[Federal Register Volume 64, Number 73 (Friday, April 16, 1999)]
[Notices]
[Pages 18946-18948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9508]


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POSTAL RATE COMMISSION

[Docket No. MC99-3; Order No. 1237]


Mail Classification Case

AGENCY: Postal Rate Commission.

ACTION: Notice of initiation of new classification docket.

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SUMMARY: This case addresses a rate anomaly facing certain nonprofit 
and classroom Periodicals class mailers. The proposed changes allow 
eligible mailers the option of calculating and paying postage under an 
alternative rate schedule. The Service also proposes postage refunds 
under certain circumstances. These actions remedy unintended 
consequences of a recent rate case. They also eliminate the incentive 
to create artificial distinctions to qualify for lower rates.

DATES: See Supplementary Information section for dates.

ADDRESSES: Send communications regarding this notice to the attention 
of Margaret P. Crenshaw, Secretary of the Commission, 1333 H Street 
NW., Suite 300, Washington, DC 20268-0001.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
1333 H Street NW., Washington, DC 20268-0001, 202-789-6820.

SUPPLEMENTARY INFORMATION: On April 9, 1999, the Postal Service filed a 
request with the Commission for a recommended decision on proposed 
changes in the domestic mail classification schedule (DMCS). The 
request was filed pursuant to section 3623 of the Postal Reorganization 
Act, 39 U.S.C. 101 et seq. The request includes attachments and is 
supported by the testimony of one witness. It is on file in the 
Commission docket room and is available for inspection during the 
Commission's regular business hours.
    The purpose of the Postal Service request is to provide a remedy 
for a rate anomaly affecting certain nonprofit and classroom 
Periodicals class mailers which inadvertently resulted from the last 
omnibus rate case (docket no. R97-1). For certain publications, the 
rates available in the nonprofit and classroom rate schedules (423.3 
and 423.4, respectively) generate higher postage amounts than the 
regular rate schedule rates.
    The Service proposes that until the Periodicals rates may be 
generally adjusted in the next omnibus rate case, a classification 
change be instituted that would allow nonprofit and classroom subclass 
mailings to use the regular rate schedule when such use would lower the 
publication's postage. Request of the United States Postal Service for 
a Recommended Decision on Periodicals Classification Change, April 9, 
1999 (``Postal Service Request'') at 1. (Even without the proposed 
classification change, preferred mailers affected by the rate anomaly 
qualify for the lower regular rates if they relinquish their preferred 
authorization.) The Service also proposes a new footnote to the regular 
rate schedule exempting nonprofit and classroom publications with less 
than 10 percent advertising that use the regular rate schedule from 
paying the advertising pound rates. Id. at 1-2.

Potential Refunds

    According to the Service, the requested classification changes are 
not intended to reopen for consideration those rates and fees 
established in docket no. R97-1, but to provide a means of access to 
the established regular rates for qualifying nonprofit and classroom 
publications using their current permits. To this end, subject to the 
Commission's recommendation and the Board of Governor's approval, the 
Service has initiated a refund procedure to address the rate anomaly as 
of April 9, 1999. Id. at 2. Under the refund procedure, nonprofit and 
classroom mailers can submit dual mailing statements and apply for a 
subsequent refund for the difference between the preferred postage paid 
and the otherwise applicable regular rate on mailings made from April 
9, 1999 forward. The refund procedure is to be comparable to the 
established ``application pending'' procedure applicable to mailers 
applying for a preferred rate authorization, as described in domestic 
mail manual (DMM) Secs. E270.8.0-9.0. Ibid.

Contents of the Filing

    The Postal Service request is supported by the testimony of witness 
Taufique (USPS-T-1), who explains the rate anomaly and describes the 
Service's classification proposal. The testimony maintains that the 
request has minimal revenue and cost impact and conforms with the 
applicable standards of the Postal Reorganization Act (specifically, 39 
U.S.C. 3623(c) classification criteria).

Proposed DMCS Provisions

    The Postal Service's request proposes changes in section 441 
(Periodicals) of the current DMCS to provide a remedy for the rate 
anomaly affecting certain nonprofit and classroom Periodicals class 
mailers. The proposed DMCS changes are provided as attachment A to the 
Service request, and likewise accompany this notice and order as 
attachment A. (Changes presented in italics.)

