[Federal Register Volume 63, Number 204 (Thursday, October 22, 1998)]
[Rules and Regulations]
[Pages 56565-56568]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28348]


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POSTAL SERVICE

39 CFR Part 111


Mailing OnLine Market Test Implementation Standards; Changes in 
Domestic Classifications and Fees; Final Rule and Notice

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule sets forth the Domestic Mail Manual (DMM) 
standards adopted by the Postal Service to implement the Decision of 
the Governors of United States Postal Service on the Recommended 
Decision of the Postal Rate Commission on the Market Test of Mailing 
Online, Docket No. MC98-1.
    The Postal Service's Request to the Postal Rate Commission 
proposed, in part, that the Postal Service be permitted to establish 
new classifications and fees for Mailing Online on a market test basis. 
The market test is a limited one involving up to 5,000 customers, 
starting in the northeastern United States, that will provide a basis 
for subsequent nationwide experimental and permanent services. The 
experiment is also the subject of the current Postal Service Request. 
Mailing Online is a service that allows postal customers with access to 
a personal computer and the Internet to transmit electronic documents 
to a postal Web site for subsequent batching and transmission to a 
contract printer, who creates and enters the consequent physical 
mailpieces. Payment for postage and mailpiece preparation is made 
online via credit card.

EFFECTIVE DATE: October 22, 1998.

FOR FURTHER INFORMATION CONTACT: Paul Lettmann, (202) 268-6261, or 
Kenneth N. Hollies, (202) 268-3083.

SUPPLEMENTARY INFORMATION: The Mailing Online market test, an 
anticipated precursor of a more permanent service offering of the 
Postal Service, will be of limited impact. Its purpose is to permit 
testing of Mailing Online as one component of PostOffice Online, a 
vehicle for the provision of a variety of services, under conditions 
that approximate those sought for a subsequent experimental service. 
These conditions include:
     Use of a hardware and software platform that can be 
adapted to the level of customer use, together with a printer whose 
contract prices are the basis for Mailing Online fees;
     Use of First-Class and Standard Mail automation presort, 
rather than First-Class single-piece, rate categories; and
     The collection of information to assist in subsequent mail 
classification and service design decisions.
    This test is the second of four steps consisting of an operations 
test, market test, and possible experimental and permanent service. 
Postal Service data collection will be focused on mailpiece 
information, with collateral emphases upon resource utilization and 
costing. Additional information will also be collected, such as 
information concerning expenditures on the data links between the 
postal Web server and the print site.
    The test will be conducted beginning October 22, 1998, until a time 
tied to action on the Request for a Mailing Online experiment. The test 
will be limited to 5,000 active PostOffice Online registrants located 
in certain northeastern ZIP Code areas and in the

[[Page 56566]]

operations test areas of Hartford, Connecticut and Tampa, Florida. 
There are no restrictions on the destinating addresses beyond the fact 
that only domestic rate categories are available. Market test customer 
mailpieces will be produced by a printer under contract with the Postal 
Service and mailed at a Waltham, Massachusetts postal facility.

Background

    On July 15, 1998, pursuant to its authority under 39 U.S.C. section 
3621, et seq., the Postal Service filed with the Postal Rate Commission 
(PRC) a Request for a Recommended Decision on a Market Test 
Classification and Fee Schedule and a Recommended Decision on an 
Experimental Classification and Fee Schedule for Mailing Online 
Service. The PRC designated the filing as Docket No. MC98-1 and 
published a notice of the filing, with a description of the Postal 
Service's proposals, in the Federal Register on July 23, 1998 (63 FR 
39600).
    The Postal Service's Request to the PRC proposed that the Postal 
Service be permitted to establish new classifications and fees for 
Mailing Online, first as a market test and later as an experiment. The 
market test will permit assessment of the features and viability of the 
new service while providing input for PRC and Postal Service 
consideration of the experiment and perhaps a permanent form of Mailing 
Online.

