[Federal Register Volume 62, Number 84 (Thursday, May 1, 1997)]
[Notices]
[Pages 23813-23817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11379]
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POSTAL SERVICE
Decision of the Governors of the United States Postal Service on
the Recommended Decision of the Postal Rate Commission on the Complaint
of the Coalition Against Unfair USPS Competition, Docket No. C96-1
AGENCY: Postal Service.
ACTION: Notice of decision.
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SUMMARY: Notice is hereby given of the Decision of the Governors in the
complaint brought to the Postal Rate Commission concerning the
packaging service known as Pack & Send. By direction of the Governors,
their Decision is published in the Federal Register following this
notice.
FOR FURTHER INFORMATION CONTACT: Scott L. Reiter, (202) 268-2999.
Stanley F. Mires,
Chief Counsel, Legislative.
April 8, 1997.
With this decision, the Governors exercise their authority to act
in rate complaints brought to the Postal Rate Commission under the
Postal Reorganization Act (``the Act''). 39 U.S.C. Secs. 3625, 3662.
The circumstances in this case are unprecedented and unusual. The
complainant challenged rates charged by the Postal Service for a
packaging service known as Pack & Send. The complaint's principal
allegation was that Pack & Send is a postal service for which a
classification and fees must be recommended by the Commission. After
hearings, the Commission determined that the complaint was justified,
but declined to issue a Recommended Decision to us regarding the status
of Pack & Send. Instead, the Commission elected to characterize its
conclusion as a ``declaratory order.''
We believe that the Commission's obligation under the Act and its
own rules was to issue a Recommended Decision. Taken at face value, the
Commission's action would effectively deprive us of our role in the
statutory scheme. We have thus construed the Commission's order to be a
Recommended Decision. For the reasons expressed below, we hereby reject
it. By separate action the Postal Service has decided to discontinue
the Pack & Send service.
Statement of Explanation and Justification
Background
This docket was initiated as the result of a complaint filed under
39 U.S.C. section 3662 by the Coalition Against Unfair USPS Competition
(``Coalition'' or ``CAUUC''). The Coalition is a trade association
representing operators of commercial mail receiving agencies
(``CMRAs''), who, among other things, offer mail boxes, shipping
services, packaging materials and packaging services in competition
with the Postal Service. For the past two years, the Postal Service has
offered Pack & Send as a pilot test, extending it over that time to
approximately 260 selected postal facilities in a few geographic areas.
The Coalition claimed that this service was unlawful, because the
Postal Service had not first sought a recommended decision from the
Commission to establish it and to set appropriate fees. Conversely, the
Postal Service contended that packaging service is not required by the
Act to be recommended by the Commission. All parties and the Commission
agreed that the only issue that needed to be resolved to determine
whether the complaint was justified was whether Pack & Send was a
``postal service.'' According to the Commission, if it made this
finding, then the complaint was necessarily justified, because the
service had not been established through proceedings before the
Commission.
Testimony was filed on behalf of the Coalition and the Postal
Service. The Postal Service provided the testimony of its Vice
President for Retail, explaining the nature and operation of Pack &
Send, and the reasons why it did not have to be recommended by the
Commission. The Commission held hearings on the testimony under its
rules governing complaints filed under 39 U.S.C. section 3662. The
Commission ultimately found that the service was a postal service, and
concluded that the complaint was justified. It made this determination
in the form of a ``Declaratory Order,'' PRC Order No. 1145, issued on
December 16, 1996. The Postal Service moved for reconsideration of the
Order. In Order No. 1156, issued on February 3, 1997, the Commission
affirmed both its substantive view regarding the status of Pack & Send,
and its procedural view that it need not issue a recommended decision.
As had been suggested by the Commission's Office of the Consumer
Advocate (OCA), the Coalition threatened to initiate federal court
litigation seeking to enjoin the Postal Service from continuing to
provide the service in the face of the Commission's findings. (Letter
of January 29, 1997, from Chair of the Coalition to Chairman of the
Board of Governors.) In part because such litigation would have made
resolution of this matter more complicated than it needed to be, the
Postal Service, with our concurrence, discontinued offering Pack & Send
service as of February 14, 1997.
