DOCKET SECTION
December
13, 1997
Ms. Margaret Crenshaw
Secretary
Postal Rate Commission
1333 H St. NW
Washington,
DC 20268-0001
RE: Postal
Rate and Fee Changes,
Docket
1997
No. R97-1
Dear Ms. Crenshaw:
Submitted
testimony
herewith
are
of Eugene E. Threadgill,
an original
on behalf
and
24 c,zpies
of the Arrlerican
of
the
Public
Power Association.
Copies
this
of this
proceeding.
testimony
have been served
upon all
parties
to
APPA-T-1
BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268
POSTAL RATE AND FEE CHANGES, 1997
Docket
No. R97-1
DIRECT TESTIMONY OF
EUGENE E. THREADGILL
ON BEHALF OF THE
AMERICAN PUBLIC POWERASSOCIATION
December
13,
1997
I.
This
testimony
presents
Power Association
post
card
(single-piece,
the
3
by
the
3
service
municipal
the
secure
customers
at the lowest
possible
city,
services
to
customers
for
use
cards
post
those
distributors
of
customers.
There
for
billing
the
Washington
is a broad
possible
cost.
It
costs
is very
of the basic
to make available
bill
their
utilities,
provide
gas,
for
Post
use post
array
basic
These
by the proposed
much in
to
public
owners and
sometimes
and sewage
cards
cards
service
interesit
a very
low cost
service
services
rendered.
for
businesses
some of
to bill
the
their
at
entjties
from escalating,
bill
and commercial
in post
public
to
public
the
services
for
Their
example,
postal
customers
serve.
water,
post
increases
the national
owned
many county,
of governmental
services
entities
many small
purposes;
nation's
purposes.
electric
In addition,
lowest
rates
to keep operating
billing
services.
provide
in
government-
utilities,
and many use
which
impacted
municipal
for
the
to their
In order
cards
also
they
residents,
entities
severely
those
use post
governments
their
card
and local
service
cost.
to the municipal
and town
for
which
electric
many of
to as "munis",
In addition
State
communities
is to provide
referred
Public
increases
post
These are not-for-profit
of
to a minimum,
in all
organization
and other
utilities.
citizens
the American
of the proposed
reductions
objective
costs
all
of
and automation).
national
2,000
owned electric
3
position
and requesting
prerorted,
APPA is
the
(APPA) opposing
rates,
more than
PURPOSE OF TESTIMONY
small
Clearly,
their
will
card
be
rates.
to keep the
and to continue
businesses
to
the concerns
expressed
2
rates
are much broader
3
their
postal
Docket
and the
which will
owned service
It
that
business
users
envelopes,
Mail
all
the
of
which
card
a series
obstacles
to automation
post
Automated
for
cards
rate
Automated
which
for
categories.
obstacles,
the 5-digit
and carrier
presort
providing
water
and
Consequently,
businesses.
to
force
and convert
the
to
In the
USPS terminated
a "Basic"
category,
categories.
The
impose very
having
access
APPA-1,
with
categories,
postal
from
severe
rate
p.
the
1).
the
These
abolition
resulted
increase
to
of
in a very
in
1996
for
billers.
The municipal
area,
rate
a
most of the mailers,
combined
and unanticipated,
card
Exhibit
impose
the USPS.
Presort
from
(See
eligibility
most post
for
have prevented
Automation
substantial,
small
Post cards
billing,
to
services
cards
except
of Automated
in
objective
No. MC95-1,
categories
increases
the customers
sewer
more profits
Docket
presort
conditions
use
case,
impact
using
card
members.
recent
and other
to stop
generate
eligibility
which
cards
case,
effect
this
and
post
reclassification
adversely
providers,
post
Classification
and put into
the
USPS has an undisclosed
will
of the post
major
in
water
gas,
municipally
appears
of
in
of it,s
suffered
USPS proposes,
electricity,
receive
increases
the mere interests
as a result
second round of increases
who
proposed
have already
costs,
MC95-1;
the
than
Post card billers
in
c;
by APPA regarding
electric
and sewer
have
a
most
very
of
and the government
utilities,
services,
high
them
serve
density
were
able
2
for
to
all
users
their
use
the
agencies
in
a market
billing
mail.
carrier
route
presort
of
rate
of
cents,
16
reclassification's.
and the
most post
card
imposition
bills
many of the users
increase
rate
of
from carrier
mail
of
of
from
eligibility
of post
cards
Users
presort
to automated
experienced
as a result
of 3.2%;
1
cards,
increases
Exh.30
D).
by
statutory
Act;
carrier
categories,
n,lling
sort,
a dramatic
Presort
'could
convert
but most post
no other
increase
card
category
of
in postal
costs
in letter
rates
second
not
rate
card
and greater
further
billers
injure
the
Presort
for
for
rate
post
post
the long-standing
and the historical
3
using
Regular
(See USPS
by
is also
20
automated
post
cards
the
is
Postal
excessive
by
should
reject
both
card
rate,
and this
post
card
cards
should
relationship
2 cent
the
rate.
