[Federal Register: April 1, 2004 (Volume 69, Number 63)]
[Notices]
[Page 17244-17249]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01ap04-122]
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POSTAL RATE COMMISSION
[Docket No. C2004-1; Order No. 1399]
Periodicals Rate Complaint
AGENCY: Postal Rate Commission.
ACTION: Notice and order on new complaint docket.
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SUMMARY: This document announces the Commission's intention to hold
hearings on a formal complaint filed by several major Periodicals
mailers. The complaint concerns the alleged inconsistency of certain
Periodicals rates with several provisions of the Postal Reorganization
Act, given several developments affecting the viability of the
longstanding rate structure. The Commission also announces several
related procedural steps.
DATES: 1. Deadline for filing direct testimony: April 26, 2004.
2. Deadline for filing notices of intervention: May 21, 2004.
ADDRESSES: File all documents referred to in this order electronically
via the Commission's Filing Online system at http://www.prc.gov> (ACRS & .
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, 202-789-6818.
SUPPLEMENTARY INFORMATION: Summary. Five mailers who make extensive use
of Outside County Periodicals rates have lodged a formal complaint with
the Commission pursuant to section 3662 of the1970 Postal
Reorganization Act (the Act or the PRA).\1\ They assert that the
Complaint ``concerns fundamental reform of the Periodicals rate
structure'' in the interest of achieving greater conformity with
statutory rate making provisions. Complaint at 4. Complainants contend
that the need for such reform is clear, as is the path that should be
taken to achieve it. They seek hearings on their allegations regarding
the inefficacy of the rate structure and other relief consistent with
their claims, including the potential adoption of an alternative rate
schedule.
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\1\ Complaint of Time Warner Inc., Conde Nast Publications, a
Division of Advance Magazine Publishers Inc., Newsweek, Inc., The
Reader's Digest Association, Inc. and TV Guide Magazine Group, Inc.
Concerning Periodicals Rates, January 12, 2004 (Complaint). These
mailers are also collectively referred to in this order as
Complainants.
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The Commission accepts the Complaint under section 3662, over the
Postal Service's objection, and announces its intention to hold
hearings under section 3624 to determine whether the allegations in the
Complaint are valid.\2\ If the Commission finds that to be the case, it
will issue a recommended decision on classification changes under
section 3623. This decision will not include a rate recommendation.
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\2\ The American Postal Workers Union, AFL-CIO (APWU), in a
February 13, 2004 letter addressed to the Secretary of the
Commission, expressed its opposition to the Complaint. Reasons
include the Complaint's reliance on Docket No. R2001-1 rate case
assumptions; concern that the proposal is a ``radical departure''
from the current methodology; the possibility of establishing a poor
precedent; the absence of an allegation that current Periodicals
rates are illegal; and the alleged inappropriateness of the
Commission's interference in the discussion process. The rules of
practice do not specifically authorize the APWU's filing at this
point in the absence of a motion, but the Commission accepts it and
has considered the points it raises in reaching its conclusions.
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I. The Time Warner Inc. et al. Complaint
The Complaint includes information addressing applicable Rule 83
provisions, such as identification of the Complainants; a statement of
the grounds for the complaint and the
[[Page 17245]]
statutory policies at issue; a description of similarly affected
classes of persons; and a description of the relief sought. As part of
the stated grounds, it provides detailed observations on numerous
Periodicals issues and initiatives, including developments leading to
the creation of a joint Periodicals Task Force, a description of
certain Task Force recommendations, and comments on AFSM 100
productivity.\3\ Complaint at 17-18.
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\3\ AFSM 100 equipment is the Service's newest mechanized flat
sorting equipment.
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The filing also includes two exhibits, an extensive evidentiary
proffer, and two attachments. Exhibit A is a multi-year comparison of
Periodicals costs and inflation; Exhibit B is the Complainants'
proposed alternative rate schedule for Outside County Periodicals Non-
Letters. The evidentiary proffer announces the Complainants' readiness
to sponsor the testimony of the following expert witnesses: Robert W.
