How the Posts are Uniquely Positioned to Cure the Fundamental Flaws of E-Mail as a Replacement for Physical Mail

By Ron Wiener, CEO & Postmaster General, Earth Class Mail (Note: This article will be appearing in an upcoming issue of Postal Technology International.)

It took posts three centuries to reach their peak worldwide volume of about 440 billion pieces of mail per year. Contrast that with email, which has exploded in popularity in just the past decade to the tune of over 50 billion messages per DAY (net of spam), not counting billions of additional MMS and SMS messages that these days may contain everything from utility bills to airline reservations, in addition to teenage girl chat. The one billion PCs in the world are like tiny post offices able to receive mail from anywhere in the world. Add in the sales of over a billion more portable, ultra-miniature post offices sold each year – cell phones, iPhones, Blackberries, et al. – and it is easy to see why email and text messaging have reached such behemoth levels of usage in such a short time span.

Twenty-five years ago futurists predicted the rapid eradication of paper-based postal mail by now – indeed the eradication of paper documents entirely – simply because of the introduction of email and electronic documents. The cell phone didn’t even factor into their calculus because they had also incorrectly predicted a peak world market of only 100,000 phones. But the mass transformation from physical paper to electronic paper is only now really starting to kick into gear. We can debate whether it will take 10 years or 50 years to see paper mail become as antediluvian as the telegram, but posts have to make major strategic moves NOW in order to make sure they maintain their central role as the trusted carriers of communications for their respected nations – or else they risk fundamental disintermediation.

This article examines why the pundits were wrong – at least in the timing of their predictions – and suggests a rationale and a clear path for posts to drive their own “creative destruction” and actually accelerate the rate of replacement of paper mail, while maintaining the most central role in this inevitable transition. Taking a lesson from the history books, posts must avoid repeating the error of Western Union, which in 1876 turned down the offer to purchase Alexander Graham Bell’s patent for the telephone because it “couldn’t imagine why anyone would want to have that noisy thing in their home when they can just walk down to the nearest Western Union office to send or receive a message.” By the time the telegram market peaked in 1945, the startup that did purchase Bell’s patent – AT&T – already boasted revenues 10 times larger than those of the entire telegram industry.

 

For all the things that we love about email, it has two fundamental flaws that have prevented it from replacing paper messaging at the rate that futurists had predicted. The first flaw is that anyone can get an email account without any proof of identity, place of residence or even legal citizenship. He or she can get a new email account it in seconds, without expending a dime or even leaving home. It isn’t even hard to assume someone else’s identity – whether an individual’s or a company’s – and commit an unlimited amount of fraud (so-called “phishing”). The second flaw is that regular email is completely exposed to malevolent listeners. Since around 1980 email has traveled the wires via a protocol known as SMTP (Simple Mail Transfer Protocol), which is as open to eavesdroppers as cell-phone calls are.

No bank or government agency is ever going to use unsecure SMTP email to send out confidential account statements. What these institutions send via email today is limited to a short message that informs you that your statement is now posted online. These messages provide a handy hyperlink to the sender’s website, but you still have to remember your login credentials if you want to see your documents online. Not much of a productivity booster.

For any mailer, sending out emails en masse to its customers is much cheaper and easier than printing, stuffing and mailing physical letters. Setting up a robust, secure online account-management system, on the other hand, is usually quite costly and complicated, and as such is beyond the reach of many small businesses. So billions of pieces of transactional mail continue to travel on the backs of carbon molecules – because that is the only way that mailers can be fairly assured of reaching their true customers – and that their customers will recognize them by that familiar logo.

A new form of email communication is being developed that will overcome these two basic flaws of email; it’s been dubbed “Trusted Postal Email.” Posts around the world will soon be in position to kick off a true paperless revolution, by popularizing secure postal email as an effective, if not superior, replacement for paper mail.

Without posts the entire concept of Trusted Postal Email cannot achieve the scale of adoption necessary to instigate rapid, holistic change. With more physical points of presence than any other institution in the world, and with the power of government authority, the posts’ 660,000 worldwide branches are the ideal retail outlets for customers to obtain their Trusted Postal Email accounts. In the same way they currently apply for a passport, customers will need to visit a post-office branch with the appropriate identification papers in order to be issued a Trusted Postal Email account. Once they have this account they will be able to exchange email with other people and organizations that also have Trusted Postal Email accounts.

How “Trusted Postal Email” Works

Ordinary email travels as plain text across the Internet, passing through any number of SMTP store-and-forward email servers. This is a fundamentally unsecure approach. Any hacker can “tap the lines” and intercept the email along the way, grabbing sensitive confidential information like a bear nabbing salmon out of a stream. This is why one should never send private information such as a Social Security, credit-card or bank-account number by email. Unfortunately, most computer users are ignorant of how wholly unsecure today’s email is, and they routinely send sensitive information through email– even passwords.

