The White House yesterday confirmed that Dan Blair, deputy director of the Office of Personnel Management, and a former aide to Congressman John McHugh has been nominated to a seat on the Postal Rate Commission, “and upon confirmation designate Chairman”.

The nomination had been predicted last month by Linn’s columnist and veteran postal correspondent Bill McAllister, who wrote at the time that “Blair’s appointment to a five-year term is a highly significant move signaling that the administration wants a strong commission to oversee the Postal Service.”

The US Postal Service yesterday filed its reply brief in the END Plant Consolidation case being considered by the Postal Rate Commission. The agency repeated its contention that “The Commission is not tasked by § 3661 to second-guess the judgment of postal management in proposing the service changes in question. Nor is it the Commission’s task under § 3661 to determine whether some alternative objectives would be “better” for the Postal Service to pursue.”, and argued that any opinion the PRC renders will be “advisory only”.

Best line in the brief has to be the footnote on page 3. After pointing out the many layers of existing oversight the USPS operates under, the brief notes that ‘At page 74, the OCA [Office of the Consumer Advocate] refers to a need for “continued surveillance” of postal management.’ The footnote asks “Can postal rendition be far behind?”

USPS N2006-1 Reply Brief
USPS N2006-1 Initial Brief
Complete Listing of Briefs filed

Bill McAllister reports in Linn’s Stamp News that George Bush plans to nominate Dan Blair, deputy director of the Office of Personnel Management, to be chair of the Postal Rate Commission. Blair has frequently been the Administration’s spokesperson when it comes to defending the requirement that the Postal Service foot the bill for military pensions for its employees, a burden other agencies don’t have to bear.

McAllister’s article points out that “Blair’s appointment to a five-year term is a highly significant move signaling that the administration wants a strong commission to oversee the Postal Service.” The article points out that Blair is a former aide to Congressman John McHugh, and has worked on previous postal reform legislation, and cites sources as saying that ”he has stated that he would help Congress rewrite those laws before he takes his seat on the commission.”

It concludes: “Although the White House has not announced the Blair appointment, three postal industry officials told Linn’s the president had selected him for the job.”

In a letter to USPS Chief Operating Officer Pat Donohoe, BMG Columbia House VP Clifton B. Knight Jr. says that the proposed new Postal rates and regulations “will make it impossible for us to remain in the business of selling music and video products by mail”. Knight asserts that his company will face increases of “62% to 115%” in its product shipments. And if the company is “constrained to stop using the mail for product shipment”, it will “inevitably reduce, if not entirely eliminate” its “use of mail for marketing and promotional purposes”.

Knight says the problem isn’t just the rates- it’s the fact that the USPS is reclassifying his company’s product from flats to parcels, even though Knight claims BMG has gone to “considerable expense” to make sure that their CD and DVD shipments meet the requirements for automated flats.

Letter from Clifton B. Knight Jr to DPMG Pat Donohoe

The proceedings in the rate case are in the discovery phase at the moment. Part of the discovery process is the submission of interrogatories, or questions by participants. Most interrogatories, naturally, are submitted by intervenors to the Postal Service. But there are also quite a few questions being asked of other intervenors. Many of these are variations on “Where did you come up with those ridiculous numbers in the testimony you submitted?”

And sometimes interrogatories seem to serve no purpose but to make a point- here’s one, submitted to APWU witness Kathryn L. Kobe by the Major Mailers Association. Kobe had testified that “it seems highly unlikely that the mail that is converting to presort mail is equivalent to the average collection mail that is coming from individual households, nonprofit organizations, and small businesses”. The MMA posed the following questions:

Please assume that you are a dutiful niece who for years sent monthly letters to your Aunt Minnie. Assume further that all these letters exhibited the cost attributes similar to an “average” First-Class single piece letter. Now, in 2005 you and your Aunt Minnie discovered the Internet and you substituted your 12 monthly letters with 12 monthly emails. Please confirm that, as far as the Postal Service is concerned, those letters are lost to the system and First-Class Single Piece has lost 12 “average” Single Piece letters. If you cannot confirm, please explain.

