BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C.
20268-ooo1
RECElVELl
Ocr 22 II 48 bH '96
POSTAL
il.&if i‘~';~~~~:~~~
OFFICE Oi 7iiC ;LCRTI,\RY
Special
Services
Fees and Classifications
Docket
No. MC9g-3
ANSWERSOF THE OFFICE OF THE CONSUMERADVOCATE
TO 1:NTERROGATORIESOF UNITED STATES POSTAL SERVICE
WITN!ZSS: SHERYDAC. COLLINS (USPS/OCA-T400-l-11)
(OCTOBER22, 1996)
The Office
of Sheryda
of the Consumer Advocate
C. Collins
USPS/OCA-T400-S-11,
Each interrogatory
to interrogatories
dated
October
is stated
hereby
the answers
USPS/OCA-T400-1-4
8 and 9, 1996,
verbatim
submits
and
respectively.
and is followed
by the
response.
Respectfully
submitted,
SHELLEY 8. DREIFUSS 0
Attorney
Office
of the Consumer Advocate
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
Please refer
to page 3 lines
8-9 of
USPS/OCA-T40O-1.
Confirm that your opposition
to the Postal
testimony.
proposal
to raise revenues outside
an omnibus rate case
Please explain
any negative
solely
on policy
grounds.
The next
A.
"Witness
revenue
net
neutrality
in their
Thompson,
services
revenue
testimony
on lines
Sherman and witness
particularly
special
sentence
for
in this
as purely
Thompson address
testimony."
present
fee
reasons
increases
docket.
policy.
9-11 of my testimony
for
I would
your
Service's
is based
response.
states,
the principles
of
These witnesses,
not
to target
the purpose
not
characterize
selected
elf increasing
their
ANSWERSOF OCA WITNESS SHERYDAC. COLLIN:j
TO INTERROGATORIESUSPS/OCA-T400-l-11
USPS/OCA-T400-2.
Please refer
to page 6 lines
l-11 of your
Please confirm
the
testimony
and to Exhibit
USPS-T-1C.
following:
a.
The before-rates
attributable
cost for certified
mail in
this filing
is $297,811,000.
b.
The before-rates
revenues for certified
mail in this filing
are $318,574,000.
C.
The before-rates
cost coverage for certified
mail
in this
filing
is 107 percent.
The after-rates
attributable
cost for certified
mail in this
d.
filing
is $285,880,000.
The after-rates
revenues for certified
mail in this filing
e.
are $416,705,000.
The after-rates
cost coverage for certified
mail
in this
f.
filing
is 146 percent.
If your responses
to any of subparts
a-f above are negative,
g.
identify
with specificity
all information
which is either
lacking
or precludes
you from offering
a confirmation.
A.
These numbers
a.-f.
g.
N.A.
appear
on Exhibit
USPS-T-1C.
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
USPS-OCA-T400-3.
Please refer to page 8 lines
15-17 of your
testimony.
a.
Identify
the date on which the initial
response to OCA/USPSTE-8 was filed.
b.
1dentif:y
the three dates on which revisions
were filed
to
witness
Needham's response to OCA/USPS-TE-8.
C.
Confirm that witness Needham's final
revision
to OCA/U~SPSTE-8 wa:s filed
two days before her appearance c'n her USPS-T8
testimony.
A.
a.
July
25,
b.
The 131 percent
interrogatory
Exhibit
1996.
dated
July
17E, page 23.
interrogatory
figure
Its
answered
65 percent
figure
became 127 percent
August
1996.
The final
Confirmed.
Lyons,
explain
the underlying
who appeared
on that
of a fundamental
change
It
September
was not until
Needham stated
workpapers.
8, lines
there
However,
20 and l-2,
day,
of the
which
the September
gave the
to the underlying
as I state
respectively,
dated
first
real
costing.
in my testimony
"A complete
the
9, 1996.
did
the changes.
in the Docket
a
The
changed
9 Errata
11, when she testified,
were errors
and suppllied
131 percent.
September
for
The
of Errata
of Errata,
reasons
Pa.telunas'
1996,
by Notice
is dated
However,
25,
in place
Notice
back to 65 percent,
C.
clearly
figure
is
USPS-T-17.)
on July
cost
coverage
coverage
source
No. R90-1,
65 percent
15,
from the original
11, 1996.
