Postal Service to deliver the e-mail

Actually, it is the U.S. Postal Service. Officials there are planning to offer people living at all 120 million of the nation's residential street addresses free e-mail addresses. It would link the e-mail and real-world addresses in a giant Postal Service database in Memphis, Tenn.

That is just one of a long line of things postal officials would like to do online, as the Internet threatens to make paper mail in envelopes as quaint as milk delivered in bottles. In September, for example, the Postal Service plans to launch a nationwide service for people who don't have e-mail. Local post offices will make paper printouts of e-mail messages and deliver them with the snail mail, charging the sender about 41 cents for a two-page document -- an eight-cent premium to first-class mail.

But the database project the Postal Service is contemplating would be more sophisticated, raising serious marketing implications by linking real-world and online identities of tens of millions of consumers.

The Postal Service sees the project mainly as an e-mail forwarding service. Signing up would be strictly voluntary, and consumers would have to supply their own Web access, be it via a paid service, such as America Online Inc., or a free one, such as NetZero or SpinWay.com. The Postal Service would forward e-mail arriving in a free account to consumers' existing e-mail addresses. For an extra fee, customers could maintain an account at the Postal Service where messages could be retrieved.

For companies, the project offers the ability to reach consumers via e-mail even if all they know about them is a street address. A company would give the Postal Service the message and a list of street addresses. The agency would check the addresses in the database and forward the message electronically.

At one point, postal executives toyed with the notion of using the database to deliver packages labeled only with a recipient's e-mail address. It seemed like a mixed blessing. On the one hand, consumers could purchase goods and divulge minimal information about themselves. On the other, anyone who knew your e-mail address would have had the ability to send you a package of some kind. Postal officials say they aren't pursuing the idea.

Postal officials have visions of consumers emptying their Postal Service e-mail accounts from home or possibly from computers set up in post-office lobbies. "We would expect that every day you go to two mailboxes: your physical mailbox and your postal e-mail box," says Deputy Postmaster General John M. Nolan. That day is a long way off, of course: The Postal Service hasn't even decided how much to charge senders to use such as service.

Still, the plan, if it comes off, would put into the hands of the U.S. government an electronic asset long regarded as the Holy Grail of digital marketing: a centralized database correlating consumers, street addresses and e-mail addresses. It could be the most efficient tool ever created for delivering spam, as unsolicited junk e-mail is known.

"We believe they are developing the largest spam database in the history of the Internet," says Dave McClure, executive director of the U.S. Internet Industry Association, Arlington, Va., which represents some 300 high-tech firms doing business on the Internet.

The Postal Service insists it is planning "a no-spamming system." Instead, officials say they are developing the database in response to requests from companies that could use it to send bills and other communications consumers want to receive. It isn't clear how the post office would be able to filter out spam -- considering that most e-mail services haven't found a bulletproof method.

Nolan says the agency believes it can be a trusted intermediary between Internet marketers and the public. "People say the Internet could be a lot more usable if there was a greater trust involved," he says. "At the Postal Service, people trust us."

Postal officials insist every byte of information will be secure. Federal law prohibits the Postal Service from selling any of its consumer information, and it says it won't share any of the data with a third party unless it receives a federal warrant. "We'll be as secure, or more secure, than other sites in terms of the privacy people can expect from us," Nolan says. For most consumers, officials say, the mailer will never even see an e-mail address.

Still, such a vast database in government hands raises a raft of privacy concerns. After all, the history of the Internet is that whenever information is collected, people figure out new ways to use it. The Postal Service's e-mail plans potentially represent the foundation for the kind of comprehensive marketing database about individuals that have raised activists' and regulators' concerns.

Naturally, the direct-mail industry takes a different view. "Anything that would enhance the use of mail for advertising is certainly something we support," says Barry Brennan, director of postal affairs at the Mail Advertising Service Association.

Brennan says mailers would like the idea of being able to send "marketing messages" to the same person through two media: e-mail and physical mail. A teaser, say, could come by e-mail, followed by a more detailed ad or catalog through paper mail.

The Postal Service's e-mail plans represent a way to bridge the Digital Divide between computer owners and those who can't afford them, the agency says. It also could be a source of badly needed revenues: Experts estimate the Postal Service stands to lose $17 billion a year by 2008 to e-mail and online bill payment -- a figure equivalent to one-quarter of its annual income.

Internet companies and e-mail providers hear alarm bells in the Postal Service's plans to offer free e-mail accounts. "They're using their monopoly to fund these new offerings. That's not a fair circumstance to have to compete under," says Jason Mahler, vice president of public policy at the Computer and Communications Industry Association, which represents Internet companies including Yahoo! Inc. and Intuit Corp.

Rep. John McHugh (R., N.Y.), chairman of the House Postal Service Subcommittee, has proposed a bill that would require the agency to spin off its Internet businesses into separate companies. The subcommittee approved it last year.

Some industry executives doubt the Postal Service can realize its dreams. "It's just delusions of grandeur; I don't think it's feasible," says Gene Del Polito, president of the Association of Postal Commerce, whose members include direct marketers. In 1982, the post office launched E-COM, a service meant to let mailers send electronic messages to individuals via a printer in the post office. After investing three years and more than $42 million, the service pulled the plug on it. Nolan acknowledges E-COM was "a cure for which there was no known disease."

Then three years ago, the post office tried again, testing a similar service called Mailing Online, in Tampa, Fla. This time, the printing was contracted out to private-sector firms. However, technical difficulties ended the project in May 1999. A revised version, still called Mailing Online, is the one planned for national launch in September.

Similar services are getting off the ground in Europe. In Britain, the Royal Mail and Microsoft Corp., recently launched one called RelayOne. Postal services in Finland and Switzerland also are planning to print e-mail messages and deliver them.