are excessive
The Commission
increased.
from
for
established
single-piece
rate,
public.
rate
standards
rates
card
increases
in the presorted
the existing
card
post
post
The Commission
the
increase
approximating
post
for
and the Basic
in
be reduced,
increase
single-piece
standards.
proposed
"penny"
will
the
increase
something
bar
to the Basic
for
an overall
cents);
19
present
proposed
In fact,
to
that
statutory
should
16 cents
in the single-piece
The
Reorganization
those
effectively
automation
Consequently,
a 5.6% increase
cents
(18
excessive
rate
of reclassification.
to 21 cents;
_,
presort
experienced
such a dramatic
a 5% increase
Presort
which
billing
of envelopes
Now, the USPS is proposing
,
As a result
carrier
for
for
cents.
had no such option.
service
the
conditions
in 1996 - 12.5% - from
18.0
billers
to reclassificatio,l.
elimination
category,
rate
prior
letter
and
restore
between
rate.
the
As
shown below,
under
out of line.
Further,
consider
whether
for
cards
post
allow
present
Rate History,
the
post
Commission
should
some form of mitigation
is
presorted
possible
post
to qualify
rates
direct
far
USPS to
conditions
be undertaken
for
are
the
of automation
and should
cards
card
in
automation
order
to
rates.
II. RATE HISTORY
RESTORE THE POSTCARD/LETTER RELATIONSXIP
USPS witness
the
Postal
that
of line
the
with
to
the historical
in the
relationship
between
years,
pressed
to increase
letter
rates.
The long
in effect
1952,
letter
cents
for
about
was only
rate
in
1933,
to
the
standing,
letter
but
rate
at
Postal
1886
one-third
rates
in
that
Service
fails
to
out
two kinds
changes
have,
in recent
to the
the
and the
post
card",
and from
1918
of
have occurred
"penny
until
were returned
letter
post
to their
1920
rate.
card
In 1925 the post
1920.
has
disproportionally
of
to 3 cents
and a penny in
2 cents,
and cards
rate
was totally
those
of
rate
significant
traditional,
from
or
but both
1918,
the very
card
history
between
post card rates
was increased
of two cents
raised
and the
one-half
letter
relationship
letters
65 years,
the passage
first-class
That abbr~aviated
to describe
Congress
since
and the post
cents,
32
relationship
fail
years.
basic
postcard/letter
1970
Those numbers
the
that,
the
to 20 cents.
mail.
over
testifies
Act,
from 8 cents
from 6 cents
disclose
Fronk
Reorganization
has increased
risen
David
rate
prewar
card
to
The
to 2
rates
rate
was
it
was returned
to
a penny.
In
was increased
to 3 cents,
but
the post
card
of
the
card
rate
was held
a penny.
rate,
and the single-piece letter
1929
A complete
history
rate,
is displayedon
4
post
the next page.
FIRST-CLASS MAIL RATE HISTORY
(Letter
Rates in cents per first
Ounce)
YEAR
1886
1887
1888
1889
1890
1891-1899
1900-1917
1918-1919
1920
1921-1932
1933
1934
1935
1936
1937
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947
194%
1949
1950
1951
1952-1958
1959-1962
1963-1967
J/7/6%
5/16/71
3/2/74
9114175
12131175
5129178
::;::z:
2117185
4/3/B%
213191
l/l/95
199%
USPS
APPA
POST CARD
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
3
4
5
6
8
7
9
10
12
13
14
15
19
20
LETTER
2
2
2
2
2
2
2
3
2
2
3
2
2
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
3
4
5
6
8
10
10
13
15
1%
20
22
POST CARD/LETTER %
50
50
50
50
50
50
50
67
50
50
33
50
50
50
50
50
50
50
50
50
50
33
33
33
33
33
33
33
33
67
75
80
83
75
80
70
69
67
67
65
64
60
66
63
Recommended Rates:
21
1%
33
33
64
55
In
2
about
3
and for
"penny"
post
post
card~rate
57 yearsthe
1952
5
the
1952
9 years
it
had been
1970,
the
historical
to
changed drastically.
the letter
Postal
rate
self
Rate
case,
cents
but
card
cents
10
in the
rate
final
the post
card
the
rate
the USPS sought
a one cent
increase
post
card
both
the letter
letter
rate
post
in the post
in the letter
rate.
Commission
In R90-1,
and post
and
subclasses,
the
recommended
to a
15%
increase
the
increases
4
to
to
13
cent
in the
the
card
rate,
which
was the
rate
granted
that
year.
