.
.
ORIGINAL
BEFORETHE
POSTAL RATE COMMISSION
WASHINGTON,
D.C. 20268-o&
OPPOSITION
CONSUMER
The United
Advocate
FCST&LRATECOWMISSIOH
OFFl~~0~ THE,jECREThRY
Docket
No. MC96-3
OF UNITED STATES POSTAL SERVICE TO OFFICE OF THE
ADVOCATE
MOTION UNDER 39 U.S.C. § 3624(c)(2)
FOR
DAY-FOR-DAY
EXTENSIONS
(August 22, 1996)
States
motion
OCA’s motion
4 35 PI ‘%
22
I
I
SPECIAL SERVICES REFORM, 1996
004989
REcEIVE:~
Postal Service
hereby
oppose
under 39 U.S.C. 0 3624(c)(2)
for sanctions
the Office
for day-for-day
is not well founded
of the Consumer
extensions.’
and must be denied
The
for several
reasons.
I.
BACKGROUND.
On June 7, 1996,
Decision
on various
mail, return
the Postal Service
special
receipts,
service
insured
filed its Request
proposals,
mail, postal
including
No changes
in rates for the classes
for other
special
provided
full base year and test year costs and related
services
classes’ and subclasses
methodology
On June
Postal Service
reflected
were proposed.
services
in its Cost and Revenue Analysis
“to submit
the Commission
issued
cost presentations
boxes, certified
mail, and special
and subclasses
Nonetheless,
of mail and all special
18, 1996,
post office
cards, registered
delivery.
for a Recommended
of mail or in the fees
the Postal Service
documentation
for all
using the standard
report
cost
(“CRA”)
Order No. 1 120, directing
that reflect
still
the Commission’s
’ Office of the Consumer Advocate Motion Under 39 U. S. C. 5 3624(tJ[‘(n$
Day Extensions
in the Procedural Schedule and the Ten-Month Dacisbnal
August
12, 1996 (“OCA Motion”).
i.he
Docket
Deadl,
~FrlFLJ
AU6 2 2 19%
h
No. R94-1
produce
attribution
new versions
T-1 by July 5, 1996.’
reconsideration
comparison
of Exhibits
Service’s
On June 28, 1996,
Docket
19, 1996,
motion
with the exception
Newspaper
the PostGal Service
J and of Exhibit
the Postal Service
12, 1996,
Association
Further
issued
and directing
cost methodology
subclass
Motion
of the United
C of IJSPSfor
providing
Decision.3
denying
the Postal
to provide
5, 1 9!36.4
methodology
a
CFlA methodology
the Postal Service
to provide
to
costs,
On .August
if the
in all respects,
costs.5
American
of America
filed comments
to Reconsider
to extend
Bankers
to Provide
3 Motion of the United States Postal Service
and Partial Response, June 28, 1996.
4 Order Denying
1996.
Recommended
offering
13, 1996,
Service
response,
by August
the OCA filed its motion
the Postal
18, 1996.
moved
Order No. 1126,
using the Commission’s
of single
On August
2 Order Directing
No. 1120, June
5 Statement
2, 1996.
through
filed a statement
so requested,
On August
No. R94-1
for reconsideration
the Postal Service
Commission
ordering
under the Postal Service’s
the Commission
under the Commission’s
3624(c)(2).
USPST5A
of Base Year 1993 costs
On July
2, 1996,
specifically
of Order No. 1 120, but also filed a partial
and the Commission’s
costs
methodology,”
under section
Association
stating
Additional
that “the conditions
Cost Presentations,
for Reconsideration
Order No.
States Postal Service
1120,
Concerning
and the
Order
of Order MO. 1120,
Order Neo. 1126,
July
79,
Order No. 1126, Augusi
@04991.
-3appear fully satisfied
II.
for imposition
of sanctions
pursuant
to Section
3624(c)(2).“@
THE POSTAL SERVICE HAS FURNISHED SUFFICIENT INFORMATION
TO
ALLOW THE COMMISSION
AND THE PARTIES TO FULLY EVALUATE THE
LIMITED PROPOSALS PRESENTED.
With its initial filing,
Year 1996
special
would
before
services.
allow
comparisons
examination
services
of the information
Moreover,
proposed
needed
with
of Postal Service
Year 1993.
