Classification Reform; Implementation Standards

SUMMARY: This represents the third notice concerning Classification

Reform published by the Postal Service for public comment. On June 29

and August 30, 1995, the Postal Service published advance notices of

proposed rulemaking (60 FR 34056-34069 and 60 FR 45298-45323,

respectively). Each provided information about current Postal Service

proposals and decisions regarding prospective rate eligibility and mail

preparation standards, and opportunities for public comment on those

and other important issues related to the Postal Service's pending

MC95-1 Classification Reform proposals. This notice reviews the

preceding months' activity in this regard, presents extensive

discussion of comments received on the second notice, detailed

descriptions of proposals that are new or revised and estimates of

their affect on the mailing community, overview charts to assist

commenters in understanding the implementing standards set forth in the

proposed rule, and the full text of the Domestic Mail Manual standards

the Postal Service proposes to adopt to implement its Classification

Reform proposals.

DATES: Comments on the implementation process or proposed standards

must be received on or before January 22, 1996.

ADDRESSES: Mail or deliver written comments to the Manager, Customer

Mail Preparation, USPS Headquarters, 475 L'Enfant Plaza SW, Room 6830,

Washington DC 20260-2405. Copies of all written comments will be

available at the above address for inspection and photocopying between

9 a.m. and 4 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Leo F. Raymond, (202) 268-5199.

SUPPLEMENTARY INFORMATION: On March 24, 1995, pursuant to its authority

under 39 U.S.C. 3621, et seq., the Postal Service filed with the Postal

Rate Commission (PRC) a request for a recommended decision on a number

of mail classification reform proposals. The PRC designated the filing

as Docket No. MC95-1 and proceedings are currently under way before the

PRC in accordance with 39 U.S.C. 3624 and the PRC's rules of practice

under 39 CFR 3001. A notice of the filing, with a description of the

Postal Service's proposals, was published on April 3, 1995, in the

Federal Register by the PRC (60 FR 16888-16893).

On June 29, 1995, the Postal Service published for public comment

in the Federal Register an advance notice of proposed rulemaking (60 FR

34056-34069). That notice included an overview of the Postal Service's

proposals in MC95-1, the process that was used in developing them, and

the instant process being used to prepare for implementation of

classification reform and to begin development of the implementing

standards for future use in the Domestic Mail Manual (DMM). The notice

also contained detailed information about issues that had been

developed for consideration as part of the implementation process,

prepared in a format that paralleled the listing of requirements in the

Domestic Mail Classification Schedule (DMCS) portion of the MC95-1

filing. Among the purposes for publishing the advance notice was the

elicitation of comments on the proposed criteria under consideration

for inclusion in DMM implementing standards, many of which had been

developed with the advice of the Classification Reform Implementation

Advisory Groups (IAGs) convened by the Postal Service as part of the

process described in the notice. Readers who are unfamiliar with the

content of the Postal Service's MC95-1 filing, or the process that is

under way for implementation of MC95-1, should review the June 29

notice.

On August 30, 1995, the Postal Service published for public comment

in the Federal Register a second advance notice of proposed rulemaking

(60 FR 45298-45323). The second notice reported a summary of the

comments received from the earlier notice and invited further comment

from interested parties on updated proposed implementing standards and

on the implementation process generally. Readers were advised that,

following review of comments received for that notice, the Postal

Service would revise its proposed implementation criteria as

appropriate and use them as the basis for the DMM standards it would

propose for adoption if the Classification Reform proposals requested

by the Postal Service in PRC Docket No. MC95-1 are adopted. Those

proposed DMM standards are set forth after the discussion of comments

from the second notice.