(See Chart
rate
there
and
was a
in the
increase
The
rate.
increases
in
rate,
in
in the
in the letter
highest
cents,
rate
20% i:ncrease
letter
back
RSO-1,
increase
card
8
to 8
Nos. R77-1,
a 5 cent
post
in
6
Postal
was rolled
In R87-1,
27% increase
increase
first
in the letter
a proposed
5 cent
amounting
rate
USPS sought
the proposed
for
temporarily
and a one cent
card rates,
but
card
rate.
in
rates,
rate
increases
rate
criteria
the
the
Service
was increased
In Docket
card
and
was increased
a 35% increase
rejected
card
2 cent
In
card
rate
to 9 cents.
by taxpayers,
In R74-1 the letter
to 6 cents.
letter
was
the
rate
and the post
and R84-1,
increase
letter
relationship
the Postal
rates.
o~cder, the post
In R76-1
that
established
the
rate,
Congre,ss enacted
1970,
directed
and equitable
No. R71-1,
to
to I cents.
3 cent
which
and
fair
and the post
cents,
and
Act,
Docket
was increased
were subsidized
for
In the period
card
In
but
of the letter
rate.
letter/post
was over subsidized.
of
was terminated,
of the letter
l/3
sustaining,
determination
rate
had been l/2
Those rates
Reorganization
become
card
and
both
and a
percentage
on the following
page).
CHARTS
FROM CHAIRMAN
OF DOCKET
HALEY’S
PRESENTATICN
R90-1 RECOMMENDED
January
Recommended
DECISION
4, 1991
Rate Increases
40%
35%
30%
25%
20%
15%
10%
1st-Class
Letters
Post Cards
Priority
rn, USPS
0
PRC
When the USPS requested
R90-1,
>
APPA was
intervened
Although
still
the
in
concerned
proceeding
the Commission
compromised
largest
percentage
and was very
damaging
rate
case,
No. R94-1,
post
across-the
card
j
Docket
force
The Postal
industry.
Its
of
adjustments,
also
labor
adjusted
not
offset
proposed
in all
rate
post
card
No.
time,
increase.
rate,
that
was
to any subclass
of
In the last
omnibus
an approximately
in
and the
to
the
present
in
postal
clearly
rate
10%
20 cent
restore
of
rates.
intensive
require
Those
annual
increases
increases
out of line.
card rates
and it
in R94-1,
ins R90-1,
The one cent
which
increase
rejected.
card and letter
rates
most of postal
of the letter
historical
a
policy
percentage
implemented
be totally
throughout
that
be
compounds the inequitable
should
of the post
in
must
productivity,
implemented
cost
employees
But the proper
to that
is
service
supervisory
COLA.
in
rates
is an across-the-board
was 50% or less
would
unions
reflect
similar
demonstrates,
labor
salaries
in postal
case for post
history
a very
increases
completely
in R90-1,
increases
the postal
discriminatory
in this
rate
with
classes,
card rates
card
is
of inflation
As the tabular
the post
Service
increases
base established
5, supra)
applied
first
that
a 19 cent
resulted
all
by any
the cost
the very
took post
with
card users.
which
the
opposed
the USPS proposed
annually
passed on through
increase
and
to post
behind
contracts
costs,
to recover
for
in Docket
rate.
inflation.
are
card rate
it,
increase
board,
The driving
living
post
that
a postal
mail
increase
J
so
a 20 cent
rate.
relationship.
(page
history,
An 18 cent
The policy
repeated
3
in the
implemented
in the current
single-piece
discriminatory
No.
rate.
Now, the
compounded
resulted
16 cent
was a major
increase
experienced
cost
did
not
Section
fair
with
rates
presort
category,
in
rates
the
rate.
Commission
and to
increase
rate
and the
the
16
'!Basic
whi~ch previously
increase
post
postal
the
presort
category,
Most presort
rate
by accepting
3-digit
the
card
letter
the
rate
rate,
their
post
to 18 cents
card
costs
mailers
which
other
THE RATE MAKING CRITERIA DO NOT SUPPORT
AN INCREASE IN THE POST CARD RATE
nine
of
criteria
for
those
criteria
are discussed
Reorganization
evaluating
of
provided
the
direct
and
and the
effect
upon
by
relative
letters
and
the
9
public,
increases
costs,
the
in
of what
values
post
the
levels.
assessment
the
indirect
rate
proposed
A careful
below.
Act provides
postal
to the
an analysis
services
of
implemented
card
For mailers
cents.
in
and
No. MC95-1,
17 cent
route
an adverse
incur.
and equitable,
examination
the
ia
in
and
increases
out-of-line
in the post
3622 (b) of the Postal
communication
available,
carrier
increases
The relationships
is
to
is
a 3% increase
and burden.
II.
Commission
a completely
5-digit
from 17.9
rates
single-piece
presort
"cent"
increases
Docket
terminate
route
had used the
card
5% increase
No. R90-1,
parallel
cent
seeking
16.3 cent
rate
postcard
in
USPS is
to
carrier
mailers
The four
the discriminatory
the
Presort"
of seeking
Reclassification,
USPS proposal
USPS in Docket
and post
out-of-line
In Mail
cent
letter
R90-1
and another
category,
case,
policy.
