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GameFly and USPS are at odds, and could go to court

Video game rental service GameFly and the United States Postal Service (USPS) could be headed to court over accusations that USPS breaks thousands of game discs each year, and offers preferential treatment to Netflix and Blockbuster.

GameFly claims it sends 590,000 games to its subscribers each month and receives 510,000 of the games back.  Around one or two percent of the total games sent each month are reportedly broken by USPS.

Ars Technica estimates that GameFly could be losing up to $295,000 per month in broken video games, if each game costs $50 to replace and one percent of all games each month are broken.

The video game rental service filed an official complaint with the Postal Regulatory Commission, accusing USPS of discriminating against the company.

To help reduce the number of games damaged, GameFly wants USPS to manually sort all of the games -- rather than use the automated sorting system -- which inadvertently damages CDs.

GameFly also believes USPS favors Netflix and Blockbuster over its service, as both companies send out a larger amount of discs.

"Until recently, none of the larger-volume DVD rental companies offered video games," said GameFly in the complaint.  "On February 11, 2009, however, Blockbuster, which hitherto had offered only movie DVDs (which GameFly does not offer), announced that Blockbuster was expanding its DVD rental service to include video games in the second quarter of 2009. As a result of this initiative, GameFly now faces direct competition from a rival that is larger and longer established — and which, because of the preferential treatment given by the Postal Service, enjoys a substantial cost advantage in the distribution of its DVDs to consumers.”

The Postal Regulatory Commission has given USPS 30 days to file a response, and the PRC will decide whether to have a hearing or dismiss the case within 90 days.

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RE: One day...
By dflynchimp on 4/26/2009 5:30:04 PM , Rating: 5
Small correction. We on the user end have already realized that very fact.

It's the ISP that are now trying to wring more money out of high bandwidth users and/or potential digital rentees by applying tiered internet service.

In reality, internet service in the U.S is already far behind the service in Japan and Europe, thanks to stagnant ISP management (otherwise known as money grubbing Whoars). Now they want us to carry the cost of modernization.

This is one area that I really think the government should step in and correct.

RE: One day...
By afkrotch on 4/27/2009 1:04:54 PM , Rating: 2
If you think US is far behind Europe in internet service, you obviously have never lived in Europe. I've lived in England and currently in Germany. They're about the same. Sometimes worse in Europe, as sometimes one single ISP has a monopoly for the country.

So while there can be more ISPs in an area, there's no competition, as that ISP is stuck using the monopoly ISP's infrastructure. Thus, they have to pay them a fee for usage and that charge goes to the consumer. You can end up with slower service and higher cost.

Like here in Germany. Deutsch Telekom is the monopoly. TKS is another ISP. Best service from TKS is a 6 meg line and a phone for about 50 Euro. Deutsch Telekom on the other hand is a 16 meg line and a phone, for about 50 Euro.

Luckily, those in a larger city have cable companies they can turn too. I can get Kabel Kaiserslautern. 30 meg line for about 50 Euro. No phone though. Those in surrounding villages are stuck with Deutsch Telekom or another DSL ISP that uses their lines anyways. Not to mention, the small villages have waiting lists. You literally have to wait for someone else to cancel their service for you to get your own service.

RE: One day...
By dflynchimp on 4/27/2009 1:37:31 PM , Rating: 2
Extremes do exist whereever you go. All of the faults you list with Europe's ISP can be found somewhere in the states.

But I agree with your point that it's the monopoly that ISP's have on their users that grant them such power.

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