[Federal Register Volume 62, Number 168 (Friday, August 29, 1997)]
[Rules and Regulations]
[Pages 45727-45730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23066]


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POSTAL RATE COMMISSION

39 CFR Part 3001

[Docket No. RM97-2; Order No. 1191]


Amendment to Rules Concerning Evidence Based on Market Research

AGENCY: Postal Rate Commission.

ACTION: Final rule.

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SUMMARY: The Commission amends Rule 31(k) of its rules of practice by 
expanding foundation requirements for market research and making 
several editorial improvements. The amendment's purpose is to provide 
participants with guidance on the type of supporting information that 
must accompany market research submissions. The amendment will improve 
participants' ability to review these submissions.

DATES: This rule is effective August 29, 1997.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
Postal Rate Commission, 1333 H Street NW., Suite 300, Washington, DC 
20268-0001, (202) 789-6820.

SUPPLEMENTARY INFORMATION: On May 2, 1997, the Commission issued a 
Notice of Proposed Rulemaking (NPRM) proposing three substantive 
changes in rule 31(k) (39 CFR 3001.31(k)). The changes addressed market 
research submitted (or relied upon) in Commission proceedings. The NPRM 
also proposed several minor editorial improvements in the rule, 
including limited restructuring. See Docket No. RM97-2, Rule 31(k) 
Revisions Concerning Market Research, 62 FR 25578 (May 9, 1997). One 
substantive

[[Page 45728]]

change reworded some of the existing foundation requirements for market 
research and added several new ones. Id. at 25582. Another recognized 
statistical disclosure limitation (SDL) methods as a means of 
protecting confidential survey data and information. Id. at 25580. A 
third change clarified reviewers' rights to obtain survey data. This 
included defining ``edited data file'' as raw data after appropriate 
coding, editing for consistency checks and application of SDL 
methodology. Id. at 25581. The proposed editorial improvements 
eliminated citations to outdated software standards, updated or revised 
several terms and headings, and separated market research rules from 
rules for other sample surveys. Id. at 25581.
    Commenters' positions. The Commission received comments on the NPRM 
from United Parcel Service (UPS), the Commission's Office of the 
Consumer Advocate (OCA), and the United States Postal Service (Postal 
Service or Service). See generally Comments of UPS in Response to NPRM, 
Comments of the OCA to the Postal Rate Commission, and Comments of the 
Postal Service (all filed June 9, 1997). The Newspaper Association of 
America (NAA) filed reply comments, along with a motion for late 
acceptance, on July 29, 1997.
    The commenters generally support the Commission's effort to address 
issues related to the growing use of market research, but differ on the 
procedure and conditions under which data confidentiality should be 
assured and on the advisability of proposed changes relating to 
reviewers' access to microdata. Opposition to contested elements of the 
proposal is based primarily on due process concerns.
    In brief, the Postal Service's position is that the Commission's 
substantive changes reflect appropriate standards, and should be 
adopted with only minor revision. Postal Service Comments at 1-2. UPS 
supports most of the proposed changes affecting foundation 
requirements, with minor modification. UPS Comments at 2 and 7. 
However, UPS urges that SDL techniques be authorized as an optional, 
rather than standard practice. It also asserts that the availability of 
SDL should not be used to deny full access to unedited raw data. Id. at 
3-7.
    The OCA also generally supports the foundation requirements; 
however, it opposes the use of SDL methods and the proposed changes 
affecting reviewers' access to data. OCA Comments at 5. Moreover, the 
OCA urges that the Commission reissue the rulemaking and include all 
statistical studies within its scope. Id.
    NAA generally agrees with the OCA's position. NAA Reply Comments at 
1. Among other things, it specifically notes that given the size and 
scope of the Service's activities, the potential harm to private 
interests, and the Service's legal duty to operate in a non-
discriminatory manner, it agrees with the OCA's conclusions that due 
process concerns require disclosure of Postal Service market research 
data, including access to data files necessary to permit replication of 
survey results. Id. at 2.
    Commission response. The Commission is issuing a final rule that 
includes, with only minor changes, revisions to the foundation 
requirements for market research and the editorial improvements. The 
final rule does not adopt SDL methods or define edited data file. The 
comments from NAA, UPS and the OCA indicate that further consideration 
of these matters is needed before uniform standards can be developed 
for use in our proceedings. The Commission considered inviting a 
further round of comments, but has determined that the workload 
associated with the recent filing of an omnibus rate case forecloses 
pursuing these matters in an independent docket at this time. However, 
the Commission continues to believe that SDL methods may provide a 
useful avenue for resolving concerns about confidentiality and access. 
It also believes that recognizing distinctions between raw data and 
edited data files for market research purposes is a potentially useful 
means of addressing certain access issues.

