[Federal Register Volume 62, Number 113 (Thursday, June 12, 1997)]
[Notices]
[Pages 32125-32128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15382]
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POSTAL RATE COMMISSION
[Docket No. MC97-3]
Bound Printed Matter Weight Limitations; Notice and Order
Initiating Proceedings to Consider Changes in Domestic Mail
Classification Schedule Provisions Governing Bound Printed Matter and
Directing Parties to Initiate Informal Procedures
Issued June 5, 1997.
Before Commissioners:
Edward J. Gleiman, Chairman;
H. Edward Quick, Jr., Vice Chairman;
George W. Haley; W.H. ``Trey'' LeBlanc III
In Order No. 1175, the Commission gave notice of the Postal
Service's withdrawal of its Request for various reforms in the
classification of parcels, and granted the Service's motion to close
the docket which had been established to consider that Request. Docket
No. MC97-2, notice of withdrawal of Request by United States Postal
Service and Order Granting Motion to Close Docket, May 9, 1997. The
Order also noted the filing of a Joint Motion 1 asking the
Commission to
[[Page 32126]]
exercise its authority under 39 U.S.C. Sec. 3623(b) by initiating a
proceeding, sua sponte, to consider whether the maximum weight
limitation applicable to the bound printed matter subclass should be
increased from 10 pounds to 15 pounds, as the Postal Service proposed
in its Request. Id. at 2, n. 2. In view of the nature of the relief
requested in the Joint Motion, the Commission decided to consider it
independently, rather than ruling upon it as a pending motion in Docket
No. MC97-2. Ibid.
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\1\ Joint Motion of Advertising Mail Marketing Association,
Association of American Publishers and the Direct Marketing
Association for Bound Printed Matter (Joint Motion), April 23, 1997.
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In a response filed on May 8, 1997,2 the United States
Postal Service opposed the joint movants' request. No other party has
submitted a response to the Joint Motion.
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\2\ The Postal Service's untimely Response was accompanied by a
Motion for Late Acceptance. On May 21, the joint movants filed a
Reply to the Postal Service's Response, together with a request for
acceptance of the reply pleading. In light of the further
elucidation of issues provided by these pleadings, and of the
parties' mutual opportunities to respond, both motions shall be
granted.
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For the reasons presented herein, the Commission has decided to
initiate proceedings for the sole purpose of considering a possible
modification in the Domestic Mail Classification Schedule provision
limiting eligibility for mailing within the Bound Printed Matter
subclass to ``Standard Mail weighing * * * not more than 10 pounds[.]''
DMCS Sec. 322.31, 39 C.F.R. Sec. 3001.322.31. While this proceeding is
subject to the requirements of 39 U.S.C. Sec. 3624(a), rather than
establishing a formal procedural schedule in the docket at this time,
the Commission shall direct interested parties to participate in
informal conferences with a view to the potential settlement of the
matter.
I. Bases of Joint Movants' Request for Proceedings
The movants note that the Postal Service's Request in Docket No.
MC97-2 contained a proposal to increase the maximum allowable weight of
a piece that otherwise meets the conditions of eligibility for mailing
at the Bound Printed Matter (BPM) rates from 10 to 15 pounds. They
further observe that this revision was the only change proposed by the
Service in the conditions of eligibility for BPM rates, and that no
change was proposed in the structure of those rates. Thus, under the
Service's proposal, otherwise eligible pieces between 10 and 15 pounds
would pay pre-existing BPM per-piece and per-pound rates according to
their actual weight. Joint Motion at 1-2.
Notwithstanding the Postal Service's withdrawal of its Request in
MC97-2, the joint movants argue that the Commission is authorized to
consider the limited BPM proposal on its own initiative, and should do
so at this time. They characterize the proposal as a ``pure''
classification matter, as ``it would simply extend existing rates to
mail matter made eligible for BPM as a result in the increase in the
maximum rate limitation.'' Id. at 3. Because the proposal does not
raise the ``thorny question'' of the Commission's authority to
recommend a new rate in the absence of a Postal Service rate request,
movants claim that the Commission's statutory power to establish a
classification proceeding to consider the change is beyond dispute. Id.
at 2-3.
Movants argue that the Commission should exercise its statutory
authority and discretion to institute a classification proceeding at
this time for three reasons. First, they claim that the proposed change
warrants serious consideration because there is at least a prima facie
question whether the current 10 pound limitation serves basic postal
policy purposes any longer, and a change in the maximum to 15 pounds
would be lawful on its face and responsive to the applicable policy
considerations. To support this point, movants represent that some
mailers, including book publishers, currently split their shipments in
order to meet the 10-pound weight limitation. This practice purportedly
increases costs to the mailer, and ultimately to its customers, while
decreasing Postal Service operational efficiencies. Id. at 4.
