[Federal Register Volume 61, Number 71 (Thursday, April 11, 1996)]
[Notices]
[Pages 16129-16146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8994]



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POSTAL RATE COMMISSION

[Docket No. MC96-2; Order No. 1107]


Mail Classification Schedule Classification Reform II (Nonprofit 
Mail); Notice and Order on Filing of Major Revisions to Domestic Mail 
Classification Schedule Provisions Affecting Preferred Rate (Nonprofit) 
Mailers (Including Related Postal Rate Changes)

Issued: April 5, 1996.
    Notice is hereby given that on April 4, 1996, the United States 
Postal Service filed a request with the Postal Rate Commission pursuant 
to section 3623 of the Postal Reorganization Act [39 U.S.C. 3623] for a 
recommended decision on proposed changes in provisions of the domestic 
mail classification schedule (DMCS) affecting preferred rate 
(nonprofit) mailers, with the exception of those mailing at the library 
rate. The proposed revisions also generally entail changes in the rates 
that will be paid by affected preferred rate mailers, other than 
Within-county mailers. See Request of the United States Postal Service 
for a Recommended Decision on Further Classification Reform of 
Preferred Rate Standard Mail and Periodicals (April 4, 1996) (referred 
to herein as ``Request'').
    Contents of the filing. The Service's Request is supported by the 
testimony of 10 witnesses. It also includes proposed DMCS changes, 
proposed rate schedule changes, and additional documentation required 
by the Commission's rules of practice. The latter includes 
certification of the accuracy of costs and data underlying the request; 
a copy of audited financial statements (for FY 1995); and a statement 
regarding compliance with certain information filing requirements. The 
Request also incorporates a motion seeking expedition (primarily 
through the settlement process) and waiver of provisions related to the 
use of financial data more recent than that relied upon in Docket No. 
MC95-1. The Request and related documents are on file in the 
Commission's docket room. Information on reviewing this material, 
either in person or electronically, appears later in this notice.
    Background. The Service identifies this proposal as the second 
phase of fundamental reform of the nation's longstanding approach to 
mail classification. It addresses the preferred (nonprofit) rate 
counterparts of the regular (or commercial) rate segments of 
Periodicals and Standard Mail (formerly known as second- and third-
class mail). Proposals for restructuring the referenced regular rate 
segments were considered, along with proposed revisions to First-Class 
Mail, in Docket No. MC95-1. The Service notes that MC95-1, which 
constituted the initial phase of its reclassification effort, 
culminated in the Governors' recent approval of all but two of the 
Commission's recommendations. (The exceptions are not material to the 
instant request.) Changes related to the first phase of classification 
reform are scheduled to take effect July 1, 1996.
    Nature and extent of proposed changes. The Service states that this 
phase of reform seeks the Commission's recommendation of classification 
and rate treatment for preferred rate mail within former second- and 
third-class mail ``comparable to the treatment recommended [by the 
Commission] for regular rate mail in Docket No. MC95-1.'' Request at 2. 
The Service indicates that this requires the establishment of 
subclasses and rate categories for preferred mail parallel to those 
which will soon take effect for the regular rate components of 
Periodicals and Standard Mail. In addition, the Service contends that 
comparability also suggests that rates and discounts for the new 
categories generally should be based on the same principles and 
methodologies the Commission applied in Docket No. MC95-1. Id. at 2-3 
(footnote omitted). This contention underlies, in part, the Service's 
motion for waiver of rule 54(f) (discussed in more detail below).
    Specific changes. The specific structural changes the Service seeks 
are (1) the establishment of a Nonprofit Enhanced Carrier Route 
Subclass within Standard Mail; (2) the establishment of rate categories 
in the Nonprofit subclass within Standard Mail parallel to those in the 
Regular subclass; and (3) the establishment of rate categories and rate 
discounts for Preferred Rate Periodicals parallel to those for Regular 
Periodicals. Id. at 1. Suggested rate changes related to the proposed 
changes in the DMCS are included in an attachment to this notice. 
Interested parties are encouraged

[[Page 16130]]
to carefully review these changes. The Service contends that the 
proposed changes are in the public interest and in accordance with the 
policies and applicable criteria of title 39, United States Code.
    Impact on Within-county and Classroom mail. For both the Within-
county and Classroom subclasses of Periodicals, the Service proposes 
elimination of the little-used ZIP + 4 Letter rate category and related 
discount. Id. at 3. It indicates that its proposals for these two 
subclasses otherwise reflect two exceptions to comparability with 
methodologies based on Docket No. MC95-1. With respect to the Within-
county subclass, the Service contends that it has identified ``no 
apparent need to change rate or discount levels at this time.'' Id. at 
3 (fn. 2). With respect to the Classroom subclass, it proposes 
adjusting advertising rates in accordance with 39 U.S.C. 3626(a). Id.
    Effect on, and assumptions related to, postal costs, volumes and 
revenues. The Service notes that postal costs, volumes and revenues for 
the affected subclasses will necessarily change as the result of the 
proposed classification changes and associated rate changes. Request at 
3. It also notes that rates are designed so that each preferred 
subclass would, as nearly as possible, meet the appropriate target cost 
coverage for Test Year (TY) 1995 indicated by recent preferred rate 
legislation. Id. at 3-4. The Service generally refers to the main 
assumptions underlying its proposal as contribution neutrality and the 
statutory target cost coverage goal. In addition, the Service notes 
that except as adjusted in Docket No. MC95-1, all assumptions made or 
implicit in the Docket No. R94-1 Recommended Decision are intended to 
continue for purposes of evaluating this Request.
    Motion for waiver of certain filing requirements. In support of its 
motion for waiver, the Service invokes the ``close relationship between 
this case and Docket No. MC95-1 * * *.'' Request at 6. Specifically, it 
seeks to be excused from incorporating into its filing any of the more 
recent financial and operating information that otherwise would be 
required by rule 54(f) and other related provisions. The Service 
justifies its request for waiver on the aforementioned close 
relationship of this case to MC95-1. Id. at 6. It notes that the 
objective of providing comparable treatment to both regular rate and 
nonprofit mailers requires reliance on comparable data from the same 
time period. It says that ``more recent information will continue to be 
provided in a timely fashion'' pursuant to the Commission's periodic 
reporting rules, but asserts that those data will not be relevant to 
the Postal Service's request in this proceeding. Accordingly, it asks 
to be excused from providing any information supplemental to that 
provided in Docket No. MC95-1, except that which is necessary to allow 
the Commission to evaluate the proposed extension of parallel rate and 
classification treatment to nonprofit Periodicals and Standard Mail. 
Id. at 6-7.
    The Commission seeks the participants' reaction to the Service's 
request for waiver by May 1, 1996. The waiver request will also be a 
topic at the prehearing conference.
    DMCS provisions related to Standard Mail. The Request includes two 
versions of proposed DMCS changes for Standard Mail. The Service 
explains that one version (Attachment A1, Sections 1-3) is limited to 
``a straightforward extension of the Regular and Enhanced Carrier Route 
subclass provisions, as recommended in Docket No. MC95-1, to the 
Nonprofit and Nonprofit Enhanced Carrier Route subclasses.'' Id. at 2 
(fn. 1). The other version (Attachment A2, Alternative Sections 2 and 
3), according to the Service, consists of ``nonsubstantive editorial 
changes in several provisions recommended in Docket No. MC95-1 for the 
Regular subclass, with parallel provisions to be applicable to the 
Nonprofit subclass.'' Id. The Service asserts that the advantage of the 
alternative version is that it ``would allow beneficial improvements in 
the structure of the commercial subclass, before those structures are 
then extended to the nonprofit subclass.'' Id. The Service indicates 
the benefit of the alternative version lies in making the structure of 
Standard Mail portion of the DMCS more consistent with the DMCS 
provisions the Commission recommended in Docket No. MC95-1 for First-
Class Mail. The Service indicates it would prefer that the Commission 
recommend the alternative DMCS provisions, but notes that it does not 
want consideration of the alternative language to interfere with 
expeditious consideration of the case as a whole. Id.
    Request for expedition through encouragement of settlement. The 
Service further expresses its interest in expedition by asking that 
this Notice emphasize the need for parties, in their intervention 
pleadings, either to affirmatively request hearings, or affirmatively 
state their willingness to forgo hearings. It also asks that the 
Commission direct intervenors who anticipate some need for hearings to 
identify with as much specificity as possible the issues on which they 
perceive hearings might be required, and issues on which they would be 
willing to proceed on a stipulated record, without hearings. See 
generally id. at 6-7.
    In support of this request, the Service notes that it has attempted 
to construct its proposal so as to minimize, if not eliminate, 
controversy by resolving many potential issues by reference either to 
the Commission's treatment of similar issues in Docket No. MC95-1 or to 
explicit statutory requirements. Id. at 7. It also indicates that it 
has worked closely with many members of the nonprofit community, 
particularly past participants in Commission proceedings, in developing 
its proposals. Based on these efforts, the Service represents that it 
believes that full or partial settlement might be possible. It also 
states that even without full settlement on all legal issues, it may be 
possible to stipulate either all or most of the Service's testimony 
into the record, without the need for discovery or hearings. Id.
    The Commission generally supports the Service's interest in 
expedition, and is willing to authorize settlement negotiations of as 
many issues as circumstances warrant. At the same time, it believes 
that no firm commitment can be made on this important matter until all 
participants have an opportunity to comment. The Commission appreciates 
the efforts the Service has taken to garner support for its proposal 
and to minimize the potential for conflict. In recognition thereof, it 
strongly encourages intervenors to address, in their notices of 
intervention, the issues essential to orderly consideration of 
potential proposals for partial or complete settlement of issues in 
this proceeding. If intervenors are unable to address this matter in 
their notices of intervention, they are directed to respond no later 
than May 1, 1996.
    Notwithstanding the Commission's willingness to consider the 
possibility of settlement, it asks that participants also anticipate 
the possibility that hearings may have to be held. If so, the 
Commission expects evidentiary hearings to begin by mid-June. In the 
same vein, the Commission notes that its issuance of proposed special 
rules is not made in derogation of attempts at settlement, but simply 
to deal with as many eventualities as possible at an early stage of the 
proceeding.
    Intervention. Participation in Commission proceedings generally 
takes the form of either full intervention or limited participation. 
See Commission rules 20 and 20a (39 CFR 3001.20 and