Mitchell (TW et al.-T-1) on Periodicals rate design; Halstein Stralberg
(TW et al.-T-2) on the development of Periodicals costs; John Steele
Gordon (TW et al.-T-3) on the impact of technological progress on ``the
widespread dissemination of information'' in the United States; and Joe
Schick (TW et al.-T-4) on the impact on smaller publications and their
printers of eliminating the unzoned editorial pound rate. The proffered
testimony of witnesses Mitchell and Stralberg appear, for information,
as Attachments A and B to the Complaint. Related workpapers have been
filed with the Commission's docket section as library references.
Complainants indicate the testimony of the other witnesses they have
identified can be provided reasonably soon.
A. Grounds for Filing the Complaint
Reasons for seeking reform. Complainants claim that the need for
reform --and deficiencies that underlie that need--``have grown
increasingly evident'' over the last two decades. In support of this
contention, they cite historical trends showing increases in mail
processing costs and declines in mail processing productivity, despite
extensive efforts by the Postal Service and mailers to achieve more
efficient Periodicals handling. Id. at 4-5 (fn. omitted). They point to
the Service's apparent belief that rate design changes are needed to
address inefficiencies in the Periodicals class, given repeated rate
and classification filings pursuing various alternatives. Id. at 5.
They also note successive reductions the Commission has made in
Periodicals cost coverage. However, they observe that ``with coverage
barely above 100 percent since the [Docket] No. R97-1 rates went into
effect, virtually no leeway remains for the Commission to shield
mailers in this way from the problems of the subclass or deficiencies
in its rate structure.'' Ibid.
Inefficient price signals. Complainants identify inefficient price
signals as a significant deficiency in the underlying rate structure.
They say these signals stem from a longstanding focus on whether
Periodicals costs are piece-or pound-oriented. However, they assert
that improvements in cost analysis over the past decade, along with
advances in postal mechanization, now show that costs are determined
``in meaningful and systematic ways'' by factors other than the basic
piece/pound distinction. These include how bundles, sacks and pallets
are made up, including related presort levels, and associated
interactions, such as mailing entry points. Id. at 6. Given that
recognition of these cost-causing factors in current rates is extremely
limited, Complainants assert that mailers cannot make efficient mailing
decisions, and should not be expected to do so. Ibid.
Consequently, Complainants argue that the price signals in the
existing rate structure are not only inconsistent with cost incurrence
as now understood, but inconsistent to the point that they impair the
value of Periodicals mail service in two ways: by raising costs and by
failing to recognize the way Periodicals mail is prepared. They assert
that neither result is contemplated by the Postal Reorganization Act.
Ibid.
Obsolete and counterproductive unzoned editorial pound rate.
Complainants regard the unzoned editorial pound rate, which dates to
1917, as another serious deficiency. They characterize it as ``a
substantial impediment to the development of a more efficient
Periodicals rate structure and an anomalous element that complicates
and sometimes defeats coherent Periodicals rate design.'' Id. at 9.
They note that the Commission has recognized that this feature imposes
certain inefficiencies, but has declined to approve proposed changes
based on references in sections 101(a) and 3622(b)(8) to ``widespread
dissemination of information'' as a means of ``binding the Nation'' and
out of a concern for certain mailers.
Complainants make three related assertions on this point. One is
that the record on the unzoned editorial pound rate in previous
Commission proceedings is deficient because it does not adequately
address historical, cultural, technological and legal developments
since 1917. Id. at 10. Another is that the decision in Mail Order
Ass'n. of America v. United States Postal Service, 2 F.3d 408 (D.C.
Dir. 1993) significantly undermined the Commission's rationale for
maintaining the unzoned editorial rate preference. Id. at 11-12. A
third claim is that changes since Docket No. R90-1 cast doubt on
whether the unzoned editorial rate currently generates policy benefits
that outweigh the burdens it imposes in derogation of other policies of
the Act, or even advances the policies of the Act at all. These changes
include the availability of pool shipments, the emergence of mass
media, and the burgeoning information revolution. Id. at 10.
Complainants contend that reconsideration in light of current
knowledge and circumstances will demonstrate that maintaining an
unzoned editorial rate for the purpose of fostering ``widespread
dissemination of information'' via Periodicals:
--Is no longer a useful, or even explicable, way of recognizing or
promoting the educational, cultural, scientific and informational value
(ECSI) of Periodical publications;
--Provides a rate benefit to long-haul publications only at the cost of
imposing complementary rate burdens on similarly situated short- and
average-haul publications, in derogation of the recognition owed to the
ECSI element of those publications under section 3622(b)(8), as well as
the requirement that rates and classifications be fair and equitable,
as set out in sections 3621, 3622(b)(1) and 3623(c)(1);
--Imposes substantial operational and pricing inefficiencies on the
Postal Service and the Periodicals subclass as a whole; and
--Creates substantial obstacles to a rational, comprehensible,
economically coherent Periodicals rate design, in derogation of section
3622(b)(7). Id. at 13.