Second, movants claim that failure to initiate the requested
proceeding will harm those mailers who stand to benefit from a
relaxation of the current maximum weight limitation, as well as their
customers. Movants observe that the Postal Service's notice withdrawing
its Request in MC97-2 did not state when an omnibus rate case might be
filed, but they anticipate that there will be an interval of at least
two years between the filing of the original Request and possible
implementation of a higher BPM weight limit recommended in the next
general rate case. Absent some countervailing consideration, movants
argue that there is no reason to deprive mailers of the potential
benefits of the classification change when there is an opportunity to
implement it more quickly. Id. at 4-5.
Finally, the joint movants argue that instituting a proceeding at
this time would not overburden the resources of either the Postal
Service or the Commission, and would be consistent with administrative
efficiency. In the context of the instant proposal, they argue, the
Postal Service's resources are not likely to be taxed because it has
already done the surveys and prepared the testimony necessary for its
support in Docket No. MC97-2. Id. at 5-6. They also claim that
consideration of the proposed increase in the maximum weight limit for
BPM would not be likely to require protracted proceedings because the
proposed change would not produce significant impact upon Postal
Service costs or revenues, or upon other users of Bound Printed Matter
or other mail categories. Joint movants state a belief that a
negotiated settlement in the proceeding is ``distinctly possible.'' Id.
at 6. Even if the matter cannot be resolved by a settlement among the
parties, they anticipate that conduct of the proceeding should not
require more than 90 days. Id. at 6. Expeditious resolution of this
issue would represent an efficient use of Commission and Postal Service
resources, movants argue, because it would narrow the scope of the next
general rate proceeding and remove uncertainty as to how potential
pieces of BPM between 10 and 15 pounds should be treated for purposes
of forecasting volumes, costs and revenues. Id. at 6-7.
II. Postal Service Response and Joint Movants' Rejoinder
In its Response of May 8, the Postal Service opposes institution of
a proceeding to consider the requested BPM classification change at
this time. The Service states that the proposal to increase the BPM
weight limit was ``part and parcel'' of the initiatives which were
withdrawn in Docket No. MC97-2, but that there is no reason to doubt
that it will be included in the next omnibus rate case. Response at 1.
Under these circumstances, and in light of the other work it is
currently undertaking, the Service states that it is unwilling to
refile the materials it submitted in support of the proposal and to
provide a witness to sponsor those materials. Ibid.
The Service also disputes joint movants' position that the proposed
change in the BPM weight limit is a ``pure'' classification change that
the Commission can initiate sua sponte. According to the Service, the
proposal raises ``clear rate and revenue issues'' that would be better
considered as part of a more comprehensive proposal that would
accommodate all potential rate and revenue effects. Id. at 1-2. The
Service suggests that the next general rate case, ``or, if it is not
imminent, another parcel case'' would be the appropriate setting in
which to consider the proposed BPM change. Id. at 2.
[[Page 32127]]
The joint movants responded to the Service's arguments in a Reply
filed on May 21. First, they argue that the Service's declared
disinclination to refile supporting evidence or to sponsor a witness is
irrelevant to the Commission's statutory authority to initiate
classification proceedings pursuant to Sec. 3623(b), which ``does not
accord the Postal Service veto power over such Commission initiatives
by holding the Commission captive to the Postal Service's willingness
to supply testimony and witnesses in such proceedings.'' Reply at 2.
Should a witness appear to be required to advance the proposal in the
Commission's proceeding, joint movants represent that ``AMMA, AAP, and
The DMA would almost certainly be in a position to provide such a
witness.'' Ibid.
The joint movants also deny that the rate and revenue issues cited
in the Postal Service's Response pose any obstacle to initiating the
requested proceeding. Inasmuch as the requested classification change
entails no change in BPM rates--just as the Service's proposal in MC97-
2 did not--joint movants argue that no substantial rate issues are
posed by the proposal. Citing the pre-filed direct testimony of a
Postal Service witness in MC97-2, they also challenge the existence of
any ``knotty revenue issues'' in connection with the proposed BPM
classification change. Thus, they argue, the Postal Service has not
advanced any meritorious basis for declining to go forward with the
requested proceeding. Ibid.
III. Considerations Leading to Initiation of Proceedings
Upon consideration of the arguments presented by joint movants and
the Postal Service, the Commission concludes that the topic of Bound
Printed Matter weight limitations is a mail classification matter which
the Commission is authorized to consider in a proceeding commenced on
it own initiative. Moreover, in view of the factors cited by joint
movants, the Commission has determined to initiate such a proceeding
for the prompt consideration of potentially appropriate changes in the
current BPM weight limit.
While implementation of a change in the current weight limit
admittedly may have some associated revenue and cost effects, the
Commission cannot agree with the Postal Service's argument that
jurisdiction to initiate a proceeding on the Commission's own
initiative is lacking because the proposal intrinsically raises revenue
and other rate-related issues that would require a rate request from
the Governors. As joint movants have noted, the proposal does not
involve any change in existing Bound Printed Matter rates, and its
implementation would not require any change whatsoever in current rate
schedules. On the contrary, an adjustment in the current BPM weight
limit to include heavier pieces would be a classic exercise of the
Commission's authority to recommend changes in mail classification,
which consists of `` `grouping' of mailing matter for the purpose of
assigning it a specific rate or method of handling. Relevant factors
include size, weight, content ease of handling, and identity of both
posting party and recipient.'' National Retired Teachers Association v.