Please assume that you also enjoy calling your Aunt Minnie as well, and in 2005 you decided to sign up for a cell phone. The cell phone company sent you 12 monthly bills in 2005, all of which qualified as Automation letters. Please confirm that, as far as the Postal Service is concerned, those letters are new to the system and First-Class Automation has gained 12 pieces that are similar to an “average” Automation letter. If you cannot confirm, please explain.

Please confirm that, as far as the Postal Service is concerned, the 12 “average” Single Piece letters lost and the 12 “average” Automation letters gained represent a “shift” of letters from First-Class Single Piece to Presorted. If you cannot confirm, please explain.

The USPS will have to reconsider its decision to close the Observatory Station located in Pittsburgh, Pennsylvania, according to a ruling handed down last week by the Postal Rate Commission. The station was closed in June of this year, prompting protests by local residents and Pennsylvania politicians.

The USPS had argued that the PRC did not have jurisdiction over the decision to close the unit, because it was not a “post office”, but a “finance station”. The PRC found otherwise, ruling that while the station might not technically be a post office as defined by the USPS, it was clearly the intent of Congress to protect such units from arbitrary closing.

The ruling concludes:

The pleadings indicate that the Postal Service began the closing process by obtaining customer input to ensure that it would maintain a satisfactory level of service to the public in the Observatory Hill area.  It appears, however, that although the Postal Service started that process, it never completed it.  To comply with the Congressional mandate of §§ 101 and 404, the Postal Service needs to complete that process with respect to Observatory Finance Station by evaluating, among other things, input from affected citizens, and reaching a conclusion on whether a satisfactory level of service will be maintained.  This obligation is heightened when the public is confused about the status of the Postal Service’s actions and about the status of their right to be heard, particularly when that confusion is caused by the contradictory statements of the Postal Service.

Order Denying Postal Service Motion to Dismiss

Doug Carlson, a frequent consumer intervenor in postal rate cases, alerted us to the database of collection box data now posted on the Postal Rate Commission web site:

“The data show the location and collection times for every collection in the country. The Postal Service resisted release of the data for several years, but a federal judge ordered the Postal Service last year to release the data in response to my Freedom of Information Act lawsuit.”

Note that the data is from January of 2005.

Click here to download the database (it’s a 15 megabyte .zip file, containing six Excel spreadsheets with the actual data).

Azeez Jaffer has responded to an article posted on the Online Journal blog that charged the Bush Administration with ‘raiding’ USPS funds to pay for Bush’s war against Iraq.

Jaffer points out the obvious inaccuracies in the blog article, but fails to mention that the most recent increase was, in fact, the direct result of Bush’s insistence on “revenue neutrality” in any postal reform bill. That has forced the USPS to raise rates in order to fund a $3 billion payment to the Treasury this year. The money is supposed to be held in trust, but regardless of whether the money goes to fund the war, the bottom line is that it reduces Bush’s budget deficit by $3 billion.

Jaffer concludes with this rather odd statement: ”Mr. Masden also implies that the war funding is possible because the Postal Rate Commission is full of Bush Administration appointees who have authority over postage rates. Wrong again. Although the Postal Rate Commission plays an important role in the development of postage rates, it’s the Governors of the Postal Service who have the final say.”

True as far as it goes, but aren’t the Governors also appointed by the President?

Setting The Record Straight

According to Postcom, PRC nominee Mark Acton performed “extremely well” at his confirmation hearing. It also notes that in his remarks, “Acton expressed a preference for the ‘hard’ inflation-based cap approved by the Senate rather than the language approved by the House.”

The Postal Rate Commission today required the Postal Service to provide data on any other plant consolidations that may have occurred around the same time as the ten it has already documented. This came in response to an interrogatory filed by David Popkin. Popkin had requested information on all such actions in the last 15 years, which the PRC found excessive.

The USPS had suggested that all such consolidations were irrelevant to the issue before the PRC. The Commission noted, however, that the ten consolidations already documented by the USPS

were completed prior to the filing of the Service’s request in this case. These supporting documents contradict the Postal Service’s suggestion that past operational consolidation actions are categorically irrelevant; they are useful for illustrating the operation of the AMP process—which is critical to implementation of its END strategy—and possibly for other germane purposes.

POR-5 - Presiding Officer’s Ruling on David B. Popkin Motion to Compel Response to Interrogatories