(Docket
was first
is
not
Witness
indication
Tr.
that
2/153-54.
witness
No. R90-1
at pages
explanation
7 and
of
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
CONTINUATION OF ANSWER TO USPS/OCA-T400-3:
what was done in the past,
the methodology
has changed
why it
[still]
was in error,
and exactly
has not been forthcoming."
how
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
Please refer to page 20 lines
l-7 of your
USPS/OCA-T400-4.
testimony.
a.
Please provide
a schedule comparable
to Schedule 55-16 with
your proposed fees.
Please provide
the beforeand after-rates
total
b.
attributable
costs for return
receipts.
Please provide
the beforeand after-rates
total
revenues
C.
for return
receipts.
Please provide
the beforeand after-rates
cost coverages
d.
for return
receipts.
A.
a.
RETURN RECEIPT CURRENT AND PROPOSEDFEE STRUCTURES
Return
Receipt
To whom & date
Service
delivered
To whom, date
delivered
& address
To whom, date
delivered
& address
after
To whom & date
Merchandise:
To whom, date
b.-d.
2-3.
After-rates
change
in cost
slight
change
version
For before-rates
figures
as a result
in revenue
of USPS-T-l,
NA
$1.50
NA
NA
$1.10
$6.60
$6.60
delivered
$1.20
$1.20
& address
$1.65
$1.65
mailing
Merchandise:
$1.10
if
different
Requested
Prclposed
Current
figures,
are similar,
as there
of providing
by keeping
WP D, pages 2-3,
see Lyons VIP D, pages
is only
a corrected
the current
attached.
ratf!.
a slight
address
and a
See OCA
ANSWERSOF OCA WITNESS SHERYDAC. COLLIN:?
TO INTERROGATORIESUSPS/OCA-T400-l-11
USPS/OCA-T400-5.
Please refer
to page 6 lines
l-3.1 of your
testimony
and Tr. 4/1073.
Please confirm
the following:
The Postal Service proposed attributable
cost for certified
a.
mail in Docket No. R94-1 was $305.8 million
b.
The Postal Service proposed revenues for certified
mail in
Docket No. R94-1 were $293.2 million.
The resulting
cost coverage using subparts
(a) and (b) for
C.
certified
mail in Docket No. R94-1 was 96 percent.
If your responses
to any of subparts
a-c above are negative,
d.
identify
with specificity
all information
which is either
lacking
or precludes
you from offering
a confirmation..
A.
a.
Confirmed.
b.
Not confirmed.
column
(4),
After
C.-d.
to confirm
See, Docket
Rates
Revenue,
Since
I am unable
cc).
See Exhibit
part
Decision
Appendix
$526,248
(thousand).
G, Schedule
No. R94-1,
$526,248
USPS--llF,
(thousand].
to confirm
noted
Exh.
part
above;
1, "Revenue"
(bi,
also
column,
I am unable
see PRC
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
USPS/OCA-T400-6.
Please refer
to page 6 lines
l-11 of your
testimony
and Tr. 4/1073.
Please confirm
the following:
a.
The Postal Service proposed attributable
cost for certified
mail in Docket No. R90-1 was $288.6 million.
b.
The Postal Service proposed revenues for certified
mail in
Docket No. R94-1 were $188.4 million.
C.
The resulting
cost coverage using subparts
(a) and (b) for
certified
mail in Docket No. R94-1 was 65 percent.
d.
If your responses to any of subparts
a-c above are negative,
identif:y
with specificity
all information
which is either
lacking
or precludes
you from offering
a confirmation.
A.
a.
Not confirmed.
See Docket
40 and WP6, page 2, $147,859
b.
Confirmed.
C.-d.
unable
to confirm
part
I was unable
(c).
USPS-T-22
at page
(thousand).
See Docket
Since
No. R90-1,
No. R90-1,
to confirm
USPS-T-22
part
(a),
at page 40.
I am
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
USPS/OCA-T400-7.
a.
Have you ever submitted
testimony
in support of a rate or
fee proposal
for which the cost coverage was below 100
percent?