Statutory Scheme
The Commission's handling of this matter, both substantively and
procedurally, raises several serious concerns. Initially, we believe
that the form of the Commission's action is fundamentally inconsistent
with the statutory scheme governing the Postal Service, and the
respective roles of the Commission and the Governors under the Postal
Reorganization Act.
The Act gives the Postal Service both general and specific powers,
including the specific authority to provide and establish nonpostal
services. 39 U.S.C. Secs. 401, 404(a)(6). Nowhere in the statute is
there any reference to Commission action in connection with nonpostal
services. For postal services, the Governors are given the final
authority to establish rates, fees, and mail classifications in
accordance with applicable provisions in chapter 36, which generally
provide for Commission proceedings leading to a recommended decision on
these matters for postal services. 39 U.S.C. Secs. 3621'3625. The
Postal Service alone may initiate proceedings to establish or change
postal rates or fees. 39 U.S.C. Sec. 3622. Under section 3662,
interested parties may challenge postal rates or services alleged not
to be in accordance with the policies of the statute, but there is no
explicit reference in that provision to any activity that is not a
domestic postal service. The Act, in fact, does not create an explicit
mechanism for challenging the legal status of services as postal or
nonpostal.
In our opinion, the suitability of section 3662 to challenge the
legal status of Postal Service activities only
[[Page 23814]]
makes sense if it is done in a way that respects the roles of the
Postal Service and the Governors in the statutory scheme.1
Section 3662 states that in the case of a rate complaint filed with the
Commission, if the Commission ``determines the complaint to be
justified, it shall, after proceedings in conformity with section 3624
of this title, issue a recommended decision which shall be acted upon
[by the Governors] in accordance with the provisions of section 3625 of
this title, and subject to review in accordance with the provisions of
section 3628 * * *.'' 39 U.S.C. Sec. 3662 (emphasis added). The
Commission's own procedural rules state that ``[i]f the Commission
determines, after the completion of proceedings which provide an
opportunity for hearing, that a complaint is justified in whole or in
part, the Commission shall issue a recommended decision to the Postal
Service, if the complaint involves a matter of rates and fees or mail
classification * * *.'' 39 CFR Sec. 3001.87 (emphasis added).
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\1\ The Postal Service did not challenge the Commission's
jurisdiction under 39 U.S.C. Sec. 3662 to resolve the question of
whether a service is postal or nonpostal within the meaning of the
Act. Since the statute contemplates that the Commission's resolution
of the proceeding would be in the form of a recommended decision,
rather than a unilateral ``declaratory order,'' it expected that the
Governors would have an opportunity to act in accordance with
sections 3662 and 3625. We do not concede that section 3662 gives
the Commission jurisdiction to review new products and services to
establish their status as postal or nonpostal service.
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In this proceeding, the Commission has held hearings in conformity
with its rules implementing section 3624. It has made a determination
concerning the only question that was before it, and has determined the
complaint to be justified. No further issues remain to be determined to
reach a final conclusion on the merits of the complaint. The Commission
should therefore have issued its finding in the form of a recommended
decision to us, as required by the plain language of the statute and
its own rules. The action it took does not allow for the exercise of
our statutory authority in this complaint case.
The Commission's conclusions regarding the status of Pack & Send
raise issues that we would have addressed had the Commission properly
issued a recommended decision. Accordingly, we are treating the
Commission's Orders as a recommended decision. In this regard, section
3625 gives us a number of options. For the reasons set forth in this
Decision, we are exercising our option to reject.
Principles at Issue
The first principle at issue is that we and the Commission are
intended to be partners in the ratemaking process. With regard to this
relationship, courts have concluded that ``one partner does not
regulate another,'' and that ``Congress did not intend that the Postal
Rate Commission regulate the Postal Service.'' Governors of United
States Postal Service v. Postal Rate Commission, 654 F.2d 108, 114-15
(D.C. Cir. 1981); Mail Order Association of America v. United States
Postal Service, 986 F.2d 509, 524 (D.C. Cir. 1993). The statute
establishes the Commission as the body with primary expertise in
classification and ratemaking, but, even on such matters, gives the
Governors the authority to make a final decision. There is, however, no
basis in the statute or in judicial precedent to support the
proposition that the Commission has primary expertise in determining
the nature of the services offered by the Postal Service. Indeed, the
absence of any provision for it in the statute suggests that the
Commission was not intended to play a role in the creation and
operation of nonpostal services. It does not have unilateral authority
in the area of its primary expertise, but rather shares that authority
in a partnership with us. The Postal Service has the primary expertise
and authority in determining the nature of the services it offers.