B. Evidentiary Proffer
Complainants state that they are prepared to present evidence
supporting their contention that pertinent improvements in rate
elements would bring about efficient changes on the part of mailers and
would bring rates into closer conformity with the Act. This includes
the Mitchell, Stralberg, Gordon and Schick testimonies. They note, in
particular, that witness Gordon's testimony will show how a century of
technological, economic and social progress has ``transformed the
conditions * * * thought to justify an unzoned editorial rate.'' Id. at
9.
[[Page 17246]]
Complainants consider the improvements they propose meritorious in
their own right, quite apart from other factors affecting mailers, but
further claim that ``the unprecedented and unexplained Periodicals cost
and rate increases of recent years make it all the more important to
explore every available path of progress.'' Ibid.
C. Main Elements of the Proposed Alternative Rate Structure
Complainants assert that the following ``simple remedies'' will
make Periodicals rates far more reflective of associated costs. These
changes are reflected in their Exhibit B rate schedule, and include:
--Establishing separate charges for the bundles, sacks and pallets used
in each mailing, instead of deriving all Periodicals revenue from piece
and pound charges;
--Recognizing both bundle and container presort levels, as well as the
effect of the mailing's entry point, on costs incurred;
--Recognizing the importance of AFSM 100 machinability for non-carrier
route flats; and
--Continuing a preference for editorial content in Periodicals, but
allowing publications with high editorial content to earn lower rates
by entering mail closer to its final destination.
Id. at 7.
Complainants acknowledge that their proposal includes more rate
elements than the current structure, but say it ``would allow
simplification of the ever more complex mail preparation
requirements.'' Id. at 8. They also assert that their proposal is not a
complete solution, and suggest that the Service ``may possess more
recent cost and mail-characteristics data with more accurate unit cost
estimates.'' Ibid.
D. Relief Sought; Basis for Jurisdiction
Requested relief. Complainants seek hearings on their complaint
under section 3624 of the Act and issuance of a decision, under
sections 3622, 3623 and 3625 of the Act, recommending the adoption of
cost-based Periodicals Outside County rates that (1) more fully reflect
differences in operational and cost-causing characteristics within the
Periodicals Outside County subclass; (2) discontinue the policy of
maintaining an unzoned editorial pound rate; and (3) promote more
efficient methods of mail preparation and entry by sending mailers
better price signals. Id. at 21.
Jurisdiction. Complainants assert that the Commission's
jurisdiction to hear this matter is founded on 39 U.S.C. 3662, 101(a)
and (d), 403(a) and (c), 3622(b)(1)-(8), and 3623(c)(1). Id. at 19.
Section 3662 establishes the Commission's authority to hear rate and
service complaints. The other referenced provisions address various
policies, such as ``Nation binding,'' fairness and equity of rates and
classifications, efficient services, and recognition of the degree of
mail preparation. These provisions are set out in the body of the
Complaint. Id. at 19-20.
In addition, the Complainants cite with approval the following
Commission statement on jurisdiction:
In a Section 3662 complaint, the rate at issue need not be per se
``unlawful,'' before changes may be recommended. In each case, the
Commission will evaluate the relevant facts and circumstances, and
determine whether the policies of the Act, on balance, call for the
recommendation of a change in rates.
Id. at 2, fn. 1, citing PRC Op. C99-4, Opinion and Recommended Decision
on Complaint of Continuity Shippers Association, April 14, 2000, at 13.
III. Postal Service Answer
The Postal Service filed its Answer to the Complaint on February
11, 2004.\4\ Therein, it states that it does not oppose improved
efficiency in Periodicals rate design; believes more can be done in
this regard; and says it is exploring many of the structural changes
Complainants propose. Answer at 2. At the same time, it opposes any
form of Commission action on the Complaint at this time, other than
summary dismissal. The Service cites an array of legal, policy and
practical considerations in support of its position. The most serious
of these are alleged deficiencies in the form and substance of the
pleading.