Pursuant to 39 U.S.C. 3624, the PRC will issue a recommended

decision on the Postal Service's Request to the Governors of the Postal

Service. This recommendation is expected in January 1996. Pursuant to

39 U.S.C. 3625, the Governors will act on the PRC's recommendations. If

the Governors determine to place the PRC's recommendations into effect,

the Board of Governors will set an implementation date for the rate and

classification changes to take effect. Publication of a notice

announcing the Governors' decision and the issuance of final Domestic

Mail Classification Schedule and Rate Schedule changes will be made

immediately following the Governors' decision. After reviewing the

comments received on this proposed rule in light of the PRC's

recommendations and of the Governors' decision, a final rule will be

published adopting appropriate DMM implementing standards for the rate

and classification changes. Publication of this final rule will be

either concurrent with publication of the Governors' decision or as

soon thereafter as possible.

Part A of this notice summarizes major changes that have been made

to or added to the proposed implementation standards since the second

advance notice of proposed rulemaking. Part B provides an analysis of

comments received on the second notice and the Postal Service

responses. Part C provides a presort summary guide with charts for each

proposed rate. Part D contains a table showing ZIP Codes ineligible for

Automation Carrier Route rates. Part E summarizes proposed changes to

the DMM, followed by the proposed revisions to DMM standards.

A. Major Changes and Additions Since August 30 Notice

This section identifies proposed additions and changes to the DMM

mailing standards that were not specifically indicated in the summary

of preparation standards presented in the August 30 advance notice of

proposed rulemaking. To aid readers in identifying changes which might

affect them, this information is provided in the following subject

matter groups: (1) Changes to the proposed mailing standards described

in the August 30 notice; (2) additional changes for the reformed

subclasses of mail not included in the August 30 notice; (3) changes

generally affecting all classes of mail; (4) changes reflecting planned

adjustments in postal operations; (5) changes affecting address

matching for all classes of mail; (6) changes affecting all third-class

mail; (7) changes affecting nonprofit third-class mail; (8) changes

affecting all second-class mail; (9) changes affecting preferred rate

second-

[[Page 66583]]

class mail; and (10) changes affecting all fourth-class mail. Unless

otherwise stated, the Postal Service proposes to make these changes

effective at the same time as the Classification Reform changes are

implemented.

1. Changes to Mailings Standards Contained in August 30 Notice

a. The proposed requirement to use uniform placement of address

elements within Retail Presort First-Class, Regular and Enchanted

Carrier Route Standard Mail, and nonautomation-compatible Publications

Service Periodicals mailings has been withdrawn.

b. The proposed minimum quantity for a package of automation-

compatible Publications Service letters to qualify for carrier route

rates has been revised from 10 pieces to 6 pieces. This would establish

a standard 6-piece package size for all Publications Service

Periodicals.

c. New sortation criteria have been added for nonautomation-

compatible letters for Publications Service and Regular Periodicals.

The new Publications Service sortation proposal would require

preparation of packages since this mail cannot be processed on

automation. The new sortation criteria for Regular Periodicals

nonbarcoded letters also would require package preparation, and allows

Regular Periodicals to qualify for presort rates in the same manner as

today.

d. Separate sortation criteria have been added for Regular

Periodicals barcoded letters and Regular Periodicals barcoded flats. As

discussed in the section concerning comments on the Periodicals

proposals, Publications Service does not have a separate barcoded rate

and carrier route mail may be counted toward the 85% ZIP+4 or delivery

point barcoded requirement. However, the Regular subclass has separate

3/5 and Basic Barcoded rates. For Postal Service processing efficiency,

Regular Periodicals mailers wishing to qualify for the separate

Barcoded letter and flat rates must prepare separate Barcoded rate

mailings meeting a separate 85% barcoding requirement that does not

include the carrier route portion of the mailing, and that does not

include firm packages. These pieces are excluded because they are not

processed on automation. These new Regular barcoded letter preparation

proposals reflect the new tray sortation levels that will be

implemented with Classification Reform. The current 10-piece 5-digit

package, 50-piece 3-digit package, and 10-piece AADC package standards

are retained to maintain eligibility for the 3/5 Barcoded rates. Since

the proposed Regular Barcoded letter rates do not provide for a

separate 5-digit Barcoded rate and a separate 3-digit Barcoded rate,

but rather a combined 3/5 Barcoded rate, the preparation of all

possible 5-digit packages before preparing 3-digit packages will be

required.