Part I. Disposition of Proposed Substantive Changes

A. Revised and Expanded Support for Market Research in Proposed Rule

31(k)(2)(i)(a)(1)-(7) (39 CFR 3001.31(k)(2)(i)(a)(1)-(7))

    Commenters addressing proposed changes affecting the foundation for 
market research submissions generally support the Commission's 
approach. They also offer several observations and specific suggestions 
for improvements. For example, the Service contends there is a 
potential for uneven application of foundation item 4 (39 CFR 
31(k)(2)(i)(a)(4)). Specifically, it claims that the reference to ``the 
effects of benchmarking'' may not reflect current industry practice. 
Postal Service Comments at 4. It also notes that item 4's reference to 
``data comparability over time'' is appropriate only for surveys 
repeated on a regular basis, and not for one-time surveys. Id.
    The Commission considers benchmarking an acceptable survey 
practice, but also recognizes that it may have limited relevance to the 
market research submitted in our proceedings. Since the added burden of 
submitting this material may outweigh its benefits, the phrase ``and 
the effects of benchmarking and revisions'' is not included in the 
final rule. In response to the Service's observation about the 
applicability of a data comparability requirement to a one-time survey, 
the Commission has decided against amending the rule to account for 
this distinction. Instead, the sponsor of a one-time survey can simply 
affirmatively indicate, when appropriate, that the requirement does not 
pertain.
    The Postal Service also observes that the phrase ``other potential 
sources of error'' in item 5 is ``perhaps necessarily, rather open-
ended and vague,'' and acknowledges that consideration of other sources 
of error is appropriate at some level. However, it suggests that the 
phrase might foster motions to strike for failure to address a 
borderline ``other source.'' Id at 3. In response to the Service's 
comments, the Commission is deleting the reference to ``other potential 
sources of error'' in item 5, but revising item 3 to cover the same 
point. As a conforming change, item 5 in the final rule now ends after 
``imputation;'.
    UPS, consistent with its suggestion that SDL methods be available 
as an option, also suggests that proposed (a)(5) be revised to read: 
``An assessment and supporting explanation of the effects of the 
application of any statistical disclosure limitation methods used 
pursuant to section 31(k)(2)(i)(c) and of editing and imputation and 
other potential sources of error on the quality of the survey 
estimates.'' UPS Comments at 7 (UPS's changes italicized).
    The Commission is not including SDL provisions in the final rule, 
nor is it formally adopting them as an option. Thus, there appears no 
need to amend the rule in the manner suggested by UPS. However, if SDL 
methods or other means of protecting confidentiality are used, the 
Commission expects, at a minimum, that the type of supporting 
information and data UPS suggests would be produced under existing 
rules without the need for motion practice.

B. Recognition of SDL Methods as a Means of Balancing Sponsors' 
Interests in Confidentiality and Reviewers' Interests in Access to 
Survey Data

    As indicated earlier, positions on the use of SDL techniques vary: 
the Postal Service strongly supports a central role

[[Page 45729]]

for them; UPS contends they should be used only on an optional basis; 
and the OCA sees little, if any, place for them in Commission 
proceedings. NAA indicates that it generally endorses the OCA's 
position. The Commission continues to believe that these techniques may 
provide a viable means of resolving concerns about confidentiality and 
survey reliability, without unduly interfering with participants' 
rights. However, commenters' widely-divergent positions on a rule that 
adequately provides for recognizing and preserving these rights 
indicates that a consensus is unlikely to be achieved without 
considerably more exploration of this technique and its ramifications. 
Thus, the Commission has determined to issue a final rule on those 
aspects of the NPRM that have broad support, and to exclude the SDL 
provisions (and related references) from the final rule. This does not 
reflect a decision on the merits of SDL procedures, but a conclusion 
related to efficient administration of the Commission's workload and 
management of its resources. Although SDL methods are not being 
formally adopted as a standard, the Commission encourages participants 
to familiarize themselves with these techniques, as they may provide, 
on occasion, an effective means of accommodating participants' 
requests. Moreover, additional experience with the use of these 
techniques on an ad hoc basis may facilitate the development of a 
satisfactory standard in some future rulemaking.