The second principle is one which derives from general notions of
public policy: that an administrative agency should attempt to resolve
issues before it in a way that avoids needless federal court
litigation, or, at the very least, is not designed explicitly for the
purpose of fostering such litigation. In this case, the course that the
Commission has taken by choosing not to issue a recommended decision
appears to respond to the OCA's argument that the Commission should not
issue a recommended decision, because of the possibility that the
Governors would exercise their lawful statutory option to reject it.
According to the OCA, this would leave the complainant with no way to
appeal our decision, since a rejection decision is not appealable under
section 3628.2 Instead, the OCA urged the Commission to
issue a ``declaratory jurisdictional order'' that could be the basis
for the Coalition to ask a federal district court to enjoin the Postal
Service from continuing to offer packaging service.3 That is
precisely what the Commission did, and what the Coalition has
threatened.
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\2\ The OCA characterized this sequence of events as a ``pit''
that the Postal Service was luring the Commission to ``fall
in[to].'' See OCA Response in Support of Complainant's Motion for
Summary Judgment at 5-6 (September 27, 1996); OCA Brief at 15-16
(November 22, 1996). The Commission, furthermore, in Order No. 1156,
noted that parties aggrieved by the interlocutory Order might avail
themselves of the federal district courts. Order No. 1156, at 16 &
n. 6.
The OCA's concern was apparently that the Governors would take
action under 39 U.S.C. Sec. 3625 that would not be reviewable under
Sec. 3628, and that Pack & Send would thereby be immune from
judicial review. OCA Motion at 6 & n.2; OCA Brief at 16 n.8. In this
regard, we note that courts have been known to assume jurisdiction
to review agency action where the claim is made that an agency's
conduct exceeds its statutory authority, even where review would
otherwise be precluded by statute.
\3\ Id.
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The third principle is that the statutory scheme embodies the
Governors' and postal management's responsibilities for managing the
Postal Service. If sound policy leads to a determination that section
3662, as a practical matter, should be adapted to enable interested
persons to challenge the nonpostal status of Postal Service activities,
it must accommodate the authority for making management decisions that
the Act entrusts to the Governors and postal management. In this
instance, the Commission justified its decision not to issue a
recommended decision on its belief that ``there is no substantive
recommendation for the Commission to make'' to the Governors. The
Commission stated that ``a recommended decision simply declaring that
Pack & Send is a postal service, and thus subject to the Commission's
jurisdiction, would be a hollow vessel lacking any recommendation of
substance upon which the Governors could act under Sec. 3625.'' Order
No. 1145, at 24.
It is not clear precisely what is meant by this. If the Commission
is suggesting that a recommendation can only pertain to changes in
rates or in the Domestic Mail Classification Schedule (DMCS), we do not
agree, at least in the context of this complaint.4 Here, the
only issue
[[Page 23815]]
was the legal status of a particular activity, i.e., whether it was
postal in nature. The Commission's recommendation and opinion, although
embodied in the form of a ``declaratory order,'' created constraints
and options for management decisionmaking. In our opinion, this is a
situation for which Governors' action responding to the Commission's
determination is both logical and mandated under sections 3662 and
3625.
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\4\ It is not the case that a meaningful or appropriate
recommendation could only be to change rates or classifications. The
Commission has often recommended maintaining the status quo,
sometimes based on a legal conclusion that a proposal would violate
the policies of the Act, or that existing classifications were not
unlawful. The Governors, furthermore, have in the past approved such
recommendations. E.g., Docket No. MC76-1-4 (The Commission
recommended that Mailgram service not be included in the Domestic
Mail Classification Schedule; the Governors approved that
recommendation.); Docket No. R77-1 (Based in part on a legal
conclusion, the Commission recommended to the Governors that the
Postal Service's proposed citizens' rate mail not be adopted; the
Governors approved). In complaint cases as well, the Commission has
based a recommendation on its legal conclusion that a challenged
classification did not violate law. Docket Nos. C85-2 and C86-1 (The
Commission recommended no change based on its legal conclusion that
the DMCS did not violate the Constitution.)
