to me than to try to have all of you be part of it. esther davis, i appreciate you showing the way. >> thank you. we will now recognize the gentlelady from the district of columbia. chairman, i must say i welcome this hearing on innovation and the postal service and particularly welcome private businesses who worked with the postal service. wondered about the identity of the perpetual identity crisis we keep the postal service in. it is a little bit private or maybe mostly private chain to the federal government. whereas the essence of being a private business when government does not get you anything is that you can go out and fail for yourself or rise. most of the downsizing by the postal service has been done by cuts. i would much prefer innovation to be the road to the future of the postal service and i do not believe there is any way out of that. so every time i see on toolision an innovative for postal service is using, i come --because i had become used to a kid growing up. i do see those and will like to ask about some of those. the new products in particular, since some of you have been involved with some of those products. hasof the success stories been every door direct mail. has apparently this product been a great success to the business community. i would like to know how the postal service understood that this is passed on to the business community. it is an innovative product that was created to leverage technology in some way. a hardcopy piece of mail. what we have done is to pistol a tape the ability to go to the website and literally pick a neighborhood. if you are a dry cleaner or restaurant you can actually pick the neighborhood and routes to see your piece of mail delivered to. you do not have to deliver to an entire zip code. you can pick a zip code you know your customers live in. it has mapping to allow the street to be created. there is a commercial version and a version where you can walk into of postal service. do you have any competition with best service? not with mail going into the mailbox, no. there is maybe more sophisticated direct mailing that takes place. i think that was initial concern of the business partners. that it would force people to more- drawdown from a traditional mail piece. our findings is that opposite. someone begins with a very simple edm product and have morphed themselves to more sophisticated mail years and have seen the value of it and started working with a commercial printer and expand where they are sending mail to. it is really a first step and a very easy way that in many aces has helped mailers move into a much broader mail stream. off based onck what they have learned by going online? >> i think that is the issue, they can take where they wanted to go to. it is saturation by mailing when they pick on the carrier route. moneyan save businesses as well. this becomes a lot more targeted. neighborhood mail is almost a way of describing. really gets focused on the area she tried to reach -- that it is tried to read. >> the post office has had fair success collaborating with others. we work extensively with the postal service. >> did they reach out to you yakke? >> my understanding is we had a best idea and to use with products as well. who reached out to who and that one? >> we reached out to the postal service initially. >> mr. cochran, do you find it you were pursued by businesses like mr. weissberg. >> it is very flattering. i think it is a recognition of the presence we have, the fact --h that we are at 153 doors 153 million doors today. we created a product that the regulator. a temporary product. we went to a regular full-time product personal return service. at the time, 10 years ago, is really when e-commerce started to take off. one of the real barriers was fisa returns. market research was showing that was the thing holding people back. it was in everyone's best interest to help us to locate a more easy return. we were proud to partner with him and i think it is a great success story. >> can i ask one more? >> absolutely. >> you were describing difficulties with the postal service. >> you put your wood behind the arrows that you believe in. and we approached ups and said we would love the package. we will give you a great rate for it. they are talking about one dollar from oregon destination. >> the fact is we have different automation. we do delineate letters from classified mail. it is important to go into the distinct streams they are supposed to so it is not creating havoc on the machines. the packages are inside an envelope does not necessarily make them a flat. it is parcel. that is the reason they were turned down because of the rigidity of the pieces and the need for these pieces to stay in the appropriate mail stream. we would welcome customer shipping notices, packages designed. i think it is an innovative design. the whole concept of securing the bottle that is tamper-resistant is a nice value set for pharmaceutical companies. we deliver well over hundreds of millions of pharmacy items on an annual basis. but it is a parcel and at the end of the day has to be mailed as a parcel. >> may i speak? my company was purchased by siemens. the entire impact was around initially their frustration with doing drugs by mail. >> at the time they had done in collaboration. they were handling it at 300 pieces per minute. guess they could not automate through the mail. the first thing we did is because we come from and innovative background. we know all of the headaches. i have built 100 distribution centers in my life. we ram this through flats. we ran this and fort worth before we ever submitted packaging. we provided this. it sends this way. we have offered to retest the expense. we want to