e. Automation-compatible Publications Service letter-size mailings

also have only one rate for noncarrier route sorted mail. Because there

is no separate 5-digit Barcoded rate for this mail, preparation of all

possible 5-digit trays will be required.

f. The presort requirements for Regular Standard Mail letters have

been revised to incorporate a minimum of 150 pieces of mail for a 3-

digit destination to qualify for 3/5 presort rates and to prepare 5-

digit and 3-digit tray levels. This reflects a consistent application

of a 150-piece criterion to qualify for 5-digit and 3-digit rates for

letter mail (with the exception of barcoded Regular Periodicals). This

proposal would also keep qualification levels for 3/5 rates at levels

somewhat equivalent to current preparation standards.

g. Within First-Class and Standard Automation Mail, and automation-

compatible Publications Service letters, a proposed requirement for a

minimum of 150 pieces of mail to an AADC destination before mailers may

prepare an AADC tray has been added. This proposal also reflects the

Postal Service's desire to maintain a consistent 150-piece tray

preparation criteria for barcoded letter mail.

h. A requirement has been added to the proposal that all letter

mail be prepared in trays under the reformed subclasses, including

Enhanced Carrier Route Standard Mail, and Regular and Publications

Service Periodicals. This requirement is discussed in more detail below

in the section on letters.

i. With certain exceptions for local mailings and some pallet

levels, all letter and flat trays containing mail in the reformed

subclasses would have to be sleeved and strapped. This is discussed in

more detail below in the section on letters.

j. The proposed standards have been revised concerning the

preparation of pieces that meet the standards for both letter-size and

automation-compatible flat-size mail, and that are prepared as packages

placed directly on pallets. The revision would limit the amount of

Regular Standard Mail that can be palletized in this manner to 10% of

the total pieces in the mailing job. This is discussed in more detail

below in the section on flats.

k. Because of the differences in presort and rate eligibility

criteria, the proposed option to combine letter-size mailings of

Regular and Publications Service Periodicals has been removed.

l. The provision for local approval to prepare First-Class Mail in

pouches has been removed from the DMM. This provision was primarily to

allow pouching of flat-size pieces and parcels. Because DMM provisions

have been proposed for traying flat-size pieces and sacking First-Class

parcels, the provision for local approval of pouching is no longer

needed.

m. The qualification criteria for Destination Delivery Unit

discounts for Standard Mail and Publications Service Periodicals have

been revised to require that mailers to take carrier route sorted mail

to the postal facility where sequencing of the mail takes place. For

Automation Standard Mail and for automation-compatible carrier route

letter-size Publications Service Periodicals, this could be the

facility where the carrier sequence barcode sorter (CSBCS) that

sequences this mail is located, rather than the facility were the

carrier is located.

n. The proposal to require that addresses in Retail Presort and

Automation First-Class mailings be updated for moves within 6 months of

the mailing has been clarified to indicate that it would become

effective as a rate eligibility requirement beginning 6 months after

Classification Reform implementation, or January 1, 1997, whichever is

sooner.

2. Additional Proposed Changes for Reformed Subclasses Not Specified in

August 30 Notice

a. New sack sortation standards for First-Class parcels have been

added. Because, the preparation of parcels in flats trays is generally

inappropriate, sack preparation criteria have been added for this

processing category of First-Class Mail.

b. Clarification has been added that Publications Service mailings

may include in-county pieces even though such pieces do not count

toward the eligibility requirements for the Publications Service rates.

c. For all mailings under the reformed subclasses, provisions have

been added requiring the preparation of a less-than-full 3-digit tray

for each 3-digit ZIP Code of the SCF that serves the entry post office.

