[Federal Register Volume 61, Number 248 (Tuesday, December 24, 1996)]
[Notices]
[Pages 67860-67862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32616]


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POSTAL RATE COMMISSION

[Order No. 1148; Docket No. MC97-1]


Experimental Nonletter-Size Business Reply Mail Categories and 
Fees, 1996; Notice and Order on Filing of Request for Establishment of 
Experimental Nonletter-Size Business Reply Mail Categories and Fees

Issued December 18, 1996.
    Before Commissioners: Edward J. Gleiman, Chairman; H. Edward 
Quick, Jr., Vice Chairman; George W. Haley; W.H. ``Trey'' LeBlanc 
III.

    Notice is hereby given that on December 13, 1996, the U.S. Postal 
Service filed a Request with the Postal Rate Commission pursuant to 
section 3623 of the Postal Reorganization Act, 39 U.S.C. 101 et seq., 
for a recommended decision on proposed changes in the Domestic Mail 
Classification Schedule (DMCS). The proposed revisions also include 
proposed new fees. The Request includes attachments and is supported by 
the testimony of three witnesses and three library references. It is on 
file in the Commission Docket Room and is available for inspection 
during the Commission's regular business hours. 1
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    \1\ In a separate notice filed simultaneously with its Request, 
the Postal Service states that interested persons who intervene in 
this proceeding may arrange to obtain copies of the request by 
contacting Postal Service counsel by telephone at (202)268-2998, or 
Ms. Bonnie D'Alessandro at (202)268-2988, and that intervenors will 
be provided with two copies of the Request upon showing that they 
have filed notices of intervention with the Postal Rate Commission.
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    Experimental Nature of the Proposed Change: The Postal Service 
indicates that it is requesting new classifications and fees for 
nonletter-size Business Reply Mail (BRM) on an experimental basis. The 
Service proposes that these experimental BRM categories be put into 
effect for two years, in order to assess the costs associated with 
providing them and their administrative feasibility.
    Description of request: The Postal Service proposes a revised 
schedule of fees for nonletter-size Business Reply Mail processed under 
two alternative accounting procedures known as the ``reverse manifest'' 
method and the ``weight averaging'' method. Generally, the Postal 
Service expects that the alternative methods of accounting for 
nonletter-size BRM pieces will reduce postal workhours that would 
otherwise be attributable to this mail, permit more expeditious rating 
and billing, allow the recipient earlier access to the mail, and 
increase customer satisfaction with BRM service. On these grounds, the 
Postal Service proposes per-piece fees for active business reply mail 
advance deposit accounts of 2 cents for nonletter-size pieces using 
reverse manifest procedures, and 3 cents for such pieces using weight 
averaging procedures.
    However, in addition to the apparently lower per-piece accounting 
costs of employing the two methods, the Service anticipates that 
establishing a ``reverse manifest'' or ``weight averaging'' BRM account 
for a recipient, as well as the required periodic sampling, auditing, 
and monitoring of such an account, will generate extraordinary postal 
costs in excess of the current BRM annual permit fee ($85.00) and 
annual advance deposit accounting fee ($205.00). To recover these 
extraordinary costs, the Service proposes adoption of application/
qualification fees for each BRM account seeking to employ an 
alternative

[[Page 67861]]

