UNITED STATES OF AMERICA

POSTAL RATE COMMISSION

WASHINGTON, DC 20268-0001

Before Commissioners: George Omas, Chairman;

Dawn A. Tisdale, Vice Chairman;

> Ruth Y. Goldway; and
>
> Tony Hammond

Postal Rate and Fee Changes Docket No. R2006-1

PRESIDING OFFICER'S INFORMATION REQUEST NO. 2

(Issued May 18, 2006)

The United States Postal Service is requested to provide the information
described below to assist in developing a record for the consideration
of the Postal Service's request for a recommended decision on proposed
rates, fees and classifications. To facilitate inclusion of the required
material in the evidentiary record, the Postal Service is to have a
witness attest to the accuracy of the answers and be prepared to explain
to the extent necessary the basis for the answers. The answers are to be
provided by June 1, 2006.

1\. In response to the Commission's request in docket R2005-1, the
Postal Service provided a volume variability factor for registry which
was based on an IOCS SAS tally analysis. In USPS-LR-L-100, the registry
variability factor has been deleted from SAS programs MODMODEL,
NMDMODEL, AND BMCMODEL. Please explain why the registry factor has been
deleted. If this is an oversight, please provide an updated registry
factor including revised copies of the aforementioned SAS programs

2\. The Postal Service has supplied the Commission with files that are
not PC executable. Library References LR-L-55 and LR-L-100 contain
programs that are in text formats and have to be converted to PC SAS.
The PRC version of these programs, as submitted in USPS-LR-L-100 is
incomplete. While a number of missing programs in the PRC version reside
in USPS-LR-L-55 and require no modification, others such as MBC and
ROLLFRWD programs need to be modified to accommodate the changes in the
PRC version.

a\) Please provide the PRC version of MBC and ROLLFRWD programs.

> b\) Please identify the remaining SAS programs used in the PRC version
> but not included in USPS-LR-L-100.

3\. Please explain why the encirclement rules are not applied in
USPS-LR-L-100 and the SAS program used to apply these rules is removed
from MOD1POOL. If this is an oversight, please provide a revised
USPS-LR-L-100 and its related spreadsheets and supporting documentation.

4\. The SAS Log for MBC program in USPS-LR-L-55 shows that the IOCS
dataset has 385 variables. However, the following results from executing
MBC program using the IOCS dataset in USPS-LR-L-9 show that there are
only 383 variables. Please explain why the submitted SAS log shows a
different result. Was there a different version of IOCS dataset used
when executing USPS-LR-L-55 or USPS-LR-L-100 programs?

4400 libname in \'c:\\r2006-1\\vantysmith\\prc-v1\\\';

NOTE: Libref IN was successfully assigned as follows:

Engine: V9

Physical Name: c:\\r2006-1\\vantysmith\\prc-v1

4401 run;

4402 filename mod \'c:\\r2006-1\\vantysmith\\prc-v1\\modfin05.sas\';

4403 libname out1 \'c:\\r2006-1\\vantysmith\\prc-v1\\out1\';

NOTE: Libref OUT1 was successfully assigned as follows:

Engine: V9

Physical Name: c:\\r2006-1\\vantysmith\\prc-v1\\out1

4404 libname out2 \'c:\\r2006-1\\vantysmith\\prc-v1\\out2\';

NOTE: Libref OUT2 was successfully assigned as follows:

Engine: V9

Physical Name: c:\\r2006-1\\vantysmith\\prc-v1\\out2

4405 libname out3 \'c:\\r2006-1\\vantysmith\\prc-v1\\out3\';

NOTE: Libref OUT3 was successfully assigned as follows:

Engine: V9

Physical Name: c:\\r2006-1\\vantysmith\\prc-v1\\out3

4406

4407 DATA IOCS ;

4408 SET IN.PRCSAS05;

4409 if substr(f257,2,1) = \'1\'

4410 or substr(f257,2,1) = \'2\' ;

4411 if f261 ne \'4\';

4412 if f264 ne \'K\';

4413 iocwgt = f9250/100000;

4414

NOTE: Character values have been converted to numeric values at the
places given by:

(Line):(Column).