This would allow small quantities of local mail to avoid being

transported to and processed at an ADC or AADC, resulting in better

service and expanding the opportunity for Standard Mail and Periodicals

to obtain destination SCF rates.

d. The rules in this notice reflect the Postal Service's intent to

allow mailers

[[Page 66584]]

to include only pieces with postage affixed at an Automation First-

Class or Standard rate in mailings presented under the value added

refund (VAR) procedures in DMM P014.4. That the relationship between

mailers participating in the VAR process, such as presort bureaus, and

their customers is that letter-size pieces coming into their operations

are intended to be incorporated into the automation mailstream.

Requiring postage to be affixed at an automation rate will simplify the

documentation and verification process for mailers, their customers,

and the Postal Service by reducing the number of different rates for

which value added computations must be made.

3. Proposed Changes That Generally Affect All Classes

a. Marking requirements that reflect the proposed new class and

subclass names have been added throughout the DMM. In order to make it

easier to apply the rate/subclass markings that are planned under

Classification Reform, an option has also been added to allow placement

of these markings on the optional endorsement line, in front of the

package label information. Furthermore, the current required walk-

sequence markings for Regular and Publications Service Periodicals, and

for Automation, Enhanced Carrier Route, and Regular Standard Mail have

been changed from ``WS'' to ``WSH'' or ``WSS'' to facilitate obtaining

separate cost information for pieces mailed at the High Density and

Saturation rates, respectively.

b. Appropriate labeling list information has been added for trays,

sacks, and pallets. The ADC labeling list, DMM L101, proposed in this

notice to apply more generally and not to First-Class Mail only, has

been redesignated accordingly as DMM L004.

c. Provisions have been added to the DMM that require mailings of

different subclasses to be prepared as separate mailings, to meet

separate minimum quantity requirements, and to bear appropriate rate/

subclass markings and appropriate postage.

d. Specific standards have been included in proposed DMM M020 and

M033 about how to place mail in trays, when to package, and what

packaging material is permitted.

e. Pallet preparation rules are also included in this proposal.

These pallet rules reflect the standards contained in a separate,

recently published final rule on pallet preparation that adopts changes

pertaining to the physical characteristics of pallet loads, such as

minimum/maximum height and weight limits, and provisions for triple-

stacking. That final rule is expected to appear in the Federal Register

on December 20, 1995. It adopts changes proposed on July 31, 1995 (60

FR 39080-39088). Although those changes are not affected by the Postal

Service's Classification Reform proposal, they are included in this

proposed rule for providing the entire set of rules on pallets as they

would look like after Classification Reform. The pallet rules in this

proposal also contain proposed DMM standards on levels of pallet

sortation and requirements to prepare pallets of Standard Mail and

Periodicals sorted to the finest levels, which are affected by

Classification Reform. These proposals are open to further comment.

4. Proposed Changes That Reflect Adjustments in Postal Operations

The Postal Service plans to make changes in its processing networks

to reflect changes that have occurred over time, and to implement

improvements to the way it processes and transports mail. One change is

the elimination of the current state distribution center (SDC) network

for non-First-Class letters, flats, and irregular parcels. The Postal

Service plans to eliminate this network and merge the mail currently

processed (SDC, state, and mixed states sorted mail) into the area

distribution center (ADC) network currently used for First-Class Mail.

This change should enhance service for SDC and state mail, provide a

finer breakdown of this mail for more precise sortation and

transportation (the ADC network has more processing centers than the

SDC network), and reduce the redundancies of two overlapping processing

networks. With this change, all letters, flats, and irregular parcels

will be processed on the same network. As a result, the Postal Service

expects to improve service and reduce the handlings for processing this

mail.