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Had the Commission issued a recommended decision, it would have
given us a number of options.5 One that we might have chosen
would have been to accept the Commission's recommendation. This would
have given the Board the further options of instructing postal
management either to discontinue the service or to prepare to file a
case seeking the Commission's recommendation of a classification and
fees for the service. To assume that we would under no circumstances
agree with the Commission that substantial evidence supported its
substantive finding, or that we would not seek to exercise a role in
the permanent establishment of this service, essentially
mischaracterizes the Governors' role with respect to both the
Commission and postal management.
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\5\ In this case, a possible recommendation could have been that
the Board should initiate a proceeding under Chapter 36, based on
the Commission's legal conclusion that Pack & Send is a postal
service.
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A recommended decision affords us other options which the
Commission sought to foreclose. We would have had the opportunity to
accept the recommendation under protest and return it to the Commission
with our request for reconsideration, or clarification, perhaps on
bases different from those already expressed by the Postal Service.
Alternatively, we could have sought judicial review under section
3625(c). We may or may not have chosen to exercise these options; but
we believe we have the statutory right to make that decision.
Finally, we could have rejected the recommendation. Indeed, we have
now chosen to do so. In this instance, however, our rejection occurs
under circumstances in which the Board and postal management decided to
discontinue the challenged service. This action, which effectively
afforded the complainant the relief it sought, does not reflect on the
merits of their challenge,6 but is based on a recognition
that the short-term and long-term costs of further controversy in this
matter may be too high.
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\6\ The Postal Service action was not intended to waive its
opposition to the Commission's legal conclusion, or to agree with
the Commission's Orders.
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Other Considerations
Another serious concern is that the outcome in this case may signal
a bias against Postal Service activities that might be considered to be
in competition with private sector entities.7 The general
question embodied in the debate over the scope of Postal Service
activities involves a complex inquiry into important policy issues. For
example, we understand that CAUUC, the complainant in this case, is
currently advocating legislation that would curtail the Postal Service
from offering services that compete with private businesses. This, in
fact, was also a theme running throughout the proceedings before the
Commission. In this regard, we acknowledge that those and other issues
are matters about which individual Governors might hold differing
views. Nevertheless, as officials who are mandated by statute to
represent the public interest generally, and not particular interests,
we are acutely aware of our duty to ensure that the Postal Service
lives up to the obligations and responsibilities conferred upon it by
the Postal Reorganization Act. In other words, whether the Postal
Service competes with private entities in any given instance is a
question of fundamental policy that lies ultimately with Congress. How
that policy is manifested in Postal Service activities has been
entrusted by the Act to postal management and the Governors.
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\7\ We understand that in the course of this litigation the OCA,
the only other party to play a significant role in the litigation,
sided with the Coalition.
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Scope of Review
Because Pack & Send has been discontinued, we need not engage in a
comprehensive analysis and discussion of the record. However, important
policy considerations arising in the Pack & Send matter are likely to
come up again in the future as new services are developed. As
Governors, we have a responsibility to consider and direct the broad
objectives of postal operations and policy. As a threshold matter, we
reiterate that we do not concede that jurisdiction lies at the Postal
Rate Commission by complaint under 39 U.S.C. section 3662 to challenge
new products, services, or activities that the Postal Service has
determined to be nonpostal. The principal inquiry presented by such a
complaint concerns the nature and status of the Postal Service's
product offerings, matters that lie outside the Commission's
acknowledged primary expertise in allocating costs and recommending
rates, fees, and classifications. Even assuming there is jurisdiction,
if section 3662 is employed, we believe that the statute requires a
joint determination between the two agencies acting as partners, as
discussed earlier.
The Governors would prefer to find in the Pack & Send Orders
guidance for the formulation and conduct of policy in differentiating
postal and nonpostal services for the future. But the Orders seem to us
to extend the standard for evaluating whether an activity is a postal
service farther than is supported by current caselaw. So too, there are
now questions regarding the application of the Commission's prior
precedents and opinions. For these reasons, rather than from our
independent assessment of the Commission's findings, we must reject the
conclusions in these two Orders.8
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\8\ The posture of the case requires that we treat the
Commission's action here as a recommended decision for our
consideration under 39 U.S.C. Sec. 3625, although not so denominated
in the Orders themselves. For the reasons expressed below, we have
concluded that the option available to the Governors which best
allows us to register our concerns is the statutory option to
reject. We also find that the Commission's interpretation of its
obligations to issue a recommended decision under 39 U.S.C.
