BEFORE THE
POSTAL RATE COMMISSION
20268-0001
WASHINGTON, D.C.
Special
Services
RECEIVE[)
OCT211 IO 54 AH ‘96
POST.Ai.
f:*'TTc:Y,I,:: Ii:'4
OFFICE
oi THESECilFr'fpy
Docket No. MC915-3
Fees and Classifications
ANSWERSOF THE OFFICE OF THE CONSUMERADVOCATE
TO INTERROGATORIES OF UNITED STATES POSTAL SERVICE
WITNESS: SHERYDAC. COLLINS (USPS/OX+T400-12-20)
(OCTOBER24, 1996)
The Office
of Sheryda
October
followed
of the Consumer Advocate
C. Collins
10, 1996.
to interrogatories
Each interrogatory
hereby
submits
the answers
USPS/OCA-TSOO-12-20,
is stated
verbatim
and is
by the response.
Respectfully
dated
submitted,
Attorney
Office
of the Consumer Advocate
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T400-12.
Please refer to your testimony
at page 23
lines
18-21.
a.
Please provide
your definition
of "implicit
cost coverage."
Using the definition
in (a), what is the "implicit
cost
b.
coverage"
of:
1.
stamped envelopes?
Please show all calculations
,with
citations
to figures.
i.i.
single-sale
stamped envelopes?
Please show all
calculations
and provided
[sic]
citations
for figures.
Please provide
underlying
calculations,
with citations
for
C.
all figures,
for the 289 percent
cost coverage on line 21.
A.
a.
"Implicit
used t:o describe
non-subclass
presort
cost
coverage
envelopes,
C.
plus
2 (proposed
divided
divided
mail
by 7.5
by cost
card
card
does not
requested
revenue
fee/additional
(postal
said
for
carrier
a
route
to have an implicit
200 percent.
My testimony
(postal
generally
calculation"
in the past,
was frequently
and I do not have the
19.7
is a term of art
For example,
of over
i-ii.
coverage"
the "revenue
of mail.
third-class
b.
cost
stamped
information.
per piece,
revenue
cost
address
for
per piece,
USPS-T-5C,
stamped
p. 10)
cards)
USPS-T-SC,
p.
10).
ANSWERSOF OCA WITNESS SHERYDAC. COLLIN:;
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T40O-13.
Please refer to your testimony
at page 24
lines
5-16.
a.
Does the denominator
of the fraction
that underlies
the 263
percent
cost coverage figure
include
all postal
card
manufacturing
costs?
b.
What percentage
of the manufacturing
costs of postal
cards
are [sic]
in fact included
in the attributable
costs of
postal
cards?
Please show all calculations.
C.
What percentage
of the manufacturing
costs of postal
cards
are [sic]
borne by categories
other than postal
cards?
Please show all calculations.
A.
a.
manufacturing
I believe
it
cost
does.
Witness
of postal
at page 106 and verified
cards
at Tr.
Needham identified
for
FY 1995 in her testimony
4/1113-14
shown in USPS-T-5A,
underlying
the CPA and are the ones used in this
2/251
see witness
Patelunas'
and my response
b.-c.
Since
and c. are inapplicable.
page 49.
that
same costs
Also
response
the
these
were the
These are the costs
calculation.
to OCA/USPS-T5-10
at Tr.
to USPS/OCA-T400-10(h).
I answered
part
a. affirmatively,
parts
b.
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T4Oll-14.
Please refer
to your testimony
at page 24
lines
16-19.
Please quantify
the "manufacturing
a.
costs"
to which you refer
on lines
16-17.
Please show all calculations
underlying
the 303 percent
cost
b.
coverage on line 19.
A.
a.
$4,353,000.
b.
53:3,16l2
-I4
353
USPS-T5B, p.
3
USPS-T5A, p.
49
$28,829
$28,829/440,529
.0654
=
USPS-T5C, p.
10
19.7/6.5
= 303%
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T400-15.
Please refer to your testimony
at page 29
[sic]
lines
15-21.
Is your statement
that witness
Needham
applied
a "price
the market can bear" pricing
approach to insured
mail
fees based solely
on witness Needham's response to
OCA/USPS-TE-38?
If your answer is negative,
please cite all
sources for your observation.
A.
I assume your
the portions
referenced
in the
to as "witness
insured
can
mail
bear”
fees.
are mentioned
are included
Needham's
response
witness
Needham m
that
pricing
approach
She applied
in my testimony.
-
lines
and of SSR-LR-109,
interrogatory,
is not my testimony
the market
is to page 2J,
of her testimony
is referred
It
citation
other
15-21.
which
if
are
in what
to OC?i/USPS-1'8-38."
applied
to the development
factors,
Yes,
several
a "price
of
of which
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS;
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T400-16.
Please refer
to your testimony
at page 31
line 5.
Please provide
your definition
of an "indemnity
analysis."
a.
What
is
the
citation
for
your
statement
that
"[nlo
indemnity
b.
analyses were performed
[sic]."?
If your response to (b) is a statement
from witness
Needham,
C.
please provide
a quotation
of the complete sentence from
which your statement
is derived,
along with the citation.
What is the proportion
of paid domestic
insurance
claims to
d.
insurance
volumes in FY 1995?
A.
a.
An example
USPS-T-22,
WI?-7, Docket
b.-c.
answer
The complete
states,
at this
analysis
Witness
information
the Postal
Service
registered
mail
insured
the
two services.
with
the higher
performed
Imail
with
sentence,
which
analyses
the
,and, therefore,
for
because
fact
quoted
is
may
is not
indemnity
a type
actual
it
I did, not
claims
that
this
indic:ate
that
claims
an appropriate
proxy
another
data.
had not
was, by necessity,
have regarding
Service
to
of indemnity
I also
of the difference
limits,
at page 28
were performed
that
uncertain.