Alleged flaws in the Complainants' filing. The Service asserts that
under the clear meaning of the language of section 3662 and Commission
rules, the threshold question in any rate and service complaint must be
whether the existing rates are unlawful, not whether some alternative
set of rates would constitute an improvement. Id. at 3-4. It claims,
however, that the instant filing ``appears premised on the supposition
that adoption of their proposed changes would constitute an improvement
over the current rates, rather than any well-grounded allegation that
the current rate structure is unlawful.'' Id. at 4. It therefore argues
that the Complaint fails to establish the necessary foundation for
conducting a section 3662 rate complaint proceeding: namely, specific
and colorable allegations that the existing rates fail to conform to
specific policies of the Act. Id. at 6.
The Service claims that this failure not only prevents Complainants
from establishing the only statutory basis for proceeding under section
3662, but also precludes the Service from meeting its obligations under
the Commission's rules. Id. at 2-3. In particular, it asserts that
Complainants do not specifically allege that existing rates, fees, or
classifications for Periodicals mail do not conform to specific
policies in the Act. Instead, the Service says the Complainants
explicitly indicate that the status quo conforms to those policies
because they state that the purpose of their alternative is ``to
achieve greater conformity'' with the ratemaking provisions of the Act.
Id. at 3. It also says critical factual allegations are never clearly
articulated in a format to which the Postal Service can directly
respond, but instead ``the factual foundations * * * consist of broad
discussions of complex and interrelated histories of operations and
finances, as well as convoluted technical analyses and quantitative
derivations forming the bases for alternative rate proposals.'' Id. at
6-7. As such, the Service says they do not lend themselves to the type
of answer typically expected in section 3662 proceedings or
contemplated by the Commission's rules. In addition, it asserts that by
avoiding compliance with these ``strict guidelines,'' Complainants have
failed to perfect their attempts to lawfully invoke the complaint
procedures, and have failed to carry even the minimal burden of
justifying the Complaint in the first instance. Id. at 8.
Contentions regarding section 3662 jurisdiction. The Service
asserts that the Complaint is really an attempt to initiate broad-based
rate and classification changes across the Outside County Periodicals
subclass, and therefore ``falls conspicuously outside the range of
cases contemplated to be entertained pursuant to section 3662.'' Ibid.
In fact, it says that such treatment would violate both sections
3622(a) and 3628 of the Act. In an extended discussion, the Service
presents its views on the regulatory scheme set out in the statute,
attendant rights and responsibilities of the respective agencies, and
section 3662's purported status as a limited ``safety valve.''
Moreover, the Service claims section 3628 is clearly intended as
the exclusive channel for review of rate case matters. It dismisses
Commission statements suggesting that section 3628 does not preclude it
from reviewing rate and related classification issues within a
complaint proceeding. Id. at 17, citing
[[Page 17247]]
Order No. 1310, Docket No. C2001-2, April 27, 2001, at 13-14. Given
this position, the Service says that since the combined classification
and rate structure the complainants now propose to improve was
established (or, at the least, reestablished) in the last omnibus rate
proceeding, it was incumbent upon any party challenging that structure
to pursue those types of issues then, up to and through the judicial
review provisions of section 3628. Id. at 16-18 (citing the legal
doctrines of res judicata and collateral estoppel).
Opposition to the initiation of a mail classification proceeding.
The Service acknowledges that the Commission has the option to consider
the filing as if it were a petition to institute a classification
proceeding pursuant to section 3623, but encourages it to decline to do
so. In support of this position, the Service says the next omnibus rate
case will provide a vehicle for consideration of the Complainants'
concerns. It also contends that the absence of such a proceeding would
allow it to continue consultations with all Periodicals mailers to
develop a Periodicals rate and classification proposal for future
consideration by the Commission. Id. at 20-21. Finally, the Service
says deferring consideration of these issues would allow it to
determine whether co-mailing and co-palletization can provide
Periodicals mailers with the efficiency-related ``choices'' that
underlie the Periodicals redesign proposed in the Complaint. Id. at 21.
If the Commission does hold a hearing, the Service suggests that it
may parallel, at least in some respects, progress the Service is making
on similar issues with mailers. Id. at 21-23. It also says that since
smaller publications can be expected to strongly oppose the Complaint's
substantive proposals, the opportunity to include them may be lost. Id.
at 23.
