The Flute Network and the Postal Rate Commission -
Opinion Released February 26, 2007

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The entire 502 page Opinion is freely available online - you can find it at the prc.gov website (but you will need Adobe Reader to actually read it.)
Here's the url:
http://www.prc.gov/R2006-1Opinion.htm - and once you get there, the TEXT OF THE OPINION is the option of importance just now.

The humbling and exciting part of it is, though folks --- YOU MADE A DIFFERENCE!!! WHAT WE DID MATTERED and the PRC honored what we had to say in their opinion --- it now remains to be seen what the United States Postal Service is going to do with it all.... if anything.... so the story is not over yet.... PLUS - with your help again, we're now well on our way to what may become "Chapter Two" if the USPS files for yet another rate increase later this year (as many of us expect them to do)!

The PRC Opinion, when the Adobe files is searched, includes a reference to "Flute Network" 24 times (some of those are, of course, part of the format for giving testimony and brief citations as part of the text, and then again in the footnotes they used). However - the PRC folks, I feel, were both respectful and generous in recapping and honoring the core concerns expressed in our testimony and brief! (I must say too how grateful I am for the help and support of several particular folks there at the PRC in Washington - wonderful people who made a generally intimidating process very "doable" - someday I'm going to figure out a way to take them to lunch sometime, somewhere, ...at the very least!)

For your reading pleasure, I've excerpted three of the pages of the PRC Opinion which discussed Flute Networks contributions to the discussion most directly, and am including them here .... also a bit that came in further down in the report which honored another specific request that we had made. Please understand that we are beginning here some 217 pages into the document, so we are (in every sense of the words) "picking up in the middle"... the most gratifying paragraph is towards the end of this segment (their page 219). There are embedded in this text internal references to the source of the argruments in each paragraph (such as specific testimony documents and/or various briefs offered by the 60 or so participants in this case), which may not make sense in terms of sentence flow... don't let those throw you though. The footnotes are also left in place, here, relative to the other paragraphs, and I will indicate page changes with "****************".

OK - here goes:

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Page 217 of the PRC Opinion on R2007 (Rate Case) – issued February 26, 2007:

[5386] On the other hand, The Flute Network argues that the value of service for Standard Regular and in particular, Standard Nonprofit Regular letter mail, is low since the Postal Service does not meet its published delivery performance standards. Witness Pritchard testifies regarding data that she collected about the quality of service for the delivery of the Flute Network’s Standard Mail.134 She argues that her data shows that “both senders and receivers are getting very poor service, and it has been deteriorating for at least two and a half years that I can document.” Flute-T-1 at 19.

[5387] Postal Service service standards call for The Flute Network’s mailings to be reaching addresses nationwide within 10 days, and locally in 1 or 2 days. However, her data show that actual experience has been much worse. Specifically, her research shows that for the bulk of those 228 subscribers reporting the date that the February 2006 issue was received, it took between 12 and 19 days to deliver. Further, the bulk of the 307 subscribers who reported when the March 2006 issue was received said that it took between 32 and 41 days to deliver.135 She concludes that the Postal Service is not living up to its own standards with respect to Standard Mail, and “one must question the kind of value in the so-called ‘value-added’ service that would substantiate an increase in postal rates … when services are not provided as promised, and when the value of a piece of mail is so degraded by late delivery that the service ends up being totally useless.” Flute-T-1 at 48.136

[5388] The Flute Network submits that consistent and reliable service is at the core of what is value of service. It acknowledges that there is probably no way to forestall increases in postal rates, but believes that the “dismal” service that Standard Mail customers (especially Standard Regular Nonprofit letter mail customers) have been

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134 She notes that “there is nothing unusual about The Flute Network which would allow one to imagine that the experiences we’ve had are a problem unique to us.” Flute-T-1 at 48.