If your response is affirmative,
please provide
a
citation
to the docket and testimony
number.
b.
Has the OCA ever submitted
testimony
in support of a rate or
fee proposal
for which the cost coverage was below 100
percent?
If your response is affirmative,
please provide
a
citation
to the docket and testimony.
C.
Do you agree with the principle
that rates and fees for
products
should be priced
so that after-rates
revenues
exceed costs?
If your response is negative,
please explain.
In your opinion,
d.
is it appropriate
to raise a rate or fee
for a product
for which the cost coverage has consistently
been held below 100 percent?
A.
a.
I do not believe
definition
of "a rate
coverages
cells.
calculate
it
at the
is not
a cost
I do not
know.
proposals
submitted
over
Yes _
or fee
for
applied
at the
subclass
coverage
for
every
level,
(or always
every
the
a product."
level,
(or always
individual
last
elf your
cost
and not
to rate
possible)
to
individual
I have not
However,
"a rate
is not necessary
for
not: sure
I’m
Generally,
subclass
necessary
coverage
b.
c:.-d.
However,
or fee proposal."
are applied
Thus,
I have.
rate
done research
on all
OCA
25 years.
I'm not
sure
Generally,
and not
possible)
rate.
of your
cost
to rate
definiti.on
coverages
cells.
to calculate
of
are
Thus,
a cost
it
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
USPS/OCA-T400-8.
Please refer
to page 6 lines
14-15 of your
testimony.
a.
Please confirm
that witness Needham considered
the own-price
elasticity
of certified
mail in analyzing
the certified
mail
fee proposal.
Please explain
any negative
response.
b.
Please confirm
that witness Needham considered
qualitative
information
about the value of service
of certified
mail
from the mailer's
perspective
in analyzing
the certified
mail fee proposal.
Please explain
any negative
response.
C.
Please confirm
that witness Needham considered
qualitative
information
about the value of service
of certified
mail
from the recipient's
perspective
in analyzing
the certifying
mail fee proposal.
Please explain
any negative
response.
A.
a.
Witness
"[Clertified
is
Needham states
mail's
evidence
own price
of a high
value
b.
Confirmed.
C.
Not confirmed.
recipient's
response
at page 70 of her
elasticity
of between
of service."
Witness
to a certified
confined
to the high
value
of this
USPS-T-8
at page 70,
lines
8-11,
-0.2
(Footnote
Needham's
mail
testimony,
response
omitted.)
discussion
piece
of the
seems to be
to the
and page 71,
and -0.3
lines
sender.
3-4.
See
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
USPS/OCA-T400-9.
Please refer to page 20 lines
8-14 of your
testimony.
a.
Confirm that the OCA has never proposed an increase
in a
rate or fee for a product
for which there is ncl
If yclur resplonse
corresponding
change in per piece costs.
is negative,
please identify
the proposals
and dockets in
which such rates or fees were proposed.
Confirm that the OCA has never proposed an increase
in a
b.
rate or fee for a product
for which there has been an
increase
in total
after-rates
costs over before-rates
costs
If your response is
equal to or less than 0.3 percent.
negative,
please identify
the proposals
and dockets in which
such rates or fees were proposed.
A.
a.-b.
OCA proposals
I do not
submitted
know.
over
I have not
the past
done research
25 years.
on all
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS;
TO INTERROGATORIESUSPS/OCA-T400-l-11
OCA/USPS-T400-10.
Please refer to your testimony
at page 24
lines
9-19.
a.
Please confirm
that total
manufacturing
costs for postal
cards in FY96 are reported
as $3,760,000
by witness
Patelunas
in Exhibit
USPS-T-5H at p. 49 and are reported
as
$4,950,000
by witness Needham in USPS-T-8 at p. 107.
If you
do not confirm,
please explain
your response.
b.
Please confirm
that total
attributable
costs for postal
and
post card subclass
costs are $631,401,000
(See Exhibit
USPS-T-S1 at p. 1).
If you do not confirm,
please explain
your response.
Please confirm
that,
C.
using witness
Patelunas'
manufacturing
cost figure
in subpart
(a), that postal
card manufacturing
costs represent
0.6% of total
postal
and post card subclass
attributable
costs.