Service Description

    Mailing Online is designed to take advantage of the capabilities of 
the Internet, a Web browser, and personal computer software to permit 
customers to create and submit documents and mailing lists in 
electronic form for subsequent printing, finishing, and entry as hard 
copy mail. The service will also allow postal customers to pay postage 
and fees online using a credit card.
    The service utilizes technology advances to benefit postal 
customers, especially individuals and small- and home-based businesses, 
who would otherwise not have access to sophisticated digital printing 
technology and to bulk automation mail rates. It is expected to reduce 
the aggregate cost of producing and entering a small mailing and 
provide a lower cost and more efficient way to use the mail. There is 
no minimum number of documents that can be submitted via Mailing 
Online. However, there is an upper limit of 5,000 addresses per 
mailing. It will also provide convenient and easy-to-use electronic 
access to postal services for those small businesses not currently 
using the mail due to a lack of mail production and preparation 
capabilities of their own.
    A typical customer will compose a document using conventional 
desktop publishing or word processing software; access a postal Web 
site and select various printing, finishing, and payment options; 
submit a mailing list for standardization based on the Postal Service's 
current address database; and complete submission of the job by sending 
electronic versions of the document and a mailing list to the Web site. 
Any addresses that do not comply with postal addressing standards will 
be purged from the address list prior to quotation of a final price. 
(Move update requirements for address quality are waived temporarily 
pending final integration of the FASTforward system with Mailing 
Online.) Software applications currently supported are MS 
WordTM, WordPerfectTM, PageMakerTM, 
VenturaTM, and Quark.TM Customers will pay for 
the service online via credit card. The price of the service includes 
the creation of physical mailpieces and postage.
    Additional features of the service include: online document 
proofing; provision of a ``file cabinet'' that retains customer mailing 
jobs for a period of 30 days and offers document and mailing list 
management capabilities; real-time online status reports of jobs 
submitted; and a quick calculator that provides immediate price 
quotations.
    The Postal Service will batch all submitted jobs and send them via 
dedicated lines to a commercial digital printing contractor located in 
the Boston area (a permanent service would involve approximately 25 
nationwide printers), who then prints the document, finishes it, places 
it in a letter or flat envelope bearing a delivery point barcode, and 
enters it as mail in Waltham, Massachusetts. In keeping with the 
Mailing Online goal of providing small-volume customers access to the 
benefits of automation, First-Class Mail and Standard Mail (A) will be 
entered at the automation basic rates. Special services are not being 
offered with Mailing Online during this market test.

Test Participation

    The Postal Service anticipates that users of the Mailing Online 
service may include a wide range of individuals, small businesses, and 
home offices. For example, Mailing Online offers to local merchants a 
convenient means for getting invoices into customers' hands quickly, 
thereby accelerating cash flow. While most customers are expected to be 
small organizations, some individual use is also anticipated, as well 
as that of larger companies for small volume, high quality mailings.
    Availability of Mailing Online during the market test is restricted 
to a maximum of 5,000 active customers located initially within certain 
ZIP Codes for the metropolitan areas of Boston, Massachusetts; New 
York, New York; Philadelphia, Pennsylvania; Hartford, Connecticut; and 
Tampa, Florida. The latter two areas also participated in an earlier 
operations test of the service. A registrant's continued participation 
is contingent on using PostOffice Online at least once each 30 calendar 
days. Less frequent usage will result in cancellation of a customer's 
registration and access to Mailing Online.

Customer Procedures

    Customers must register as PostOffice Online customers and obtain a 
customer ID and password by first accessing www.postofficeonline.com on 
the Internet.
    To use the Mailing Online service, a registered customer clicks on 
the ``Make a Mailing'' button and does the following:
    1. Produces a document using one of the supported word processing, 
office suite, or desktop publishing software programs, and uploads it 
to the Web site;
    2. Produces a database of recipients' names and addresses, ranging 
from one to 5,000 (maximum limit per mailing), and, optionally 
including variable data for merger into respective documents. These 
addresses and data may be obtained by customers from existing 
commercial vendors or created by the Mailing Online customer.

