BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268-0001
POSTAL RATE AND FEE CHANGES, 1997
;
Doc:ket No. R97-1
THE MCGRAW-HILL COMPANIES’ INITIAL
INTERROGATORIES AND OTHER DISCOVERY REQUESTS
DIRECTED TO USPS WITNESS TAUFIQUE (MHIUSPS-T34-l-6)
Pursuant to the Commission’s rules of practice, sections25-27, The
McGraw-Hill Companies, Inc. submits the following interrogatories ;andother
discovery requeststo United StatesPostal Service witness Altaf H. Taufique
Respectfully submitted,
Lz-! A+L~
G ,JY,
Timothy W. Bergin
0
Squire, Sanders& Dempsey L.L.P.
1201 PennsylvaniaAvenue, N.W.
P.O. Box 407
Washington, D.C. 20044-0407
(202) 626-6600
Counsel for The McGraw-Hill
Companies, Inc.
CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document in
accordancewith Section 12 of the rules of practice.
Timothy W. Bergin
September 17, 1997
MHIUSPS-T34-1. With reference to your testimony on p. 19, lines 10.14:
Pleaseexplain fully (including all analytical steps and calculations) how
(a)
you determined that editorial content would cover approximately 89 percent of its
costs under your proposed rate design for Periodicals mail.
What editorial content cost coverage would result under your proposed
(b)
rate design for Periodicals Regular mail assuming that you were constrained to set the
editorial pound charge at 75 percent of the zone l/2 charge? Pleaseexplain your
answer and calculation fully.
Cc) Pleaseexplain fully all factors that causethe editorial ‘contentcost
coverage under your proposed rate design for Periodicals Regular mail, and under the
scenario posited in part (b) above, to be lower than the 95.5 percent editorial content
cost coverage under the rate design recommendedin Docket R94-1 (Op. & Rec. Dec.
T 5150).
Pleaseexplain fully the extent to which your methodology in estimating
(4
editorial content cost coverage is or is not consistent with the methodology employed
by witness Foster in Docket R94-1 (see USPS-T-11, WP V.B, V.C (as modified
September29, 1994) (attached hereto).
Pleaseconfirm that your estimate of editorial content cost coverage is
Cd
necessarily only a rough estimate because(among other things) it is based on the zone
distribution for advertising pounds, which has no necessaryor likely correspondence
with the zone distribution for editorial pounds, and it also likely underestimatesthe
piece revenue from high-editorial publications, which tend not to qualify for
substantial presort discounts. To the extent you are unable to confirm, please explain
fully.
MHNJSPS-T342.
With reference to your responseto ABPKJSPS-T34-9:
What editorial content cost coverage would result assuming that 30
(a)
percent of Periodicals Regular revenuesare to be generatedby the pound rates, and
assuming an editorial pound charge that is 75 percent of the zone l/2 charge? Please
explain your calculation fully.
What editorial content cost coverage would result assuming that 30
(b)
percent of Periodicals Regular revenuesare to be generatedby the pound rates, and
assuming an editorial pound charge that is 80 percent of the zone l/2 charge? Please
explain your calculation fully.
Cc) What editorial content cost coverage would result assumingthat 35
percent of Periodicals Regular revenuesare to be generatedby the pound rates, and
assuming an editorial pound charge that is 75 percent of the zone l/2 charge? Please
explain your calculation fully.
-3What editorial content cost coverage would result assuming that 35
(4
percent of Periodicals Regular revenuesare to be generated by the pound rates, and
assuming an editorial pound charge that is 80 percent of the zone l/2 charge? Please
explain your calculation fully.
In the scenario posited in part (d) above, what average increase in piece
(e)
rates (over currednt rates) would result? Pleaseexplain your calculation fully.
In the scenario posited in part (d) above, to what exte:ntdo you estimate
Ul
that the rate increase (over current rates) for any piece rate cell woulld exceed 10
percent? Pleaseexplain your answer fully.
In your view, could the increase in piece rates under the scenario
(g)
posited in part (d) above be justified, in view of the reduced editorial pound charge,
under statutory ratemaking criterion no. 8 (ECSI) (see USPS-T-30, p. 2)? Please
explain your answer fully.
MH/USP!GT34-3. With reference to your proposal (p. 13, liines 18-19) that
contrary to past practice (see R80-I Op. & Rec. Dec. I( 888, 894-9,5), the editorial
pound rate should be calculated independently of any of the zone rates:
What if any specific constraints do you envision on limtre increasesin
(a)
the editorial pound charge? Pleaseexplain your answer fully.
Do you envision that the Postal Service may in the future propose an
(b)
increase in the editorial pound charge that would result in an editorial cost coverage
exceeding 100 percent? Do you envision that the maximum level of the editorial
pound charge would be subject to open-endedlitigation in each future rate case?
MHKJSPS-T34-4. With reference to your testimony (p. 6, lines 14-15) that
under your proposal, “all Periodicals subclasseswill have 3-digit and 5-digit piece
rates for both letters and flats for auromurion compatible mail,” please explain the
effect of your proposal on non-automation-compatiblePeriodicals mail.
MHKJSPS-T345. With reference to your testimony (p. 10, lines 13-15) that
the “letter categories were not affected by this shift [to the proposed new 3-digit and
5-digit categories], and retained the samelevel of volume as the base year,” please
explain the effect of your proposal on letter-sized Periodicals mail.
MH/UWS-T34-6. In view of the ongoing deployment of the FSM 1000,
when will the Postal Service extend the automation discounts to tabmid-sized
periodicals, and/or periodicals weighing more than one pound?
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