Docket
by the
of
the
cards,
an
alternatives
demonstrate
that
the
proposed
post
card
statutory
criteria
increases
mandate
:1
post
not
card
justified,
rate
and
that
the
reductions.
A. FAIRNESS AND EQUITY
In
5
single-piece
.>
cards.
this
case,
letters,
For Presorted
the
USPS proposes
and
an increase
letters
letters
and 5.6% for
3
of
cards,
the
.j'
examination
post
cards
of
of recent
the
would
to 18 cents
of cards
would
is so great
bring
about
card
revenue;
increase
result
should
demand and possibly
increases
As an
letters
rate
is
and post
excessive
any revenue
the present
loss
20 cent
reduction
of one cent
generate
could
a revenue
to
card
elasticity
in demand and a net loss
rate
by
In view
be reduced.
increase
are
categories
The demand price
the proposed
cent
of
USPS profits,
decrease
two
a
rate
card
post
monumental.
and costs
be negligible.
a significant
are
from reducing
that
3.1% for
single-piece
the proposed
20 cent
dollar
of
For the automa.ted
values
and that
multi-billion
of 5% for
increases
present
criteria,
the USPS that
cards.
proposed
relative
demonstrate,
the statutory
rate
the
an increase
and cards
5.1% for
~I
are
could
in post
significantly
increase.
B. VALUE OF SERVICE
If
one
thing
is
service"
of
a post
card
service
1.
rate
is
it
clear,
but
certainly
of a letter,
proposed
crystal
a tiny
not
is
that
fraction
the
of
the 60+ percent
"value
of
value
of
the
implied
by the
relationships.
Privacy
-
Letters
and
Standard
private
and sealed
The
primary
Letters
against
difference
is
that
inspection.
10
between
First-class
But
a post
First-class
letters
card,
are
like
Standard
is
mail,
open
possibility
of
could
access
gain
information
for
in the economic
2.
private
resulting
that
the
postal~
and the post
letter
from
them from card
rate
3.
that
Demand
quantitative
Following
of
of the
Price
Elasticity
-
of value
of service
is the price
p.4)
O'Hara
As
Witness
the higher
elasticity,
"Long--run
O'Hara
Own-Price
(USPS-T-30
First-class
price
the value
Demand Elasticities",
p.5)
cards
Private
cards
a one
double-
on a 3.5"
in
the
APPA members decided
letter
was sufficient
should
which
to
has
not have a
rate.
one of
the
significant
most
used in establishing
of demand.
the
of the
card
lower
service
the
cost
(USPS-T-30,
own-price
provided.
as reported
The
by witness
are as follows:
letters
Private
elastic
is
increase
elasticity
testifies,
four
can be written
of a letter
60+ percent
markups and coverage
for
that
for
A communication
is
that
has value
6 times,
communication
of the capacity
measures
privacy
frcm
the
bills.
use
of information
some
letter
a mailer
and
to 24 times,
that
no
has no privacy-value.
is
(187 sq.in.)
to letter
percent
17
card
reclassification,
value
provides
of
bills
- The quantity
sq.in.).
card
Clearly,
by a o..e ounce letter
greater
from 4 to
users
purposes.
Quantity
(31
a post
A competitor
card
a post
as much as information
card
rate
propels
to
world,
page double-sided
x 6" post
view;
communication.
Communication
pages,
public
competitive
can be conveyed
sided
to
-0.232
-0.944
(those
not printed
as First-Class
letters;
11
by the USPS) are
that
indicates
4
times
that
as
the
service
provided
2
the
3
services
5
for
post
cards
Utilities
which
are moving
slowly
to electronic
also
have the option
letter
billing.
Recent
and are switching
in
the
net
These
quantity
for
three
from
of
prices
does
60+% of
increases
have
in the rates
Six
days
gas,
carrier's
route.
a week carriers
bill,
a return
to one ounce,
post
card
difference
water
bills.
in setting
dramatic
a far
privacy/lack
of
lower
privacy,
differences
in
significant
that
The
are totally
demand
criteria
demonstrate
a letter.
trudge
or
sewer
those
bills
envelope,
those
The
requires
most
of
cards
On a given
If
-
services,
post
or a loss
letters.
be the
value
that
out
a card
proposed
of line.
WEIGHT MAKES A DIFFERENCE
heavy bags of mail.
electric,
the
for
III.
clearly
for
pressure
even though
provided.
