,,--
POSTAL RATE COilHlSCiON
OFFICEOFTHE SEC;RETARY
SPECIAL SERVICES REFORM,
I
1996
Docket
No. MC96-3
MOTION OF THE UNITED STATES POSTAL SERVICE
FOR RECONSIDERATION
OF PRC ORDER NO. 1129
OR, IN THE ALTERNATIVE,
FOR SEVERANCE OF CONSIDERATION
OF THE NASHUA/MYSTIC
IN A SEPARATE PROCEEDING
(August 16, 1996)
For the following
requests
1996),
reconsideration
which
grants
Lab (hereinafter,
consideration
Service
proceeding
another.
the classes
/ ‘-.
for consideration
39 U.S.C.
’ Dow Jones
v. United
---
decision
of certain
Alternatively,
to initiate
the Postal
a separate
discrete
Postal Service,
files a formal
in rates and fees, the Commission
on the Postal Service’s
in the instant
special
services
any changes
of mail, nor the fees and terms
States
Color
.to include
when the Postal Service
Request
does not encompass
and subclasses
No. MC96-3
its authority
changes
Service’s
Inc. and Mystic
8,
of that BRM proposal.
93622(b),
seeking
goal of the Postal
the fees and terms
Photo,
Docket
exercise
respectfully
Order No. 1 129 (August
Reply Mail (BRM) proposal.
the Commission
This Request
Postal Service
District
to expand
to issue a recommended
The narrow
change
with
States
of Nashua
that the Commission
In accordance
is required
the Motion
“Nashua/Mystic”)
requests
with
the United
of Postal Rate Commission
of a Business
classification
Request
reasons,
PROPOSAL
Request.’
proc:eeding
is to
and ‘to eliminate
to the ral:es
or terms
of other special
for
rservices
656 F.2d 786, at 790 (D.C. C,jr. 1981). x-5
I---
not specifically
addressed
in the Request
at page 3, “[wlhile
special
services
considering
by the Postal Service’s
for which
other reforms,
proposals.*
the Postal Service
reforms
” it included
might
As further
recognizes
be advisable,
indicated
thalt there
may be
and is a,ctively
none of those
matters
within
has further
indicated
that
the scope of
its Request
More specifically,
comprehensive
United
States
the Postal Service
review
of Business
Postal Service
Reply Mail (BRM) is underway.
On Plans For Business
a
Statement
Reply Mail Reform
(July
Of
19,
1996).
In this regard,
at page 10 of its Order No. 1 129, the Commission
statecl that:
[tlhe prospect of having access to more BRM cost and operational data in a
subsequent
case would support deferring consideration
of Nashua’s proposal if
it were coupled with some assurance that there will be a relevant filing in the
foreseeable
future.
In reaching
this conclusion,
the Commission
emphasized
that:
the Postal Service has promised only that it will be in a better position “to take
appropriate
action” at the end of the year, action which may or may not
involve a filing with the Commission.
This contrasts with the zsituation in
Docket No. MC951
in which the Commission
refused UPS’s request to
include reform of the Priority Mail rate structure.
An important
factor in that
decision was the Commission’s
belief that issues relating to the structure
of
Priority Mail would be reviewed in a future docket, based on imentions
expressed by the Postal Service to make a relevant filing in the near future.
See Docket No. MC95-1,
PRC Order No. 1064, citing Tr. l/30.
PRC Order No. 1 129 at IO.
’ Docket
No.
Recommended
MC96-3,
Decision
Request
Of The
On Special Service
United States
Postal
Changes, at 1.
Service
For
A
6
I--
@ g ,r
-3In Mail Order Association
406,
at 423
of America
(D.C. Cir. 1993),
v. United
the D.C. Circuit
States
Postal Scarvice
II
Court of Appeals
explicitly
2 F.3d.
held that:
a ratemaking
is inevitably circumscribed
to some extent by the parameters
of the Postal Service’s request; it is not an open invitation for the Commission
to propose wide-ranging
and unrelated changes in classificationis.
To open up
these proceedings
to extraneous
initiatives would undermine the timeliness
concerns that govern ratemaking.
Similar,
if not identical,
proceeding.
In this respect,
acknowledging
39 U.S.C.
authority
never intended
proposal
3622
involving
by the statutory
to control
and
request
pertinent
when
by a Postal Service
to interfere
matters
the administration
that there are practical
and determination
whether
scheme,
understandable
Postal Service’s
into sometlhing
pursuit
request
under
of its
and legal limits
on the
it was
of an extraneous
under 39 U.S.C.
with the formulation
of the Postal Service’s
proposal,
or not a foray
a principle
inclination
into unwanted
of comity
services
territory
ought to influence
to investigate
a matter
Iof postal
§§
policy
operational
is circumscribed
the Commission’s
that is unrelated
to the
but that is raised by a participant.