U.S. Postal Service, 430 F.Supp. 141, 146-47 (D.D.C. 1977), aff'd, 593
F.2d 1360 (D.C. Cir. 1979). (Emphasis added.)
Similarly, the Commission sees no procedural or evidentiary
impediments to going forward with a proceeding to consider the
requested change at this time. The proposed increase in the maximum
weight limit for BPM is a limited and self-contained change in existing
mail classifications, as movants note. This being the case, there is no
compelling need to await the filing of other parcel classification
initiatives prior to considering the requested change. With regard to
evidentiary requirements, the proposal's effects on Postal Service
revenues and costs are issues to be considered, but it is reasonable to
anticipate that evidence bearing on them will be forthcoming. While the
Postal Service has stated its disinclination to re-submit evidence from
its direct case in MC97-2, the joint movants have undertaken the
evidentiary burden of advancing the proposal, as noted above, and the
Postal Service will of course have the opportunity to provide evidence
in response.
On the other hand, there appear to be several affirmative reasons
for going forward with the proceeding at this time. This particular
proposal has already been considered by Postal Service management and
approved for submission by the Governors in Docket No. MC97-2, and
evidently was received with favor by a significant segment of Bound
Printed Matter mailers. While the Postal Service's Request in MC97-2 is
no longer before the Commission, these facts strongly suggest that the
proposal merits consideration. Taken together with statements in the
Postal Service's Response to the Joint Motion, they also suggest that
the Commission ultimately will be called upon to make a recommendation
regarding this proposal, if not in the proceeding requested by joint
movants, then in a subsequent case in the foreseeable future. In
addition, the joint movants apparently are sanguine about the prospects
of settlement on this proposal in the proceeding they request now.
Furthermore, consideration of the proposed change prior to the
Postal Service's filing of an omnibus rate request, or initiation of
another parcel classification reform docket, may serve to accelerate
the removal of a restriction that, movants claim, induces mailer
practices that are detrimental to the mailer, its customers, and
arguably to the operational objectives of the Postal Service.
Additionally, if the Commission determines that the proposal warrants
recommendation, its adoption would constitute a modest first step in
advancing classification reform of the parcel categories, and serve to
simplify and facilitate the rest of the process.
For these reasons, the Commission shall initiate special
proceedings to consider potential changes in the portion of Domestic
Mail Classification Schedule section 322.31 (39 CFR 3001.322.31) which
restricts eligibility for mailing within the Bound Printed Matter
subclass to ``Standard Mail weighing * * * not more than 10 pounds[.]''
As a mail classification proceeding, this docket is subject to the
formal procedural requirements specified in 39 U.S.C. Sec. 3624(a).
However, in light of the limited scope of the proceeding and the
history of the BPM proposal in connection with Docket No. MC97-
2,3 the Commission shall direct interested parties to
participate in informal conferences with a view to the potential
settlement of the matter initially, rather than establishing a formal
schedule in the docket at this time. The first such conference will be
scheduled for July 9, at 10:00 a.m., in the Hearing Room of the
Commission, 1333 H Street, N.W., Suite 300, Washington, D.C. Those
attending this conference should designate a spokesperson to inform the
Commission by July 23, 1997, of the progress made toward reaching a
negotiated settlement. The Commission itself will not take an active
role in these informal discussions.
\3\ Because of the BPM proposal's presence in the Postal
Service's Request in Docket No. MC97-2, the Commission will direct
the Secretary to serve copies of this Notice and Order upon all
parties of record in that proceeding.
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It is ordered:
(1) The Joint Motion of Advertising Mail Marketing Association,
Association of American Publishers and the Direct
[[Page 32128]]
Marketing Association for Bound Printed Matter, filed April 23, 1997,
is granted.
(2) The Motion of United States Postal Service for Late Acceptance
of Response to Joint Motion of AMMA, AAP, and DMA, filed May 8, 1997,
is granted.
(3) The Joint Motion of Advertising Mail Marketing Association,
Association of American Publishers and the Direct Marketing Association
for Acceptance of Reply Pleading, filed May 21, 1997, is granted.
(4) Notices of intervention in this proceeding shall be filed no
later than June 30, 1997.
(5) W. Gail Willette, Director of the Commission's Office of the
Consumer Advocate, is designated to represent the general public in
this proceeding.
(6) An informal conference among the parties for the purpose of
exploring the potential for a negotiated settlement in this proceeding
will be held on July 9, 1997, at 10:00 a.m. in the Hearing Room of the
Commission.
(7) The Secretary shall cause this Notice and Order to be served
upon each party of record in Docket No. MC97-2, and to be published in
the Federal Register.
By the Commission.
Margaret P. Crenshaw,
Secretary.
[FR Doc. 97-15382 Filed 6-11-97; 8:45 am]
BILLING CODE 7710-FW-P