[[Page 16131]]
20a). Commenter status is available for persons wishing to express 
their views informally, without incurring the obligations that attach 
to the two other forms of participation. See Commission rule 20b (39 
CFR 3001.20b). Those wishing to be heard in this matter as either a 
full intervenor or limited participant are directed to file a written 
notice of intervention identifying the status they intend to assume and 
affirmatively stating how actively they expect to participate. Limited 
participants are advised that Commission rules of practice impose an 
obligation to respond to discovery requests under certain 
circumstances.
    Notices should be sent to the attention of Margaret P. Crenshaw, 
Secretary of the Commission, 1333 H Street NW, Washington, DC 20268-
0001, and are to be filed on or before May 1, 1996. Commenter status 
does not require a notice of intervention.
    Representation of the general public. In conformance with section 
3624(a) of title 39, the Commission designates W. Gail Willette, 
Director of the Commission's Office of the Consumer Advocate (OCA), to 
represent the interests of the general public in this proceeding. 
Pursuant to this designation, Ms. Willette will direct the activities 
of Commission personnel assigned to assist her and, when requested, 
will supply their names for the record. Neither Ms. Willette nor any of 
the assigned personnel will participate in or provide advice on any 
Commission decision in this proceeding. The OCA shall be separately 
served with three copies of all filings, in addition to and 
contemporaneous with, service on the Commission of the 24 copies 
required by section 10(c) of the rules of practice (39 CFR 3001.10(c)).
    Special rules of practice. The Commission proposes conducting this 
proceeding pursuant to the special rules of practice set forth in 
Attachment C. These rules, for the most part, are the same as those 
successfully employed in Docket No. MC95-1. However, experience under 
the rules in that proceeding, as well as the Commission's increased 
ability to make documents available to participants in electronic 
format, appears to warrant several changes. Therefore, the following 
proposed amendments to the rules are noted. One involves service of the 
list of designated written cross-examination, notices of intent to 
conduct oral cross-examination, and notices of intent to participate in 
oral argument. Special Rule No. 3.B. allows these to be served only 
upon the Commission, the OCA, the complementary party, and those filing 
special requests for service. In addition, Special Rule No. 4.A. has 
been amended to indicate that the Secretary will prepare a cover sheet 
for designations of written cross-examination that facilitates easier 
review by interested persons. In addition, Special Rule No. 4.A. has 
been amended to return to the practice of allowing parties to file 
their list of designated cross-examination three days before the 
witness's scheduled appearance. The Commission notes that this change 
will increase the amount of time parties have to review answers to 
interrogatories by setting the deadline closer to the relevant 
benchmark, which is the witness's appearance date. This change, as well 
as the anticipated change in the format of the Commission-prepared 
cover sheet, is intended to reduce delay in the hearing room and make 
the designation process run more smoothly. It is not intended to make 
any substantive evidentiary changes.
    In addition, a provision has been added to as Special Rule No. 3.D. 
encouraging, but not requiring, participants to file electronic 
versions of written documents filed with the Commission. The electronic 
version would operate as a supplement to, rather than replacement of, 
the requirement that a written version (and the requisite number of 
copies thereof) be served on the Commission. No party will be penalized 
for not providing an electronic version. The Commission also asks that 
participants be prepared to discuss electronic filing at the prehearing 
conference.
    Participants are encouraged to carefully review the terms of all 
the rules, with special attention to the changes noted above. 
Participants are encouraged to suggest any additional changes they 
believe would be beneficial.
    Initial prehearing conference: date, location, and agenda. The 
Commission will convene a prehearing conference at 9:30 a.m. on Friday, 
May 3, 1996, in the Commission's hearing room at 1333 H Street NW, 
Suite 300, in Washington, DC. The Commission asks that persons 
attending the conference be prepared to discuss procedural and 
scheduling matters pertinent to the Service's filing. The Commission is 
especially interested in the potential for settlement of any issues or 
other opportunities for expedition.
    In the interest of conducting a comprehensive conference, 
participants are to file a notice of issues they would like to raise 
for consideration no later than 7 days before the prehearing 
conference. Suggestions need not be limited to procedural matters, but 
may include substantive issues to the extent that considering them at 
this stage may contribute to expedition of the entire proceeding. A 
final agenda incorporating participants' suggestions will be 
distributed at the beginning of the prehearing conference. The 
Presiding Officer may schedule additional prehearing conferences if 
circumstances warrant.
    Docket room operations. Documents may be filed with the 
Commission's docket section Monday through Friday between 8 a.m. and 5 
p.m. Questions about docket room operations, including electronic 
filing or electronic access, should be directed to Ms. Peggie Brown (at 
202-789-6847) or Ms. Joyce Taylor (at 202-789-6846).
    It is ordered:
    1. The Commission will sit en banc in this proceeding.
    2. Notices of intervention shall be filed no later than May 1, 
1996. Intervenors are strongly encouraged to indicate their position on 
the possibility of settlement of all, or part, of the issues in this 
proceeding. They are also encouraged to identify with specificity the 
issues they believe may require a hearing, as well as those issues they 
believe can be addressed by proceeding with a stipulated record.
    3. A prehearing conference will be held Friday, May 3, 1996 at 9:30 
a.m. in the Commission's hearing room.
    4. Participants are directed to file notices of issues to be 
addressed at the prehearing conference not later than 7 days prior to 
the conference.
    5. Comments on the proposed special rules of practice set out in 
Attachment C should be filed by May 1, 1996.
    6. Answers to the Service's motion for waiver of rule 54(f) and 
related provisions are due on or before May 1, 1996.
    6. W. Gail Willette, Director of the Commission's Office of the 
Consumer Advocate, is designated to represent the interests of the 
general public in this proceeding.
    7. The Secretary shall cause this Notice and Order to be published 
in the Federal Register.

    By the Commission.
Margaret P. Crenshaw,
Secretary.

Proposed Set of Changes in the Domestic Mail Classification 
Schedule

    In this request, the Postal Service is proposing that the 
Commission recommend certain changes in the Domestic Mail 
Classification Schedule (DMCS). The current DMCS is reprinted at 39 CFR 
3001.68, Appendix A (July 1, 1995). The current DMCS, however, was

[[Page 16132]]
extensively revised by the Governors' Decision of March 4, 1996, acting 
upon the Commission's Recommended Decision in Docket No. MC95-1 of 
January 26, 1996. The changes recommended by the Commission and 
approved by the Governors have been scheduled by the Board of Governors 
to take effect on July 1, 1996. In this attachment, the changes 
proposed in the instant request are shown relative to the revised DMCS 
approved by the Governors on March 4, 1996, even though the revisions 
approved at that time have not yet been formally implemented. This 
provides a much more useful basis for comparison than any which could 
be made with the existing DMCS language that has already been 
superseded by the Governors' Decision.
    Also for purposes of convenience, the proposed changes have been 
placed in four groups, consisting of (1) a new section to establish a 
Nonprofit Enhanced Carrier Route subclass within Standard Mail, (2) 
substantive changes in certain other provisions for Standard Mail, (3) 
conforming changes in cross-references within Standard Mail, and (4) 
changes in the provisions for Periodicals. Within each of the last 
three groups, proposed additions are italized, and proposed deletions 
are set off with brackets and presented in bold type.
    The changes shown in this attachment are structured to take the 
language recommended by the Commission for the commercial portion of 
Standard Mail (weighing less than 16 ounces) and, without alteration, 
insert identical provisions in the preferred rate portions. 
Substantively, this will be sufficient to create a structure that 
allows parallel treatment of preferred rate and commercial rate mail. 
However, there are nonsubstantive editorial changes that the Postal 
Service believes could be made in the commercial portion which would 
improve the organization of the DMCS. Ideally, it would be better to 
propose such changes for the commercial sector first, before extending 
the commercial provisions to the nonprofit sector. This attachment 
includes no such changes. Instead, they have been presented in 
Attachment A2, Alternative Set of Changes in the Domestic Mail 
Classifiction Schedule. The Postal Service would prefer that the 
Commission recommend the alternative set of DMCS changes shown in 
Attachment A2. This attachment, in contrast, is included to indicate 
what would appear to be the minimum changes the Commission could 
recommend to allow parallel treatment of commercial and nonprofit 
Standard Mail.
    The proposed changes shown in this attachment are:
1. In The Standard Mail Classification Schedule, the Following New 
Section 321.5 Is Proposed
321.5  Nonprofit Enhanced Carrier Route Subclass
321.51  Definition
    321.511  General. The Nonprofit Enhanced Carrier Route subclass 
consists of Standard Mail weighing less than 16 ounces that is not 
mailed under section 321.1, 321.2, 321.3, 321.4 or 323, that is mailed 
by authorized nonprofit organizations or associations (as defined in 
sections 321.411 and 321.412) under the terms and limitations stated in 
section 321.413, and that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is prepared, marked, and presented as prescribed by the Postal 
Service;
    c. Is presorted to carrier routes as prescribed by the Postal 
Service;
    d. Is sequenced as prescribed by the Postal Service; and
    e. Meets the machinability, addressing, and other preparation 
requirements prescribed by the Postal Service.
    321.52  Basic Rate Category. The basic rate category applies to 
Nonprofit Enhanced Carrier Route subclass mail not mailed under section 
321.53, 321.54 or 321.55.
    321.53  Basic Pre-Barcoded Rate Category. The basic pre-barcoded 
rate category applies to letter-size Nonprofit Enhanced Carrier Route 
subclass mail which bears a barcode representing not more than 11 
digits (not including ``correction'' digits), as prescribed by the 
Postal Service, and which meets the machinability, addressing, and 
barcoding specifications and other preparation requirements prescribed 
by the Postal Service.
    321.54  High Density Rate Category. The high density rate category 
applies to Nonprofit Enhanced Carrier Route subclass mail presented in 
walk-sequence order and meeting the high density requirements 
prescribed by the Postal Service.
    321.55  Saturation Rate Category. The saturation rate category 
applies to Nonprofit Enhanced Carrier Route subclass mail presented in 
walk-sequence order and meeting the saturation requirements prescribed 
by the Postal Service.
    321.56  Destination Entry Discounts. Destination entry discounts 
apply to Nonprofit Enhanced Carrier Route subclass mail prepared as 
prescribed by the Postal Service and addressed for delivery within the 
service area of the BMC (or auxiliary service facility), sectional 
center facility (SCF), or destination delivery unit (DDU) at which it 
is entered, as defined by the Postal Service.
2. In the Standard Mail Classification Schedule, the Following 
Substantive Changes Are Proposed in Sections 321.411, 321.42, 321.43, 
and 370 (Additions italicized, deletions bracketed)
321.4  Nonprofit Subclass
321.41  Definition
321.411  General. The Nonprofit subclass consists of Standard Mail 
weighing less than 16 ounces that is not mailed under section 321.1, 
321.2, 321.3, 321.5 or 323, and that is prepared in a mailing of at 
least 200 addressed pieces or 50 pounds of addressed pieces [quantities 
of at least 50 pounds or 200 pieces], is presorted, [and] marked, and 
presented as prescribed by the Postal Service, meets the machinability, 
addressing, and other preparation requirements prescribed by the Postal 
Service, and is mailed by authorized nonprofit organizations or 
associations of the following types:
    a. Religious,
    b. Educational,
    c. Scientific,
    d. Philanthropic,
    e. Agricultural,
    f. Labor,
    g. Veterans',
    h. Fraternal,
    i. Qualified political committees.
* * * * *
321.42  Nonprofit Rate Categories
     321.421  Basic Sortation Rate Category. Mailers must sort 
Nonprofit subclass mail as prescribed by the Postal Service. Mail which 
is not presorted to three-digit or five-digit ZIP Code areas or to 
carrier routes qualifies for the basic rates in Rate Schedule 321.4A.
    [321.422  Basic Sortation, ZIP + 4 Rate Category. The basic 
sortation, ZIP + 4 rate category applies to mail mailed under section 
321.421 which bears a proper ZIP + 4 code and which meets the 
machinability, address readability and other preparation requirements 
prescribed by the Postal Service.]
    321.422[3] Basic Sortation, Pre-Barcoded Rate Category. The basic 
sortation, pre-barcoded rate category applies to mail mailed under 
section 321.41[421] which bears a barcode representing not more than 11 
digits (not including ``correction'' digits) as prescribed by the 
Postal Service, and which meets the machinability,

[[Page 16133]]
addressing, and [barcoding specifications and] other preparation 
requirements prescribed by the Postal Service.
    321.423[4]  Three- and Five-Digit Presort Level Rate Category. The 
three- and five-digit presort level rate category applies to Nonprofit 
subclass mail [which is] presorted to single or multiple three-[digit 
or] and five-digit ZIP Code destinations, as [areas. The mail must be 
prepared in the manner] prescribed by the Postal Service.
    [321.425  Three- and Five-Digit Presort Level, ZIP + 4 Rate 
Category. The three- and five-digit presort level, ZIP + 4 rate 
category applies to mail mailed under section 321.424 which bears a 
proper ZIP + 4 code and which meets the machinability, address 
readability and other preparation requirements prescribed by the Postal 
Service.]
    321.424[6]  Three-Digit Presort Level, Pre-Barcoded Rate Category. 
The three-digit presort level, pre-barcoded rate category applies to 
letter-size mail mailed under section 321.41[424] which is presorted to 
three digits, which bears a barcode representing not more than 11 
digits (not including ``correction'' digits) as prescribed by the 
Postal Service, and which meets the machinability, addressing, and 
barcoding specifications and other preparation requirements prescribed 
by the Postal Service.
    321.425[7]  Five-Digit Presort Level, Pre-Barcoded Rate Category. 
The five-digit presort level, pre-barcoded rate category applies to 
letter-size mail mailed under section 321.41[424] which is presorted to 
five digits, which bears a barcode representing not more than 11 digits 
(not including ``correction'' digits) as prescribed by the Postal 
Service, and which meets the machinability, addressing, and barcoding 
specifications, and other preparation requirements prescribed by the 
Postal Service.
    [321.428  Carrier Route Presort Level Rate Category. The carrier 
route presort level rate category applies to Nonprofit subclass mail 
which is presorted to a carrier route, with at least 10 pieces to each 
carrier route. The mail must be prepared in the manner prescribed by 
the Postal Service.]
    321.426[9]  Three- and Five-Digit Presort Level, Pre-barcoded 
[Flats] Rate Category. The three- and five-digit presort level, pre-
barcoded [flats] rate category applies to flat-size mail mailed under 
section 321.41 [Nonprofit subclass flat size pieces] which is [are 
properly prepared and] presorted to single or multiple three- and five-
digit ZIP Code destinations as prescribed by the Postal Service, which 
bears[, bear] a barcode representing not more than 11 digits (not 
including ``correction'' digits) as prescribed by the Postal Service, 
and which meets the [meet the flats] machinability, addressing, and 
barcoding [and address readability] specifications and other 
preparation requirements prescribed by [of] the Postal Service. [Such 
flats must be presented for mailing in a manner which does not require 
cancellation.]
321.43  Destination Entry Discounts [Nonprofit Subclass Discounts
    321.431  Saturation Discount. The saturation discount applies to 
Nonprofit subclass mail presented in a carrier route presort mailing 
which is walk sequenced and which meets the saturation and preparation 
requirements prescribed by the Postal Service.
    321.432  125-Piece Walk-sequence Discount. The 125-piece walk-
sequence discount applies to Nonprofit subclass mail presented in a 
carrier route presort mailing which is walk sequenced and contains a 
minimum of 125 pieces per carrier route, and which meets the 
preparation requirements prescribed by the Postal Service.
    321.433  Destination Entry Discount. The destination entry 
discounts apply[ies] to Nonprofit subclass mail prepared as prescribed 
by the Postal Service and addressed [which is destined] for delivery 
within the service area of the BMC (or auxiliary service facility), or 
sectional center facility (SCF), [or destination delivery unit (DDU)] 
at which it is entered, as defined by the Postal Service.
* * * * *
370  Rates and Fees
    The rates and fees for Standard Mail are set forth as follows:

------------------------------------------------------------------------
                                                       Schedule         
------------------------------------------------------------------------
a. Single Piece subclass...................  321.1                      
b. Regular subclass........................  321.2                      
c. Enhanced Carrier Route subclass.........  321.3                      
d. Nonprofit subclass......................  321.4                      
e. Nonprofit Enhanced Carrier Route          321.5                      
 subclass.                                                              
f [e]. Parcel Post subclass                                             
  Basic....................................  322.1A                     
  Destination BMC..........................  322.1B                     
g [f]. Bound Printed Matter subclass                                    
  Single Piece.............................  322.3A                     
  Bulk and Carrier Route...................  322.3B                     
h [g]. Special subclass....................  323.1                      
i [h]. Library subclass....................  323.2                      
j [i]. Fees................................  1000                       
------------------------------------------------------------------------

3. In the Standard Mail Classification Schedule, the Following 
Conforming Cross-References Are Proposed in Sections 321.11, 321.21, 
321.31, 331, 341, 344.1, 344.21, 353.1, 361, and 381 (Additions 
italicized, deletions bracketed)
321.1  Single Piece Subclass
    321.11  Definition. The Single Piece subclass consists of Standard 
Mail weighing less than 16 ounces that is not mailed under sections 
321.2, 321.3, 321.4, 321.5 or 323.
* * * * *
321.2  Regular Subclass
    321.21  Definition. The Regular subclass consists of Standard Mail 
weighing less than 16 ounces that is not mailed under sections 321.1, 
321.3, 321.4, 321.5 or 323, and that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is presorted, marked, and presented as prescribed by the Postal 
Service; and
    c. Meets the machinability, addressing, and other preparation 
requirements prescribed by the Postal Service.
* * * * *
321.3  Enhanced Carrier Route Subclass
    321.31  Definition. The Enhanced Carrier Route subclass consists of 
Standard Mail weighing less than 16 ounces that is not mailed under 
section 321.1, 321.2, 321.4, 321.5 or 323, and that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is prepared, marked, and presented as prescribed by the Postal 
Service;
    c. Is presorted to carrier routes as prescribed by the Postal 
Service;
    d. Is sequenced as prescribed by the Postal Service; and
    e. Meets the machinability, addressing, and other preparation 
requirements prescribed by the Postal Service.
* * * * *
330  Physical Limitations
331  Size
    Standard Mail may not exceed 108 inches in length and girth 
combined. Additional size limitations apply to individual Standard Mail 
subclasses. The maximum size for mail presorted to carrier route in the 
Enhanced Carrier Route and Nonprofit Enhanced Carrier Route subclasses 
is 14 inches in length, 11.75 inches in width, and 0.75 inch in 
thickness. For merchandise samples

[[Page 16134]]
mailed with detached address cards, the carrier route maximum 
dimensions apply to the detached address cards and not to the samples.
* * * * *
340  Postage and Preparation
341  Postage
    Postage must be paid as set forth in section 3000. When the postage 
computed at a Single Piece, Regular, Enhanced Carrier Route, [or] 
Nonprofit or Nonprofit Enhanced Carrier Route Standard rate is higher 
than the rate prescribed in any of the Standard subclasses listed in 
322 or 323 for which the piece also qualifies (or would qualify, except 
for weight), the piece is eligible for the applicable lower rate. All 
mail mailed at a bulk or presort rate must have postage paid in a 
manner not requiring cancellation.
* * * * *
344  Attachments and Enclosures
344.1  Single Piece, Regular, Enhanced Carrier Route, [and] Nonprofit 
and Nonprofit Enhanced Carrier Route Subclasses (section 321)
* * * * *
    344.21  General. First-Class Mail or Standard Mail from any of the 
subclasses listed in section 321 (Single Piece, Regular, Enhanced 
Carrier Route, [or] Nonprofit or Nonprofit Enhanced Carrier Route) may 
be attached to or enclosed in Standard Mail mailed under sections 322 
and 323. The piece must be marked as prescribed by the Postal Service. 
Except as provided in sections 344.22 and 344.23, additional postage 
must be paid for the attachment or enclosure as if it had been mailed 
separately. Otherwise, the entire combined piece is subject to the 
First-Class or section 321 Standard rate for which it qualifies (unless 
the rate applicable to the host piece is higher), or, if a combined 
piece with a section 321 Standard Mail attachment or enclosure weighs 
16 ounces or more, the piece is subject to the Parcel Post rate for 
which it qualifies.
* * * * *
353.1  Single Piece, Regular, Enhanced Carrier Route, [and] Nonprofit 
and Nonprofit Enhanced Carrier Route Subclasses (section 321)
    Undeliverable-as-addressed Standard Mail mailed under section 321 
will be returned on request of the mailer, or forwarded and returned on 
request of the mailer. Undeliverable-as-addressed combined First-Class 
and Standard pieces will be returned as prescribed by the Postal 
Service. The Single Piece Standard rate is charged for each piece 
receiving return only service. Charges for forwarding-and-return 
service are assessed only on those pieces which cannot be forwarded and 
are returned. The charge for those returned pieces is the appropriate 
Single Piece Standard rate for the piece plus that rate multiplied by a 
factor equal to the number of section 321 Standard pieces nationwide 
that are successfully forwarded for every one piece that cannot be 
forwarded and must be returned.
* * * * *
360  Ancillary Services
361 All Subclasses
    All Standard Mail will receive the following services upon payment 
of the appropriate fees:

------------------------------------------------------------------------
                  Service                              Schedule         
------------------------------------------------------------------------
a. Address correction......................  SS-1                       
b. Certificates of mailing indicating that   SS-4                       
 a specified number of pieces have been                                 
 mailed.                                                                
------------------------------------------------------------------------

    Certificates of mailing are not available for Regular, Enhanced 
Carrier Route, [and] Nonprofit and Nonprofit Enhanced Carrier Route 
subclass mail when postage is paid by permit imprint.
* * * * *
380  Authorizations and Licenses
381  Regular, Enhanced Carrier Route, [and] Nonprofit and Nonprofit 
Enhanced Carrier Route Subclasses
    A mailing fee as set forth in Rate Schedule 1000 must be paid once 
each year by mailers of Regular, Enhanced Carrier Route, [and] 
Nonprofit and Nonprofit Enhanced Carrier Route subclass mail.
4. In the Periodicals Classification Schedule, New Sections 423.6 and 
423.7 are Proposed to be Added, and New Section 423.8 is Proposed to be 
Substituted for Old Section 423.6 (Additions italicized, deletions 
bracketed)
423  Preferred Rate Periodicals
* * * * *

423.6  Preferred Rate Pound Rates

    For Preferred Rate Periodicals entered under sections 423.3, 423.4 
and 423.5, an unzoned pound rate applies to the nonadvertising portion. 
A zoned pound rate applies to the advertising portion and may be 
reduced by applicable destination entry discounts. The pound rate 
postage is the sum of the nonadvertising portion charge and the 
advertising portion charge. For Preferred Rate Periodicals entered 
under section 423.2, one pound rate applies to the pieces presorted to 
carrier route to be delivered within the delivery area of the 
originating post office, and another pound rate applies to all other 
pieces.

423.7  Preferred Rate Piece Rates

    423.71  Basic Rate Category. The basic rate category applies to all 
Preferred Rate Periodicals not mailed under section 423.72 or 423.73.
    423.72  Three-Digit City and Five-Digit Rate Category. The rates 
for this category apply to Preferred Rate Periodicals entered under 
sections 423.3, 423.4. or 423.5 that are presorted to three-digit 
cities and five-digit ZIP Code destinations as prescribed by the Postal 
Service.
    423.73  Carrier Route Rate Category. The carrier route rate 
category applies to Preferred Rate Periodicals presorted to carrier 
routes as prescribed by the Postal Service.
[423.6  Preferred Rate Discounts
    423.61  Destination Entry Discounts. Copies of any Preferred Rate 
Periodicals class mail which are destined for delivery within the 
destination sectional center facility (SCF) area or the destination 
delivery unit (DDU) area in which they are entered, as defined by the 
Postal Service, qualify for the applicable discount as set forth in 
Rate Schedules 423.2, 423.3, and 423.4.
    423.62  ZIP + 4 and Pre-barcoded Letter Discounts. Copies of any 
automation compatible Preferred Rate Periodicals class mail which bear 
a proper ZIP + 4 code, or which bear a barcode representing not more 
than 11 digits (not including ``correction'' digits) as prescribed by 
the Postal Service, and which meet the machinability, addressing, and 
barcoding specifications and other preparation requirements prescribed 
by the Postal Service qualify for the applicable ZIP + 4 or pre-
barcoding discounts as set forth in Rate Schedules 423.2, 423.3, and 
423.4.
    423.63  125-piece Walk-sequence Discount. Copies of Preferred Rate 
Periodicals class mail presented in mailings which are walk sequenced 
and contain a minimum of 125 pieces per carrier route and which meet 
the preparation requirements prescribed by the Postal Service are 
eligible for the applicable discount set forth in Rate Schedules 423.2, 
423.3, and 423.4.
    423.64  Saturation Discount. Saturation Preferred Rate Periodicals 
class mail presented in mailings which are walk sequenced and which 
meet the saturation and preparation requirements prescribed by the 
Postal Service qualifies for the applicable discount set

[[Page 16135]]
forth in Rate Schedules 423.2, 423.3, and 423.4.
    423.65  Pre-barcoded Flats Discounts. Pre-barcoded Preferred Rate 
Periodicals class flats which are properly prepared and presorted, 
which bear a barcode as prescribed by the Postal Service, and which 
meet the flats machinability and address readability specifications of 
the Postal Service, are eligible for the applicable discounts for pre-
barcoded flats set forth in Rate Schedules 423.2, 423.3, and 423.4.]

423.8  Preferred Rate Discounts

    423.81  Barcoded Letter Discounts. Barcoded letter discounts apply 
to letter size Preferred Rate Periodicals mailed under sections 423.71 
and 423.72 which bears a barcode representing not more than 11 digits 
(not including ``correction'' digits) as prescribed by the Postal 
Service, and which meets the machinability, addressing, and barcoding 
specifications and other preparation requirements prescribed by the 
Postal Service.
    423.82  Barcoded Flats Discounts. Barcoded flats discounts apply to 
flat size Preferred Rate Periodicals mailed under sections 423.71 and 
423.72 which bear a barcode representing not more than 11 digits (not 
including ``correction'' digits) as prescribed by the Postal Service, 
and meet the flats machinability, addressing, and barcoding 
specifications and other preparation requirements prescribed by the 
Postal Service.
    423.83  High Density Discount. The high density discount applies to 
Preferred Rate Periodicals mailed under section 423.73, presented in 
walk sequence order, and meeting the high density and preparation 
requirements prescribed by the Postal Service.
    423.84  Saturation Discount. The saturation discount applies to 
Preferred Rate Periodicals mailed under section 423.73, presented in 
walk-sequence order, and meeting the saturation and preparation 
requirements prescribed by the Postal Service.
    423.85  Destination Entry Discounts. Destination entry discounts 
apply to Preferred Rate Periodicals which are destined for delivery 
within the service area of the destination sectional center facility 
(SCF) or the destination delivery unit (DDU) in which they are entered, 
as defined by the Postal Service. The DDU discount only applies to 
Carrier Route rate category mail; the SCF discount is not available for 
mail entered under section 423.2.
    423.86  Nonadvertising Discount. The nonadvertising discount 
applies to Preferred Rate Periodicals entered under sections 423.3, 
423.4, and 423.5 and is determined by multiplying the proportion of 
nonadvertising content by the discount factor set forth in Rate 
Schedules 421, 423.3 or 423.4 and subtracting that amount from the 
applicable piece rate.