Proposed Rate Schedule

    In attachment B to its request, the Service displays changes it 
proposes to DMCS rate schedule 421--Periodicals rate schedule 421--
regular subclass). The Service's requested changes in rates accompany 
this notice and order as attachment B.

[[Page 18947]]

Procedural Proposal

    The Service's request is accompanied by a motion for expedition and 
for waiver of certain provisions of rule 64(h) (``Postal Service 
Motion''). The Service requests waiver of the requirement to provide 
the information specified in Commission rules 64(d), 64(h), 54(f)(2), 
54(f)(3), 54(h), 54(i) and 54(j), to the extent they apply. Postal 
Service Motion at 6. Rule 64(h)(3) provides that the requirements may 
be waived if the Commission determines that it has been demonstrated 
that proposed changes in the classification schedule do not 
significantly change rates and fees or cost-revenue relationships 
referred to in the rule. In support of the waiver, the Service cites 
the limited nature and applicability of the proposed DMCS changes. In 
particular, it notes that the proposal does not involve a fundamental 
change in any classification or fee, and is extremely restricted in its 
impact on the revenues and costs of the affected Periodicals subclasses 
and on the revenues and costs of the system as a whole. Id. at 6-8.
    With regard to its motion for expedition, the Service maintains 
that its proposal to correct the unintended rate anomaly in the 
nonprofit and classroom Periodicals subclasses entails straightforward, 
minor changes to the DMCS and rate schedule for the Periodicals regular 
subclass, with an insignificant effect on the Service's overall 
volumes, revenues and costs. Id. at 2-3. In accordance with the 
simplicity and minor impact of the request, the Service suggests a 
number of procedures to facilitate a speedy resolution, including: (1) 
A relatively short intervention period; (2) a requirement that if 
parties desire a hearing, they request one in their notice for 
intervention, with those issues believed to be of sufficient import 
delineated; and (3) limited (if any) and expedited discovery, 
restricted to those matters bearing directly on the proposed changes. 
Id. at 3-4.

Commission Action on Docket No. MC99-3 Motion

    The Commission is inclined to handle this request in an expedient 
manner, absent a request for a hearing on a genuine issue of material 
fact. To this end, the Commission directs that any interested party 
wishing to respond to the Postal Service motion file an answer by April 
28, 1999.

Intervention

    Anyone wishing to be heard in this case is directed to file a 
written notice of intervention with Margaret P. Crenshaw, secretary of 
the Commission, 1333 H Street, NW., Suite 300, Washington, DC 20268-
0001 no later than April 28, 1999. Notices should indicate whether an 
intervenor is seeking full or limited participation status and whether 
a hearing is requested. See 39 CFR 3001.20 and 3001.20a. Participants 
should state with specificity the issues which they believe will merit 
evidentiary hearings. There will be a prehearing conference in this 
docket on May 3, 1999, and if no requests for hearing are received by 
April 28, the Commission will entertain a motion from the Postal 
Service to enter its testimony into evidence at that time and to 
discuss the need for additional procedural steps.

Representation of the General Public

    In conformance with section 3624(a) of title 39, U.S. Code, the 
Commission designates Ted P. Gerarden, 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, 
Mr. Gerarden will direct the activities of Commission personnel 
assigned to assist him and, upon request, supply their names for the 
record. Neither Mr. Gerarden 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 
Commission's rules of practice (39 CFR 3001.10(c)).
    It is ordered:
    1. The Commission will sit en banc in docket no. MC99-3.
    2. Notices of intervention in docket no. MC99-3 shall be filed no 
later than April 28, 1999.
    3. Ted P. Gerarden, director of the Commission's office of the 
consumer advocate, is designated to represent the interests of the 
general public in docket no. MC99-3.
    4. Answers to the Postal Service's April 9, 1999 motion referenced 
in the body of this order concerning waiver of certain filing 
requirements and expedition of its request shall be filed no later than 
April 28, 1999.
    5. A prehearing conference for the consideration of procedural 
matters in docket no. MC99-3 shall be held in the hearing room of the 
Commission, 1333 H Street, NW., Washington, DC on May 3, 1999, at 9:30 
a.m.
    6. The secretary of the Commission shall arrange for publication of 
this order in the Federal Register in a manner consistent with 
applicable requirements.