"value"
for postal
Service's
to customsers,
services
should
Post card
to an automated
purposes,
and tremendous
- which
used in setting
not
of
communication,
elasticity
billing
than
for
APPA members have indicated
elasticity
cards
of
customers
communications.
in charges
the
aspects
of one-fourth
their
to the Postal
increase
post
must bill
with
for
in demand price
coverage
price
to letters
revenue
difference
cost
contacts
a substantial
range
to pay more and shift
some of them are surrendering
requires
in the
value.
letter
billers
that
is
day,
from
bills
to
would
the
400+
which
for
weigh
or
recognized
its
12
10
services.
carrying
may be delivering
are in envelopes
The USPS has
prices
to door
a carrier
and advertising,
letters
door
homes on the
which
runs
12
that
contain
the letter
times
a
up
as much as
weight
In 1991,
makes
a
the USPS
made available
i
Postmaster
letters
a half-ounce
for
International
up to 2 pages
a postcard)
(about
IV.
Post cards,
the
lowest
United
the traditional
severely
increases
"penny"
card
sewer
basic
-
post
nation's
It
is
infrastructure
services
\:
The increases
No.
R90-1
placed
cards.
And the
another
heavy
essential
restore
the
of
our
card
rates
burden
an inexpensive
of
concern
for
the
in this
essential
minimum,
commercial
No.
and
commercial
means of
those
public's
basic
and that
in Docket
use of
post
MC9551 imposed
customers
use
for
can,
of
an
essential
in this
government,
essential
and
services.
were allowed
in
which
national
of
Docket
public
case.
gas, water,
The Commission
13
means
in
to bill
the
cost
the
on governmental
of
have
upon
reclassification
to the public.
card,
costs
other
the
20 cent
organizations
most
that
of
from
rates
the
been
rate,
- electricity,
to subsidize
a heavy
confidence
of
card
low
to an absolute
means of communication
provided
quantity
citizens
show its
that
be kept
in post
burden
services
availability
of
mandatory
they must not be compelled
that
the governmental
center
infrastructure.
of
should
to the public
the
between
in postcard
explained,
at
are
allow
have always
in the post
use
a reduction
services
history,
to the present
The Commission
As previously
would
IMPACT UPON THE PUBLIC
The dramatic
the
this
35 cents.
communication
impacted
provide
for
that
the communication
means of
by requiring
-j
5 times
The Assistant
to Mexico.
stated
our nation's
communication.
public
mail
throughout
cost
S>ates.
for
Affairs
to be mailed
:3
7
rate
case
and
communication.
the
The Commission
Single-piece
should
exercise
and the Basics Presort
:i
i
value
':
criteria,
of
rate
service,
calculated
divided
cost
cards
of
(the
by reducing
post
rates.
card
coverage
worksharing
(other
worksharing
letters
given
much
elasticity,
totally
of
both
the
cost.
only
slightly
letters,
and
presorted
worksharing
case,
cost,
from
the
and the
a category
and automated
(Exhibit
below
far
the
above
appears
of
discounts
for
to be doubtful,
much
267.11%
coverage
category
the
and
the
cards,
other
if
the
p. 43) That
282.29% cost
any
which
value,
cards)
USPS-30B,
Even
limited
statutory
In this
revenue
the
In the case of "worksharing"
"mailgrams").
more
other
variable
the projected
of
evaluating
and
volume
can be justified,
'greater
cost
price
Loverage
is
unjustified.
USPS witness
total
Unit
cards
validity
of
for
purpose
the
Sharon
Costs
Presort
of
to be 7.7560
the
USPS cost
of
this
post
contribution
to system
unit
Daniel
cost
(USPS-T-29)
Single-Piece
single-piece
total
demand,
is 267.11%.
than
made after
to be assessed.
variable
coverage
is
as the
is
aggregate
is a cost
the
coverage"
volume
cost
service
,,
elasticity
"cost"
projected
for
which
coverage
by its
post
decision,
is the "cost
USPS has calculated
,i
authority
V. COST COVERAGE
The final
I
its
cards
to
Other
witness
cents.
analyses,
rate,
costs,
of Presort
cards
but
the estimated
be 11.429
those
will
costs
which
would
a 83.37%,
is 7.7568;
14
represent
mark-up.
cents,
and
address
the
are
The USPS proposes
analysis.
card
reports
accepted
a 21 cent
a 9.6
The
the proposed
cent
projected
rate
is 19
cents,
producing
145% mark-up.
a
imposes
that
use
low value
little
cost
on postal
presorted
mail
imposes
operations
system
of
stamps;
the
than
retail
mail
processing
operations.
contribution
to
the
unit
costs
proposed
the-board
post
projects
impact
card
i
rates
generate
revenue.
With
$2,242,407,000
of post
card
revenue
reduction
reduction
of revenue
an increased
all
of
revenue
in post
the
cards
should
sale
out
of
mail
per-piece
be less
cards.
than
The unit
of line.
rates
to the USPS would
reductions
total
post
revenue
of only
cards,
volume,
even if
loss
be very
be trivial.
15
Fiscal
1998
Given
$29,136,000.
reduction
increase
that
Q'Hara
of $1,088,979,000.
and an increase
The benefits
would
for
a rate
a total
1.3%.
in across-
Witness
Cards revenue
$29 million,
of about
card
and
out-going
be negligible.