Sec. 3662 serves as an independent basis for rejection.
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Applicable Standards
The introduction of new services, involving innovative features
juxtaposed with existing activities, tests the Governors' ability both
to find consistency with what has gone before and to identify firm
ground for the future. In our capacity as Governors, we have developed
an increasing appreciation for both the challenge of drawing the
appropriate lines around some of the forward-looking services which
management is developing to serve our customers, and the inescapable
need to make these decisions in the interest of a modern, vibrant
postal system moving into the twenty-first century, and within the
statutory framework currently afforded. We sense that the
Commissioners, in their effort to provide verbal yardsticks for
measuring the postal or nonpostal character of Pack & Send, have
recognized some of the same needs and wrestled with much the same
inherent ambiguities.
For judicial assistance, the Commission and the Governors must rely
primarily on one case which attempted a definition of postal versus
[[Page 23816]]
nonpostal as applied to specific services then offered. In Associated
Third Class Mail Users v. United States Postal Service, 405 F. Supp.
1109 (D.D.C. 1975), (``ATCMU''), the district court reviewed the Postal
Service's assertion that fees for a group of special services, such as
mailing list corrections, registry, and insurance, could be changed
without a Commission recommendation. The court concluded that all of
the services under consideration were ``postal services,'' because
``nearly all of these other services are very closely related to the
delivery of the mail.'' Id. at 1115. The court found that money orders
were a ``possible exception * * * since they can be used equally as
well without being delivered by mail.'' Id. Nevertheless, the court
concluded that money orders would also be treated as postal, since the
majority of Postal Service money orders were ``* * * actually'' sent by
mail. The court also found that whether the fees set for these services
had a ``substantial public effect'' was relevant to whether Congress
intended them to be recommended by the Commission. On appeal, the Court
of Appeals affirmed the district court's holding, without adopting all
of its reasoning. National Association of Greeting Card Publishers v.
United States Postal Service, 569 F.2d 570, 596-96 (D.C. Cir. 1976)
(``NAGCP''). The court found that the services in question were postal
because ``each clearly involves an aspect in the posting, handling and
delivery of mail matter.'' 9 As for the money order
exception, the court agreed with the district court that, since the
majority were mailed, they could be viewed as ``intimately a part of
postal services.'' Id. The court did not comment on the district
court's ``public effect'' criterion.
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\9\ Id. at 596. The Court of Appeals stated: ``Since the Act
provides no specific definition of `postal services,' * * * we must
construe its meaning within the purposes of the Act, looking to
legislative history where the words themselves, read plainly, are
inadequate.'' Id.
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Subsequent to the district court decision, but before the NAGCP
Court of Appeals affirmance, the Commission in Docket No. R76-1
reviewed the jurisdictional status of a broad range of postal
activities and services, referring to the test formulated by the
district court. PRC Op. R76-1, Vol. 2, App. F. The Commission concluded
that many of these satisfied the general tests outlined by the district
court. However, the Commission then questioned the applicability of
those tests to several other activities. In particular, the Commission
questioned the ``jurisdictionality'' of money orders, ``because of
their lack of intrinsic connection with the carriage of mail.'' Id. at
12. Furthermore, in its Opinion in Docket No. R76-1, the Commission
elaborated on the standard articulated by the court, in connection with
special postal services. The Commission characterized these as:
services other than actual carriage of mail but supportive or
auxiliary thereto. They enhance the value of service rendered under
one of the substantive mail classes by providing such features as
added security, added convenience or speed, indemnity against loss,
correct information as to the current address of a recipient, etc.
We believe that this standard is consistent with the decision in
Associated Third Class Mail Users, supra, that special postal fees
are within the jurisdiction of the Commission.
PRC Op. R76-1, Vol. 1, at 266-67.