    Dated: April 12, 1999.
Margaret P. Crenshaw,
Secretary.

Attachment A--Periodicals, Classification Schedule

* * * * *
440 POSTAGE AND PREPARATION
    441 Postage. Postage must be paid on Periodicals class mail as set 
forth in section 3000. When the postage computed for a particular issue 
using the Nonprofit or Classroom rate schedule is higher than the 
postage computed using the Regular rate schedule, that issue is 
eligible to use the Regular rate schedule. For purposes of this 
section, the term issue is subject to certain exceptions related to 
separate mailings of a particular issue, as specified by the Postal 
Service.

               Attachment B--Periodicals Rate Schedule 421
                       [Regular Subclass \1\,\2\]
------------------------------------------------------------------------
                                                               Rate\3\
                                        Postage rate unit      (cents)
------------------------------------------------------------------------
Per Pound:
    Nonadvertising Portion.........  Pound.................         16.1
    Advertising Portion:\11\
        Delivery Office\4\.........  Pound.................         15.5
        SCF\5\.....................  Pound.................         17.8
        1&2........................  Pound.................         21.5
        3..........................  Pound.................         22.9
        4..........................  Pound.................         26.3

[[Page 18948]]

 
        5..........................  Pound.................         31.6
        6..........................  Pound.................         37.1
        7..........................  Pound.................         43.8
        8..........................  Pound.................         49.5
    Science of Agriculture:
        Delivery Office............  Pound.................         11.6
        SCF........................  Pound.................         13.3
        Zones 1&2..................  Pound.................         16.1
Per Piece:
    Less Nonadvertising Factor\6\..  ......................          5.9
    Required Preparation\7\........  Piece.................         29.4
    Presorted to 3-digit...........  Piece.................         25.3
    Presorted to 5-digit...........  Piece.................         19.7
    Presorted to Carrier Route.....  Piece.................         12.2
    Discounts:
        Prepared to Delivery         Piece.................          1.3
         Office\4\.
        Prepared to SCF\5\.........  Piece.................          0.7
        High Density\8\............  Piece.................          1.9
        Saturation\9\..............  Piece.................          3.7
    Automation Discounts for
     Automation-Compatible
     Mail:\10\
        From Required:
            Prebarcoded letter size  Piece.................          6.2
            Prebarcoded flats......  Piece.................          4.6
        From 3-digit:
            Prebarcoded letter size  Piece.................          4.7
            Prebarcoded flats......  Piece.................          3.9
        From 5-digit:
            Prebarcoded letter size  Piece.................          3.5
            Prebarcoded flats......  Piece.................         2.9
------------------------------------------------------------------------
Schedule 421 Notes
\1\ The rates in this schedule also apply to commingled nonsubscriber,
  non-requester, complimentary, and sample copies in excess of 10
  percent allowance in regular-rate, non-profit, and classroom
  periodicals.
\2\ Rates do not apply to otherwise regular rate mail that qualifies for
  the within county rates in Schedule 423.2.
\3\ Charges are computed by adding the appropriate per-piece charge to
  the sum of the nonadvertising portion and the advertising portion, as
  applicable.
\4\ Applies to carrier route (including high density and saturation)
  mail delivered within the delivery area of the originating post
  office.
\5\ Applies to mail delivered within the SCF area of the originating SCF
  office.
\6\ For postage calculations, multiply the proportion of nonadvertising
  content by this factor and subtract from the applicable piece rate.
\7\ Mail not eligible for carrier-route, 5-digit or 3-digit rates.
\8\ Applicable to high density mail, deducted from carrier route presort
  rate.
\9\ Applicable to saturation mail, deducted from carrier route presort
  rate.
\10\ For automation compatible mail meeting applicable Postal Service
  regulations.
\11\ Not applicable to qualifying Nonprofit and Classroom publications
  containing 10 percent or less advertising content.

(Authority: 39 U.S.C. 3622)
[FR Doc. 99-9508 Filed 4-15-99; 8:45 am]
BILLING CODE 7715-01-P