USPS-30 A and B),
of
makes no
unit
the
recommended
USPS seeking
(Exhibit
mail
almost
in revenue
demand for
the
Presorted
purchase
and After-Rates
of
on postal
the
Total
the
burdens
for
should
an increase
actually
mail.
undeniable
REVENUE IMPACT
of these
That represents
elasticity
cost
for
is
by Single-piece
Before-Rate-increase
of $1,059,84,3,000
less
rate
a
and which
It
by the USPS are totally
VI.
The revenue
operations.
by presorted
contribution
cents,
11.2
elasticity,
Consequently,
system
per-piece
contributions
bypasses
high
far
system
of
costs
and out-of-line
and very
single-piece
postal
presorted
system
staggering
of very
very
bulk,
to
That-is,,simply.a
piece
mail
a contribution
might
in post card
in
there
would
revenue
were a loss
amount
to the public
substantial.
of
to a
of a
Any loss
VII.
?
3
The standard
rendered
is
separates
:3
PRESENT AUTOMATION CONDITIONS ARE BURDENSOME
billing
3.5"
the
card
with
into
barcode
categories.
cards
stub
able
to qualify
Exhibit
their
post
for
the
full
for
the
sufficient
to
utilities.
Card B has a horizontal
the full
barcode
such a configuration
employed
(See
appear
to allow
Exhibi.t
permissible
usual
card
information
Card D, the
electric,
post
first
water,
five
p.3)
could
stub
digits
and sewer
of
been
to meet
address
stub,
containing
might
not
required
across
a complete
prints
card
designed
portion
below
rate
have not
porti.on
information
strip
by some
the bottom,
the address.
revision
be
which
However,
of the computer
the bills.
to be two other
APPA -1,
post
3.5"
that
full
11
rates.
recently
2.25"
to the
many users
purposes
automation
to be printed
requires
and printer
There
the
customer's
automation
for
and a 2.25"
However,
that
the complete
Card A has a 3.75"
barcode,
services
to be returned
to contain
business
cards
accommodate
the
p. 1) Consequently,
standards.
information.
program
stub
and other
eligibility
enough
permits
address
APPA-1, p. 2 shows two cards
automation
billing
containing
APPA-1,
for
tear-stri.p
portion
eligibility
for
billing
customers
vertical
is too narrow
required
for
billing
a perforated
a 3.5"
(See Exhibit
post
for
and a 2.5"
That address
digit
wide
x 6",
information,
mailer.
/
post card-used
possible
billers
methods
which
to meet automation
First,
(Card
C)
the
be extended
to 7 inches,
and a 3.5"
address
stub.
might
standards.
length
16
presort
most of
of
to allow
a
the
Second,
of the bar code are omitted.
utilities
be
their
on
Local
bills
.1
and deliver
their
Under
those
circumstances,.
across
the
stub
burdensome.
i
automated
~I
of
the
For
proposed
3.5"
At that
card
in
to increase
used
printed
its
billing
No.
of increasing
opposition,
CPUM pointed
carrier
was renewed
out
routes
carriers
a compromise
continue
presorted
Some
most
utility
to be accepted
to carrier
similar
out
until
inch
that
1982,
Mailers
gas utilities,
for
for
billing,
eligible
cards
immediately.
In that
MC77-2.
cards
In
issue
were
was
case,
sorted
to
postoffices
and,
the
so
and
A separate
LSM processing.
June 2,
post
punch-card
punch-card
allowed
(LSM).
Ut~ility
to destination
for
3" to
the standard
No. MC79-1, was established,
was worked
machines
Public
post
the
Service
from
change-in-size
by the USPS in
any requirement
Docket
sorting
implemented
the
and were delivered
without
proceeding,
that
a postcard
old
in
Postal
and natural
if
done
been
the
the minimum size
response
but
of
of
used that
consequences,
postponed,
for
was a 3.25
electric
still
CPUM's
be sufficient
as has
height
The Council
would have disastrous
to
unduly
sequence.
MC73-1,
by utilities
had many members which
and the prospect
and walk
barcode
and
use of computers,
then represented
digit
11
might
new letter
extensive
by a reproducer.
(CPUM), which
I
Docket
the minimum
before
for
6 digits
be reached,
to implement
time,
entire
postoffices.
may be unnecessary
routes
could
example,
in order
last
destination
the
card
to carrier
Some compromise
5-digit
printing
a post
Printing
sorting
past.
3
to local
mail
in that
3.25"
long
case,
cards
as they
to
were
routes.
compromise
could
17
be reached
in
this
case.