As the Postal Service
costs
and cost coverages
cost coverages
Postal Service
would
adl mail classes
and after
does not agree that a comprehensive
for a proper
in this docket,
its initial
for reconsideration,
comparison
under the differing
which
evaluation
filing
of the
clearly
provided
all
for such an examination.
its motion
costs
with the filing
and among
and Test
of mail and all
for base year and test year before
the Postal Service
changes
and subclasses
between
of all rates and fees is required
circumscribed
full Base Year 1995
data were presented
of cost coverages
and special
Although
presented
and after rates costs for all classes
Cost and revenue
and subclasses
rates.
the Postal Service
versus
Commission
stated,
methodologies
in this docket
the Postal Service
costing
ratios reflecting
could
be applied
to indicate
what
look like under the Commission’s
has stated that it will provide
costs
provided
methodologies
a
folr Base
the differences
in 1993
to the Postal Service’s
comparable
methodology.
in this docket
costs
and
Also, the
incorporating
the
’ Comments of the American Bakers Association
and the Newspa’per Association
of
America on “Statement
of the United States Postal Service Concerning
Order No.
1126, n August
13, 1996. This Opposition
should also be considered
an opposition
to ABA’s and NAA’s Comments.
004992
-4Commission’s
It would
methodology
be surprising
application
except
if any changes
of the single subclass
the Commission’s
recommended
Both OCA in its motion
the Postal Service
4.’
Accordingly,
information
objective
subclasses
needed
analysis
has refused
“to furnish
to provide.
to do so.
result from
whatsoever
on
needed to compare
incorrect.
no basis for imposition
and the parties
of costs
fail ‘to address
what
The OCA’s statement
the tools
is thus demonstrably
comparison
services
would
have any effect
in their comments,
willing,
by the Commission
and special
which
if req,uested
decision.
there is simply
of an extensive
would
and ABA-NAA
cost coverages”
costs,
in cost coverages
has, and is further
that the Postal Service
3 and R94-1
for single subclass
MC96-
See OCA Motion,
of sanctions
to accomplish
and cost coverages
where
at
the
their declared
for all c18asses,
has been made available.
’ OCA’s further argument concerning
Ramsey pricing is puzzling.
On the one hand
according to OCA, the Commission
needs to compare cost coverages for all classes
and subclasses
and special
services
so that it can apply the “principle”
of
“simultaneous
markups”
as in Ramsey pricing in an omnibus rate case. OCA states
that Ramsey prices “can only be accomplished
if all rates are set simultan~eously,
in
relation to one another.”
On the other hand, the OCA admits that “the Service is not
espousing
Ramsey pricing in this docket”
because “[ilf it were “this would be a
ld. OCA then goes on to say that it never has agreecl with the
general rate case.”
Postal Service’s position on demand pricing. The Postal Service does not know how
to respond to this circular and confusing
argument.
004993
r-
-5Ill.
EVEN IF THE POSTAL SERVICE PRODUCES COSTS USING THE
COMMISSION’S
METHODOLOGY,
A SPONSORING WITNESS WILL STILL
BE REQUIRED.
Neither
the OCA nor ABA-NAA
issue of who is supposed
costing
methodology.
v. United
however,
that under MOAA,
approach
under section
thus would
an interested
IV.
any costs
information
presented
In fact, they fail to even mention
America
costing
States Postal Service,
3624(c)(2)
would
serve no useful
party to produce
requires
nothing
The obvious
such costs
the
using the Commission’s
Mail Order Association
of a particular
it on the record.’
toward
solution
and sponsor
resolving
of
It is (clear,
that the proponent
and rationalize
contribute
purpose.
addressing
2 F.3d 408 (D.C. Cir. 1993).
due process
must fully articulate
Sanctions
this issue and
is for the Commission
a witness
defending
or
them.
SANCTIONS
UNDER SECTION 3624(c)(2)
ARE NOT AUTHORIZED
WHERE THE
POSTAL SERVICE’S INITIAL FILING WAS IN FULL COMPLIANCE
WITH THE
COMMISSION’S
RULES, NECESSARY DATA HAVE BEEN PROVIDED, A’ND NO
DELAY HAS BEEN SHOWN
The extraordinary
carefully
respect
relief made available
circumscribed
to requests
in narrowly
-
to sponsor
offer any helpful
defined
by Congress.
3624(c:l
has been
First, such relief is only available
made under section
circumstances.
under Section
3622.