135 Witness Pritchard also kept track of the delivery of The Flute Network’s issues from January 2005 to the May/June 2006 issue to her personal residence. Her experience was that the delivery time from Waynesville, NC to San Bernardino, CA took between 7 and 46 days depending on the issue.

136 She also includes first-hand experiences of peer companies and subscribers.

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PAGE 218 Docket No. R2006-1

experiencing, as demonstrated by witness Pritchard’s testimony, should not go unrecognized. It asks that the Commission take this information into account when setting rates. Furthermore, it asks the Commission to include a “strong recommendation” that there be a firm commitment on the part of the Postal Service to demonstrate substantial improvement in the delivery service performance for Standard Mail. Flute Brief at 30.

[5389] The Postal Service argues that The Flute Network’s survey is not representative of Standard Mail and should be afforded no material evidentiary weight. It points out that the survey only concerned one publication, and there is no evidence to suggest that its mailing patterns are representative. It does concede that “the data may provide a basis for concluding that there are opportunities for improving some of the service provided to a single publication.” Postal Service Brief at 146.

[5390] Commission analysis. The Postal Service proposal increases the institutional cost contribution per piece for Standard Regular from 7.18 cents in Docket No. R2005-1 to 9.49 cents in the instant docket. This implicitly conforms with witness Mitchell’s argument that the current institutional cost burden for Standard Regular is too low. Again, the Commission finds that based on the facts and circumstances of this case and applying all the factors of the Act, the Postal Service’s proposal does not go quite far enough in raising the institutional cost burden for Standard Regular.

[5391] Nevertheless, the Commission has to be careful in making sure that it does not go too far in reallocating institutional costs. In addition to potentially producing undesirable large swings in rates for the two subclasses (under 3622(b)(4)), it could also give the mistaken impression that the value of service in Standard Regular is relatively high, which runs contrary to the testimony submitted by The Flute Network.137

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137 Although The Flute Network’s arguments are said to apply to “Standard Mail (especially Standard Non-profit [Regular] Letter Mail),” Flute Brief at 3, the data presented are for the Regular subclasses. Accordingly, in light of the differences between the ECR and Regular subclasses discussed above (especially with respect to degrees of worksharing and dropshipment), the Commission considers these arguments applicable only to the Regular subclasses.

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PAGE 219 Chapter V: Rate Design

[5392] A more thorough analysis of the actual delivery performance for Standard Regular has never been presented for the Commission’s consideration. The Commission is grateful for the testimony and data provided by The Flute Network. Although the data collected can not be considered a random sample or even close to a scientific analysis, the data unquestionably shows that service provided to The Flute Network newsletter is severely lacking, and it raises serious questions as to the delivery performance for other Standard Regular origin-based national mailings. It can not be dismissed as pure coincidence, especially given that the Postal Service has never presented any data showing delivery performance of Standard Regular Mail, let alone any better, more statistically unbiased data than The Flute Network’s. The Commission finds that The Flute Network’s data is reason to refrain from increasing the Standard Regular institutional cost burden much more than proposed by the Postal Service. The Commission recommends a cost coverage for Standard Regular of 170.8 percent with a unit contribution of 9.54 cents per piece.

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AND -- Further down – page 421 of the PRC Opinion:

[6009] The Flute Network suggests discontinuing the Automated Correction Service marking “Temporarily Away” on returned mailpieces because the information is useless to mailers who pay a fee for the service. Flute-T-1 at 43.

[6010] The Commission recommends the new automated option, and applauds the Postal Service for employing technological advancements to increase the value of its services. The Commission adopts the structure and fees proposed by the Postal Service for Automated Address Correction Service and calculates an overall cost coverage of 139.3 percent. The Commission suggests that the Postal Service assess its utilization of the “Temporarily Away” marking.

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SOOOOO...... it was all worthwhile, folks! It really was! YOU made it happen, we were listened to, and I couldn't be more proud of Flute Network subscribers!

THANK YOU! I just can't say that big enough...... THANK YOU!
....and - the adventure continues!.....

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