Alternative Set of Changes in the Domestic Mail Classification 
Schedule

    In this request, the Postal Service is proposing that the 
Commission recommend certain changes in the Domestic Mail 
Classification Schedule (DMCS). The current DMCS is reprinted at 39 CFR 
Sec. 3001.68, Appendix A (July 1, 1995). The current DMCS, however, was 
extensively revised by the Governors' Decision of March 4, 1996, acting 
upon the Commission's Recommended Decision in Docket No. MC95-1 of 
January 26, 1996. The changes recommended by the Commission and 
approved by the Governors have been scheduled by the Board of Governors 
to take effect on July 1, 1996. In this attachment, the changes 
proposed in the instant request are shown relative to the revised DMCS 
approved by the Governors on March 4, 1996, even though the revisions 
approved at that time have not yet been formally implemented. This 
provides a much more useful basis for comparison than any which could 
be made with the existing DMCS language that has already been 
superseded by the Governors' Decision.
    In contrast to the changes shown in Attachment A1, the changes 
shown in this attachment are structured to include nonsubstantive 
editorial changes to section 321.2 regarding the Regular subclass, 
before proposing to extend identical provisions to the Nonprofit 
subclass. Not only will this allow parallel treatment of preferred rate 
and commercial rate mail, but these changes would also improve the 
organization of the DMCS. Specifically, the changes proposed for 
section 321.2 would make that section more consistent with section 221 
(regarding First-Class letters) by grouping the definitions of the 
presort rate categories and the automation rate categories separately. 
The Postal Service would prefer that the Commission recommend the 
alternative set of DMCS changes shown in this attachment, as opposed to 
those shown in Attachment A1.
    The requested changes shown in this attachment have been placed in 
five groups, consisting of 1) a new section to establish a Nonprofit 
Enhanced Carrier Route subclass within Standard Mail, 2) nonsubstantive 
editorial changes in certain provisions for Regular subclass Standard 
Mail, 3) substantive changes in certain other provisions for Nonprofit 
subclass Standard Mail, 4) conforming changes in cross-references 
within Standard Mail, and 5) changes in the provisions for Periodicals. 
Within each of the last four groups, proposed additions are underlined, 
and proposed deletions are set off with brackets and presented in bold 
type.
    The five groups of requested changes in this attachment compare 
with the four groups in Attachment A1 as follows. The first group, the 
new Nonprofit Enhanced Carrier Route Subclass, is the same, except for 
one change in a cross-reference to the Limitation on Authorization 
provision (321.412 or 321.413). The second group, nonsubstantive 
changes in the Regular subclass, has no counterpart in Attachment A1. 
The third group, substantive changes regarding the Nonprofit subclass, 
is different from its counterpart in Attachment A1 because it tracks 
the Regular subclass changes shown in group 2), rather than the Regular 
subclass provisions recommended by the Commission in Docket No. M95-1. 
The fourth and fifth groups are identical to their Attachment A1 
counterparts.
    The requested changes shown in this attachment are:
1. In The Standard Mail Classification Schedule, the Following New 
Section 321.5 is Proposed
321.5  Nonprofit Enhanced Carrier Route Subclass
321.51  Definition
    321.511  General. The Nonprofit Enhanced Carrier Route subclass 
consists of Standard Mail weighing less than 16 ounces that is not 
mailed under section 321.1, 321.2, 321.3, 321.4 or 323, that is mailed 
by authorized nonprofit organizations or associations (as defined in 
sections 321.41) under the terms and limitations stated in section 
321.412, and that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is prepared, marked, and presented as prescribed by the Postal 
Service;
    c. Is presorted to carrier routes as prescribed by the Postal 
Service;
    d. Is sequenced as prescribed by the Postal Service; and
    e. Meets the machinability, addressing, and other preparation 
requirements prescribed by the Postal Service.
    321.52  Basic Rate Category. The basic rate category applies to 
Nonprofit Enhanced Carrier Route subclass mail not mailed under section 
321.53, 321.54 or 321.55.

[[Page 16136]]

    321.53  Basic Pre-Barcoded Rate Category. The basic pre-barcoded 
rate category applies to letter-size Nonprofit Enhanced Carrier Route 
subclass mail which bears a barcode representing not more than 11 
digits (not including ``correction'' digits), as prescribed by the 
Postal Service, and which meets the machinability, addressing, and 
barcoding specifications and other preparation requirements prescribed 
by the Postal Service.
    321.54  High Density Rate Category. The high density rate category 
applies to Nonprofit Enhanced Carrier Route subclass mail presented in 
walk-sequence order and meeting the high density requirements 
prescribed by the Postal Service.
    321.55  Saturation Rate Category. The saturation rate category 
applies to Nonprofit Enhanced Carrier Route subclass mail presented in 
walk-sequence order and meeting the saturation requirements prescribed 
by the Postal Service.
    321.56  Destination Entry Discounts. Destination entry discounts 
apply to Nonprofit Enhanced Carrier Route subclass mail prepared as 
prescribed by the Postal Service and addressed for delivery within the 
service area of the BMC (or auxiliary service facility), sectional 
center facility (SCF), or destination delivery unit (DDU) at which it 
is entered, as defined by the Postal Service.
2. In the Standard Mail Classification Schedule, the Following 
Editorial Revisions to Section 321.2 are Proposed (Additions 
italicized, deletions bracketed)
321.2  Regular Subclass
    321.21  General. [Definition.] The Regular subclass consists of 
Standard Mail weighing less than 16 ounces that is not mailed under 
sections 321.1, 321.3, 321.4, or 323. [, and that:]
321.22  [Regular] Presort Rate Categories.

    321.221  General. The presort rate categories apply to Regular 
subclass mail that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is presorted, marked, and presented as prescribed by the Postal 
Service; and
    c. Meets the machinability, addressing, and other preparation 
requirements prescribed by the Postal Service.
    321.222[1]  Basic [Sortation] Rate Categor[y]ies. The basic rate 
categories apply to presort rate category mail not mailed under section 
321.223. [Mailers must sort Regular subclass mail as prescribed by the 
Postal Service. Mail which is not presorted to three-digit or five-
digit ZIP Code areas or to carrier routes qualifies for the basic rates 
in Rate Schedule 321.2A.]
    321.223  Three- and Five-Digit [Presort Level] Rate Categor[y]ies. 
The three- and five-digit [presort level] rate categor[y]ies appl[ies]y 
to presort rate category [Regular subclass] mail presorted to single or 
multiple three- and five-digit ZIP Code destinations[,] as prescribed 
by the Postal Service.
321.23  Automation Rate Categories
    321.231  General. The automation rate categories consist of Regular 
subclass mail that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is presorted, marked, and presented as prescribed by the Postal 
Service;
    c. Bears a barcode representing not more than 11 digits (not 
including ``correction'' digits) as prescribed by the Postal Service;
    d. Meets the machinability, addressing, barcoding, and other 
preparation requirements prescribed by the Postal Service.
    [321.222] 321.232  Basic [Sortation, Pre-]Barcoded Rate Category. 
The basic [sortation, pre-]barcoded rate category applies to letter-
size automation rate category mail not mailed under section 321.233 or 
321.234. [mail mailed under section 321.21 which bears a barcode 
representing not more than 11 digits (not including ``correction'' 
digits) as prescribed by the Postal Service, and which meets the 
machinability, addressing, and barcoding specifications, and other 
preparation requirements prescribed by the Postal Service.]
    [321.224] 321.233  Three-Digit [Presort Level, Pre-]Barcoded Rate 
Category. The three-digit [presort level, pre-]barcoded rate category 
applies to letter-size automation rate category mail [mailed under 
section 321.21 which is] presorted to single or multiple three-digit 
ZIP Code destinations as prescribed by the Postal Service. [three 
digits, which bears a barcode representing not more than 11 digits (not 
including ``correction'' digits) as prescribed by the Postal Service, 
and which meets the machinability, addressing, and barcoding 
specifications and other preparation requirements prescribed by the 
Postal Service.]
    [321.225] 321.234  Five-Digit [Presort Level, Pre-]Barcoded Rate 
Category. The five-digit [presort level, pre-]barcoded rate category 
applies to letter-size automation rate category mail [mailed under 
section 321.21 which is] presorted to single or multiple five-digit ZIP 
Code destinations as prescribed by the Postal Service. [five digits, 
which bears a barcode representing not more than 11 digits (not 
including ``correction'' digits) as prescribed by the Postal Service, 
and which meets the machinability, addressing, and barcoding 
specifications and other preparation requirements prescribed by the 
Postal Service.]
    321.235  Basic Barcoded Flats Rate Category. The basic barcoded 
flats rate category applies to flat-size automation rate category mail 
not mailed under section 321.236.
    [321.226] 321.236 Three- and Five-Digit [Presort Level, Pre-
]Barcoded Flats Rate Category. The three- and five-digit [presort 
level, pre-]barcoded flats rate category applies to flat-size 
automation rate category mail [mailed under section 321.21 which is] 
presorted to single or multiple three- and five-digit ZIP Code 
destinations as prescribed by the Postal Service. [,which bears a 
barcode representing not more than 11 digits (not including 
``correction'' digits) as prescribed by the Postal Service, and which 
meets the machinability, addressing, and barcoding specifications and 
other preparation requirements prescribed by the Postal Service.]
    [321.23] 321.24  Destination Entry Discounts. Destination entry 
discounts apply to Regular subclass mail prepared as prescribed by the 
Postal Service and addressed for delivery within the service area of 
the BMC (or auxiliary service facility), or sectional center facility 
(SCF), at which it is entered, as defined by the Postal Service.
3. In The Standard Mail Classification Schedule, the Following 
Substantive Changes are Proposed in Sections 321.4 and 370 (Additions 
italized, deletions bracketed)
321.4  Nonprofit Subclass
321.41  [Definition
    321.411] General. The Nonprofit subclass consists of Standard Mail 
weighing less than 16 ounces that is not mailed under section 321.1, 
321.2, 321.3, 321.5 or 323, and that is [prepared in quantities of at 
least 50 pounds or 200 pieces, presorted and marked as prescribed by 
the Postal Service, and] mailed by authorized nonprofit organizations 
or associations of the following types:
    a. Religious,
    b. Educational,
    c. Scientific,
    d. Philanthropic,
    e. Agricultural,
    f. Labor,
    g. Veterans',
    
[[Page 16137]]

    h. Fraternal,
    i. Qualified political committees.
    321.411[2] Nonprofit Organizations and Associations. Nonprofit 
organizations or associations are organizations or associations not 
organized for profit, none of the net income of which benefits any 
private stockholder or individual, and which meet the qualifications 
set forth below for each type of organization or association. The 
standard of primary purpose applies to each type of organization or 
association, except veterans' and fraternal. The standard of primary 
purpose requires that each type of organization or association be both 
organized and operated for the primary purpose. The following are the 
types of organizations or associations which may qualify as authorized 
nonprofit organizations or associations.
    a. Religious. A nonprofit organization whose primary purpose is one 
of the following:
    i. To conduct religious worship;
    ii. To support the religious activities of nonprofit organizations 
whose primary purpose is to conduct religious worship;
    iii. To perform instruction in, to disseminate information about, 
or otherwise to further the teaching of particular religious faiths or 
tenets.
    b. Educational. A nonprofit organization whose primary purpose is 
one of the following:
    i. The instruction or training of the individual for the purpose of 
improving or developing his capabilities;
    ii. The instruction of the public on subjects beneficial to the 
community. An organization may be educational even though it advocates 
a particular position or viewpoint so long as it presents a 
sufficiently full and fair exposition of the pertinent facts to permit 
an individual or the public to form an independent opinion or 
conclusion. On the other hand, an organization is not educational if 
its principal function is the mere presentation of unsupported opinion.
    c. Scientific. A nonprofit organization whose primary purpose is 
one of the following:
    i. To conduct research in the applied, pure or natural sciences;
    ii. To disseminate systematized technical information dealing with 
applied, pure or natural sciences.
    d. Philanthropic. A nonprofit organization primarily organized and 
operated for purposes beneficial to the public. Philanthropic 
organizations include, but are not limited to, organizations which are 
organized for:
    i. Relief of the poor and distressed or of the underprivileged;
    ii. Advancement of religion;
    iii. Advancement of education or science;
    iv. Erection or maintenance of public buildings, monuments, or 
works;
    v. Lessening of the burdens of government;
    vi. Promotion of social welfare by organizations designed to 
accomplish any of the above purposes or:
    (A) To lessen neighborhood tensions;
    (B) To eliminate prejudice and discrimination;
    (C) To defend human and civil rights secured by law; or
    (D) To combat community deterioration and juvenile delinquency.
    e. Agricultural. A nonprofit organization whose primary purpose is 
the betterment of the conditions of those engaged in agricultural 
pursuits, the improvement of the grade of their products, and the 
development of a higher degree of efficiency in agriculture. The 
organization may advance agricultural interests through educational 
activities; the holding of agricultural fairs; the collection and 
dissemination of information concerning cultivation of the soil and its 
fruits or the harvesting of marine resources; the rearing, feeding, and 
management of livestock, poultry, and bees, or other activities 
relating to agricultural interests. The term agricultural nonprofit 
organization also includes any nonprofit organization whose primary 
purpose is the collection and dissemination of information or materials 
relating to agricultural pursuits.
    f. Labor. A nonprofit organization whose primary purpose is the 
betterment of the conditions of workers. Labor organizations include, 
but are not limited to, organizations in which employees or workmen 
participate, whose primary purpose is to deal with employers concerning 
grievances, labor disputes, wages, hours of employment and working 
conditions.
    g. Veterans'. A nonprofit organization of veterans of the armed 
services of the United States, or an auxiliary unit or society of, or a 
trust or foundation for, any such post or organization.
    h. Fraternal. A nonprofit organization which meets all of the 
following criteria:
    i. Has as its primary purpose the fostering of brotherhood and 
mutual benefits among its members;
    ii. Is organized under a lodge or chapter system with a 
representative form of government;
    iii. Follows a ritualistic format; and
    iv. Is comprised of members who are elected to membership by vote 
of the members.
    i. Qualified political committees. The term ``qualified political 
committee'' means a national or State committee of a political party, 
the Republican and Democratic Senatorial Campaign Committees, the 
Democratic National Congressional Committee, and the National 
Republican Congressional Committee:
    i. The term ``national committee'' means the organization which, by 
virtue of the bylaws of a political party, is responsible for the day-
to-day operation of such political party at the national level; and
    ii. The term ``State committee'' means the organization which, by 
virtue of the bylaws of a political party, is responsible for the day-
to-day operation of such political party at the State level.
    321.412[3]  Limitation on Authorization. An organization authorized 
to mail at the nonprofit Standard rates for qualified nonprofit 
organizations may mail only its own matter at these rates. An 
organization may not delegate or lend the use of its permit to mail at 
special Standard rates to any other person, organization or 
association.
    321.42  [Nonprofit] Presort Rate Categories
    321.421  General. The presort rate categories apply to Nonprofit 
subclass mail that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is presorted, marked, and presented as prescribed by the Postal 
Service; and
    c. Meets the machinability, addressing, and other preparation 
requirements prescribed by the Postal Service.
    321.422[1]  Basic [Sortation] Rate Categories[y]. The basic rate 
categories apply to presort rate category mail not mailed under section 
321.423. [Mailers must sort Nonprofit subclass mail as prescribed by 
the Postal Service. Mail which is not presorted to three-digit or five-
digit ZIP Code areas or to carrier routes qualifies for the basic rates 
in Rate Schedule 321.4.]
    [321.422 Basic Sortation, ZIP + 4 Rate Category. The basic 
sortation, ZIP + 4 rate category applies to mail mailed under section 
321.421 which bears a proper ZIP + 4 code and which meets the 
machinability, address readability and other preparation requirements 
prescribed by the Postal Service.]
    321.423[4]  Three- and Five-Digit [Presort Level] Rate 
Categories[y]. The three- and five-digit [presort level] rate 
categories[y] apply[ies] to presort rate category [Nonprofit subclass] 
mail [which is] presorted to single or multiple three-[digit or] and 
five-digit ZIP Code destinations [areas. The mail