Second,
It must be shown
with
the relief may be had only
that the Postal Service
has
* The ABA-NAA
suggestion
that the Postal Service
produce
costs
using the
Commission’s
cost methodology
and then sponsor a witness attacking those costs is
certainly novel. Unfortunately
for ABA-NAA,
it also runs afoul of the APA requirement
that “the proponent
of a rule or order has the burden of proof.”
5 U.S.C. § 556(d)
(emphasis
added).
If the Commission
takes the Postal Service up on its offer to
produce “Commission”
costs except for single stibclass costs, the Postal Service plans
to provide these costs in a library reference, without a witness to sponsor them.
064994
-6unreasonably
a reasonable
delayed
consideration
time to a lawful
may extend
or speculative,
the lo-month
actions.
Even assuming
the present
filing
39 USC.
made, or can make, a showing
specific
Docket
No. MC78-1,
period
in recent
delayed,
or that any case preparation
Service
Practice
total
with
requires.
its initial
and estimated
The costing
In particular,
It does not specify
were available
time,
from the
with
respect
no party
has definitely
a
3624(c),
let
unlike in
this section
or other procedural
to
has
caused
by section
For example,
invoking
has made a
event has been
much less “unreasonably
presentations
were in full compliance
accrued
specific
has been slowed.
has not delayed,
filing
and definite.
resulted
we do not concede,”
pleadings
that any cross-examination
and Procedure.
actual
which
3624(c)
of this case, as required
argument
of this case.
to have directly
that the Postal Service
credible
consideration
the showing
only for a limited,
has acted unreasonably.
no party
The Postal Service
P
3623,
delay in the consideration
alone that the Postal Service
Furthermore,
within
§ 3624(c)(2).
that relief under Section
under section
to respond
it must be well-founded
that is, by one day for each day of delay shown
Postal Service’s
by failing
order of the Commission.
of delay may not be nebulous
The Commission
of the rate request
Rule 54(f)(l)
costs for various
any particular
manner
presented
delayed”
by the Po:stal
with the Commission’s
and (2) requires
years.
Rules of
presentation
of
That is all the rule
of presentation
or any particular
’ The Postal Service is aware that the Commission
has concluded
otherwise
in the
past. See Docket No. MC78- 1, Order Declaring Status of Proceeding Pursuant to 39
U.S. C. § 3624/c),
Order No. 280, May 18, 1979.
(-
-7costing
methodology.
Further,
all special
narrow.
costs
were presented
services,
even though
The Commission
Of course,
conduct
anyone
costs
and cost coverages
or the Commission
the Postal Service
else’s ability
are quil,e
response
wish to
has, providecl
the
to Order INos. 1 1210 and
to use the available
inlformation
and
their own analysis.
Moreover,
which
analysis,
olf mail as well as
made in this docket
can compare
to do so. The Postal Service’s
has not impeded
and subclasses
if other parties
their own single subclass
data necessary
1126
the proposals
and the parties
using this information.
propose
for all classes
the Postal Service
demonstrated,
services
affected
Commission’s
to produce
subclass
by this case regardless
a “Commission
of whether
was used. ”
response
version”
adopt
of costs without
a different
that the Postal Service
costing
to Order No. ‘I 120,
in the special
the Postal Service’s
The Postal Service
The fact that the Commission
that the Postal Service
argument
a partial
for the most part, only minor differences
cost methodology
analysis.”
provided
approach
has “unreasonably
also has offered
incorporatinlg
or certain
or the
the single
part:ies may prefer
does not support
delayed”
corlsideratioln
an
of its
” The cost comparisons
presented by the Postal Service in response to Order No.
1120 used Base Year 1993.
As the Postal Service pointed oLlt, however,
ratios
developed from those data could be applied to the costs and cost coverages presented
in this case to demonstrate
how costs and cost coverages would appear under the
Commission’s
methodology.
r‘,
” The Governors of the Postal Service have rejected single subclass
expressed an intent to continue to oppose this costing approach.
costs
and have
-
004996
;-.
-8Request. ”
A finding
Commission
could
Thus,
produce
conclusion.
the continued
is proceeding
existence
according
continue
has repeatedly
to proceed
dispute
recommended
the Postal Service
to provide
of published
the Commission’s
single subclass
R94-1,
conforming
and MC96-2.
to the Commission’s
same reality
in disputed
applies
and where
to perform
the Commission
would
method
to its scheduled
over correct
itself is ideally
data which
attempt
to replicate
did so in Docket
Service
any delay.
