Postal Rate Case Briefs Due

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The reply briefs from interested parties commenting on the most recent postal rate recommendation from the U.S. Postal Service Board of Governors are due today to the Postal Rate Commission, and mailers are watching the proceeding closely.

This current round of comments is the last one before the PRC makes a final decision. While the law sets no specific date, insiders said the PRC's decision should come in a month.

The Board of Governors earlier this month sent the recommended rate increases implemented in January back to the PRC. The governors want to overturn the PRC's recommendation to cut the postal service's rate request from a 6 percent average increase to a 4.6 percent increase. The USPS claimed that the PRC exceeded its authority when it reduced the amount of new revenue designated for the USPS' contingency fund from $1.7 billion to $1 billion.

The PRC began looking into the request and asked interested parties to submit their comments on the governors' decision by March 19.

Several parties responded, including a consortium of direct marketers and mass mailers headed by the Direct Marketing Association that urged the PRC to reaffirm its recommendations from November and February.

In its filing, the consortium said, "In our view, the commission should not accede to the governors' request. The revenue requirement established earlier by the commission was fully justified on the basis of the evidence of record, and the commission has already revisited its decision once."

Moreover, the filing said the PRC "has actually given the postal service almost all the revenue it requested." The rates recommended by the PRC are expected to produce an estimated $68.93 billion, which is only slightly less than the postal service had requested.

If the PRC decides to recommend higher rates, then the commission "should develop revised rates using the same pricing process and principles that it uses in every rate case," the consortium said.

The group said the PRC should apply all statutory pricing factors, including the impact of further rate increases on volume, and should develop a new rate based on those pricing factors.

Participating in the coalition with the DMA are Advo Inc., the Alliance of Independent Store Owners and Professionals, Alliance of Nonprofit Mailers, Inc., American Business Media, Association of American Publishers, Association of Priority Mail Users Inc., Coalition of Religious Press Associations, Dow Jones & Co., Florida Gift Fruit Shippers Association, Magazine Publishers of America, Major Mailers Association, The McGraw Hill Cos., National Newspaper Association, Parcel Shippers Association and Time Warner Inc.

If the PRC again refuses to approve the 6 percent rate increase, the governors have the power to raise rates unilaterally by a unanimous vote. Insiders said it seems likely that they will do so.

The USPS originally called for average increases of 3.5 percent for First-Class; 14.2 percent for periodicals; 4.9 percent for enhanced carrier route; 9.4 percent for all other Standard-A mail; and 1.3 percent for package services, including parcel post.

The PRC's recommended average increases for each mail class were significantly lower. The rate increases were 1.8 percent for First Class; 9.9 percent for periodicals; 4.5 percent for enhanced carrier route; 8.8 percent for all other Standard-A mail; 2.7 percent for package services, including parcel post; 17.6 percent for bound printed matter; 16 percent for Priority Mail; 7.2 percent for nonprofit periodicals; and 4.8 percent for nonprofit standard.


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