[[Page 16138]]
must be prepared in the manner] as prescribed by the Postal Service.
    321.43  Automation Rate Categories
    321.431  General. The automation rate categories consist of 
Nonprofit subclass mail that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is presorted, marked, and presented as prescribed by the Postal 
Service;
    c. Bears a barcode representing not more than 11 digits (not 
including ``correction'' digits) as prescribed by the Postal Service;
    d. Meets the machinability, addressing, barcoding, and other 
preparation requirements prescribed by the Postal Service.
    321.432[23]  Basic [Sortation, Pre-] Barcoded Rate Category. The 
basic [sortation, pre-]barcoded rate category applies to letter-size 
automation rate category mail not mailed under section 321.433 or 
321.434. [321.421 which bears a barcode representing not more than 11 
digits (not including ``correction'' digits) as prescribed by the 
Postal Service, and which meets the machinability, addressing, and 
barcoding specifications and other preparation requirements prescribed 
by the Postal Service.]
    [321.425  Three- and Five-Digit Presort Level, ZIP + 4 Rate 
Category. The three- and five-digit presort level, ZIP + 4 rate 
category applies to mail mailed under section 321.424 which bears a 
proper ZIP + 4 code and which meets the machinability, address 
readability and other preparation requirements prescribed by the Postal 
Service.]
    321.433[26]  Three-Digit [Presort Level, Pre-]Barcoded Rate 
Category. The three-digit [presort level, pre-]barcoded rate category 
applies to letter-size automation rate category mail [mailed under 
section 321.424 which is] presorted to single or multiple three-digit 
ZIP Code destinations [three digits, which bears a barcode representing 
not more than 11 digits (not including ``correction'' digits) as 
prescribed by the Postal Service, and which meets the machinability, 
addressing, and barcoding specifications and other preparation 
requirements] as prescribed by the Postal Service.
    321.434[27]  Five-Digit [Presort Level, Pre-]Barcoded Rate 
Category. The five-digit [presort level, pre-]barcoded rate category 
applies to letter-size automation rate category mail [mailed under 
section 321.424 which is] presorted to single or multiple five-digit 
ZIP Code destinations [five digits, which bears a barcode representing 
not more than 11 digits (not including ``correction'' digits) as 
prescribed by the Postal Service, and which meets the machinability, 
addressing, and barcoding specifications, and other preparation 
requirements] as prescribed by the Postal Service.
    [321.428  Carrier Route Presort Level Rate Category. The carrier 
route presort level rate category applies to Nonprofit subclass mail 
which is presorted to a carrier route, with at least 10 pieces to each 
carrier route. The mail must be prepared in the manner prescribed by 
the Postal Service.]
    321.435[29]  Basic Barcoded [Pre-barcoded] Flats Rate Category. The 
basic barcoded flats rate category applies to flat-size automation rate 
category mail not mailed under section 321.436. [The pre-barcoded flats 
rate category applies to Nonprofit subclass flat size pieces which are 
properly prepared and presorted, bear a barcode as prescribed by the 
Postal Service, and meet the flats machinability and address 
readability specifications of the Postal Service. Such flats must be 
presented for mailing in a manner which does not require cancellation.]
    321.436  Three- and Five-Digit Barcoded Flats Rate Category. The 
three- and five-digit barcoded flats rate category applies to flat-size 
automation rate category mail presorted to single or multiple three- 
and five-digit ZIP Code destinations as prescribed by the Postal 
Service.
[321.43  Nonprofit Subclass Discounts
    321.431  Saturation Discount. The saturation discount applies to 
Nonprofit subclass mail presented in a carrier route presort mailing 
which is walk sequenced and which meets the saturation and preparation 
requirements prescribed by the Postal Service.
    321.432  125-Piece Walk-sequence Discount. The 125-piece walk-
sequence discount applies to Nonprofit subclass mail presented in a 
carrier route presort mailing which is walk sequenced and contains a 
minimum of 125 pieces per carrier route, and which meets the 
preparation requirements prescribed by the Postal Service.]
    321.44[33]  Destination Entry Discounts. [The d]Destination entry 
discounts apply[ies] to Nonprofit subclass mail prepared as prescribed 
by the Postal Service and addressed [which is destined] for delivery 
within the service area of the BMC (or auxiliary service facility)[,] 
or sectional center facility (SCF) [, or destination delivery unit 
(DDU)] at which it is entered, as defined by the Postal Service.
* * * * *
370  Rates and Fees
    The rates and fees for Standard Mail are set forth as follows:

------------------------------------------------------------------------
                                                       Schedule         
------------------------------------------------------------------------
a. Single Piece subclass...................  321.1                      
b. Regular subclass........................  321.2                      
c. Enhanced Carrier Route subclass.........  321.3                      
d. Nonprofit subclass......................  321.4                      
e. Nonprofit Enhanced Carrier Route          321.5                      
 subclass.                                                              
f [e] Parcel Post subclass                                              
  Basic....................................  322.1A                     
  Destination BMC..........................  322.1B                     
g [f] Bound Printed Matter subclass                                     
  Single Piece.............................  322.3A                     
  Bulk and Carrier Route...................  322.3B                     
h [g] Special subclass.....................  323.1                      
i [h] Library subclass.....................  323.2                      
j [i] Fees.................................  1000                       
------------------------------------------------------------------------

4. In The Standard Mail Classification Schedule, the Following 
Conforming Cross-References are Proposed in Sections 321.11, 321.21, 
321.31, 331, 341, 344.1, 344.21, 353.1, 361, and 381 (Additions 
italicized, deletions bracketed)
321.1  Single Piece Subclass
    321.11 Definition.  The Single Piece subclass consists of Standard 
Mail weighing less than 16 ounces that is not mailed under sections 
321.2, 321.3, 321.4, 321.5 or 323.
* * * * *
321.2  Regular Subclass
    321.21 Definition.  The Regular subclass consists of Standard Mail 
weighing less than 16 ounces that is not mailed under sections 321.1, 
321.3, 321.4, 321.5 or 323, and that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is presorted, marked, and presented as prescribed by the Postal 
Service; and
    c. Meets the machinability, addressing, and other preparation 
requirements prescribed by the Postal Service.
* * * * *
321.3  Enhanced Carrier Route Subclass
    321.31  Definition. The Enhanced Carrier Route subclass consists of 
Standard Mail weighing less than 16 ounces that is not mailed under 
section 321.1, 321.2, 321.4, 321.5 or 323, and that:
    a. Is prepared in a mailing of at least 200 addressed pieces or 50 
pounds of addressed pieces;
    b. Is prepared, marked, and presented as prescribed by the Postal 
Service;

[[Page 16139]]

    c. Is presorted to carrier routes as prescribed by the Postal 
Service;
    d. Is sequenced as prescribed by the Postal Service; and
    e. Meets the machinability, addressing, and other preparation 
requirements prescribed by the Postal Service.
* * * * *
330  Physical Limitations
331  Size
    Standard Mail may not exceed 108 inches in length and girth 
combined. Additional size limitations apply to individual Standard Mail 
subclasses. The maximum size for mail presorted to carrier route in the 
Enhanced Carrier Route and Nonprofit Enhanced Carrier Route subclasses 
is 14 inches in length, 11.75 inches in width, and 0.75 inch in 
thickness. For merchandise samples mailed with detached address cards, 
the carrier route maximum dimensions apply to the detached address 
cards and not to the samples.
* * * * *
340  Postage and Preparation
341  Postage
    Postage must be paid as set forth in section 3000. When the postage 
computed at a Single Piece, Regular, Enhanced Carrier Route, [or] 
Nonprofit or Nonprofit Enhanced Carrier Route Standard rate is higher 
than the rate prescribed in any of the Standard subclasses listed in 
322 or 323 for which the piece also qualifies (or would qualify, except 
for weight), the piece is eligible for the applicable lower rate. All 
mail mailed at a bulk or presort rate must have postage paid in a 
manner not requiring cancellation.
* * * * *
344  Attachments and Enclosures
    344.1  Single Piece, Regular, Enhanced Carrier Route, [and] 
Nonprofit and Nonprofit Enhanced Carrier Route Subclasses (section 321)
* * * * *
    344.21  General. First-Class Mail or Standard Mail from any of the 
subclasses listed in section 321 (Single Piece, Regular, Enhanced 
Carrier Route, [or] Nonprofit or Nonprofit Enhanced Carrier Route) may 
be attached to or enclosed in Standard Mail mailed under sections 322 
and 323. The piece must be marked as prescribed by the Postal Service. 
Except as provided in sections 344.22 and 344.23, additional postage 
must be paid for the attachment or enclosure as if it had been mailed 
separately. Otherwise, the entire combined piece is subject to the 
First-Class or section 321 Standard rate for which it qualifies (unless 
the rate applicable to the host piece is higher), or, if a combined 
piece with a section 321 Standard Mail attachment or enclosure weighs 
16 ounces or more, the piece is subject to the Parcel Post rate for 
which it qualifies.
* * * * *
353.1  Single Piece, Regular, Enhanced Carrier Route, [and] Nonprofit 
and Nonprofit Enhanced Carrier Route Subclasses (section 321)
    Undeliverable-as-addressed Standard Mail mailed under section 321 
will be returned on request of the mailer, or forwarded and returned on 
request of the mailer. Undeliverable-as-addressed combined First-Class 
and Standard pieces will be returned as prescribed by the Postal 
Service. The Single Piece Standard rate is charged for each piece 
receiving return only service. Charges for forwarding-and-return 
service are assessed only on those pieces which cannot be forwarded and 
are returned. The charge for those returned pieces is the appropriate 
Single Piece Standard rate for the piece plus that rate multiplied by a 
factor equal to the number of section 321 Standard pieces nationwide 
that are successfully forwarded for every one piece that cannot be 
forwarded and must be returned.
* * * * *
360  Ancillary Services
361  All Subclasses
    All Standard Mail will receive the following services upon payment 
of the appropriate fees:

------------------------------------------------------------------------
                  Service                              Schedule         
------------------------------------------------------------------------
a. Address correction......................  SS-1                       
b. Certificates of mailing indicating that   SS-4                       
 a specified number of pieces have been                                 
 mailed.                                                                
------------------------------------------------------------------------

    Certificates of mailing are not available for Regular, Enhanced 
Carrier Route, [and] Nonprofit and Nonprofit Enhanced Carrier Route 
subclass mail when postage is paid by permit imprint.
* * * * *
380  Authorizations and Licenses
381  Regular, Enhanced Carrier Route [and] Nonprofit and Nonprofit 
Enhanced Carrier Route Subclasses
    A mailing fee as set forth in Rate Schedule 1000 must be paid once 
each year by mailers of Regular, Enhanced Carrier Route [and] Nonprofit 
and Nonprofit Enhanced Carrier Route subclass mail.
5. In The Periodicals Classification Schedule, New Sections 423.8 and 
423.7 are proposed to be Added, and New Section 423.8 is Proposed to be 
Substituted for Old Section 423.6 (Additions italicized, deletions 
bracketed)
423  Preferred Rate Periodicals
* * * * *

423.6  Preferred Rate Pound Rates

    For Preferred Rate Periodicals entered under sections 423.3, 423.4 
and 423.5, an unzoned pound rate applies to the nonadvertising portion. 
A zoned pound rate applies to the advertising portion and may be 
reduced by applicable destination entry discounts. The pound rate 
postage is the sum of the nonadvertising portion charge and the 
advertising portion charge. For Preferred Rate Periodicals entered 
under section 423.2, one pound rate applies to the pieces presorted to 
carrier route to be delivered within the delivery area of the 
originating post office, and another pound rate applies to all other 
pieces.