At page 9 of Order No. 1 129, the Commission
the special
in MOAA,
Iof the instant
and objectives.
In any event,
perhaps
initiated
has the potential
assessment
capabilities
believes
This is particularly
in a proceeding
disposition
to pursue classification
to turn a Postal Service
to be.
and 3623
authority
as well as prerogatives
the Postal Service
Commission’s
ought to control
in light of the discussion
the Commission’s
§3623(b),
dockets,
considerations
are discrete,
self-contained
emphasized
services,
that
there is little
“since
‘all of
procedural
-4efficiency
While
to be lost by considering
this might
another
Depending
MC96-3
the context
settle the question
to consider
-- where,
number
In particular,
of the case under 39 U.S.C.
concerns.
initiated
objects
to engraft
to narrowly-defined
Request
has extracted
an explicit
to be no principle
to deny the requests
surely
relation
an infinite
variety
Second,
r”.
--
should
the case -- control
has several
not
the
conl:lusion
promise
in MOAA
proceeding
by the Postal Service
proposal
serious
will be
of any intervenor,
from the Postal Service
in the near future.
on which
the Commission
can be expected
situated
services
similarly
changes
to Nashua/Mystic.
which
or mail classes
to be potentially
the Order appears
No.
services
to that proposal
of classification
were not deemed
Docket
relevant
of intervenors
to all of the other special
No. 1 129,
special
rate and classification
unless that intervenor
there appears
be expanded.
onto the Court’s
classification
iproceedings
it should
0 3623.
any unrelated
Commission
Request,
determination
to expanding
to consider
initiate
of litigating
expandling
discrete
this administrative
that the scope of a discrete
in response
expanded
limited
could justify
of equally
in this docket,”
feasibility
of PRC Order No. 1 129, the Postal Service
First, the Order appears
the condition
service
the case should
this rationale
as here, the Postal Service
Upon review
special
of the administrative
of whether
an unlimited
proposals.
discrete
of the Postal Service’s
on the circumstances,
classification
status
be a valid assessment
issue within
not, by itself,
another
could
for postal
to act
in
ulntil PRC Order
at issue in this proceeding.
to signal a disregard
If so,
There is
be plroposed
which,
to
management’s
prerogative
to achieve
and classification
Postal Service
was,
specific
changes.
Moreover,
is disappointed
until August
operational
8, 1996,
in view
a comprehensive
Reply Mail, one goal of which
authority
from the Board of Governors
classification
reform
proposals
what
No. MC78-2,
the Governors
was then third-class
reconfiguration
proceeding.3
was not consistent
that their review
internal
to formally
in --I
MDAA
inject
management
is to determine
the Commission
adopted
whether
pursue
itself
rate
the
into what
review
of
to Irequest
specific
rate and
to the fact that in
with the Postal Service’s
decisions
to reconfigure
the fact that the proposed
that the Governors
of recommended
points
a recommendation
mail, notwithstanding
It is noteworthy
would
limited
in the near future.
At page 9 of Order No. 1129,
Docket
of the reasoning
that the Commission
Business
goalsthrough
and revenue
expressed
Request
in that
the view
in that case
under 39 U.S.C.
§ 3625
ought not be impeded by the Commission
expanding the docket and delaying
the processing of what should be a straightforward
matter, to encompass
other proposals that are not essential to what the Commission
was requested
to consider
.4
3 The Commission’s
anecdotal reference to Docket No. MC78-2 fails to acknowledge
its rather contentious
dispute with the Governors on the classification
issues in that
proceeding.
No anecdotal history of Commission classification
recommendations
which
deviated from Postal Service Requests would be complete without reference to the
unpleasantness
surrounding
the ultimate resolution of the Docket No. R90-1 Public’s
Automation
Rate proposal.
If anything, both anecdotes serve as reminders th,at much
care should be taken to allow classification
reform proposals to develop in a manner
which best affords postal management the opportunity to fully consider and review their
operational
and financial consequences.
4 Decision
Of The
Governors
Of The
United
States
Postal
Service
/-’
.--..-_
--
~-
-__-
Regarding
(continued...)