4413:17

NOTE: There were 726475 observations read from the data set IN.PRCSAS05.

NOTE: The data set WORK.IOCS has 215379 observations and 383 variables.

NOTE: DATA statement used (Total process time):

real time 26.15 seconds

cpu time 2.23 seconds

4415 data mods12 ;

4416 infile mod ;

4417 input

4418 \@1 f2 \$ 6.;

NOTE: The infile MOD is:

File Name=c:\\r2006-1\\vantysmith\\prc-v1\\modfin05.sas,

RECFM=V,LRECL=256

NOTE: 2676 records were read from the infile MOD.

The minimum record length was 0.

The maximum record length was 6.

NOTE: SAS went to a new line when INPUT statement reached past the end
of a line.

NOTE: The data set WORK.MODS12 has 2675 observations and 1 variables.

NOTE: DATA statement used (Total process time):

real time 0.03 seconds

cpu time 0.03 seconds

4419 proc sort ;

4420 by F2;

4421

4422 \*\-\-\-\-\-\-\-\-\-\-\-\--Step 1: Separate BMCs from
nonBMCs\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--;

4423

NOTE: There were 2675 observations read from the data set WORK.MODS12.

NOTE: The data set WORK.MODS12 has 2675 observations and 1 variables.

NOTE: PROCEDURE SORT used (Total process time):

real time 0.03 seconds

cpu time 0.03 seconds

4424 DATA temp out2.bmc ;

4425 SET iocs;

4426

4427 \* \...\.... create the file for the 21 BMC finance numbers
\...\...\...;

4428 \* \..... create a temporary file for MODS and NONMODS tallies
\.....;

4429

4430 \*\...\.....encrypted BMC
numbers\...\...\...\...\...\...\...\...\...;

4431 If f2 = \'259504\' or f2 =\'875506\' or f2 = \'537702\' or f2 =
\'831114\'

4432 or f2 = \'349210\' or f2 =\'451611\' or f2 = \'143812\' or f2 =
\'564914\'

4433 or f2 = \'842327\' or f2 =\'282427\' or f2 = \'941522\' or f2 =
\'631626\'

4434 or f2 = \'411827\' or f2 =\'689333\' or f2 = \'913633\' or f2 =
\'064831\'

4435 or f2 = \'455146\' or f2 =\'067146\' or f2 = \'665745\' or f2 =
\'629842\'

4436 or f2 = \'167457\' or f2 =\'286427\'

4437 THEN OUTPUT OUT2.BMC ;

4438 else output temp;

NOTE: There were 215379 observations read from the data set WORK.IOCS.

NOTE: The data set WORK.TEMP has 204249 observations and 383 variables.

NOTE: The data set OUT2.BMC has 11130 observations and 383 variables.

NOTE: DATA statement used (Total process time):

real time 3.71 seconds

cpu time 1.37 seconds

4439 proc sort data=temp;

4440 by f2;

4441

NOTE: There were 204249 observations read from the data set WORK.TEMP.

NOTE: The data set WORK.TEMP has 204249 observations and 383 variables.

NOTE: PROCEDURE SORT used (Total process time):

real time 7.71 seconds

cpu time 3.56 seconds

4442 data out1.mod out3.nmod ;

4443 merge temp(in=a) mods12(in=b);

4444 by f2;

4445 IF A=1 AND B=1 THEN OUTPUT OUT1.MOD;

4446 ELSE OUTPUT OUT3.NMOD;

4447

4448

4449 run;

NOTE: There were 204249 observations read from the data set WORK.TEMP.

NOTE: There were 2675 observations read from the data set WORK.MODS12.

NOTE: The data set OUT1.MOD has 171343 observations and 383 variables.

