Here is a brief article about its problems and the roadblocks in the way of solving those problems, in National Review Online. Believe it or not, this is an area where Europe is ahead of us - one of a few.
It seems to me USPS should be able to charge advertising mailers anything it chooses, with the obvious understanding that, if the fees go too high, direct mail advertising will mostly disappear. I see no reason why Congress should control anything other than first class mail fees.