always existed and have evolved with changes in technology, transportation, and communications. Delivery and retail decisions are made primarily by local staff (i.e., district employees and local postmasters), with overarching guidance provided by national USPS policies and procedures. These local field staff consider such factors as the number and location of delivery points in the area, the quality of the roads and transportation, employee safety, mail volume, projected costs, and the type of service offered in nearby areas. The following information in this section provides an overview of the current USPS delivery and retail networks, recent trends, and how decisions about delivery and retail networks are made. USPS’s legal and statutory framework provides the basis for its delivery services. For example, USPS is to “provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities”; “provide a maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sustaining”; “receive, transmit, and deliver throughout the United States…written and printed matter, parcels, and like materials”; and “serve as nearly as practicable the entire population of the United States.” These provisions are considered key parts of universal service and provide the general operational guidance for USPS. USPS has the ability to establish delivery service within these broad provisions but by law must operate in a break-even manner. A long-standing provision in the appropriations acts for USPS requires the continuation of 6-day delivery and rural delivery service. According to USPS officials, delivery decisions are made at the local levels. National policies outline overall operational guidance, but discretion is provided to local officials, including area and district managers and postmasters, to make delivery decisions in their respective areas. These local officials—who, according to national USPS officials, are most familiar with the area to be served—make decisions related to the type, frequency, and location of delivery service that will be provided to a given address. A summary of key decisions is included in table 2, and additional information on each of these decisions is provided in the following sections. According to USPS, local officials select the delivery method that provides service in the most efficient and cost-effective manner. They consider such factors as the number and location of delivery points in the area, the quality of the roads and transportation, employee safety, mail volume, projected costs, and the type of service offered in nearby areas. These local officials also are provided with specific manuals that contain national guidance on establishing delivery service, as well as on how to carry out these operations on a day-to-day basis. USPS customers are entitled to receive mail delivery service at no charge in one of two ways: via mail carrier or via the customer retrieving his or her mail at a designated postal facility. The majority of USPS’s residential and business deliveries are made by mail carriers—about 86 percent in fiscal year 2003. Approximately 14 percent of USPS’s deliveries are where customers travel to a USPS facility, primarily a post office, to retrieve their mail. These customers receive mail service either via box service or general delivery pick up. Box service may be provided (1) at no charge to customers who are not eligible for carrier service—this would represent their free mail delivery service—or (2) at a fee to customers to supplement their existing delivery service. Customers who are not eligible for carrier delivery and whose retail facility does not provide box service are provided with general delivery service where they retrieve their mail from a post office counter at no charge. While current mail recipients have access to mail delivery service at no charge—the cost of delivery is borne by postal ratepayers—the process by which customers are eligible for free delivery has recently been clarified. In the 1996 Mail Classification Case before the PRC, USPS proposed eliminating the fee for box service that it charged customers who were not eligible for carrier delivery. At the time of this case, USPS estimated that about 940,000 boxes would be offered free of charge as a result of this policy. This proposal, however, did not require USPS to offer a free box to all customers ineligible for carrier delivery, such as those ineligible due to their proximity to a postal facility (i.e., the quarter-mile rule). These customers would only be allowed to receive general delivery service at no charge. The PRC, in its ensuing recommendation, raised issues about inequities regarding customer eligibility for free box delivery and urged USPS to rectify them. USPS dropped the quarter-mile-rule provision during the following 1997 rate case, and, as such, customers ineligible for carrier service became eligible for free box service. According to USPS officials, most customers receive mail delivery 6 days a week, but there are customers who do not. These customers include businesses that are not open 6 days a week; resort/seasonal areas that are not open year-round; or areas that are not easily accessible due to transportation constraints, such as remote areas that may require the use of boats or airplanes to deliver the mail. For example, mail is transported by mules for delivery in the Grand Canyon, by snowmobiles for delivery in some areas of Alaska, and by boats for delivery on islands in Maine and other states. As previously stated, the majority of USPS customers receive carrier service. Once it is determined that a customer is eligible for carrier service, USPS determines the type of carrier route service that will be provided. USPS has three primary carrier route categories—city, rural, and highway contract routes—and has national policies and procedures that contain the criteria used to establish, manage, and operate the three types of routes. Excerpts from these policy and procedure manuals are provided in table 3. USPS’s “rural” designation does not necessarily reflect geographically defined rural areas, and there is no population threshold for a USPS- designated rural or city route. Rural carrier routes encompass a wide range of geographic areas and may cover both less-densely populated areas generally considered to be rural as well as suburban areas generally considered to be urban. A USPS rural route such as one in Charlotte, North Carolina, or Jacksonville, Florida, may cover a geographically defined suburban area and may contain a similar number of delivery points as a city route. USPS officials explained that many suburban areas met rural route criteria when they were originally established. However, they also stated that although the population may have grown in an area that now may be considered suburban, USPS maintains existing operations in this situation. Thus, it retains the rural route classification.