We have concluded that the Commission's decision in this proceeding
expands this earlier standard. The order identified Pack & Send as
``[i]ntrinsically'' a ``value-added'' service that was ``supportive or
auxiliary'' to the carriage of mail. Order No. 1145, at 19.
The order also found the public effect standard applicable to Pack
& Send's ``impact on competing stores in the private sector that offer
packaging service and access to alternative means of shipping
parcels.'' Id.
Policy Concerns
The Commission's action raises questions about a broader standard
for postal services than the courts have defined. In this regard,
several general policy implications emerge.
First, we have concerns about the validity and implications of the
``value added'' standard suggested in the order. The district court in
ATCMU defined a postal service as ``closely related to the delivery of
mail.'' 405 F. Supp. at 1115 (emphasis added). The Court of Appeals
referred to services ``involv[ing] an aspect in the posting, handling
and delivery of mail matter.'' 596 F.2d at 596 (emphasis added). The
value added concept differs from these more conventional tests. For our
own analysis, we have found it a vaguer standard providing little
guidance. Nor does the value added concept necessarily flow logically
from either of the courts' definitions.
The Commission's assessment of Pack & Send under this standard was
based on its conclusion that ``the locus of the added value is the
alternative form of acceptance it provides.'' Order No. 1145, at 19;
see id. at 15. While we do not address that finding, we note that the
observation that packaging amounts to ``mail preparation for a fee''
may imply an overbroad and unworkable formula. The Commission and the
Governors had earlier found that the sale of packaging materials did
not constitute a postal service. PRC Op. R76-1, Vol. 2, App. F, at 20-
21. In this regard, the fact that packaging materials are inventoried,
stocked, and sold by postal employees did not change the inherent
nature of their sale as a nonpostal service. Furthermore, as a general
matter, the performance of a service by a postal employee does not
change the essential nature of that service and cannot, merely by
virtue of the employee's involvement, make that service a postal
service.
Based on the description in Docket No. R76-1, quoted above, the
Commission presumably intended the ``value-added'' criterion to be the
same as the courts' standards. The concepts of ``value'' and
``enhancement,'' however, may be impractically broad and imprecise
considering the variety of support services that are increasingly
offered and required as conditions for mailing in an automated
operational environment. We are concerned, furthermore, that such a
standard could be taken so broadly as to include a range of activities
that might be considered ``valuable'' in connection with particular
uses of mail, but that do not bear any substantive relationship to mail
in an operational sense.10
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\10\ The Postal Service may find it advantageous in the future
to offer services that enhance the value of mail content after it
ceases to be mail, or perhaps before mail is produced. In this
regard, we are concerned that a ``value-added'' test could extend to
Postal Service activities that bear little relation to the actual
provision of conventional, core mail services.
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Second, we are concerned with the ramifications of the Commission's
use of the money order, or ``frequency of mailing'' rationale that was
enunciated early on by the courts, but that has not been consistently
applied since that time. The Commission considered in Docket No. R76-1
that photocopying machines in postal lobbies would not be a postal
service, even if every copy made were required to be mailed. PRC Op.
R76-1, Vol. 2, App. F, at 20. In that case, where the service did not
involve a clearly postal-related activity, a complete correlation
between the service and mailing could not support a finding that the
service is postal. With regard to Pack & Send, the Commission's order
concluded that the likelihood of mailing established only ``a
dispositive tendency toward a finding'' that packaging service was
postal in nature. What emerges from this history is an unreliable
guideline. While it may be easy to assume that use of a
[[Page 23817]]
service could result in mailing, it is difficult to see how a standard
based on frequency of this occurrence can determine Commission
jurisdiction.11
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\11\ We must defer to the courts' formulation of the frequency
of mailing standard. Nevertheless, we note that in the cases the
test was established as an exception for an entrenched existing
service, sale of money orders, which did not share the
characteristics that the courts concluded established a status as a
postal service. Consistent with the Commission's reservations, it is
possible that the application of that standard is limited to the
unique circumstances in ATCMU, in which the court was asked to
consider jurisdiction over existing special services as a group.
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Finally, the application of the public effect standard in Pack &
Send appears to differ from the ATCMU court's original formulation. As
described by the district court, the public effect test pertained to
the financial consequences of a particular service, as reflected in
postal revenues, and the effect on consumers' expenses for the service.