Rates and Fees

    Documents presented through Mailing Online are eligible for the 
following rate categories only:
     First-Class Mail Letters and Sealed Parcels-Automation 
Basic Letters and Flats
     Standard Mail (A) Regular--Automation Basic Letters and 
Flats
    Fees are as follows:

------------------------------------------------------------------------
                            Feature                                Fee
------------------------------------------------------------------------
Paper (per sheet):
  8\1/2\ x 11.................................................    $0.006
  8\1/2\ x 14.................................................     0.009
  11 x 17.....................................................     0.014
Printing (per impression):
  Simplex (8\1/2\ x 11).......................................     0.026
  Simplex (8\1/2\ x 14).......................................     0.026
  Duplex (8\1/2\ x 11)........................................     0.026
  Duplex (8\1/2\ x 14)........................................     0.026
Spot Color (per impression)...................................     0.013
Finishing:
  Folding (per fold)..........................................     0.013

[[Page 56567]]

  Stapling (per staple).......................................     0.010
  Saddle Stitch (per finished piece)..........................     0.250
  Tape Binding (8\1/2\ x 11) (per finished piece).............     0.563
  Tape Binding (8\1/2\ x 14) (per finished piece).............     0.688
  Applying Tabs to Self Mailer................................     0.088
Envelopes:
  #10 Envelope................................................     0.019
  Flat Envelope...............................................     0.068
Inserting (per envelope):
  #10 Envelope................................................     0.017
  Flat Envelope...............................................     0.194
------------------------------------------------------------------------

Implementation

    Pursuant to 39 U.S.C. 3624, the PRC on October 7, 1998, issued to 
the Governors of the Postal Service its Opinion and Recommended 
Decision on the Postal Service's Request. The PRC recommendation 
generally followed the mail classification structure and fees requested 
by the Postal Service.
    After reviewing the PRC's Recommended Decision and its consequences 
for the Postal Service and postal customers, the Governors, pursuant to 
39 U.S.C. 3625, acted on the PRC's recommendations on October 16, 1998. 
(Decision of the Governors of the United States Postal Service on the 
Recommended Decision of the Postal Rate Commission on the Market Test 
of Mailing Online, Docket MC98-1.)
    The Governors determined to approve the PRC's recommendations, and 
the Board of Governors set an implementation date of October 22, 1998, 
for those fee and classification changes to take effect.
    This final rule contains the DMM standards adopted by the Postal 
Service to implement the Governors' decision.
    As described above, market test fees apply only to preparation of 
Mailing Online mailpieces which must be entered in one of the 
identified automation basic categories. Mailing Online volume is 
ineligible for entry at deeper discounts or at single-piece rates.
    Because of the limited scope of this market test, the Postal 
Service finds no need to solicit comment on the standards for Mailings 
Online or, pending their evaluation, to delay implementation of the 
market test.

List of Subjects in 39 CFR Part 111

    Postal Service.

    For the reasons discussed above, the Postal Service hereby adopts 
the following amendments to the Domestic Mail Manual, which is 
incorporated by reference in the Code of Federal Regulations (see 39 
CFR part 111).

PART 111--[AMENDED]

    1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-
3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

    2. Amend the Domestic Mail Manual as follows:

E  Eligibility

* * * * *

E110  Basic Standards

1.0  CLASSIFICATION AND DESCRIPTION
* * * * *

1.3  Matter Closed Against Postal Inspection

    [Amend 1.3 by adding documents created and mailed by means of 
Mailing Online as follows:]
    Matter closed against postal inspection includes First-Class Mail 
and Express Mail. Electronic documents created by means of Mailing 
Online (G093) for possible transmission as First-Class Mail are closed 
against inspection. Hard copy versions of electronic Mailing Online 
documents, while being prepared for entry as First-Class Mail, also are 
closed against postal inspection. The USPS may open mail other than 
First-Class Mail or Express Mail to determine whether the proper rate 
of postage is paid. Material wrapped or packaged so that it cannot be 
examined easily or examined without destruction or serious damage is 
closed against postal inspection and is charged the appropriate First-
Class Mail or Express Mail rate.
* * * * *
4.0  FEES