If you do not confirm,
please explain
your response.
Please confirm
that,
using witness Needham's manufacturing
d.
cost figure
in subpart
(a), that postal
card manufacturing
costs represent
0.8% of total
postal
and post c:ard subclass
attributable
costs.
If you do not confirm,
please explain
your response.
Assume the Postal Service's
stamped card propos:al is adopted
e.
as proposed.
Is it your belief
that,
in future
rate
proceedings
involving
changes in postal
and postcard
the Postal Service
intends
to continue
to
subclass
rates,
include
postal
card manufacturing
costs in the attributable
costs for the postal
and post card subclass?
E'lease provide
a citation
in support of this proposition.
Assume that all of the Postal Service's
proposals
are
f.
adopted as proposed.
Would you agree or disagree
with the
proposition
that in the next rate proceeding
in which postal
and post card subclass
rates are proposed to be changed,
manufacturing
costs for postal
cards should be excluded
from
the total
attributable
costs for rate categories
within
that
Explain
any negative
response.
subclass?
Isn't
it
true
that
all
users
of
the
postal
and post card
g.
for the manufacturing
costs of
subclass pay, to some degree,
If your answer is no, please explain.
postal
cards?
If total
manufacturing
costs for postal
cards were
h.
attributed
to postal
cards alone, please state what the per
piece attributable
costs for postal
cards would be for the
Please show all
test year and the base year in this docket.
calculations
and provide
citations
for all numbers used in
calculations.
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
CONTINUATION OF INTERROGATORY & ANSWER TO USPS/OCA-1400-10:
1.
j.
k.
A.
Do private
post card users pay, through post ca~rd postage,
for the stationery
provided
to postal
card users?
If your
answer is anything
other than an unqualified
no, please
explain.
Do private
post card users value free stationery
given to
post card users?
If your answer is anything
ot~her than an
unqualified
no, please explain.
Do postcard
users receive
any benefit
from the free
stationery
provided
to postal
card users?
If your answer is
anything
other than an unqualified
no, please explain.
a.-d.
e.
intends
Confirmed.
I have no way of knowing
to do in the
f.
I agree
g-
No.
Please
what the Postal
Service
future.
see the
response
of witness
Sherman to
USPS/OCA-TlOO-11(d).
h.
including
at 10.
including
The base year
attributable
manufacturing
costs
The test
year
manufacturing
is
attributable
costs
cost
1.5 cents
cost
is
for
for
7.7 cents
postal
cards
as shown at USPS-T-X
postal
cards
as shown at USPS-T-5J
at 15.
i.-k.
TlOO-11(e)-(g).
Please
see witness
Sherman's
response
to USPS/OCA-
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-l-11
USPS/OCA-T400-11.
Please refer
to page 20 lines
3-4 of your
testimony.
Is your conclusion
that the fee for return
receipts
should
a.
nsot be raised based on your finding
that the classification
c:hanges for return
receipts
only served to improve address
hygiene?
b.
Did you consider
any other circumstances
in which correct
address information
may prove to be useful?
C.
D'o you deny that there have been any other improvements
to
return
receipt
service,
such as that discussed
by witness
Needham in her responses to OCA/USPS-TS-6 and OCA/USPS-TSll?
A.
a.
No.
b.
Not specifically.
overall
would
improvement
result
regardless
see my testimony
However,
of whether
receipt
at 20,
However,
I did
in the number of correct
from this
No.
C.
return
Please
proposal
these
or not
are adopted.
lines
5-14.
consider
addresses
that
the
which
is negligible.
other
improvements
the Postal
Service's
are there
proposals
for
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DECLARATION
I,
Sheryda
C. Collins,
declare
under penalty
the an,swers to interrogatories
USPS/OCA-TlOO-l-11
States
and correct,
Postal
knowleiAge,
Service
information
are true
and belief.
of perjury
that
of the United
to the best
of my
CERTIFICATE OF SERVICE
I hereby
certify
document upon all
accordance
with
that
I have this
participants
section
3.B(3)
of record
date
served
in this
of the special
the foregoing
proceeding
rules
in
ofi practice.
Attorney
Washington,
DC 20268-0001
October 22, 1996
--