The Postal Service also plans to eliminate the current option for

mailers to prepare mail sorted to specific multi-ZIP Coded post offices

(listed in DMM L001). Due to changes in Postal Service operations, this

level of sortation no longer provides additional value to the Postal

Service because most of this mail is now sorted at a mail processing

plant that serves such post offices. The Postal Service has itself

stopped preparing most such sortations. Moreover, the implementation of

letter and flat automation has reduced the need for these separations

because, for this mail, it is more efficient to process larger

quantities of mail made up to fewer sortation levels.

The Postal Service plans to implement the transition from the SDC

network to the ADC network and to eliminate optional city preparation

when it implements the rate and classification changes that result from

Classification Reform. Making all these changes at the same time will

have less impact on postal operations and on mailers than if they were

made in stages. The Postal Service proposes to apply these changes

systemwide to all affected subclasses of mail, both reformed and not,

in order to obtain the maximum benefit. Preferred Rate Periodicals,

however, will retain the option of being prepared in optional city

packages and sacks, because eliminating them could affect qualification

for the Level H rates.

A less-than-systemwide implementation of the ADC network would

compel the Postal Service to maintain SDC, states, and mixed states

processing and optional city preparation for only a portion of the

letter, flat, and irregular parcel mailstreams. This dual system would

complicate processing and would impose unwarranted costs for separate

facilities, equipment, and personnel for a greatly reduced volume of

SDC network mail.

Therefore, the Postal Service proposes to eliminate the optional

city package and sack sortation level and to eliminate the SDC, state,

and mixed states package and sack sortation levels for all current

second- and third-class letters and flats and all current third- and

fourth-class irregular parcels, except Preferred Rate Periodicals,

which will retain the option of being prepared in optional city

packages and sacks. The SDC, state, and mixed states package and sack

sortation levels will be replaced by ADC and mixed ADC package and sack

sortation.

Customers should note that because alignment of the Postal

Service's processing and distribution networks is an ongoing process,

the facilities listed as ADC/AADC destinations at the time that

Classification Reform is implemented might differ from those shown in

the DMM labeling lists contained in this proposal. Some ZIP ranges

might change, and some facilities currently identified as ADC or AADC

destinations might be realigned. The same range of ZIP Codes also might

be assigned to different ADC facilities, depending on the class of

mail.

5. Proposed Changes Affecting Address Matching for All Mail

The Postal Service has also been developing improvements in the

product cycle and the update schedule for its Address Information

System (AIS) products. In conjunction with the

[[Page 66585]]

Classification Reform case, the Postal Service proposed adopting a

bimonthly update frequency for its AIS products. It also proposed

requiring that carrier route information used in qualifying for all

carrier route rates be obtained through a match to a current Carrier

Route Information System (CRIS) scheme or other AIS product that

contains carrier route coding information no more than 90 days before

the date of the mailing. This change is necessary due to the proposed

increase in the issuance cycle of AIS products and the need to

standardize the time frames applicable to the use of those products. A

more detailed discussion of this change is set forth below in the

section on the addressing proposals in the August 30 notice. The Postal

Service proposes to apply these AIS changes to carrier route mailings

of all classes and subclasses. Given the frequency of route adjustments

that will occur over the next few years, maintaining the old matching

schedule for some carrier route mail while changing it for other mail

would be confusing, costly and irrational because of overlapping

required updates.

Mailers at ZIP+4 and Barcoded rates will also be required to use a

current database as defined under new release date schedules when

matching addresses to the ZIP+4 database. Mailings prepared under

subclasses not included under the current proposals for Classification

Reform would need to have their addresses matched to the ZIP+4 database

using CASS- or MASS-certified address matching software once a year,

whereas mailings prepared under the reformed subclasses would need to

have this match performed at least once every 6 months. The frequency

at which address matching software must obtain CASS/MASS certification

also will not change.