C. Clarification of Reviewers' Rights to Survey Data and Computer Files

    Although the Postal Service supports the proposed revisions 
clarifying access to survey data, both UPS and the OCA oppose them. 
Consistent with its position on SDL methods, UPS proposes adding a 
provision specifically stating that a party is not precluded from 
obtaining unedited raw data. UPS Comments at 5. The OCA also suggests 
several revisions, including replacing the ``upon request'' language 
with a provision requiring the Service to produce all data at the time 
it files its request.
    Although the Commission is not formally adopting the proposed 
definition, it recently has stated that the efforts of market research 
reviewers should be directed, in the first instance, at probing the 
overall reliability of the survey effort, instead of relying on 
techniques designed for microdata analysis. 62 FR 25581 (citing Docket 
No. RM81-1 Final Notice at 13 and PRC Op. MC95-1, Appendix C). The 
decision against adopting a definition of input data at this time does 
not alter that position.
    The Commission believes that the OCA's suggestion that relevant 
data be produced earlier than now required under the rule is an idea 
that warrants additional consideration. However, the NPRM indicated 
that the Commission chose a narrow focus for this rulemaking. A timing 
change affecting production deadlines falls outside the current 
docket's boundaries.

Part II. Editorial Improvements

    The Postal Service is the only commenter specifically addressing 
the editorial improvements identified in the NPRM. 62 FR 25581. The 
Service agrees that specific references to software standards are no 
longer necessary, and supports omitting the footnote in which they now 
appear. However, instead of the Commission's proposed replacement of 
``magnetic tape'' with ``a compact disk'' (which appears in the first 
sentence of the concluding paragraph (k)(3)(i)(i) (39 CFR 
3001.31(k)(3)(i)(i)), the Service suggests the following alternative:

    Paragraphs (k)(3)(i) (d) and (f) of this section shall be 
provided in the form of a compact disk or other media or method 
approved in advance by the Administrative Office of the Postal Rate 
Commission.

Postal Service Comments at 8.
    As the NPRM indicates, the Commission had considered a more general 
reference. Since the Service's proposal preserves various options for 
complying with the rule, the Commission is including it in the final 
rule. The Commission further notes that it welcomes the Service's 
continued cooperation in this area.
    No commenter objects to the minor restructuring of the rule or 
changing the heading of rule (k)(2)(ii) from ``Sample surveys'' to 
``Other sample surveys.'' Accordingly, the final rule is unchanged in 
these respects.

List of Subjects in 39 CFR Part 3001

    Administrative practice and procedure, Confidential business 
information, Freedom of information, Postal Service, Sunshine Act.
    For reasons set forth in the preamble, 39 CFR part 3001 is amended 
as follows:

PART 3001--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 3001 continues to read as 
follows:

    Authority: 39 U.S.C. 404(b), 3603, 3622-3624, 3661, 3662.

    2. 39 CFR 3001.31(k) is amended as follows:
    3. Redesignate paragraphs (k)(2) (i) through (iv) as (k)(2) (ii) 
through (v).
    4. Amend redesignated paragraph (k)(2)(ii) by changing the title 
from Sample surveys to Other sample surveys.
    5. Add paragraph (k)(2)(i) to read as follows:


Sec. 3001.31  Evidence.

* * * * *
    (k) Introduction and reliance upon studies and analyses--(1) * * *
    (2) * * *
    (i) Market research. (a) The following data and information shall 
be provided: (1) A clear and detailed description of the sample, 
observational, and data preparation designs, including definitions of 
the target population, sampling frame, units of analysis, and survey 
variables;
    (2) an explanation of methodology for the production and analysis 
of the major survey estimates and associated sampling errors;
    (3) a presentation of response, coverage and editing rates, and any 
other potential sources of error associated with the survey's quality 
assurance procedures;
    (4) a discussion of data comparability over time and with other 
data sources;
    (5) an assessment of the effects of editing and imputation;
    (6) identification of applicable statistical models, when model-
based procedures are employed; and
    (7) an explanation of all statistical tests performed and an 
appropriate set of summary statistics summarizing the results of each 
test.
* * * * *
    6. Revise paragraph (k)(3)(i)(e) to read as follows:
* * * * *
    (k) * * *
    (3) * * *
    (i) * * *
    (e) For all source codes, documentation sufficiently comprehensive 
and detailed to satisfy generally accepted sofitard documentation 
standards appropriate to the type of program and its intended use in 
the proceeding.
    7. Revise the first sentence of the concluding text after paragraph 
(k)(3)(i)(i) to read as follows:
* * * * *
    (k) * * *
    (3) * * *
    (i) * * *
    (i) * * *
    Paragraphs (k)(3)(i)(d) and (f) of this section shall be provided 
in the form of a compact disk or other media or method approved in 
advance by the

[[Page 45730]]

Administrative Office of the Postal Rate Commission. * * *

    Dated: August 26, 1997.
Margaret P. Crenshaw,
Secretary.
[FR Doc. 97-23066 Filed 8-28-97; 8:45 am]
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