partner with the post office. hello, we have volume. please, work with us. i do not know what to do. >> thank you very much. >> i have a few more questions. we will give mr. norton more time after if he wants it. mr. williams, some of the innovations you talked about some of the virtual po box. can you tell me what a virtual po box is? >> at first question it seems like what mr. davis was offering . >> perhaps they are related to one another. >> today the postal service is limited and the number of post office boxes that can offer to our users. it is also limited in the number of things you can put in their. it would allow people -- we can talk about classes of customers that allows the customer to open a box that has no dimensions and to anld be delivered address in the united states that people apply for. there are a lot of foreign customers that would like to do this but cannot because they do not have a u.s. address. allow it toox would go there and that post office could combine it with other things going to that country and send it at a discounted rate. we think that would be good for commerce. it would also provide for small businesses and innovative the ability to operate the business out of the virtual po box. would temporarily store the items. with a faxry this type service. it remains alive. it strikes me as a good idea. this is also something that i mentioned earlier in the meeting, taking the moment and demanded this in this environment is very difficult. i would say it has not come in a strong, compelling way to hybrid mail. >> i want to go to mr. weissberg for a second. you are a success story in working with the post office. was ups a board of when you all started out with this product? >> when we initially started it took a process of years of speaking with the postal service by us and other companies that wanted to do pc postage to convince the postal service to approve it does allow it to exist. there were people within the postal service that were encouraging. there were others more discouraging. >> any suggestions for how we can change the process of getting innovative rocks like stamps.com -- innovative to get like stamps.com to exist? >> we do think there are protections that come to make sure the postal service has launch a product. we do very much support the concept of using a public-private ownership. player toindustry come up with the best solutions that work well. that has to be a little bit awkward in that they are a regulator and you are a competitor. lex it is a very difficult position to be in when you invest a lot of time and effort into an industry into launching by the postalated service. you have to provide detailed information about how your products work. they launch it directly competitive. let's make it to a couple more questions to go. outbox, mr. to davis, one of the things i service has the potential to offer is targeted ads. a targeted internet user. i will go shop for dress shirts online and almost every site i visit has an advertisement for dress shirts on it. this is highly targeted advertising valued by advertisers, and the postal service talks about advertisers not getting their product delivered, but wouldn't this valuet actually have more to advertisers than a random catalog. intense spending -- intense spending is the holy grail of all advertising. holytent spending is the grail of all advertising. you can imagine advertising that is free to an end user. they can decide if they want to engage with them or not. tests ofry interesting small sample size products where we would present digitally an a new flavor of kind bar. in some of our tests we have as much as 50% engagement. astounding for any digital advertising piece. people would say yes. to give you an idea on how much that is worth. they offer about 20 dollars per sample product given to a new user of the product. an enormous amount of product -- money being spent. powerful very targeting tool. >> that would be revenue to outbox and not the postal service. i guess the issue becomes, is there a model for something like this where the third-party does it or something you develop the technology to sell it to the postal service and they do it? was that the feeling you got in your negotiations? >> right. a is hard to unpack uncomplicated web of business mandates. at the end of the day there can be winners and losers. hope that the postal service could not create this on their own or too slow to do that. then outside third party companies could develop it. spend private dollars to develop it. then could either white label it or be a third-party contractor. >> thank you very much. we have a little bit of time before we have to leave. ms. norton has some more questions. keepsm interested in what the postal service from developing new and innovative contacts. we have fund them off, of course, as a private business. that always allow them to access the private business. issues orany impediments that stand in the way of the post office doing the usual work of seeking innovations, particularly given the unique -- unique in for structure? infrastructure? >> i think the challenge, part of it, is the current law we operate under. it is restricted. >> what about the law? an example, it says the products that we are allowed to enter into postal products and has put a box around things we can do. if we get approached by someone with an innovative idea, if some of these things are against the we'reome of the things working on, some do not fit the model and some are not legal. restrictivef very privacy rules. a lot of data for what goes into the american household with things like imb. statutes thatacy exists. unlike private sector countries -- companies we are not allowed