6. Changes Affecting All Third-Class Mail

a. Due to the proposed adoption of the name Standard Mail as part

of Classification Reform for all mail currently in third- and fourth-

class mail, the Postal Service proposes to change the class

abbreviations from 3C to STD for sack, tray, and pallet labels for

current third-class mail (which will be known as Standard Mail (A)).

b. To make it easier to apply the rate/subclass markings that are

proposed under Classification Reform, this proposal would allow

Standard mailers the option of placing these markings on the optional

endorsement line, in front of the package label information.

7. Proposed Changes Affecting Nonprofit Third-Class Mail

As a convenience to Nonprofit Standard mailers, the Postal Service

proposes to allow an optional preparation of Nonprofit Standard Mail

under the rate eligibility, presort rules, PAVE-certified presort

software or standardized documentation requirements, and address

quality and accuracy standards for the reformed subclasses. The current

third-class nonprofit rates would apply to such mailings. For example,

mailers could choose to prepare a letter-size Nonprofit 3/5 and Basic

mailing under the preparation rules for the Regular Standard Mail

subclass. This would mean that the addresses would have to be matched

to the correct 5-digit ZIP Code no more than 1 year before the date of

mailing; PAVE-certified software would have to be used to presort the

mailing or standardized documentation would have to be submitted with

the mailing; the pieces would have to be in groups of 150 pieces to a

3-digit area trayed to 5-digit and 3-digit destinations, with the trays

sleeved and strapped. The current nonprofit third-class 3/5 rates would

apply to groups of 150 pieces for a 3-digit area properly presorted

under the Regular Standard Mail standards. Preparation of Nonprofit

Standard Mail under the rules for Regular, Automation, or Enhanced

Carrier Route Standard Mail would also enable it to be combined

(comailed) with mailings of those subclasses.

8. Proposed Changes Affecting All Current Second-Class Mail

a. Due to the change in the name of second-class mail that is

proposed with implementation of Classification Reform, the Postal

Service proposes to change the class abbreviations from 2C or NEWS to

PERIOD or NEWS, as applicable, for sack, tray, and pallet labels for

all Periodicals, including Preferred Rate Periodicals. In addition, the

mail processing category of the mail will be required to follow the

class abbreviation on the second line of the sack or tray label, making

those standards for Periodicals consistent with other classes of mail,

and assist Postal Service mail processing personnel in directing

containers of Periodicals to the proper operation.

b. The Periodicals imprints required as part of the identification

statement would be changed from ``Second-Class Postage Paid at * * *''

and ``Application to Mail at Second-Class Postage Rates is Pending at *

* *'' to ``Periodicals Postage Paid at * * *'' and ``Application to

Mail at Periodicals Postage Rates is Pending at * * *.''

9. Proposed Changes Affecting Preferred Rate Second-Class Mail

As a convenience to Preferred Rate Periodicals mailers, the Postal

Service proposes to allow the optional preparation of Preferred Rate

Periodicals under the presort and eligibility rules for Regular

Periodicals (including addressing and PAVE-certified or standardized

documentation standards). The current second-class preferred rates

would apply to such mailings. For example, if a mailer chose to prepare

a letter-size Nonprofit Level G and H mailing under the preparation

rules for the Regular Periodicals 3/5 and Basic rates, the pieces would

have to be trayed, sleeved, and strapped, and optional city and

optional SCF sortations could not be performed. The Level H rates would

apply only to 5-digit and unique 3-digit packages properly sorted to 5-

digit and 3-digit trays.

10. Proposed Changes Affecting All Current Fourth-Class Mail

Due to the change in the name of fourth-class mail that is proposed

with implementation of Classification Reform, the Postal Service

proposes to change the class abbreviations from 4C to STD 4C for sack

labels for fourth-class mail (which will be known as Standard Mail

(B)), and to change the rate markings ``Special Fourth-Class'' and

``Presorted Special Fourth-Class'' to ``Special Standard Mail'' and

``Presorted Special Standard Mail'' to agree with the revised names for

these types of mail.