Trusted Postal Email works differently in that all account holders will receive two digital certificates when they establish their account – one that proves their identity, and another that allows them to digitally sign contracts and other documents. Trusted Postal Email requires that all senders use their identity certificate when they send mail, thereby guaranteeing that no anonymous SPAM can occur. Rather than sending messages using SMTP, Trusted Postal Email servers deliver messages directly to the recipient’s Trusted Postal Email server using an encrypted, secure inter-post communication backbone. Hence the entire message path is from a known person or company, via a trusted national post, to another known person or company – and as secure as a presidential nuclear-launch order.
Email clients (e.g., Microsoft Outlook, Eudora, or a webmail client like Hotmail or Gmail) will be enhanced to support all of the features of Trusted Postal Email. One of the most valuable features of Trusted Postal Email is that the sender receives confirmation both when the message is successfully delivered into the recipient’s account and when the recipient actually opens the message or downloads the document. This is the equivalent of sending a document by registered, certified mail – only at a fraction of the cost, without the consumption of paper or fuel, and with a delay of mere seconds versus a day or more for conventional mail or express-courier delivery.

Here’s a comparison of the two email systems:

Trusted Postal Email

Posts will charge a nominal fee for sending a message by Trusted Postal Email. It will be much less than they charge today for delivery of paper mail, but their costs will be insignificant, as will the environmental impact of their delivery infrastructure. Bulk mailers such as banks and direct marketers will be able to use the same mechanism to safely send personalized messages to anyone with a Trusted Postal Email account. As we see today with physical mail, it is anticipated that one-to-many mailings will in fact constitute more than 90% of the message traffic via Trusted Postal Email. Though the average price of a single message may be a fraction of today’s postage-stamp price, the expectation is that message volume will grow to orders of magnitude greater than today’s paper-mail volumes, boosting postal revenues far above their current levels as posts become the facilitators of the next critical inflection point in communications technology.

Business Models Will Vary By Country

Some posts may choose to limit the usage of Trusted Postal Email only to mail that today travels by First-Class, and not allow any advertising mail to flow through it. However, most major posts currently operate on an advertising-supported business model – just like newspapers and television stations – and so they may offer lower prices or even free usage in exchange for the customers’ willingness to also receiving advertising in their mailbox, as they do today. Allowing posts the freedom to charge whatever they’d like of consumers, businesses and government customers would also help narrow the digital divide because, just as with traditional email accounts, users who cannot afford to pay cash are always able to pay with their attention. Hence millions of Gmail, Hotmail and Yahoo! Mail users have opted to benefit from a free email account in exchange for being distracted by the occasional advertisement. It is the difference between a customer who receives his television programming over the airwaves, abounding with adverts, and one who pays for a cable- or satellite-TV subscription to enjoy only the pure content.

When Will Trusted Postal Email Be Here?

Efforts are under way within both private industry and regulatory agencies to make Trusted Postal Email a reality within the next year or two. A very important milestone was achieved in August at the 2008 UPU Congress in Geneva, when members voted to adopt a new E-Services proposal (Document 27a and 27b). In doing so the UPU officially set the industry’s strategy for the next four years to include the development of a number of exciting new electronically based services that will be deployable by any or all of its 191 national-post members.

Included in the UPU’s strategy document is reference to the long-awaited “.post” TLD (“Top Level Domain”), which ICANN (the international governing body for the Internet domain-name space) had awarded to the UPU in 2004. For a variety of reasons the signing of a Registry Agreement between the UPU and ICANN, and the deployment of “.post,” has been delayed for several years; however, now appears to be the ideal time for its debut – just in time to save the business models of many national posts from aggressive cannibalization by electronic substitutions.

How Does All This Tie In With Secured Virtual Mailbox Services?

Denmark’s eBoks, Belgium’s Certipost and Finland’s NetPosti are but a few examples of “secured virtual mailbox” services that have been introduced into the market by posts as long as eight years ago, with several other posts in the offing about to introduce their versions. In most cases (Denmark being the most notable exception) these services have only reached single-digit adoption rates so far. I believe there are two reasons for this. First, they only address their own countries’ customers, while many large mailers have global customer bases. These services need to be de-Balkanized to be more attractive to major mailers like banks and telcos with multi-national operations. Second, the average customer has a higher pain dealing with the mail that continues to arrive in paper form than with the mail that is already electronic. Combining these virtual mailboxes with online postal mail systems for paper mail — e.g. Earth Class Mail — will make a truly compelling offering and allow posts to reach the tipping point adoption.

No Longer a Fairy Tale

The posts are uniquely positioned to develop an extraordinarily compelling next-generation platform that will simply revolutionize how businesses, governments and consumers communicate electronically. Many advocates also believe that the potential for electronic advertising through the auspices of the national posts can far exceed the size of the search-engine industry today. By combining massive scalability, trusted brands, privacy protection, measurable end-delivery, and state-of-the-art technology, Trusted Postal Email will within the next few years enable as-yet unimagined new business models that will stimulate the growth of the global economy, the dissemination of critical information to citizens, and the fiscal strength of national posts themselves. Particularly in the arena of localized advertising, posts knowing the true physical location of their customers have a natural advantage versus online channels where the user’s IP address is the only clue (and could be off by a hemisphere in its accuracy). Like the children’s tale of The Tortoise and the Hare, Google may soon be surprised by who is coming up in its rear-view mirror.

Ron Wiener is the CEO and Postmaster General of Earth Class Mail Corp., based in Seattle, WA. As a former catalog-industry and domain-name-industry CEO, he brings a unique perspective as postal executive, mass mailer and Internet computing technologist to the question of how posts can not only survive but thrive in the new digital economy.

August 10, 2008 | Filed Under Earth Class Mail, The Postal Future 

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