4.1  Presort Mailing

    [Amend 4.1 to indicate Mailing Online mailers pay fees in 
accordance with G093.]
    A First-Class Mail presort mailing fee must be paid once each 12-
month period at each office of mailing by any person or organization 
entering mailings at automation or Presorted First-Class Mail rates 
and/or Presorted Priority Mail rates. Payment of one fee allows a 
mailer to enter mail at all those rates. Persons or organizations 
paying this fee may enter mail of their clients as well as their own 
mail. Mailing Online customers using pay fees in accordance with G093 
and are not required to pay an annual mailing fee.
* * * * *

E140  Automation Rates

1.0  BASIC STANDARDS
    [Amend 1.1b by adding a reference to Mailing Online in G093 as 
follows:]

1.1  All Pieces

    All pieces in a First-Class Mail automation rate mailing must:
* * * * *
    b. Be part of a single mailing of at least 500 pieces of automation 
rate First-Class Mail, subject to 1.2, or be provided for entry using 
Mailing Online service under G093.
* * * * *

E611  All Standard Mail

1.0  BASIC INFORMATION
* * * * *

1.2  Postal Inspection

    [Amend 1.2 by adding provision for Standard Mail documents created 
in electronic form by means of Mailing Online and subsequently mailed 
as follows:]
    Standard Mail is not sealed against postal inspection except that 
electronic documents retained by the Postal Service in connection with 
Mailing Online are sealed against postal inspection. Regardless of 
physical closure, the mailing of articles at Standard Mail rates, 
including mailpieces entered via Mailing Online mailings, constitutes 
consent by the mailer to postal inspection of the contents.
* * * * *

E612  Additional Standards for Standard Mail (A)

* * * * *
4.0  BULK RATES
* * * * *

4.7  Annual Fees

    [Amend 4.7 by adding a reference to fees in G093 as follows:]
    Bulk rate Standard Mail (A) is subject to an annual mailing fee 
once each 12-month period. The fee may be paid in advance only for the 
next year and only during the last 30 days of the current service 
period. The fee charged is that in effect on the date of payment. Each 
mailer who enters mail at bulk rates paid with a meter or precanceled 
stamps must pay an annual bulk mailing fee at each post office of 
mailing; a mailer paying this fee may enter clients' mail as well as 
the mailer's own. The mailer whose permit imprint appears on pieces in 
a mailing paid with a permit imprint must show that permit number on 
the postage statement and must pay the

[[Page 56568]]

annual bulk mailing fee for that permit; this fee is in addition to the 
fee for an application to use permit imprints.
    Mailing Online customers pay fees in accordance with G093 and are 
not required to pay the annual mailing fee.
* * * * *

4.9  Preparation

    Each bulk rate mailing is subject to these general standards:
* * * * *
    [Amend 4.9 by adding a reference to Mailing Online in G093 as 
follows:]
    b. Each mailing must contain at least 200 pieces or 50 pounds of 
pieces or be provided for entry using Mailing Online service under 
G093. Other volume standards can also apply, based on the rate claimed.
* * * * *

G  General Information

* * * * *
    [Amend the title to add ``Market Test'' as follows:]

G090  Market Test and Experimental Classifications and Rates

* * * * *
[G091  Reserved.]
* * * * *
    [Add new G093 as follows:]

G093  Mailing Online

1.0  BASIC ELIGIBILITY

1.1  Description

    The standards in G093 apply to documents produced by a properly 
registered customer who has paid the appropriate fees established for 
the Mailing Online market test, and to mailpieces presented for entry 
by a printer under contract with USPS.