B. Summary of Comments From Second Notice

The Postal Service received 49 pieces of correspondence offering a

total of 207 comments on the August 30 notice. Respondents included

major mailer associations, individual publishers, printers, presort

bureaus, mailers, and private citizens. As with the first notice, the

comments do not lend themselves to easy categorization or direct

association with specific provisions in the second notice. Rather,

commenters tended to speak to general areas of concern, such as

automation, or to common aspects of several proposed criteria, such as

tray volumes for several different presort levels. Although the

proposals were replicated in the second notice in the same format as in

the first, comments tended to aggregate these into a single response.

The largest single area to which comments were directed in general

was

[[Page 66586]]

the preparation of automation mail (First-Class Mail and Standard

Mail); approximately 70 comments discussed issues in that area.

Addressing issues were the focus of 28 comments, although other

comments mentioned addressing issues to a degree. Publications Service

was the subject of 13 comments. Nonautomation First-Class (Retail

subclass) and Standard Mail (Regular and Enhanced Carrier Route

subclasses) received a total of 2 and 27 comments, respectively.

Another 26 comments discussed general issues, including some (like the

wisdom of classification reform) that are beyond the scope of this

rulemaking. The specific points raised in the comments are presented

below, organized by subject areas represented by the Implementation

Advisory Groups (IAGs): letters, flats, addressing, and publications.

Miscellaneous issues are reported thereafter. Readers are invited to

comment on the proposed DMM provisions and to identify additional

proposals or issues that warrant inclusion in Classification Reform

implementation plans.

1. General Comments

a. Minimum Quantity Requirements

One commenter asked whether separate 200-piece minimums will be

required for each Standard Mail subclass when the mailings are

commingled on pallets. Each subclass of Standard Mail (Automation,

Enhanced Carrier Route, and Regular) will be required to meet a

separate 200-piece minimum quantity requirement, and each subclass of

First-Class Mail (Automation and Retail) will have to meet a separate

500-piece minimum quantity requirement.

b. Definitions of Mailing and Mailing Job

One commenter requested clarification of what a mailing and a

mailing job will be under Classification Reform. This commenter noted

that because the Postal Service indicated that it will allow mailings

of different subclasses to be claimed on the same mailing statement,

that the current axiom that ``a mailing statement equals a mailing''

cannot be used. This commenter also requested a definition of a mailing

job as used in the description of when pieces meeting the standards for

both letter-size and barcoded flat-size pieces may be prepared as

packages on pallets. He specifically asked whether there will be time

limits such as a day, week, or month for a mailing job.

A mailing may include only one subclass and only one mail

processing category (e.g., letter, flat) and is reported on a mailing

statement. A mailing job, defined by the mailer and agreed to by the

local business mail entry unit, contains the total pieces meant to be

mailed to a defined set of addresses. A mailing job may contain more

than one mailing (e.g. more than one subclass).

c. Presort Accuracy Validation and Evaluation (PAVE)

The Postal Service has proposed to require use of PAVE-certified

software or standardized documentation when preparing mailings under

any of the reformed subclasses. Nine comments were received regarding

this proposal, five of which included requests for clarification of

standards.

Two commenters wanted a definition of ``standardized

documentation'' and examples of any required documentation along with

more clearly defined requirements. One asked whether PAVE certification

will be available before the implementation of Classification Reform. A

commenter that uses software developed in-house asked how the

requirement for PAVE certification affects in-house software developers

and requested further clarification of PAVE. Another commenter

expressed concerns about documenting overflow trays and requested

clarification of content documentation for allowed overflow trays.

A utility company said that it would like uniform requirements for

mailing documentation and a single computerized mailer file, possibly

accessible by permit number, that would document Postal Service

certification of software and mailing processes. A second utility

company believed that CASS, which focuses on address quality, and PAVE

are duplicative in nature and suggested that public utility mailers who

use CASS-certified software and update customer moves within the

prescribed time frame should be exempt from the requirement to use PAVE

software.