423.7  Preferred Rate Piece Rates

    423.71  Basic Rate Category. The basic rate category applies to all 
Preferred Rate Periodicals not mailed under section 423.72 or 423.73.
    423.72  Three-Digit City and Five-Digit Rate Category. The rates 
for this category apply to Preferred Rate Periodicals entered under 
sections 423.3, 423.4 or 423.5 that are presorted to three-digit cities 
and five-digit ZIP Code destinations as prescribed by the Postal 
Service.
    423.73  Carrier Route Rate Category. The carrier route rate 
category applies to Preferred Rate Periodicals presorted to carrier 
routes as prescribed by the Postal Service.
423.6  Preferred Rate Discounts
    423.61  Destination Entry Discounts. Copies of any Preferred Rate 
Periodicals class mail which are destined for delivery within the 
destination sectional center facility (SCF) area or the destination 
delivery unit (DDU) area in which they are entered, as defined by the 
Postal Service, qualify for the applicable discount as set forth in 
Rate Schedules 423.2, 423.3, and 423.4.
    423.62  ZIP + 4 and Pre-barcoded Letter Discounts. Copies of any 
automation compatible Preferred Rate Periodicals class mail which bear 
a proper ZIP + 4 code, or which bear a barcode representing not more 
than 11 digits (not including ``correction'' digits) as prescribed by 
the Postal Service, and which meet the machinability, addressing, and 
barcoding specifications

[[Page 16140]]
and other preparation requirements prescribed by the Postal Service 
qualify for the applicable ZIP + 4 or pre-barcoding discounts as set 
forth in Rate Schedules 423.2, 423.3, and 423.4.
    423.63  125-piece Walk-sequence Discount. Copies of Preferred Rate 
Periodicals class mail presented in mailings which are walk sequenced 
and contain a minimum of 125 pieces per carrier route and which meet 
the preparation requirements prescribed by the Postal Service are 
eligible for the applicable discount set forth in Rate Schedules 423.2, 
423.3, and 423.4.
    423.64  Saturation Discount. Saturation Preferred Rate Periodicals 
class mail presented in mailings which are walk sequenced and which 
meet the saturation and preparation requirements prescribed by the 
Postal Service qualifies for the applicable discount set forth in Rate 
Schedules 423.2, 423.3, and 423.4.
    423.65  Pre-barcoded Flats Discounts. Pre-barcoded Preferred Rate 
Periodicals class flats which are properly prepared and presorted, 
which bear a barcode as prescribed by the Postal Service, and which 
meet the flats machinability and address readability specifications of 
the Postal Service, are eligible for the applicable discounts for pre-
barcoded flats set forth in Rate Schedules 423.2, 423.3, and 423.4.]

423.8  Preferred Rate Discounts

    423.81  Barcoded Letter Discounts. Barcoded letter discounts apply 
to letter size Preferred Rate Periodicals mailed under sections 423.71 
and 423.72 which bears a barcode representing not more than 11 digits 
(not including ``correction'' digits) as prescribed by the Postal 
Service, and which meets the machinability, addressing, and barcoding 
specifications and other preparation requirements prescribed by the 
Postal Service.
    423.82  Barcoded Flats Discounts. Barcoded flats discounts apply to 
flat size Preferred Rate Periodicals mailed under sections 423.71 and 
423.72 which bear a barcode representing not more than 11 digits (not 
including ``correction'' digits) as prescribed by the Postal Service, 
and meet the flats machinability, addressing, and barcoding 
specifications and other preparation requirements prescribed by the 
Postal Service.
    423.83  High Density Discount. The high density discount applies to 
Preferred Rate Periodicals mailed under section 423.73, presented in 
walk sequence order, and meeting the high density and preparation 
requirements prescribed by the Postal Service.
    423.84  Saturation Discount. The saturation discount applies to 
Preferred Rate Periodicals mailed under section 423.73, presented in 
walk-sequence order, and meeting the saturation and preparation 
requirements prescribed by the Postal Service.
    423.85  Destination Entry Discounts. Destination entry discounts 
apply to Preferred Rate Periodicals which are destined for delivery 
within the service area of the destination sectional center facility 
(SCF) or the destination delivery unit (DDU) in which they are entered, 
as defined by the Postal Service. The DDU discount only applies to 
Carrier Route rate category mail; the SCF discount is not available for 
mail entered under section 423.2.
    423.86  Nonadvertising Discount. The nonadvertising discount 
applies to Preferred Rate Periodicals entered under sections 423.3, 
423.4, and 423.5 and is determined by multiplying the proportion of 
nonadvertising content by the discount factor set forth in Rate 
Schedules 421, 423.3 or 423.4 and subtracting that amount from the 
applicable piece rate.

Requested Changes in Rate Schedules

    In conjunction with the requested changes to the Domestic Mail 
Classification Schedule set forth in Attachment A, the Postal Service 
is also requesting that the Commission recommend corresponding changes 
in the attendant Rate Schedules. The attached Rate Schedules, which 
show the current and proposed full rates, reflect the changes in 
organizational format recommended by the Commission on January 26, 
1996, and approved by the Governors on March 4, 1996, even though the 
effective date for formal implementation of those changes is July 1, 
1996. Attached following the full rate Rate Schedules are the Phasing 
Schedules, showing proposed rates at each level from Step 2 to Step 6. 
(There are no phasing schedules attached for Within County or Classroom 
Periodicals, because there are no proposed changes in the phased rate 
elements for those subclasses. Thus, the phasing schedules for Within 
County and Classroom are proposed to stay the same as those established 
by Docket No. R94-1.)
    The current and proposed Rate Schedules are as follows:

Standard Mail Rate Schedule 321.4 Nonprofit Subclass \1\

Current Full Rates

------------------------------------------------------------------------
                                                                  Piece 
                          Letter size                             rate  
                                                                 (cents)
------------------------------------------------------------------------
Piece Rate....................................................      13.5
Discounts (per piece)                                                   
  Destination Entry                                                     
    BMC.......................................................       1.2
    SCF.......................................................       1.8
    Delivery Office \2\.......................................       2.3
  Presort Level                                                         
    3/5 Digit.................................................       1.3
    Carrier Route.............................................       3.8
    Saturation................................................       4.1
  Automation \3\                                                        
    ZIP + 4 \4\...............................................  ........
    Basic.....................................................       0.7
    3/5 Digit \5\.............................................       0.4
  Barcode \4\                                                           
    Basic.....................................................       1.8
    3-Digit \5\...............................................       1.0
    5-digit \5\...............................................       1.8
------------------------------------------------------------------------

Current Full Rates

------------------------------------------------------------------------
                                                                  Piece 
                        Non-letter size                           rate  
                                                                 (cents)
------------------------------------------------------------------------
Piece rate \6\................................................      19.3
Discounts (per piece):                                                  
  Destination Entry:                                                    
    BMC.......................................................       1.2
    SCF.......................................................       1.8
    Delivery Office \2\.......................................       2.3
  Presort Level:                                                        
    3/5 Digit.................................................       1.4
    Carrier Route.............................................       4.7
    125-Piece Walk Sequence...................................       4.9
    Saturation................................................       5.4
  Automation \7\                                                        
    Barcode \4\                                                         
      Basic...................................................       2.6
      3/5 Digit...............................................       1.8
------------------------------------------------------------------------


                                                                        
                                                        Piece     Pound 
                   Pound rate \6\                       rate      rate  
                                                       (cents)   (cents)
Pound Rate plus Per-Piece Rate......................       7.9      54.7
Discounts:                                                              
  Destination Entry (per pound):                                        
    BMC.............................................  ........       6.0
    SCF.............................................  ........       8.4
    Delivery Office \2\.............................  ........      10.8
  Presort Level (per piece):                                            
    3/5 Digit.......................................       1.4  ........
    Carrier Route...................................       4.7  ........
    125-Piece Walk Sequence.........................       4.9  ........
    Saturation......................................       5.4  ........
  Automation (per piece) \7\                                            
    Barcode \4\                                                         
      Basic.........................................       2.6  ........
      3/5 Digit.....................................       1.8  ........


[[Page 16141]]


Current Schedule 321.4 Notes

    \1\ A fee of $85.00 must be paid once each 12-month period for 
each bulk mailing permit.
    \2\ Applies only to carrier route presort, 125-piece walk 
sequence and saturation mail.
    \3\ For letter-size pieces meeting applicable Postal Service 
regulations.
    \4\ Among ZIP+4 and barcode discounts, only one discount may be 
applied.
    \5\ Deducted from otherwise applicable \3/5\-digit rate.
    \6\ Mailer pays either the piece or the pound rate, whichever is 
higher.
    \7\ For flat-size pieces meeting applicable Postal Service 
regulations.

Standard Mail Rate Schedule 321.4A Nonprofit Subclass: Presort 
Categories \1\

Proposed Full Rates

------------------------------------------------------------------------
                                                                Proposed
                                                                  rate  
                                                                 (cents)
------------------------------------------------------------------------
Letter Size:                                                            
  Piece Rate:                                                           
    Basic.....................................................      13.8
    3/5-Digit.................................................      12.0
  Destination Entry Discount per Piece:                                 
    BMC.......................................................       1.3
    SCF.......................................................       1.8
Non-Letter Size:                                                        
  Piece Rate:                                                           
    Minimum per Piece: \2\                                              
      Basic...................................................      20.1
      3/5-Digit...............................................      14.9
    Destination Entry Discount per Piece:                               
      BMC.....................................................       1.3
      SCF.....................................................       1.8
  Pound Rate \2\..............................................      48.4
    Plus per Piece Rate:                                                
      Basic...................................................      10.0
      3/5-Digit...............................................       4.8
    Destination Entry Discount per Pound:                               
      BMC.....................................................       6.2
      SCF.....................................................       8.8
------------------------------------------------------------------------

Schedule 321.4A Notes

    1 A fee of $85.00 must be paid once each 12-month period for 
each bulk mailing permit.
    2 Mailer pays either the minimum piece rate or the pound rate, 
whichever is higher.

Standard Mail Rate Schedule 321.4B Nonprofit Subclass: Automation 
Categories \1\

Proposed Full Rates

------------------------------------------------------------------------
                                                                Proposed
                                                                  rate  
                                                                 (cents)
------------------------------------------------------------------------
Letter Size: \2\                                                        
  Piece Rate:                                                           
    Basic Letter \3\..........................................      10.5
    3-Digit Letter \4\........................................      10.1
    5-Digit Letter \5\........................................       8.8
  Destination Entry Discount per Piece:                                 
    BMC.......................................................       1.3
    SCF.......................................................       1.8
Flat Size: \6\                                                          
  Piece Rate;                                                           
    Minimum per Piece: \7\                                              
      Basic Flat \8\..........................................      17.7
      3/5-Digit Flat \9\......................................      12.5
    Destination Entry Discount per Piece:                               
      BMC.....................................................       1.3
      SCF.....................................................       1.8
  Pound Rate \7\..............................................      48.4
    Plus per Piece Rate:                                                
      Basic Flat..............................................       7.6
      3/5-Digit Flat..........................................       2.4
    Destination Entry Discount per Pound;                               
      BMC.....................................................       6.2
      SCF.....................................................       8.8
------------------------------------------------------------------------

Proposed Schedule 321.B Notes

    1 A fee of $85.00 must be paid once each 12-month period for 
each bulk mailing permit.
    2 For letter-size automation pieces meeting applicable Postal 
Service regulations.
    3 Rate applies to letter-size automation mail not mailed at 3-
digit, 5-digit or carrier route rates.
    4 Rate applies to letter-size automation mail presorted to 
single or multiple three-digit ZIP Code destinations as prescribed 
by the Postal Service.
    5 Rate applies to letter-size automation mail presorted to 
single or multiple five-digit ZIP Code destinations as prescribed by 
the Postal Service.
    6 For flat-size automation mail meeting applicable Postal 
Service regulations.
    7 Mailer pays minimum piece rate or pound rate, whichever is 
higher.
    8 Rate applies to flat-size automation mail not mailed at 3/5-
digit rate.
    9 Rate applies to flat-size automation mail presorted to single 
or multiple three- and five-digit ZIP Code destinations as specified 
by the Postal Service.

