Opinion ID: 370472
Heading Depth: 1
Heading Rank: 5

Heading: second-class users claims

Text: 101 Having been concerned to this point with the broad sweep of the PRC's performance under the Act, we now consider the lacunae of three specific decisions concerning second-class mail.
102 As noted above, Supra note 80, the second-class regular rate (for mailings of 5,000 or more copies, mailed outside the county of publication) consists of three separate charges: a piece rate, a poundage rate for the editorial portion of the publication, and a poundage rate for the advertising portion that is zoned according to distance. In Docket No. R77-1, the Commission adopted for the first time a three-tier piece rate that varies according to the degree of presortation. 93 Mail presorted to carrier route is charged a piece rate of 4.4 cents. Mail presorted to five digit zip code (or three digit ZIP code for certain cities) is charged a piece rate of 5.4 cents. All other second-class regular rate is charged a piece rate of 7.0 cents. 94 Although Postal Service regulations require that all second-class mail be presorted to the greatest extent possible, 95 the two presort discounts are available only where the presorted mail is sorted into sacks either at least one-third full or weighing at least 20 pounds. 103 American Business Press (ABP) attacks the limitation on eligibility for the presort discount as discriminatory against smaller publications that cannot fill one-third sacks when the presorting is to five digit zip codes, either because of low circulation or wide geographic dispersion. Record evidence suggested that only a small percentage of all publications would be eligible for the discounts, 96 although approximately 77 percent of regular rate mail, by volume, would be eligible. 97 ABP argued before the Commission that the proper measure of eligibility for the presort discounts should be the six-copy bundle, the standard prescribed by postal regulations for separating bulk mailing from individual mailings. 104 We find the Commission's limitations on eligibility supported by the evidence. Postal Service witness McCaffrey stated that the one-third sack requirement in presortation was a standard USPS requirement. 98 Witness Madison found the presort discount justified by cost savings. 99 His study was based, however, on the assumption of a one-third sack limitation. The Commission noted that there was no correlation between the Madison cost and volume data and the presortation of six piece bundles which is the eligibility requirement sought by ABP. 100 ABP attacks as not explained the reliance on the Madison study. 101 Its position presumes that the effect on USPS costs of presortation to six-copy bundles would not differ from the cost effects of presortation to one-third sacks. We cannot ignore or gainsay the likelihood that the significantly smaller six copy bundle would entail greater handling costs than the one-third sack. Since precise cost data was lacking with regard to the six copy bundle, the PRC was justified, at least in its first attempt at devising a second-class presort discount, in choosing to limit the availability of the discount to those mailings for which it had reliable data. 105 We find no basis for ABP's claim that, in adopting the second-class rate structure, the PRC focused on one ratemaking criterion the degree of preparation performed by the mailer 102 to the exclusion of other factors, particularly the effect of rate increases on mail users. 103 106 We read the PRC's opinion as reflecting a full consideration of the pertinent factors. The Commission expressly took into account the interests of small publications though not to the degree ABP desires by modifying the presort discount, limited to mailers using five digit zip codes, so as to be availa ble as well to those using three-digit city zip codes (though still subject to the one-third sack restriction). 104 The Commission also rejected a zoned editorial charge, because small publications are least able to avoid the highest zone charges through the device of multiple points of entry. 105 107
108 The magazine publishers attack as contrary to the evidence the PRC's adoption of the Postal Service's estimate that the average weight of a second-class regular rate publication in the test year would be 6.1 ounces. 106 They assert that this figure represents an unjustified extrapolation from a recent downward trend in the average weight of second-class publications. Invoking a survey of Magazine Publishers Association (MPA) members, the publishers argue that the downward trend has been reversed, and that average weight has actually increased. The result is a $29 million underestimation of the revenues that will be generated by the two poundage charges, which together account for 52 percent of second-class regular rate revenues. 107 109 It is not our function to weigh again evidence that was carefully considered by the PRC. 108 The Commission discounted the MPA study as inconclusive because its sample MPA members was not necessarily representative of all second-class publications. The Commission further noted that the seeming downward adjustment of average weights in the test year to 6.1 ounces from the average weight of 6.2 ounces found in fiscal years 1976 and 1977 was not a downward extrapolation at all, but was merely the product of rounding the detail actually used in the projection. 109 Finally, the Commission concluded that any increase in revenues resulting from increased weight would be offset, at least partially, by increased costs, and that, even assuming such a revenue excess, the resulting second-class regular rate cost coverage of 105 percent would not be unreasonable. 110 Though the evidence is in conflict, a substantial evidentiary basis for the PRC's decision is present, and we have no warrant to substitute the court's assessment of the evidence for the considered judgment of the Commission. 110
111 The magazine publishers also attack the PRC's conclusion that individual load time varies entirely with volume and therefore is 100 percent attributable. Load time generally is the time spent depositing mail in delivery receptacles. 111 Load time is divided into batch load time and individual load time. Batch load time is the time spent at delivery points placing batched letter size mail in receptacles or otherwise delivering mail in batches. 112 Individual load time is the time spent at delivery points placing individual pieces of mail into receptacles or otherwise delivering individual pieces. 113 112 Since letter-size mail is batched, individually loaded mail consists primarily of second-class publications. Because, in theory, individual loading requires a separate step for each piece, the Commission has consistently found it 100 percent variable with volume, and has attributed individual load time costs, primarily to second-class. The magazines allege that this attribution is patently arbitrary because it proceeds from an assumption that a carrier at a delivery point will load batches and magazines in separate steps, rather than by first combining the magazine with the batch and placing them into the receptacle together. 113 There is some force to the magazines' position. The Commission concluded that load time includes all time involved handling mail at the receptacle. 114 Under this view, even if the magazines were correct in their point, load time would include the time spent combining the batches and the individual pieces. This does not entirely jibe with the definitions of load time, which seem to restrict that function to the act of placing mail in the receptacle. The problem appears to stem from a deficiency in accurate data as to the proportion of second-class regular rate mail that is loaded individually, 115 and uncertainty as to where in the cost model to account for the steps of combining the individual pieces and batches. 116 114 Despite some misgivings, we are not inclined to remand on this point alone, in view of its relative lack of consequence and the fact that the PRC has insisted upon improved data in future proceedings. Postal ratemaking continues to evolve and we cannot yet expect USPS and PRC to have gleaned every bit of data and developed every model to perfection. Considering the PRC's immense task in digesting huge quantities of data and meeting the requirements of the Act, we believe it a sound approach to forgive such minor transgressions.