When the Postal
the
analysis
is witness
4/1107,
Lyons did
prospective
value
statement
I did not mean to imply
case.
been done bu,t to highlight
higher
an indemnity
Tr.
"No indemnity
fee."
in 'this
to this
to OCA/USPS-TE-30,
of my testimony.
re-quote,
I consider
No. R90-1.
The citation
Needham's
arrive
of what
ori
to use
in security
between
has gained
experience
analysis
should
be
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-12-20
CONTINUATION OF ANSWER TO USPS/OCA-T4-16:
d.
I have not
calculated
this
figure.
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS:
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T400-17.
Is your statement
at page 32 lines
26-27
based on your claim that no information
has been provided
by the
Postal Service on the maximum paid Express Mail document
reconstruction
insurance
claim for the most recent fiscal
year?
A.
Mr.
.__--
My statement
Popkin
~__---
at Tr.
was based on witness
4/1270-71
and Chairman
Needham's
Gleiman
colloquies
at Tr.
~---
with
4/1286.
__,
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T400-18.
Please refer
to your testimony
a.t page 31
lines
10-12.
a.
Please (define "appropriate
data by insurance
indemnity
levels"
with specificity.
b.
Did the OCA ask for the information
in (a) thrclugh
discovery?
If your response is affirmative,
please provide
a citation.
C.
How would you go about obtaining
"appropriate
data by
insurance
indemnity
levels"?
d.
Can this information
be ascertained
from information
on the
record?
If not, please state the extent
to which such
information
is on the record
(with appropriate
citations),
and ide,ntify
all information
that you claim is not on the
record that you would need to derive "appropriate
data by
insurance
indemnity
levels."
A.
a.
data
similar
"A,ppropriate
to that
at 4-5 and Docket
this
is gathered
b.
Yes.
USPS/OCA-T400-16.
by insurance
shown in Docket
No. MC96-3,
data
C.-d.
data
See Tr.
No. R90-1,
SSR-LR-109
routinely
indemnity
USPS-T-22,
at 3.
by the Postal
to
is
WP-7
I assume that
Service.
4/1106.
See my answer
levels"
(a) above and to
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS;
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T400-19.
Please refer to
line 2. Please identify
all of the
conclusion
that "somewhat lower fees
contribution
to institutional
costs
to improve its competitive
position."
A.
My statement
current
and proposed
higher
than
indicated
that
various
misplaced.
Postal
Service
This
the
___--___
would
large
security
studied
should
greater
benefit
bu:siness
-__--
being
to lower
use of postal
individual
mailer
than
and carrier
stolen
would
or
claims
be the
the
insurance
"Aunt
and the Postal
fees,
the
thereby
and mail
Minnie"
to be
case
In such a case,
measures.
be able
the
lost,
cause indemnity
to fee revenues
would
has
and may soon be implemented.
parcels
added security
Service's
are considerably
to improve
in turn,
these
Postal
measures
This,
without
mail
the
Service
to fewer
in relation
insured
that
The Postal
lead
smaller
for
fact
fees.
are being
should
encouraging
fees
competitors'
accountability
This
was based on the
page 29 line 18 to page 30
facts that inform your
might still
provide
a
and allow the Postal Service
services.
parcel
Service.
~_-
mailer,
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS;
TO INTERROGATORIESUSPS/OCA-T400-12-20
USPS/OCA-T400-20.
a.
Is it your testimony
that postal
card customers should not
incur the same postage and stationery
costs as private
postcard
mailers?
If your answer is no, please explain.
b.
As a general principle,
is it your view that identifiable
costs attributable
to a hypothetical
product
be subsidized
by other products
that do not share characteristics
that
contribute
to the hypothetical
product's
attributable
costs?
Please explain
your response.
A.
a.
same rate
of postage.
Frequently,
private
glossy
coating
printing
these
However,
post
would
weight
counsel,
I will
"hypothetical
for
and "free
products"
stock
post
telephone
stationery"
including
cost
.-
Attributable
stationery
of post
~-_____-_-
cost
pictures
"post
postal
of
between
OCA and Postal
substituting
cards"
for
"postal
"other
"characteristics".
at pages 21-25
cards
per piece
and manufacturing
All
costs.
question
for
and
multi-color
available.
call
this
product“,
to USPS/OCA-T400-10(h),
cards.
is
pay the
may differ.
I assume that
As I show in my testimony
answer
color
on stationery
answer
cards
costs
have full
card
have a bearing
and postal
stationery
Also,
Pe.c a clarifying
b.
cards"
cards
on one side.
and varying
Service
Post card
Not necessarily.
for
costs,
are not
postal
is
and state
subsidizing
cards,
one-half
cards.
--
the
in
ANSWERSOF OCA WITNESS SHERYDAC. COLLINS
TO INTERROGATORIESUSPS/OCA-T400-12-20
CONTINUATION OF ANSWER TO USPS/OCA-T400-20:
Part
unable
b. was framed
to state
a general
because,
as I point
processing
costs
far
outweigh
the
out
However,
as a hypothetical.
principle
concerning
in the previous
this
paragraph,
of private
cards
(in
comparison
stationery
costs
of postal
cards.
I am
hypothetical
the higher
to postal
cards)
DECLARATION
I,
Sheryda
the answers
States
declare
to interrogatories
Postal
knowledge,
C. Collins,
Service
information
are true
under penalty
USPS/OCA-T400-12-20
and correct,
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)
date
of r'ecord
of~the
served
in this
special
proceeding
rules
.&Q#&.+.P%
SHELLEY S. DREINSS
Attorney
Washington,
DC 20268-0001
October 24, 1996
;;
the foregoing
in
of practice.