-
More recent
history
accommodating
thoroughly
suggests
approach
consider
that the Commission
to responding
significant
more recent
thoroughly
the operational
review
that has worked
classification
No. R94-1
reform
proposals,
reform
review
No. R94-l
process
it was known
which
to postal
when
took
expedited
proposals
would
at l-4.
into account
parcel service
4 (...continued)
Recommended
Decision
(December
4, 1979).
be included
considered
intervenor
In Docket
management’s
ongoing
as a basis for deferring
Of The Postal
and R90-1.
filed in Docket
in Docket
No. R94-1
Reform
to give weight
classification
proposals
consideration
Rate Commission
that
in Docket
reform
PRC Order No. 1064
No.
I.
in the
in that docket.
consideration
in the
classification
in Classification
plans to pursue
No. MC95-1,
of
was engaged
internal
it appropriate
classification
is one
mail classification
in the Request
by the Postal Service
management’s
it evaluated
defined,
resulted
reforms
than to the Commission’s
that the Postal Service
ultimately
need to
resolution
Nos. MC78-2
of intervenor
yet then only vaguely
the Commission
PRC Op. R94-1,
1995)
when
classification
Nevertheless,
in Docket
to consideration
There was no promise
specific
future
approach
of various
contentious
‘to
prior to litigation,
to management’s
aspects
one need look back no farther
comprehensive,
MC95-1.
and financial
and
management
proposals
of deferring
issues than was experienced
Docket
relatively
practice
reform
well to avoid the unfortunately
As an example,
a productive
to the need of postal
classification
The Commission’s
has found
See,
(June 30,
of reform
of Priority
Of
Mail
On Bulk Third-Class
Mail
/-
-7classification
proposals
Commission
saw the wisdom
classification
reform
of Classification
252.
of interest
To the extent
commitment
II, Docket
between
action
consideration
which
No. MC96-I.
of Commission
its commitment
to explore
was sufficient
for the Commission
Priority
Mail reform
.-- and the commitment
On Plans For Business
the ongoing
Business
review
exchange
of Business
changes
the Postal Service
exchange
of pre-decisional
action
became
the subject
depends
expedited
at V-251-
upon a
the Postal Service
finds
parcel service
strong
reform5
consideration
in its July
--
of
19, 1996,
to have a chilling
Reply Mail by postal
be affected
on the future
effect,
management,
the Postal Service
who would
5 See,
Docket
No. MC95-1,
Request
Recommended
Decisions On Classification
Mail, at 3-4; and Tr. l/30.
r-
rate and
See, PRC Op. MC:95-1,
reflected
may be contemplating.
views
the
Reply Mail Reform.6
of ideas between
Reply Mail customers
of nonprofit
to avoid premature
PRC Order No. 1 129 also can be expected
on the current
Likewise,
ultimately
by the Postal Service,
which
Statement
Parcel Service.
No. MC95-1,
that deferral
to future
similarities
of deferring
in Docket
Reform
to United
not only
but also on
and the universe
by and interested
A fully robust
of BRM among
of
in any
and candid
postal
managers
Of United
States
Postal
Service
For
Reform Of First-, Second-., and Third-Class
6 So as not to preempt the prerogatives
of the Board of Governors, which has yet to
be asked to consider authorization
of the filing of a Business
Reply Mail rate or
classification
case at the Commission,
the Statement could not represent categorically
that such a case will be filed.
So as not to pre-judge the outcome of the internal
management
review of BRM, the Statement also stopped short of guaranteeing
that
such authority will be requested.
064902
r-.
-8would
in all likelihood
the subject
Nashua’s
be inhibited
of discovery
concerns
in connection
to litigation
and other
BRM customers
litigants
in Docket
No. MC96-3.
interested
the ‘conversion
parties
far exceed
postal
management.
Docket
intervene
those
No. MC96-3
Injection
could
unnecessarily
promise
and the Commission’s
-..-------
of
the Postal
who must now choose
whether
to become
to litigation
associated
with
with
status
“being
participation
heard”
in informal
parties
some
in litigation
dialogue
who have otherwise
to do so now in order to protect
parties
coluld require
with
Reply Mail issues at this late date in
could be at stake.
now stand,
procedural
considerable
,/--
elevation
be
Accordingly,
chosen
interests
not to
they have
it seems that every
at risk of exhausting
their limited
effort
resources
or prematurely.
As matters
MC96-3
Moreover,
could
between
of Business
be made to avoid putting
or musing
will chill exchanges
well require
in this proceeding
had no reason to expect
should
associated
scribbling
this issue.
of the matter
to incur expenses
which
with
status
Service
In addition,
if every preliminary
there is incongruence
schedule
-- which,
of being brought
decision
without
between
the injection
to a conclusion
to open the proceeding
reclassification.