1.2  Customer Eligibility

    Test participation is subject to the following conditions:
    The customer must be registered as a user of PostOffice Online via 
the PostOffice Online Web site (www.postofficeonline.com). Registration 
requires an intent to use PostOffice Online and actual usage at least 
once each 30 calendar days. Registration is also currently limited 
based on the customer's ZIP Code.

1.3  Mailings

    Electronic documents submitted to the postal Web site will be 
batched and sent to a commercial printer under contract with USPS, who 
then prints the document, finishes it, and places it in a letter or 
flat envelope bearing a delivery point barcode, and enters it as mail 
at a postal facility. First-Class Mail will be charged postage at the 
automation basic rates and Standard Mail (A) will be charged postage at 
the automation basic rates. There is a limit of 5,000 addresses per 
mailing. Special services are not available during the market test.

1.4  Address Quality

    Address quality requirements for automation rate pieces contained 
in E140 do not apply for customers who submit job orders under the 
market test.

1.5  Rates and Fees

    The rates and fees applicable to documents created using Mailing 
Online are as follows:
    a. Documents presented through Mailing Online during the market 
test are eligible for the following rate categories only:
     First-Class Mail Letters and Sealed Parcels--Automation 
Basic Letters and Flats
     Standard Mail (A) Regular--Automation Basic Letters and 
Flats
    b. Fees are as follows:

------------------------------------------------------------------------
                            Feature                                Fee
------------------------------------------------------------------------
Paper (per sheet):
  8\1/2\ x 11.................................................    $0.006
  8\1/2\ x 14.................................................    $0.009
  11 x 17.....................................................    $0.014
Printing (per impression):
  Simplex (8\1/2\ x 11).......................................    $0.026
  Simplex (8\1/2\ x 14).......................................    $0.026
  Duplex (8\1/2\ x 11)........................................    $0.026
  Duplex (8\1/2\ x 14)........................................    $0.026
Spot Color (per impression)...................................    $0.013
Finishing:
  Folding (per fold)..........................................    $0.013
  Stapling (per staple).......................................    $0.010
  Saddle Stitch (per finished piece)..........................    $0.250
  Tape Binding (8\1/2\ x 11) (per finished piece).............    $0.563
  Tape Binding (8\1/2\ x 14) (per finished piece).............    $0.688
  Applying Tabs to Self Mailer................................    $0.088
Envelopes:
  #10 Envelope................................................    $0.019
  Flat Envelope...............................................    $0.068
Inserting (per envelope):
  #10 Envelope................................................    $0.017
  Flat Envelope...............................................    $0.194
------------------------------------------------------------------------

1.6  Sealed Against Inspection

    Documents will be treated as sealed against postal inspection while 
they are in an electronic form. Once the documents are printed and 
entered as mail, they will be treated in accordance with the provisions 
of E110.1.3 and E611.1.2, which, respectively, state that First-Class 
Mail is closed against postal inspection and that Standard Mail is not 
sealed against postal inspection.
* * * * *

P040  Permit Imprints

* * * * *
5.0  MAILINGS

5.1  Minimum Quantity

* * * * *
    [Amend 5.1 by adding a provision for Mailing Online as follows:]
    Permit imprint mailings must contain at least 200 pieces or 50 
pounds, except:
* * * * *
    d. A mailing may contain fewer pieces if provided for entry using 
Mailing Online service in G093.
* * * * *
    A transmittal letter making these changes in the pages of the 
Domestic Mail Manual will be published and will be transmitted to 
subscribers automatically. As provided by 39 CFR 111.3, notice of 
issuance will be published in the Federal Register.
Neva R. Watson,
Attorney, Office of Legal Policy.
[FR Doc. 98-28348 Filed 10-21-98; 8:45 am]
BILLING CODE 7710-12-P