As
explained,
post
cards
presorted
do not need to go through
2
at the outgoing
7
the first
sectional
destinations.
rounds
center
that
At the destination
automation
equipment
five
of the automation
digits
cards
delivered
.;
digit
and carrier
-1
digits
of
3.5"
to 5-digits,
x 7" card,
in
should
offices
also
should
and
excessive
the
automation
rate
take
increase
being
provide
current
rate
recommended
33
cent
18
letter
relationship.
consistent
privacy,
.z
times
of
some relief
very
cent
single-piece
consistent
the price
elasticity
past
post
for
5-
last
6
possibly
a
actions
by
card rate
the historical
and
users
cards,
last
year
of
that
relationships,
post
resulted
and
the
in a major
'The Commission
post
cards
in
the
the
followin'g
table,
post
card
rate
be 54.5% of
with
the long
in
such a rate
regulatory
limited
on~ly the
consideration
all
shown
As
the
post
be eligible
with
by
first
Therefore,
should
letters
for
case.
rate,
the
upon post card billers.
Additionally,
with
into
which
imposed
sequences,
in a Single-piece
reclassification,
should
a
values,
is sorted
SUMMARY
when compared with
relative
mail
be explored.
the USPS, which have resulted
is quite
processing
The alternative,
address.
VIII.
The Commission
where
rates
routes,
to 3 and 5-digit
mail
and to walk
automation
the
sends
code are irrelevant.
to destination
bar-codes
of automation
centers,
to carriers
sorted
or to carrier
of letters:
18
standing
relationship
standards,
communication
would
capacity,
considering
our
historical
would be
the
8.5% weight,
more
zero
and 4
Comparison of Letters
and Post Card,
At APPA Recommended Rates
Letter
~...
Post card
PC/Letter
Criter&i
3
Rate
33 cents
18
Privacy
Sealed
Open
Zero
Communication
8 pages
113 page
5%
Weight
1
l/12
8.5%
Elasticity
-0.2'3
A Basic
9
Presort
unit
costs
post
card rate,
clearly
oz.
of 15 cents
cents)
with
20 cent
the
record
single-piece
every
statutory
Single
piece
increase
rate
for
First-class
would
be far
more consistent
statutory
standards.
Second,
"discount"
provide
the
for
the rate
The Basic
Third,
modification
record
basic
Presort
the
Presort
card rate
card rate
with
the historical
would
be
post
cards
required
should
the
directed
for
by
33 cent
the proposed
be rejected.
letter
relationship
present
two
As
rate
and
cent
and fails
by the statutory
conditions
19
prcposed
is punitive
be increased
be
the present
excessive,
and a 33 cent
presorted
should
quite
should
rate
differential
th,at
the
card
that
of the Automation
single-piece
Consequently,
rate.
post
is
with
clear
USPS
post
cards
is
discount
cent
18
of total
standards.
post
post
an 18 cent
An
case demonstrates
letter
in the single-piece
have a mark-up
100%.
as compared
standard,
%
CONCLUSION
in this
shown above,
with
400
the statutory
IX.
First,
oz.
would
of almost
and a 15 cent Basic
consistent
54..5%
-0.944
rate
(7.7568
cents
Ratio
to
standards.
to 3 cents.
to
post
'consider
cards
some
presorted
to 5-digits
5 digit
for
It
i
‘nd carrier
postoffice,
enlargement
also
and delivered
to allow,those
the Automation
might
routes,
categories
be useful
of permissible
presorted
without
to
post
consider
cards
the
the
to a destination
post
full
ca:rds to qualify
11
digit
barcode.
ramifications
to 7 inches.
Suite 200
1493 Chain Bridge
McLean, Virginia,
(703) 734-1918
(703) 734-1943
20
3 or
Rd.
22101
of
an
CURFSCULLJM VITAE
1493
Personal
Eugene E. Threadgill
Chain Bridge Rd. Ste.