The Nashua/Mystic
BRM categories,
but possibly
proposal
also First-Class
the current
No.
of BRM, shows
in an expediited
to consideration
has implications
Docket
manner
--
of BRM
not only for existing
Mail as well.’
’ At page 11 of its Order, the Commission
observed that Nashua has disavowed
an
intent to litigate issues of the appropriate attributable cost and rate for automated BRM.
(continued...)
__--
,I-.
-9In opposition
to the Nashua/Mystic
Service
and the OCA expressed
Docket
No. MC96-3
discovery
initiated
the concerns
voiced
practice
have upon the current
contentious
in the near future.
resources
to deal with
The Commission
response
Business
because
of
particularly
if
Given the breadth
of PRC Order No. 1129,
be borne out in
the Postal Service,
in
the need to assemble
Reply Mail issues,
to discovery
has indicated
schedule,
or protracted.8
had no reason to anticipate
unrelated
and expeditious
litigation
and the OCA could
In addition,
both the Postal
that expansion
since the issuance
by the Postal Service
for this Docket,
For Enlargement,
about the impact
by Nashua/Mystic
organizing
efficient
concern
on BRM issues becomes
of discovery
motion
could
Motion
the usual stanclard
is likely to be difficult
of
to achieve.
that:
if, during the course of Docket No. MC96-3, the Postal Service should
demonstrate
that Nashua’s proposal cannot be adequately conisidered vvithout
a wide-ranging
reexamination
of the structure of BRM fees, and that such
consideration
must await the outcome of its current investigations,
the Nashua
proposal can be severed and considered in a separate phase o-f this docket.
PRC Order No. 1129,
respectfully
proceeding.
requests
at 11.
For the reasons
that the Commission
While the comprehensive
stated
reconsider
review
above,
the Postal
its decision
of BRM is underway
Service
to enlarge
this
by
’ (...continued)
That declaration of intent provides little solace to the Postal Service in light of the wideranging interrogatories
filed by Nashua/Mystic
in the past week alone.
,,.--
* Opposition
Of The United States Postal Service To Nashua Photo Inc. And Mystic
Color Lab Motion To Enlarge Scope Of Proceeding For Consideration
Of Classification
Modification
With Respect To Business Reply Mail (July 24, 1996); Office Of The
Consumer Advocate Response To Motion Of Nashua Photo And Mystic Color Lab To
Enlarge Scope Of Proceeding
(July 25, 1996).
004904
- 10 management,
the Postal Service
Nashua/Mystic
appropriate
purpose
proposal
should
in a Commission
of BRM reform
believes
be deferred
proceeding
initiating
a BRM reform
authority
under 39 U.S.C.
to wag the Docket
reconsider
proceeding,
No. MC96-3
initiated
docket,
should
a separate
to address
without
the risk of having
delayed
initiation
under
of consideration
53623(b),
Such an approach
the resolution
can exercise
would
Request
of non-BRM
UNITED
the Commission
permit
-..___
--
the Commission
affec:ted
schedule,
by the
submitted,
STATES
POSTA,L SERVICE
By its attorneys:
Daniel J. Foucheaux,
Jr.
Chief Counsel, Ratemaking
,I’--
BRM proposal
on the current
matters
to
of BRM issues.
Respectfully
475 L’Enfant Plaza West, S.W.
Washington,
D.C. 20260-l
137
(202) 268-2998;
Fax -5402
August 16, 1996
of
its
the BRM “tail”
decline
of the Nashua/Mystic:
the Postal Service’s
or
such a proceeding.
Should the Commission
a review
first,
that it has no intention
avoid the risk of allowing
based on its authority
docket.
declares
for the
comes
time the Commission
to initiate
of the
(a) such time as is
rate case, whichever
at which
“dog.”
consideration
by the Postal Service
formally
should
to undertake
in the instant
and the parties
§3623(b)
the Commission
its decision
create
until either
or the next omnibus
(b) until such time as the Postal Service
In any event,
that Commission
004905
- 11 -
CERTIFICATE
I hereby
certify
participants
that
of record
OF SERVICE
I have this day served the foregoing
in this proceeding
of Practice.
in accordance
,--;
with
T. Tidwell
upon all
section1 12 of the Rules
?%A
2 W-Y
Michael
475 L’Enfant Plaza West, S.W.
Washington,
D.C. 20260-I
137
(202) 268-2998;
Fax -5402
August 16, 1996
document