to data mine. that is a restriction. >> that is a restriction that would not be as controversial here. the chairman seem to buy into this description of postal products when he admonished mr. daring to suggest nonthinking products might be suitable. i disagree with the chairman on that. it seems to me we have information that if we look of thecally for 60 years 20th century the postal service was used mostly by immigrants. savings accounts. limits on the amount of savings accounts. there were facilities where there are no banks. they have pulled out of many neighborhoods because they do than the digital postal service does. i do not see what is wrong with nonthinking service. this is what i meant when i opened my last question. it is like a little bit pregnant. you just cannot do it in a market economy. invite mr. cochran and williams to elaborate on youpostal services that think the postal service could enter and thrive and truly compete with the private sector. the postal service was in the banking sector for a number of years worldwide. is many will provide financial services and will provide 14.5% of the income, which will help them to continue to provide universal access and reduces the overhead for the postal service -- postal offices out there. we currently provide financial services with money orders and other kinds of informal services that we do in remote areas for the customers. to update the money order to the digital age. we do not think it is good for citizens or e-commerce to be cut off from one another. you cannot use money orders to engage in e-commerce as a result of 68 million adults that are cut off from commerce and commerce is, from them. what would happen if the u.s. ? thel service used to postal service is really at a time of significant change in our business model. i think that is well-documented as male declines single piece we have shifted. in the course of innovation we have to take a look at ourselves and our network, and we have a ubiquitous retail network. how do we use that to generate topline revenue? there are more things we can deliver if you think about the fact we have two hundred 17,000 people out there today driving the streets of the united states, working hard and delivering product or mailers and shippers and then there is a robust network of processing centers and transportation that i think can be further leveraged. i think the future grail is the one we spoke a lot about today is the digital space. there are going to be places where the postal service needs to step forward and have a strong footprint in the digital space and in my pre-information we sent in, we talked about what we're doing with the government to help authenticate. there is a lot of opportunities for the postal service to continue to leverage the brand, trust, security and world-class network we have. that is where innovation is focused, to use the infrastructure to generate revenue and keep providing great service to the american people. think it is important to add the law may be too restrictive and maybe good that you are looking at it, the 2006 butcome about that law -- outlaw was not put in there to be mean-spirited or hurt anyone. it was put in there to make sure the postal service does not drive the small businessman or innovator out of there. the postal service does not need is going tore it harm private enterprise. on the other hand, it does -- agree the postal service should not harm competitors and the same business or alive his mess. i think that is the whole point of competition of market economy. >> may be the topic of the subcommittee as to where we can go and find the right balance to allow the postal service to increase revenue. to use their advantage. i would like to thank witnesses for being here. we were able to come for a very complex topic in a timely manner . i think we all have food for thought for how we can move modernizing and bringing new technologies to the postal service that are good for america. thank you all very much for your time, and we are adjourned. >> for over 35 years c-span brings public affairs events from washington directly to you, putting you in the broom at congressional hearings, white house events, briefings and conferences and offering complete gavel-to-gavel it coverage. all of the public service of time for it industry. for the private industry. c-span, created over 35 years ago. watch us in hd, like us on facebook and follow us on twitter. beginshington journal" in a moment. then a discussion about the implications of russians growing influence. coverage from the brooking institution starts at 10:00 eastern. later in the day donald trump will address the national press coverage. tonight, a conversation about the 2008 financial crisis and subsequent regulations put in place by the bills authors. former house financial services chairman barney frank and former senate inking committee chair chris dodd at 8:00 eastern here on c-span. coming up, michael waldman on the brenner -- brennan center .or justice been talking about the conservative political agenda. rivera on some of the middle east foreign-policy challenges facing the obama administration. join the conversation on facebook and twitter. ♪ host: good morning, everyone. the house is in session this week with legislation blowing to ensure the v.a. controversy. live coverage of the house here on c-span. the front page of wall street journal this month. the obama administration is set to announce new climate change proposal next week. cap and trade and renewable energy options. we will stick with the economy here this morning for the first part of today's washington journal. we want to hear from you. how is the job market for new college graduates?