Standard Mail Rate Schedule 321.5; Nonprofit Enhanced Carrier Route 
Subclass \1\

Proposed Full Rates

------------------------------------------------------------------------
                                                                Proposed
                                                                  Rate  
                                                                 (cents)
------------------------------------------------------------------------
Letter Size:                                                            
  Piece Rate:                                                           
    Basic.....................................................       9.9
    Basic Automated Letter \2\................................       8.5
    High Density..............................................       9.3
    Saturation................................................       8.7
  Destination Entry Discount per Piece:                                 
    BMC.......................................................       1.3
    SCF.......................................................       1.8
    DDU \3\...................................................       2.4
Non-Letter Size:                                                        
  Piece Rate:                                                           
    Minimum per Piece: \4\                                              
      Basic...................................................      10.7
      High Density............................................      10.0
      Saturation..............................................       9.4
    Destination Entry Discount per Piece:                               
      BMC.....................................................       1.3
      SCF.....................................................       1.8
      DDU \3\.................................................       2.4
  Pound Rate \4\..............................................      45.1
    Plus per Piece Rate:                                                
      Basic...................................................       1.3
      High Density............................................       0.6
      Saturation..............................................       0.0
    Destination Entry Discount per Pound:                               
      BMC.....................................................       6.2
      SCF.....................................................       8.8
      DDU \3\.................................................      11.4
------------------------------------------------------------------------

Proposed Schedule 321.5 Notes

    1 A fee of $85.00 must be paid each 12-month period for each 
bulk mailing permit.
    2 Rate applies to letter-size automation mail presorted to 
routes specified by the Postal Service.
    3 Applies only to enhanced carrier route mail.
    4 Mailer pays either the minimum piece rate or the pound rate, 
whichever is higher.

Periodicals Rate Schedule 423.2 Within County

(Full Rates)

------------------------------------------------------------------------
                                                       Current  Proposed
                                                        rate      rate  
                                                       (cents)   (cents)
------------------------------------------------------------------------
Per Pound:                                                              
    General.........................................      12.6      12.6
    Delivery Office \1\.............................      11.6      11.6
Per Piece:                                                              
    Required Presort................................       8.2       8.2
    Carrier Route Presort...........................       4.4       4.4
Per Piece Discounts:                                                    
    Delivery Office \2\.............................       0.3       0.3
High Density (formerly 125 pc.) \3\.................       0.5       0.5
    Saturation......................................       0.7       0.7
    Automation Discounts for Automation Compatible                      
     Mail \4\ From Required:                                            
        ZIP + 4 Letter size.........................       0.4       N/A
        3-digit Pre-barcoded Letter size............       0.4       0.4
        5-Digit Pre-barcoded Letter size............       1.7       1.7
        3/5-Digit Pre-barcoded Flats................       1.5       1.5
------------------------------------------------------------------------


[[Page 16142]]

    1 Applicable only to the pound charge of carrier route 
(including high density and saturation) presorted pieces to be 
delivered within the delivery area of the originating post office.
    2 Applicable only to carrier presorted pieces to be delivered 
within the delivery area of the originating post office.
    3 Applicable to high density mail, deducted from carrier route 
presort rate.
    4 For automation compatible pieces meeting applicable Postal 
Service regulations.

Periodicals Rate Schedule 423.3 Publications of Authorized 
Nonprofit Organizations \10\

Full Rates

------------------------------------------------------------------------
                                                  Current      Proposed 
                                 Postage rate     rate \1\     rate \1\ 
                                     unit         (cents)      (cents)  
------------------------------------------------------------------------
Per Pound:                                                              
    Nonadvertising portion....  Pound                  14.3         14.2
    Advertising portion: \9\                                            
        Delivery Office \2\...  Pound                  18.0         16.9
            SCF \3\...........  Pound                  19.1         19.0
            1&2...............  Pound                  21.2         21.4
            3.................  Pound                  22.3         22.4
            4.................  Pound                  25.0         25.1
            5.................  Pound                  29.2         29.2
            6.................  Pound                  33.5         33.6
            7.................  Pound                  38.8         38.8
            8.................  Pound                  43.2         43.2
Per Piece: Less Nonadvertising  ..............          4.2          4.2
 Factor of: \4\                                                         
    Required Preparation \5\..  Piece                  21.3         21.9
    Presorted to 3-digit city/  Piece                  16.2         17.4
     5-digit.                                                           
    Presorted to Carrier Route  Piece                  11.7         10.7
    Discounts:                                                          
        Prepared to Delivery    Piece                   0.6          1.2
         Office \2\.                                                    
        Prepared to SCF \3\...  Piece                   0.4          0.6
        High Density (formerly  Piece                   0.2          0.7
         125-pc.) \6\.                                                  
        Saturation \7\........  Piece                   0.8          2.1
    Automation Discounts for                                            
     Automation Compatible                                              
     Mail:\8\                                                           
        From Required:                                                  
            ZIP + 4 Letter      Piece                   0.8          N/A
             size.                                                      
            Pre-barcoded        Piece                   2.0          3.0
             Letter size.                                               
            Pre-barcoded Flats  Piece                   2.7          2.4
        From 3/5 Digit:                                                 
            ZIP + 4 Letter      Piece                   0.5          N/A
             size.                                                      
            3-Digit Pre-        Piece                   1.2          2.3
             barcoded Letter                                            
             size.                                                      
            5-Digit Pre-        Piece                   2.0          2.3
             barcoded Letter                                            
             size.                                                      
            Pre-barcoded Flats  Piece                   1.8          2.4
------------------------------------------------------------------------

Schedule 423.3 Notes

    \1\ Charges are computed by adding the appropriate per-piece 
charge to the sum of the nonadvertising portion and the advertising 
portion, as applicable.
    \2\ Applies to carrier route (including high density and 
saturation) mail delivered within the delivery area of the 
originating post office.
    \3\ Applies to mail delivered within the SCF area of the 
originating SCF office.
    \4\ For postage calculation, multiply the proportion of 
nonadvertising content by this factor and subtract from the 
applicable piece rate.
    \5\ Mail presorted to 3-digit (other than 3-digit city), SCF, 
states, or mixed states.
    \6\ Applicable to high density mail, deducted from carrier route 
presort rate.
    \7\ Applicable to saturation mail, deducted from carrier route 
presort rate.
    \8\ For automation compatible mail meeting applicable Postal 
Service regulations.
    \9\ Not applicable to publications containing 10 percent or less 
advertising content.
    \10\ If qualified, nonprofit publications may use Within-County 
rates for applicable portions of a mailing.

Periodicals Rate Schedule 423.4 Classroom Publications \10\

Full Rates

------------------------------------------------------------------------
                                                  Current      Proposed 
                                 Postage rate     rate \1\     rate \1\ 
                                     unit         (cents)      (cents)  
------------------------------------------------------------------------
Per Pound:                                                              
    Nonadvertising portion....  Pound                  11.3         11.3
    Advertising portion: \9\                                            
        Delivery Office \2\...  Pound                  18.0         16.9
            SCF \3\...........  Pound                  19.1         19.0
            1&2...............  Pound                  21.2         21.4
            3.................  Pound                  22.3         22.4
            4.................  Pound                  25.0         25.1
            5.................  Pound                  29.2         29.2
            6.................  Pound                  33.5         33.6
            7.................  Pound                  38.8         38.8
            8.................  Pound                  43.2         43.2

[[Page 16143]]
                                                                        
Per Piece: Less Nonadvertising  ..............          3.5          3.5
 Factor of: \4\                                                         
    Required Preparation \5\..  Piece                  17.1         17.1
    Presorted to 3-digit city/  Piece                  12.8         12.8
     5-digit.                                                           
    Presorted to Carrier Route  Piece                   9.0          9.0
    Discounts:                                                          
        Prepared to Delivery    Piece                   0.5          0.5
         Office \2\.                                                    
        Prepared to SCF \3\...  Piece                   0.3          0.3
        High Density (formerly  Piece                   0.2          0.2
         125-pc.) \6\.                                                  
        Saturation \7\........  Piece                   0.7          0.7
    Automation Discounts for                                            
     Automation Compatible                                              
     Mail \8\                                                           
        From Required:                                                  
            ZIP + 4 Letter      Piece                   0.7          N/A
             size.                                                      
            Pre-barcoded        Piece                   1.7          1.7
             Letter size.                                               
            Pre-barcoded Flats  Piece                   2.3          2.3
        From 3/5 Digit:                                                 
            ZIP + 4 Letter      Piece                   0.4          N/A
             size.                                                      
            3-Digit Pre-        Piece                   1.0          1.0
             barcoded Letter                                            
             size.                                                      
            5-Digit Pre-        Piece                   1.7          1.7
             barcoded Letter                                            
             size.                                                      
            Pre-barcoded Flats  Piece                   1.5          1.5
------------------------------------------------------------------------



Schedule 423.4 Notes

    \1\ Charges are computed by adding the appropriate per-piece 
charge to the sum of the nonadvertising portion and the advertising 
portion, as applicable.
    \2\ Applies to carrier route (including high density and 
saturation) mail delivered within the delivery area of the 
originating post office.
    \3\ Applies to mail delivered within the SCF area of the 
originating SCF office.
    \4\ For postage calculation, multiply the proportion of 
nonadvertising content by this factor and subtract from the 
applicable piece rate.
    \5\ Mail presorted to 3-digit (other than 3-digit city), SCF, 
states, or mixed states.
    \6\ Applicable to high density mail, deducted from carrier route 
presort rate.
    \7\ Applicable to saturation mail, deducted from carrier route 
presort rate.
    \8\ For automation compatible mail meeting applicable Postal 
Service regulations.
    \9\ Not applicable to publications containing 10 percent or less 
advertising content.
    \10\ If qualified, nonprofit publications may use Within-County 
rates for applicable portions of a mailing.

Phasing Schedules

Summary of Proposed Rates for Phasing Schedule (Rate Schedule 
321.4A)

                                     Standard Nonprofit--Presort Categories                                     
                                                     (Cents)                                                    
----------------------------------------------------------------------------------------------------------------
                                                             Step 2     Step 3     Step 4     Step 5     Step 6 
----------------------------------------------------------------------------------------------------------------
Letter Size:                                                                                                    
    Piece Rate:                                                                                                 
        Basic............................................       12.6       12.9       13.2       13.5       13.8
        3/5-Digit........................................       10.8       11.1       11.4       11.7       12.0
    Destination Entry Discount per Piece:                                                                       
        BMC..............................................        1.3        1.3        1.3        1.3        1.3
        SCF..............................................        1.8        1.8        1.8        1.8        1.8
Non-Letter Size:                                                                                                
    Piece Rate:                                                                                                 
    Minimum per Piece:                                                                                          
        Basic............................................       18.9       19.2       19.5       19.8       20.1
        3/5-Digit........................................       13.7       14.0       14.3       14.6       14.9
    Destination Entry Discount per Piece:                                                                       
        BMC..............................................        1.3        1.3        1.3        1.3        1.3
        SCF..............................................        1.8        1.8        1.8        1.8        1.8
    Pound Rate...........................................       42.7       44.1       45.5       47.0       48.4
        Plus per Piece Rate:                                                                                    
        Basic............................................       10.0       10.0       10.0       10.0       10.0
        3/5-Digit........................................        4.8        4.8        4.8        4.8        4.8
    Destination Entry Discount per Pound:                                                                       
        BMC..............................................        6.2        6.2        6.2        6.2        6.2
        SCF..............................................        8.8        8.8        8.8        8.8        8.8
----------------------------------------------------------------------------------------------------------------

Summary of Proposed Rates for Phasing Schedule (Rate Schedule 
321.4B)

[[Page 16144]]


                                                                                                                
                                    Standard Nonprofit--Automation Categories                                   
                                                     (Cents)                                                    
----------------------------------------------------------------------------------------------------------------
                                                              Step 2    Step 3     Step 4     Step 5     Step 6 
----------------------------------------------------------------------------------------------------------------
Letter Size:                                                                                                    
    Piece Rate:                                                                                                 
        Basic Letter.....................................        9.3        9.6        9.9       10.2       10.5
        3-Digit Letter...................................        8.9        9.2        9.5        9.8       10.1
        5-Digit Letter...................................        7.6        7.9        8.2        8.5        8.8
    Destination Entry Discount per Piece:                                                                       
        BMC..............................................        1.3        1.3        1.3        1.3        1.3
        SCF..............................................        1.8        1.8        1.8        1.8        1.8
Flat Size:                                                                                                      
    Piece Rate:                                                                                                 
        Minimum per Piece:                                                                                      
            Basic Flat...................................       16.5       16.8       17.1       17.4       17.7
            3/5-Digit Flat...............................       11.3       11.6       11.9       12.2       12.5
        Destination Entry Discount per Piece                                                                    
            BMC..........................................        1.3        1.3        1.3        1.3        1.3
            SCF..........................................        1.8        1.8        1.8        1.8        1.8
    Pound Rate...........................................       42.7       44.1       45.5       47.0       48.4
        Plus per Piece Rate:                                                                                    
            Basic Flat...................................        7.6        7.6        7.6        7.6        7.6
            3/5-Digit Flat...............................        2.4        2.4        2.4        2.4        2.4
        Destination Entry Discount per Pound:                                                                   
            BMC..........................................        6.2        6.2        6.2        6.2        6.2
            SCF..........................................        8.8        8.8        8.8        8.8        8.8
----------------------------------------------------------------------------------------------------------------