IV. Discussion
A pivotal question in any filing before the Commission is whether
jurisdiction lies. In this case, the Postal Service asserts that the
Complainants have failed to make the requisite jurisdictional showing
because there is neither an ``unambiguous claim'' that existing rates
do not conform to applicable policies, nor adequate identification of
the policies that are implicated. Moreover, it believes that
Complainants' reliance on a Commission statement, in PRC Op. C99-4,
regarding the scope of section 3662 is misplaced. It contends the
Commission's view is not a legally supportable position. Id. at 4, fn.
2 (referring to Complaint at 2, citing PRC Op. C99-4, April 14, 2000,
at 13).
The Commission concludes that no fundamental flaws in the filing
preclude its acceptance for the purpose of determining whether the
concerns it raises are justified. The Service's contention that
Complainants have failed to invoke jurisdiction because they have not
used several ``magic words'' is not persuasive.\5\ First, it invokes
the ``plain meaning'' of a statutory provision only at the expense of a
``plain reading'' of the entirety of the pleading. The Complaint raises
a sophisticated, not simplistic, claim. Thus, the Service's near-
exclusive focus on one or two phrases in the Complaint ignores its very
core: a challenge to the continued efficacy of Outside County
Periodicals rates, given a structure that may be so outmoded and
inapposite that the rates it generates ipso facto violate controlling
provisions of the Act. Considered in this light, the Complainants'
reliance on the Commission's previous statement regarding its
responsibility to evaluate relevant facts and circumstances is not
misplaced.
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\5\ The Service alludes to the possibility that use of the words
``greater conformity'' rather than something unambiguous may be an
``artful dodge'' by two or more individual Complainants who consider
themselves bound to not object to the current rate structure by
virtue of being signatories to the Docket No. R2001-1 settlement.
The Commission has no response to this, other than to note the clear
evidence that the Complainants have read, and apparently agreed,
with the Commission's statement, in PRC Op. C99-4 at 13, that the
rate at issue in a section 3662 complaint need not be per se
``unlawful'' before changes may be recommended. See, for example,
Complaint at 2.
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Failure to identify policies, as required by Rule 83. The Service
also contends that Complainants have failed to comply with Rule 83 in
certain respects, including a failure to identify the policies they
believe are involved. Complainants devote more than a page of their
pleading to setting out specific provisions of the Act, in addition to
citing them in the text. The pleading also contains substantial
discussion about why Complainants contend that consistency with these
policies is lacking. Given these circumstances, the Service's argument
must be rejected.
Technical compliance. The Service is correct that the filing does
not necessarily conform to the format used by others. However, Rule 83
speaks to required information, rather than a set format. The
Complainants have provided their full name and address in compliance
with Rule 83(a). Complaint at 2-4. In the Commission's view, they have
provided, throughout their extensive filing, a full and complete
statement of their grounds, including specific reference to the postal
rates involved and the policies to which it is claimed they do not
conform. They have described all persons or classes of persons known or
believed to be similarly affected (Outside County Periodicals mailers),
in compliance with Rule 83(c). Id. at 5 and 18-19 (and elsewhere). They
have provided a statement of the specific relief or redress requested,
in compliance with Rule 83(d). Id. at 1 and 21. No copies of the type
of correspondence referred to in Rule 83(e) have been provided. The
Commission assumes this is because none exists. If this is not the
case, Complainants should supplement their filing in this respect.
Given the foregoing assessment, the Commission concludes that the
Service's assertion that technical deficiencies foreclose Complainants
from having set out colorable claims is unfounded.
Effect of practical obstacles on holding a hearing. The Service
notes that there are several practical considerations the Commission
should consider. These include the inability to recommend rates if it
proceeds with this Complaint; the possibility of redundant discussions
on some issues, as the Service and mailers may continue independent
talks; ongoing pallet experiments; strong objections from small
mailers; and the ability to address issues the Complaint raises in the
next omnibus rate case.