The
the difference
in results,
where
have been madse available
to perform
Nos.
analysis
where
difference
positioned
of
requiring
force in this instance,
analysis
attribution
without
did not require
yield a de minimis
and,
in past cases that,
The lack of a Rstal
the requested
the
decis’ions
The Commission
preferred
in equal or greater
methodologies
data necessary
sponsor
MC95-1,
costs.
where
to sc:hedule,
demonstrated
of a fundamental
analyses
unwarrainted
under its methodology,
it is able to produce
R90-1,
costs,
costs
why this case cannot
The Commission
city carrier
delay is particularly
and sponsor
it is clear that the hearing
there is no reason
despite
of unreasonable
the analysis
the
to all,
and
it on the record.
” The conclusions
of Order No. 280 are inapposite.
In that instance, the Commission
found that numerous changes in the testimony
of Postal Service witnesses
as well as
the Postal Service’s failure to produce certain information
contributed
to delay in the
hearings schedule and frustrated the attempts of parties to prepare counter-proposals
and rebuttal testimony.
See Order No. 280, at 25 and 27. Neither OCA nor ABANAA have argued credibly in their papers requesting sanctions that they are unable to
prepare for hearings or that they have been hampered in preparing whatever testimony
they might submit.
In fact, OCA has filed preliminary estimates of the amount of oral
cross-examination
it has for the Postal Service’s witnesses.
Office of the Consumer
Advocate
Notice of Expected Amount of Oral Cross-Examination,.
August
14, 1996.
---
00499:
-9In this regard it again must be emphasized
question
does far more than merely
Rather, the Commission
available
again has requested
or defended
decision,
which
supports
the reasonableness
required
Service’s
conduct,
the Commission
Postal Service’s
Postal Service,
methodology
unsound
develop,
the passage
to invoke
legitimate
document
favors,
3624,
response
in these
of failure
to respond
to a lawful
application
of 39 U.S.C. § 3624(c)(2)
proceeding
has not been delayed.
by the !Postal
circumstances
act, made in response
that the Commission,
subclass
rejects
as
by t!he Congress
to respond
in
not be lawful.
does not believe that the Postal
Commission
be warranted
order.
extension
of this case
Nor would
in circumstances
where
CONCLUSION
Sy declining
to the
and not the
on the record the single
to Order Nos. 1 120 and 1 126 authorizes
as a result
to the order.
and the Postal Service
In light of the above, the Postal Service
Service’s
3624
was not contemplated
and would
such methods,
necessitate’d
or disciplinary
insistence
Such a purpose
of section
Section
and sponsor
that the Commission
and invalid.
response
but
The MOAA
and defend
of any delay actually
as a punitive
continued,
to sponsor
take publicly
by the Commission,
on the record.
of the Postal Service’s
any attempt
only be interpreted
created
order in
of data #or information.
that the Postal Service
by the Commission
Given the lack of a showing
V.
the provision
data, and apply to that data algorithms
never sponsored
could
request
that the Commission
in full to Order Nos. 1 120 and 1 126, the Postal
the
I-
-lOService
intends
established
no disrespect
by the Act.
of the Commission’s
disputed
costing
or to the ratemaking
Rather, this is a disagreement
rules, and over the appropriate
structure
over the appropriate
entity
to produce
scope
and :sponsor
methodologies.
For all of the reasons
the OCA motion
to the Commission
cited herein, the Postal Service
respectfully
requests
be denied.
Respectfully
UNITED
submitted,
STATES POSTAL SERVICE
By its attorneys:
Daniel J. Foucheaux, Jr.,
Chief Counsel, Ratemaking
,’
&LL/a?
Susan M. Duchek
475 L’Enfant Plaza West, S.W.
Washington,
D.C. 20260-l
137
(202) 268-2990;
Fax -5402
August 22, 1996
&=-Jz
that
004999
CERTIFICATE
I hereby
participants
certify
of record
that
OF SERVICE
I have this day served the foregoing
in this proceeding
in accordance
with
of Practice.
Susan M. Duchek
475 L’Enfant Plaza West, S.W.
Washington,
D.C. 20260-l
137
(202) 268-2990;
Fax -5402
August 22, 1996
document
section
upon all
12 of the Rules