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Commission backs discounted rate for Net postage

The U.S. Postal Rate Commission endorses a new class of mail that would allow a discounted rate on Internet postage, just as the cost of a regular first-class stamp is set to increase.

The U.S. Postal Rate Commission endorsed a new class of mail this week that would allow a discounted rate on Internet postage, just as the cost of a regular first-class stamp is set to increase by a penny.

The commission's approval is the first of several steps necessary to permit a reduction on first-class postage bought online. Santa Monica, Calif.-based Stamps.com, which began lobbying a year ago for an online postage rate reduction, has proposed an industry-wide cut of 4 cents for stamps purchased online.

Monday, the commission approved new rates that will increase the cost of a first-class stamp to 34 cents next year.

Supported by several Internet businesses, a new discounted class of postage could become a reality because of the increased efficiency and cost reductions associated with processing stamps through the Web.

A lower rate could be a boon for sales at ailing online postage companies such as Stamps.com and E-Stamp, which have been hit hard by market resistance for Internet companies this year. Last month, Stamps.com laid off 240 staff members following several high-level executive departures, including the resignation of its chief executive.

The decision now moves to the governors of the U.S. Postal Service. Following review from the governors, who may ratify, approve or deny the proposal, the postmaster general will make a final decision on the new class of mail.

"This recommendation is a huge vote of confidence for the emerging Internet postage category," Frank Heselton, a Stamps.com consultant and former assistant postmaster general for Rates, said in a statement.

"The creation of this new classification is a logical first step toward establishing a specific and permanent discount for users of Internet postage," Heselton added.