The Commission finds that these considerations are not persuasive
reasons to refrain from holding hearings. The inability to recommend
rates in a classification case initiated by the Commission is a
statutory reality. Dow Jones v. United States Postal Service, 656 F.2d
786, 790 (D.C. Cir. 1981). This was a contributing factor in a recent
Commission decision to forego initiating a proceeding on non-postal
services, see Order No. 1388 (January 16, 2004), but the totality of
the circumstances indicate a different result is appropriate here. This
is a complaint that raises basic issues about the efficacy and legality
of a current rate structure applicable to an entire class of mail. The
Commission will consider these issues, ask for and review data as
appropriate to inform our deliberations, and if necessary recommend
changes to that structure.
Nonetheless, practical considerations lead the Commission to
conclude that this inquiry should not result in the recommendation of
specific rates. Foremost among these considerations is the importance
of avoiding unnecessary disruption to the businesses of both
[[Page 17248]]
Periodicals mailers and the Postal Service. Before the type of sweeping
changes suggested by Complainants are implemented, substantial time
must be allowed for mailer education on the new design, as well as on
use of new mailing statements that would have to be designed and
distributed. Postal facilities would have to prepare for an altered
mailstream. Publishers and printers must have adequate opportunity to
alter their mailing practices in recognition of any new rate structure
prior to its implementation.
Given the industry's concerns about any rate increases in the
current economic climate, Commission consideration of potential changes
in specific rates in the context of this complaint would be likely to
obscure the careful review of more important structural concepts.
Proceeding to review the effects of the current and proposed rate
structures on economic efficiency and the various public policies of
the Act as a first step, before attempting to design actual rates, is
most likely to allow for efficient evaluation of relevant and material
issues. If a new structure is found appropriate, the period for
education and preparation can begin while specific rates are being
developed.
There is widespread recognition that the Postal Service is planning
on submitting an omnibus rate request shortly. In the interim, it may
be possible to develop and analyze additional cost and volume data that
may be identified as necessary for use in that case. Further, issues
resolved in this case can perhaps be implemented in that case.
Regardless of the timing of additional dockets the importance of
avoiding potential widespread confusion attendant to implementing a new
rate design without allowing substantial time for mailer education and
preparation, convince the Commission that it is best to forego any
specific rate recommendations in response to this Complaint. If this
Complaint is found to be justified, the most proper course of action
for the Commission will be to recommend to the Governors classification
changes that describe and define a rate structure more consistent with
the policies of the Act. This will allow the Postal Service to develop
in the first instance rates designed to fairly implement the new rate
structure.
The fact that discussions may occur in other forums while a
Commission proceeding is underway may dilute attention in some
respects, but may energize the inquiry in other ways. In addition,
Commission proceedings offer significantly more potential for open and
public discussion than might be the case with some industry/Postal
Service talks. Data from ongoing pallet experiments could presumably be
introduced into the hearing record as it becomes available, so no party
would appear to be disadvantaged by a parallel complaint hearing on
pallet-related issues.
Two other factors cited as obstacles--the likelihood of strong
objections from some mailers and the ability to consider issues raised
here in a future rate case--actually present no greater hurdles than
they would in any circumstance. In fact, the Commission's assigned
statutory role is to serve as a forum for matters that are often
inherently contentious, and it is no stranger to opposition from
mailers who oppose various proposals and initiatives, be they in the
category of large or small. Past experience indicates that the
Commission allows all parties' concerns to be aired, and this
proceeding will be no different. Finally, not postponing consideration
of the potential need for significantly revised rate structure to the
next omnibus case avoids at least two difficulties. One is that
interested mailers and the Commission are not likely to be as
preoccupied by myriad other, complex controversial issues such as are
present in omnibus rate cases. Additionally, outside the context of the
10-month statutory time frame of a rate case, there is considerably
more leeway in almost all aspects of scheduling. This should result in
the most complete and balanced record possible for analyzing the issues
raised by Complainants.
IV. Preliminary Procedural Matters
Hearings. The anticipated scope of this case encompasses matters
raised in the Complaint, as well as other issues found to be germane.
This proceeding will address concerns about the efficacy of the rates
generated by the current structure in light of:
The extremely low cost coverage the class has
been assigned in recent rate decisions;
Persistent, disproportionate increases in
Periodicals mail processing costs;
Recent trends in mail processing productivity;
and
The impact of the unzoned (or ``flat'')
editorial pound rate on the Commission's ability to recommend rates
that are consistent with the statutory ratemaking criteria.
Status of Time Warner Inc. et al.'s proffered testimony.
Complainants are directed to file all testimony, including that already
provided as attachments to its Complaint with the Commission no later
than 30 days from the date of this Order.
