POSTAL RATE CASE: Off and…stumbling

Mailers seek to postpone rate case

Just a few weeks after the current postal rate case began in February, a consortium of organizations and mailers – including the Alliance of Nonprofit Mailers, the American Business Press, Dow Jones, the Magazine Publishers of America, McGraw-Hill Cos., the National Newspaper Association, and Time Warner – banded together to request a delay of the rate case deliberations until as late as June. At issue is the data being submitted by the U.S. Postal Service to substantiate its postal rate plan.

In the rate case – a 10-month series of hearings and briefs designed to iron out a new postal rate scheme – the USPS is using data from its fiscal year 1998 as a base and test year. But because these figures do not take into account the 1999 postage increase, many mailers believe that they could overstate costs and underestimate revenue. The Postal Rate Commission (PRC) has demanded that the USPS show 1999 data, but the agency says it won’t be able to produce the figures until mid-April. As a result, the aforementioned group of mailers and organizations requested that the rate case proceedings be stalled until six weeks after the ’99 data are made available.

As of early March, it was undecided whether the PRC would suspend the hearings. It was also unclear how it would respond to a Feb. 24 comment submitted by the Association for Postal Commerce (PostCom – formerly the Advertising Mail Marketing Association) in response to a January Notice of Inquiry, in which the PRC sought comments concerning the desirability of using data from fiscal ’99 in this case.

PostCom says that the Postal Service’s case “may well be subject to dismissal” for failing to comply with a PRC rule that sets bounds on the USPS’s choice of a base and test year. PostCom also notes that fiscal ’98 “was not, at the time of filing, the most recent year for which accrued cost data was available as required, and the Postal Service has offered no explanation for its decision to base its case on stale data and to then spread the time interval between base and test years towards the extreme limit.”

Among other early highlights in the rate case, according to the Alliance of Nonprofit Mailers, most of the major postal labor unions have signed on as rate case intervenors. (Intervenors are non-USPS parties who testify in favor of or against elements of a rate case.) The Alliance says the unions will likely support the $2 billion in contingency funding that the USPS is seeking, what with labor contract negotiations only a couple of years off.

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