McLean, VA 22101
(703)
(703)
Data:
Born:
May
19,
734-1918
734-1943
1918;
200
Fax
Miami,
Florida
Education:
Employment:
1972-97
George Washington University,
LL.M.,
1950
Georgetown University,
J.D.,
1944
University
of Florida,
B.A. With Honors, 1940
American
University
- course
work
for
M.A in
Economics completed,
1948-50
Federal
Legislation
Editor,
George town
Law
Journal,
1943-4
Private
Law practice
before the Postal Rate
Commission, the Federal Energy Regulatory
Commission
and Courts,
representing
bulk first-class
mailtr
Associations;
pipelines,
gas distribution
companies
and competitors
Committees
Testified
Congressional
before
regarding
postal matters;
submitted
recommendations
to the Postal Service
and to Congress that (1) the
function
of
regulation
of
postal
rates
and
classes
by the Postal
Rate Commission
should
be
with
regulation
of
telecommunications
merged
and transportation
services
(2)
.the Board
of
Governors
of the Postal
Service
should
have its
own staff
to write
of lawyers
and economists
its decisions
(.3) carriers
should co~llect data for
Advised
population
census
and demographics;
Accounting
Office
committees
of
the
General
regarding
proposed revisions
of the Private
Express
Statutes
and Postal Reform legislation
Testified
regarding
1971
Assistant
Supervised
assisted
before
energy
Congressional
policy
issues
Committees
General Counsel,
Postal Rate Commision
Commlsslon
orders;
preparation
of
Congressional
in
presentations
to
Committees
reviewing
operations
of the U.S. Postal
Service and the Postal Rate Commission,
created
by
the Postal Reorganization
Act of 1970
1969-70
Judge,
Services
disputes
Board
of
Contract
Appeals,
Administration;
adjudicated
-~
General
contract
1968-9
Consultant,
National
Iranian
Gas
Company,
Teheran,
Iran
- prepared
contract
for
sale
of
natural
gas to Soviet Union (Sojuznefteexport)
1957-68
Private
law practice
(Wolf and Case; Connole
&
pipelines,
O'Connell)
representing
natural
gas
producers
and gas utility
companies
before
the
Federal Power Commission
1955-57
Transmission
Consultant,
Sui
Gas
Company,
Karachi,
Pakistan
- drafted
contracts
for
sale
of gas to Karachi
Gas Company and Indus
Gas
revision
Company;
consulted
regarding
of
gas
purchase contract
with Pakistan
Petroleum
1951-55
Trial
Attorney,
Litigated
cases
1948-50
Advisor,
National
Attorney
Labor
Board - wrote NLRB decisions
and orders
1946-7
Farragut
and
Assistant
Professor,
College
Technical
Institute,
Farragut,
Idaho; taught
courses
in
Economics
Economic
History,
and
Mathematics
and Law
1944-6
Chief
Judge William
E.
Law Clerk,
District
of Columbia Court of Appeals
1942-4
Economic
Gasoline
Rationing
Statistician,
Price
Administration
Branch,
Office
of
Iof gasoline,
analyzed
demand for
and supply
recommended changes in coupon ration
program
Federal Power Commission
and wrote opinions
Published
Relations
Richardson,
Papers
66,
Insurance Under the Sherman Act, 32 Georgetown Law Journal
November, 1943
Resource Pricing
of Natural
Gas Field
Sales,
Public
Util.
Fortnightly,
Oct. 1966
Public
and Classes,
Utility
Regulation
of Postal
Rates
Utilities
Fortnightly,
May, 1977
Anti-Competitive
Abuse Under the Natural
Gas Policy Act, Pub.
Utilities
Fortnightly,
March, 1988
A Perspective
on Pipeline
Pricing
Under the Natural
Gas Act,
16 Energy Law Journal
441, November, 1995
BILLING
Current
Typical
Standard
POST CARDS
Billing
Exhibit
APPA-1
Post Card
THREADGILL EIJCJENE
1493 CEAIN BRIWE BD
MC
The complete barcode
the
2.5 inch return
required
stub
for
-
l-
LEAN
VA
Automation
22101-5726
~I.11 not
fit
on
BILLING
Present
A.
Post
- -----
POST CARDS
Automation-Compatible
Card with
Billing
Horizontal
, . ~.,,
Return
Exhibit
APPA-1
Post Cards
Stub
!ccce~
M~“E~SE
SC.51
-RN l3-t.f m&J$.qqj-!=Jg
-------------.--_.
AcCO”NTN0.
21-1360-10
s:.
P. QAND
M”STBEPAIDlw
10/19/97
91’ ECIST END AVE
7b.lb
.w.?O”NT DUE:
B. Post Card with
a 3.75"
EASLEY
Return
SC
29640-3132
Stub
$(y
. . goly=
ANYTOWN, MD
ITel:
RETURN PaSTAGE G”PP.ANTEED
ACMMI vymbw : 10002921
Oak Meter Read : 1019,
Present Reading : 255624
Previous Reading : 255624
TohI Used
:
6134
lal~ges/c~dits: 12.45
'Prenou Unpid
: 0.00
- tielhlourll Lhs w10/97
-To be Paid By :
37
109. al-4 10002921--5
~scM.tvTNEPARDs,
.~
B~.~uPPER
LwJ3 IIn
MD1 NX
1486f30608
i I 1.1II II I, II II III II II II .I. I I I 111
II 1.1,II 11.1
IllII II I II 111
I I I I, I
- 2 -
BILLING
Possible
C.
Illustrative
Alternative
POST CARDS
Automation-Compatible
Exhibit
Billing
APPA- 1
Post cards
7" Post card
EUGENE E THREADGILL
SUIT 200
1493 CHAIN BRIDGE RD
MCLEAN VA
2?101-5726
1,,1,1,,1,1,,,1111 ~~~~~~ll,l,l,l,~,l,,l,l,ll,,l,i,,,,ll~,,,l,ll
D. Standard
Post card
with
first
of barcode
5-Digits
\
EUGENE t:
omitted
THREADGILL