accounting method: ($1000) for the reverse manifest method and ($3000) 
for the weight averaging method. Finally, the Postal Service proposes 
additional monthly fees of ($1000) for accounts using the reverse 
manifest method and ($3000) for accounts using the weight averaging 
method. These new fees would be in addition to the current permit fees.
    The Request also states that the Postal Service intends to select 
20 or fewer applicants to participate in the proposed experiment: as 
many as 10 BRM recipients for use of the reverse manifest method, and 
up to 10 recipients for use of the weight averaging method. The Service 
proposes a two-year duration for the experiment to allow interested 
mailers sufficient time to gauge the potential costs and benefits of 
the alternative methods in light of their mailing practices, and to 
provide the Postal Service time to select a cross-section of 
participating users, set up the required administrative procedures, and 
to collect and analyze operational, cost and market research data.
    Motion for waiver of certain filing requirements The Postal 
Service's request was also accompanied by a motion for waiver of 
compliance with certain requirements of section 64(h) of the rules of 
practice (39 CFR 3001.64(h)), which specify rate-related information to 
be included in classification requests that would affect rates and 
fees. Specifically, the Postal Service seeks waiver of compliance with 
subsections (d) (in part), (f)(2), (f)(3), (h), (j), (l)(1) (in part), 
and (l)(2) of section 54 of the rules (39 CFR 3001.54(d), (f)(2), 
(f)(3), (h), (j), (l)(1), and (l)(2)), which would otherwise be 
required under section 64(h)(2)(i) (39 CFR 3001.64(h)(2)(i)]) The 
Postal Service states that the requested waiver is justified by the 
extremely limited scope of the proposed experiment, the irrelevance of 
some of the rules' requirements to Business Reply Mail, and its 
anticipation that the consequent effects on costs, revenues, and 
volumes will be insignificant.
    Motion for application of protective conditions to a workpaper: The 
Postal Service's Request was also accompanied by a motion requesting 
that the Commission apply protective conditions which would restrict 
participants' access to, and prohibit public disclosure of, Workpaper I 
to the Direct Testimony of Witness Leslie Schenk, which the Postal 
Service has filed in camera. In support of its motion, the Service 
states that witness Schenk's cost estimates for nonletter-size Business 
Reply Mail are based upon data that include the incoming BRM piece 
volumes received by Nashua Photo, Mystic Color Lab, and Seattle 
Filmworks, three film processors which compete among themselves and 
against other firms in the film processing industry. The Service 
represents that each firm considers its incoming BRM volume to be 
commercially sensitive, privileged and confidential information, and 
that access to such data was granted to witness Schenk with the 
explicit understanding that it would not be publicly disclosed or 
provided to any competing firm. The Service proposes a list of 
protective conditions that would limit access to the workpaper, its 
permissible use, and duration of access by authorized individuals.
    Motion to expedite the proceeding: Section 67d of the rules of 
practice (39 CFR 3001.67d) states that the Commission will treat cases 
falling under the experimental rules as subject to the maximum 
expedition consistent with procedural fairness, and prescribes adoption 
of a schedule that will allow issuance of a decision not more than 150 
days from a determination that experimental treatment of the request is 
appropriate. Notwithstanding this provision, the Postal Service has 
submitted a motion requesting that the Commission establish procedures 
allowing for issuance of a recommended decision on its request within 
120 days of the date of its filing. In support of its motion, the 
Postal Service states that it has provided sufficient information to 
allow such expedited consideration, and notes the Commission's ability 
to consider and issue a recommended decision concerning the experiment 
proposed in Docket No. MC96-1 in less than 90 days. In connection with 
its motion, the Postal Service proposes adoption of special rules of 
procedure, which it provided in draft form. The Service also provides a 
proposed procedural schedule.
    Anyone wishing to be heard in this matter is directed to file a 
written notice of intervention with Margaret P. Crenshaw, Secretary of 
the Commission, 1333 H Street, NW, Washington, D.C. 20268-0001, on or 
before January 17, 1997. Intervenors should indicate whether they want 
full or limited participation status. See rules 39 CFR 3001.20 and 
3001.20a.
    Those interested in participating in this docket are given notice 
that the Commission will evaluate whether it is appropriate to use 
rules 67-67d for considering the Postal Service Request. In determining 
whether the procedures for experimental cases are appropriate, the 
Commission will consider: (1) The novelty of the proposed change; (2) 
the magnitude of the proposed change; (3) the ease or difficulty of 
collecting data on the proposed change; and (4) the duration of the 
proposed change. Participants are invited to comment on whether the 
Postal Service request should be evaluated under rules 67-67d. Such 
comments are to be filed on or before January 17, 1997. Prior to a 
Commission decision on this question, participants should act on the 
assumption that the Postal Service request that the case be considered 
pursuant to these rules will be approved.
    Rule 67a provides a procedure for limiting issues in experimental 
cases. In order to enable participants to evaluate whether genuine 
issues of fact exist, the Postal Service shall respond to discovery 
requests within 10 days. Written discovery pursuant to rules 25-28 may 
be undertaken immediately upon intervention.
    A decision on whether there is a need for evidentiary hearings, and 
the scope of any such hearings has not been made yet. Participants 
wishing to comment on this question should file a statement of issues 
raised by the Postal Service request by January 17, 1997. At the same 
time, participants should designate those issues involving questions of 
material fact which they believe require trial type hearings. The 
Postal Service and any interested participant may file responses to 
these statements on or before January 24, 1997.
    If it is determined to schedule trial type hearings to consider 
topics involving issues of material fact, hearings to evaluate the 
supporting evidence presented by the Postal Service may be scheduled to 
begin as soon as February 10, 1997. The Presiding Officer will 
establish subsequent procedural dates.
    Representation of the general public: In conformance with 
Sec. 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)).
    It is ordered:

[[Page 67862]]

    1. The Commission will sit en banc in this proceeding.
    2. Notice of intervention will be filed no later than January 17, 
1997.
    3. Participants wishing to comment on whether it is appropriate to 
consider this request under Commission rules 67-67d shall submit such 
comments no later than January 17, 1997.
    4. Participants are directed to file statements of issues and 
designations of issues requiring trial type hearings no later than 
January 17, 1997; responses may be submitted no later than January 24, 
1997.
    5. Answers to the Postal Service motions: to Expedite the 
Proceeding, for Waiver of Certain Filing Requirements, and Requesting 
Protective Conditions are to be submitted no later than January 22, 
1997.
    6. W. Gail Willette, Director of the Commission's Office of the 
Consumer Advocate, is designated to represent the general public.
    7. The Secretary shall cause this Notice and Order to be published 
in the Federal Register.

    By the Commission.
Margaret P. Crenshaw,
Secretary.
[FR Doc. 96-32616 Filed 12-23-96; 8:45 am]
BILLING CODE 7710-FW-P