NOTE: The data set OUT3.NMOD has 32906 observations and 383 variables.

NOTE: DATA statement used (Total process time):

real time 7.03 seconds

cpu time 1.86 seconds

5.  Please refer to worksheet "Volume Input Data" in both USPS-LR-L-123
    and USPS-LR-L-124.

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a)  The source given for BY, TYBR, and TYAR International mail volumes
    is "Volume Forecast from Witness Thress (USPS-T-7), Attachment A."
    International mail volumes are not provided in Attachment A. Please
    provide the correct source for the BY, TYBR, and TYAR International
    mail volumes.

b)  The TYBR Return Receipt volume is listed as 249.957. The source
    given is "Volume Forecast from Witness Thress (USPS-T-7), Attachment
    A." However, the value in witness Thress's testimony (in the same
    units) is 247.952. Please reconcile the difference.

c)  The source given for BY, TYBR, and TYAR Stamped Envelopes is "Volume
    Forecast from Witness Thress (USPS-T-7), Attachment A." Stamped
    envelope volumes are not provided in Attachment A. Please provide
    the correct source for the BY, TYBR, and TYAR Stamped Envelope
    volumes.

d)  For the categories indicated below, please provide a spreadsheet
    with step by step calculations indicating how to develop the volumes
    in the Volume Input Data worksheet starting from Witness Thress
    (USPS-T-7), Attachment A volume forecast numbers. Please also
    provide a brief rationale for each adjustment.

    i.  TYAR First-Class single-piece

    ii. TYAR First-Class nonautomated presort

    iii. TYAR First-Class automated presort

    iv. TYBR First-Class automated presort

    v.  TYAR Priority mail

    vi. TYBR Standard Regular

    vii. TYAR Standard Regular

    viii. TYBR Standard ECR

    ix. TYAR Standard ECR

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6.  USPS Exhibit T-10B details the volumes used by the cost rollforward
    model in calculating the mail volume cost effect.

    a.  Please confirm that the "other" category in special services
        volumes (transactions) consists of the transactions for Return
        Receipts, Delivery Confirmation, and Signature Confirmation.
        Also, please confirm that the volume estimates for these three
        categories are shown in Attachment A of USPS T-7.

    b.  The sum of the volumes for Return Receipts, Delivery
        Confirmation, and Signature Confirmation from Attachment A of
        USPS T-7 do not match what is shown in USPS Exhibit T-10B for
        each of the years of the rollforward, including the Base Year. A
        comparison of the volumes is shown below.

![](media/image1.wmf)

Please reconcile these differences.

7.  Please refer to USPS-LR-L-126, file R2006-1 Outside County.xls,
    worksheets "TYAR NP" (cell D88) and "TYAR CR" (cell D54). Please
    explain why container revenue is not included in the revenue totals
    for Nonprofit or Classroom.

8.  Please refer to the following statement in USPS-T-35, page 6, line
    22: "I propose a 37 -- 63 split between revenue to be raised from
    pounds and pieces." Please explain how container revenues are
    categorized and what effect this has on the 37 -- 63 split.

9.  Please refer to the discussion of pound rates in USPS-T-35, pages
    6-10 and worksheet "Pound Data" (cells D54, D55, and D56). Please
    explain fully why 30 percent passthroughs are used for the pound
    rate dropship discounts instead of the 50.3, 50.4, and 50.4 percent
    passthroughs proposed in Docket No. R2001-1. (*See* Docket No.
    R2001-1, USPS-LR-J-107, file OC01.xls, worksheet "Pound Data_Adv"
    cells D47, D48, and D49.)

10. Please reconcile the differences in revenues for Within County and
    Outside County in USPS-LR-L-126, file R2006-1 Outside County.xls,
    worksheet "FY2008 Summary," cells D6, D7, D8, and D10 with the
    revenues appearing in USPS-31B.

> George Omas
>
> Presiding Officer