Summary of Proposed Rates for Phasing Schedule (Rate Schedule 
321.5)

                                    Standard Nonprofit Enhanced Carrier Route                                   
                                                     (Cents)                                                    
----------------------------------------------------------------------------------------------------------------
                                                              Step 2    Step 3     Step 4     Step 5     Step 6 
----------------------------------------------------------------------------------------------------------------
Letter Size:                                                                                                    
    Piece Rate:                                                                                                 
        Basic............................................        7.4        8.1        8.7        9.3        9.9
        Basic Automated Letter...........................        7.3        7.6        7.9        8.2        8.5
        High-Density.....................................        6.8        7.5        8.1        8.7        9.3
        Saturation.......................................        6.2        6.9        7.5        8.1        8.7
    Destination Entry Discount per Piece:                                                                       
        BMC..............................................        1.3        1.3        1.3        1.3        1.3
        SCF..............................................        1.8        1.8        1.8        1.8        1.8
        DDU..............................................        2.4        2.4        2.4        2.4        2.4
Non-Letter Size:                                                                                                
    Piece Rate:                                                                                                 
        Minimum per Piece:                                                                                      
            Basic........................................        8.2        8.9        9.5       10.1       10.7
            High Density.................................        7.5        8.2        8.8        9.4       10.0
            Saturation...................................        6.9        7.6        8.2        8.8        9.4
        Destination Entry Discount per Piece:                                                                   
            BMC..........................................        1.3        1.3        1.3        1.3        1.3
            SCF..........................................        1.8        1.8        1.8        1.8        1.8
            DDU..........................................        2.4        2.4        2.4        2.4        2.4
    Pound Rate:..........................................       33.1       36.4       39.3       42.2       45.1
        Plus per Piece Rate:                                                                                    
            Basic........................................        1.3        1.3        1.3        1.3        1.3
            High Density.................................        0.6        0.6        0.6        0.6        0.6
            Saturation...................................        0.0        0.0        0.0        0.0        0.0
        Destination Entry Discount per Pound:                                                                   
            BMC..........................................        6.2        6.2        6.2        6.2        6.2
            SCF..........................................        8.8        8.8        8.8        8.8        8.8
            DDU..........................................       11.4       11.4       11.4       11.4       11.4
----------------------------------------------------------------------------------------------------------------

Summary of Proposed Rates for Phasing Schedule (Rate Schedule 
423.3)

[[Page 16145]]


                         Periodicals: Publications of Authorized Nonprofit Organizations                        
                                                     (cents)                                                    
----------------------------------------------------------------------------------------------------------------
                                                             Step 2     Step 3     Step 4     Step 5     Step 6 
----------------------------------------------------------------------------------------------------------------
Per Pound: Non-Advertising Portion.......................       13.4       13.8       13.8       14.2       14.2
Per Piece:                                                                                                      
    Required Preparation.................................       21.3       21.4       21.6       21.7       21.9
    Presorted to 3-Digit City/5-Digit....................       16.8       16.9       17.1       17.2       17.4
    Presorted to Carrier Route...........................       10.1       10.2       10.4       10.5       10.7
----------------------------------------------------------------------------------------------------------------
Note.--All rate elements not shown are unaffected by step increases.                                            

Proposed Special Rules of Practice

(Docket No. MC96-2)

Contents
1. Evidence
    A. Case-in-chief
    B. Exhibits
    C. Motions to Strike
    D. Designations of evidence from other Commission dockets
2. Discovery
    A. General
    B. Objections and motions to compel responses to discovery
    C. Answers to interrogatories
    D. Follow-up interrogatories
    E. Discovery to obtain information available only from the Postal 
Service
3. Service
    A. Discovery requests
    B. Exceptions to general service requirements for certain documents
    C. Document titles
    D. Supplementary electronic filing
4. Cross-examination
    A. Written cross-examination
    B. Oral cross-examination
5. General
1. Evidence
    A. Case-in-chief. A participant's case-in-chief shall be in writing 
and shall include the participant's direct case and rebuttal, if any, 
to the United States Postal Service's case-in-chief. It may be 
accompanied by a trial brief or legal memoranda. There will be a stage 
providing an opportunity to rebut presentations of other participants 
and for the Postal Service to present surrebuttal evidence.
    B. Exhibits. Exhibits should be self-explanatory. They should 
contain appropriate footnotes or narrative explaining the source of 
each item of information used and the methods employed in statistical 
compilations. The principal title of each exhibit should state what it 
contains or represents. The title may also contain a statement of the 
purpose for which the exhibit is offered; however, this statement will 
not be considered part of the evidentiary record. Where one part of a 
multi-part exhibit is based on another part or on another exhibit, 
appropriate cross-references should be made. Relevant exposition should 
be included in the exhibits or provided in accompanying testimony.
    C. Motions to strike. Motions to strike are requests for 
extraordinary relief and are not substitutes for briefs or rebuttal 
evidence. All motions to strike testimony or exhibit materials are to 
be submitted in writing at least 14 days before the scheduled 
appearance of the witness. Responses to motions to strike are due 
within seven days.
    D. Designation of evidence from other Commission dockets. 
Participants may request that evidence received in other Commission 
proceedings be entered into the record of this proceeding. These 
requests should be made by motion, should explain the purpose of the 
designation, and should identify material by page and line or paragraph 
number. Absent extraordinary justification, these requests must be made 
at least 28 days before the date for filing the participant's direct 
case. If requests for designations and counter-designations are 
granted, the moving participant must submit two copies of the approved 
material to the Secretary of the Commission for inclusion in the 
record.
    Opposition to motions for designation and/or requests for counter-
designations shall be filed within 14 days.
2. Discovery
    A. General. Rules 25, 26 and 27 apply during the discovery stage of 
this proceeding except when specifically overtaken by these special 
rules. Questions from each participant should be numbered sequentially, 
by witness.
    The discovery procedures set forth in the rules are not exclusive. 
Parties are encouraged to engage in informal discovery whenever 
possible to clarify exhibits and testimony. The results of these 
efforts may be introduced into the record by stipulation, by 
supplementary testimony or exhibit, by presenting selected written 
interrogatories and answers for adoption by a witness at the hearing, 
or by other appropriate means.
    In the interest of reducing motion practice, parties also are 
encouraged to use informal means to clarify questions and to identify 
portions of discovery requests considered overbroad or burdensome.
    B. Objections and motions to compel responses to discovery. Upon 
motion of any participant in the proceeding, the Commission or the 
presiding officer may compel an answer to an interrogatory or request 
for admissions if the objection is overruled. Motions to compel should 
be filed within 14 days of an objection to the discovery request.
    Parties who have objected to interrogatories or requests for 
production of documents or items which are the subject of a motion to 
compel shall have seven days to answer. Answers will be considered 
supplements to the arguments presented in the initial objection.
    C. Answers to interrogatories. Answers to discovery requests shall 
be prepared so that they can be incorporated as written cross-
examination. Each answer shall begin on a separate page, identify the 
individual responding, the participant who asked the question, and the 
number and text of the question.
    Participants are expected to serve supplemental answers to update 
or to correct responses whenever necessary, up until the date that 
answers are accepted into evidence as written cross-examination. 
Participants filing supplemental answers shall indicate whether the 
answer merely supplements the previous answer to make it current or 
whether it is a complete replacement for the previous answer.
    Participants may submit responses with a declaration of accuracy 
from the respondent in lieu of a sworn affidavit.
    Answers to discovery are to be filed within 14 days of the service 
of the discovery request. Participants are urged, but not required, to 
deliver discovery requests by hand to those who are subject to the 14-
day deadline.
    D. Follow-up interrogatories. Follow-up interrogatories to clarify 
or elaborate on the answer to an earlier discovery request may be filed 
after the initial

[[Page 16146]]
discovery period ends. They must be served within seven days of receipt 
of the answer to the previous interrogatory unless extraordinary 
circumstances are shown.
    E. Discovery to obtain information available only from the Postal 
Service. Rules 25 through 27 allow discovery reasonably calculated to 
lead to admissible evidence during a noticed proceeding with no time 
limitations. Generally, through actions by the presiding officer, 
discovery against a participant is scheduled to end prior to the 
receipt into evidence of that participant's direct case. An exception 
to this procedure shall operate when a participant needs to obtain 
information (such as operating procedures or data) available only from 
the Postal Service. Discovery requests of this nature are permissible 
up to 20 days prior to the filing date for final rebuttal testimony.
3. Service
    A. Discovery requests. Interrogatories, objections and answers 
thereto should be served, in conformance with Rule 12 on the 
Commission, the OCA (three copies), on the complementary party and on 
any other participant so requesting. Special requests relating to 
discovery must be served individually upon the party conducting 
discovery and state the witness who is the subject of the special 
request.
    B. Exceptions to general service requirements for certain 
documents. Designations of written cross-examination, notices of intent 
to conduct oral cross-examination, and notices of intent to participate 
in oral argument shall be served on the Commission, the OCA (three 
copies), the Postal Service, and the complementary party (as 
applicable), as well as on participants filing a special request for 
service.
    C. Document titles. Parties should include informative titles to 
identify the content of any filing. The relief requested or the issue 
addressed should be noted. Transmittal documents should identify the 
answers or other materials being provided.
    D. Supplementary electronic filing. Participants are encouraged to 
supplement their service (on the Commission) of written copies with an 
identical version prepared in electronic format. Electronic copies will 
be posted on the Commission's Bulletin Board (202) 789-6891 and on the 
Commission's Home Page on the World Wide Web (www.prc.gov) by 
Commission-authorized personnel.
4. Cross-examination
    A. Written cross-examination. Written cross-examination will be 
utilized as a substitute for oral cross-examination whenever possible, 
particularly to introduce factual or statistical evidence.
    Designations of written cross-examination should be served no later 
than three working days before the scheduled appearance of a witness. 
Designations shall identify every item to be offered as evidence, 
listing the participant who initially posed the discovery request, the 
witness and/or party to whom the question was addressed (if different 
from the witness answering), the number of the request and, if more 
than one answer is provided, the dates of all answers to be included in 
the record. (For example, ``OCA-T1-17 to USPS witness Jones, answered 
by USPS witness Smith (July 1, 1996) as updated (July 21, 1996).'' When 
a participant designates written cross-examination, two copies of the 
documents to be included shall simultaneously be submitted to the 
Secretary of the Commission.
    The Secretary of the Commission shall prepare for the record a 
packet containing all materials designated for written cross-
examination in a format that facilitates review by the witness and 
counsel. The witness will verify the answers and materials in the 
packet, and they will be entered into the transcript by the presiding 
officer. Counsel for a witness may object to written cross-examination 
at that time, and any designated answers or materials ruled 
objectionable will be stricken from the record.
    B. Oral cross-examination. Oral cross-examination will be permitted 
for clarifying written cross-examination and for testing assumptions, 
conclusions or other opinion evidence. Requests for permission to 
conduct oral cross-examination should be served three or more working 
days before the announced appearance of a witness and should include 
(1) specific references to the subject matter to be examined and (2) 
page references to the relevant direct testimony and exhibits.
    Participants intending to use complex numerical hypotheticals or to 
question using intricate or extensive cross-references, shall provide 
adequately documented cross-examination exhibits for the record. Copies 
of these exhibits should be provided to counsel for the witness at 
least two calendar days (including one working day) before the 
witness's scheduled appearance.
5. General.
    Argument will not be received in evidence. It is the province of 
the lawyer, not the witness. It should be presented in brief or 
memoranda. Legal memoranda on matters at issue will be welcome at any 
stage of the proceeding.
    New affirmative matter (not in reply to another party's direct 
case) should not be included in rebuttal testimony or exhibits.
    Cross-examination will be limited to testimony adverse to the 
participant conducting the cross-examination.
    Library references may be submitted when documentation or materials 
are too voluminous reasonably to be distributed. Each party should 
sequentially number items submitted as library references and provide 
each item with an informative title. Parties are to file and serve a 
separate Notice of Filing of Library Reference(s). Library material is 
not evidence unless and until it is designated and sponsored by a 
witness.

[FR Doc. 96-8994 Filed 4-10-96; 8:45 am]
BILLING CODE 7710-FW-P