Representation of the general public. In conformance with section
3624(a) of title 39, U.S. Code, the Commission designates Shelley S.
Dreifuss, director of the Commission's Office of the Consumer Advocate
(OCA), to represent the interests of the general public in this
proceeding. Pursuant to this designation, Ms. Dreifuss will direct the
activities of Commission personnel assigned to assist her and, upon
request, will supply their names for the record. Neither Ms. Dreifuss
nor any of the assigned personnel will participate in or provide advice
on any Commission decision in this proceeding.
Request related to Complaint format and Rule 84 obligations. The
Commission has considered the Service's request that, at a minimum,
Complainants be required to recast their filing in a manner that
facilitates an admission or denial pursuant to Rule 84. The motivation
for this request appears to be a concern that the Complaint's format
may place the Service's compliance with Rule 84 in jeopardy because its
February 11, 2004 Answer does not admit or deny any factual
allegations. It notes that Commission rules indicated that the absence
of an explicit response in its Answer may be deemed to be an admission
of some fact. Answer at 13-14, fn. 8.
Rule 84 serves at least two main purposes: it is a formal avenue
for the Service to address matters raised in a complaint, and a vehicle
for the Commission to make certain procedural and substantive
determinations. As a general observation, the Commission notes that the
Answer the Service has provided conveys a clear grasp of the legal and
technical issues involved in the Complaint, a full understanding of
attendant consequences, and the ability to identify alternative courses
of action. To the extent the Service is concerned about admissions by
default, the Commission states that, given the circumstances presented
by the format of the filing in this case, it is waiving the
applicability of that portion of Rule 84. Accordingly, the Service's
objection on this ground is moot.
The Complainants will not be directed to recast their pleading. To
the extent the Service's request that this be done derives from the
fact that two proffered pieces of testimony were attached to the
Complaint, it is moot. The Service is not expected to address those
evidentiary proffers at this time. To the extent the request grows out
of the claim that specific policies of the Act have not been
identified, the
[[Page 17249]]
Commission finds this contention plainly erroneous. The body of the
Complaint identifies and quotes numerous policies; moreover, the
discussion includes explanations of which policies are implicated and
why this is so. Complaint at 19-20. Finally, the fact that discrete
paragraphs are not numbered, as they have been in some complaint
filings, does not appear to significantly impede a response.
Request for opportunity for comments from others. The Service
suggests that the Commission provide an opportunity for others to
comment prior to instituting proceedings on the Complaint. The
Commission believes that sufficient facts and information have been
placed before it via the Complainants' pleading and the Service's
February 11, 2004 Answer. Interested parties will have an opportunity
to address issues of concern to them throughout the hearing process.
Intervention; hearing. Those wishing to be heard in this matter are
directed to submit a notice of intervention, on or before May 21, 2004,
via the Commission's Filing Online system, which can be accessed
electronically at http://www.prc.gov. Persons needing assistance with
Filing Online may contact the Commission's Docket Section at 202-789-
6846. Notices shall indicate whether participation will be on a full or
limited basis. See 39 CFR 3001.20 and 3001.20a. The Commission
anticipates holding a hearing in this case. To assist the Commission in
making decisions relative to this determination, participants are
directed to indicate, in their notices of intervention, whether they
intend to participate in the hearing and the nature of that
participation. Pursuant to rules 26-28, participants may initiate
discovery following the submission of Complainant's testimony.
Public notice. The Commission directs the Secretary to arrange for
publication of this Order in the Federal Register.
V. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. C2004-1, Periodicals Rate
Design, to consider matters raised in the Complaint of Time Warner Inc.
et al. and other germane issues.
2. The Commission will sit en banc in this proceeding.
3. The deadline for filing notices of intervention is May 21, 2004.
4. Notices of intervention shall indicate whether the intervening
party intends to participate in the hearing, and the nature of that
participation.
5. The deadline for filing direct testimony is 30 days from the
date of this order.
6. Shelley S. Dreifuss, director of the Commission's Office of the
Consumer Advocate, is designated to represent the interests of the
general public.
7. The Secretary shall arrange for publication of this document in
the Federal Register.
Dated: March 26, 2004.
Steven W. Williams,
Secretary.
[FR Doc. 04-7265 Filed 3-31-04; 8:45 am]