405 F. Supp. at 1115. The court implied that, beyond the simple
magnitude of customer expenses, the impact on mailers who had no other
alternatives (in the case of money orders) had a bearing on this
consideration. The court indicated that the test was related broadly to
the policies in the Act favoring the availability of hearings and the
opportunity to scrutinize and challenge proposed changes in fees.
Again, however, the court indicated that the magnitude as well as the
scope of the financial impact ``on sizeable and diverse groups in
society'' was a controlling consideration. Id. at 1116. In the Pack &
Send complaint proceeding, the Commission focused on the potential
financial impact on competitors, rather than on the public or customers
of the service. Indeed, the Commission properly acknowledged that the
impact of Pack & Send in its current form was relatively minor.
It is unclear how a public effect consideration, which includes
postal competitors and omits postal customers, is consistent with the
standard outlined by the district court. We do not endorse it as a
guide to future policy, or as a test of the Postal Service's or the
Commission's jurisdiction.
Need for Change
The uncertainties that have complicated the Pack & Send situation
amplify the inadequacies of existing administrative mechanisms to
accommodate the needs of a modern Postal Service. A modest proposal,
such as offering packaging services, should not have to be unduly
inhibited or interrupted by potentially lengthy administrative or court
proceedings. The Postal Service should be able, quickly and
efficiently, to test the viability and design of service offerings that
provide service of value to the general public, and that have already
been established in the marketplace. In the long run, if the Postal
Service is to provide affordable universal service, at uniform rates,
it must be able to take advantage of opportunities for new revenues.
Furthermore, to keep in step with the continually evolving economic
environment, it must be able to provide innovative services quickly.
This will require real flexibility to design and test products and to
set rates, in accordance with fair, uncomplicated opportunities for
review that are appropriate for the circumstances.
We have come to our resolution of this matter with regret. It would
be far better if the legal standards were clear, well settled, and
universally understood, so that full attention could be given to
meeting the real needs of the public.
For the ordinary citizen, the current accumulation of past choices
about what has or has not been put in the rate and mail classification
schedules, what does or does not have the participation of the
Commission, is difficult to comprehend. When a customer makes a
photocopy in the lobby to put in his envelope, he uses a service not
classified in the schedules. When he buys a money order for the same
purpose, the schedules define that service for him. When he purchases
philatelic services, the fees are outside the rate schedules, because
the Postal Service has separate authority for them under 39 U.S.C.
section 404(a)(5). When he buys stamped envelopes, the fees are in the
rate schedules, although the Postal Service has separate authority for
the service under 39 U.S.C. section 404(a)(4). Mailgrams, delivered in
the mailstream, are not classified as mail services. Mailing list
services, which correct the customer's address file and do not directly
involve the mailstream at all, are classified as mail services.
Perhaps it is too much to expect at this point that the Commission
and the Governors should have achieved full congruence and consistency
between what is in and what is outside the accumulation of services
reflected in the schedules recommended by the Commission and approved
by the Governors. Virtually the only judicial assistance for the task
has come from one case, litigated more than 23 years ago, early in the
history of the reorganized Postal Service. With the benefit of
additional years of experience, perhaps it is now time to revisit the
drawing of the relevant lines.
Conclusion
In summary, there are important policy considerations raised in the
Pack & Send analysis of the postal versus nonpostal nature of a
service. The Postal Service has nonetheless discontinued the operation
of Pack & Send and is not reversing that action by this Decision.
Postal management will, however, continue to study its options
regarding packaging service in general or a variant of Pack & Send as a
postal service, and, if appropriate, make recommendations to the Board
of Governors.
Estimate of Anticipated Revenue
The Postal Reorganization Act requires that our Decision include an
estimate of anticipated revenues. 39 U.S.C. Sec. 3625(e). Because the
Postal Service has already discontinued Pack & Send service, our
Decision will have no effect on anticipated postal revenues.
Order
In accordance with the foregoing Decision of the Governors, the
Commission's Orders No. 1145 and 1156, construed as a recommended
decision under 39 U.S.C. section 3662, are rejected. This Decision
shall be published in the Federal Register.
By the Governors:
Tirso Del Junco,
Chairman.
[FR Doc. 97-11379 Filed 4-30-97; 8:45 am]
BILLING CODE 7710-12-P