PAVE and CASS are not duplicative. CASS tests the ability of

address matching software to match addresses correctly to the Postal

Service ZIP+4 database and to apply proper barcodes. PAVE tests the

ability of presort software to sort addresses correctly according to

Postal Service sortation requirements and to produce accurate presort

and postage documentation and accurate mailing statement facsimiles.

The Postal Service plans to have PAVE testing available for all

reformed subclasses prior to implementation of Classification Reform.

PAVE certification does not remove the requirement to submit

documentation with each mailing where documentation is required. This

is because PAVE tests the ability of the software program to sort

properly, but does not test the mailer's proper use of it or

application of proper mailing parameters to each mailing. PAVE also

tests the ability to prepare properly formatted mailing statement

facsimiles. The Postal Service also plans to make production of

standard documentation a requirement for PAVE certification. Software

that is developed in-house may be PAVE-certified. Requests for PAVE

certification information and tests should be directed to: PAVE

Program, National Customer Support Center, United States Postal

Service, 6060 Primacy Pky Ste 101, Memphis TN 38188-0001

Mailers will have the choice of using either PAVE-certified

software or standardized documentation, regardless of whether they use

presort software. Therefore, mailers not using software to sort their

mail will not need to meet the PAVE requirements. However, such mailers

must be able to present standardized documentation for those mailings

that require documentation. Standardized documentation requirements are

still being developed and will be published for comment in a separate

proposed rule. The Postal Service expects to publish this proposal in

the Federal Register by early February 1996. Questions concerning

whether overflow trays will need to be documented also will be

addressed in that notice.

The request for a single computerized mailer file, possibly

accessible by permit number, that would document Postal Service

certification of software and mailing processes is more related to a

system certification approach to mail acceptance. Although this is an

idea that will be considered for the future, it will not be developed

and deployed by the time of Classification Reform implementation.

2. Automation Subclasses

a. 100% Barcoding

The Postal Service has proposed that First-Class and Standard Mail

Automation subclasses be composed of 100% delivery point barcoded

pieces for letters and 100% ZIP+4 barcoded or delivery point barcoded

pieces for flats. Fifteen commenters responded to the proposal for 100%

barcoding.

Three commenters supported this proposal because it promotes higher

quality addresses. Four commenters

[[Page 66587]]

indicated that they cannot obtain 100% barcoding of their mailing

lists. Six commenters expressed doubts that the goal could be achieved

because current matching software is too restricted from making matches

to the ZIP+4 file and because data missing from the file prevents a

match.

Mailers with good quality addresses can obtain delivery point

barcodes on their mailpieces. If they cannot, those pieces can be

mailed at the appropriate subclass rates for nonbarcoded mail. Having

identified a need for accurate barcodes to ensure proper automated

sortation, the Postal Service tests and certifies address matching

software to ensure that the software is producing correct barcodes.

Because only correct barcodes are acceptable, software is controlled to

help ensure that a barcode will not be applied if an incomplete or

otherwise poor quality address inhibits reliable coding. The Postal

Service is proposing reduced postage rates for mail with correct

barcodes. Those rates were not designed to apply to nonbarcoded mail or

to mail with incorrect barcodes. Incorrect barcodes cause misdirected

mailpieces, in turn causing increased costs and reducing the Postal

Service's ability to provide timely, consistent delivery service. To

aid mailers with barcoding, the Postal Service already has a variety of

tools for improving address quality. If the mailer cannot use CASS- or

MASS-certified software to successfully barcode some of its mail (with

a delivery point barcode or, for flats, a correct ZIP+4 barcode), the

mailer will be required to mail those pieces at the Retail First-Class

or Regular Standard rates.

One commenter wanted Address Element Correction extended to small

mailers. The current limit is 10,000 address records. However, smaller

lists may be acceptable. Interested mailers should call the National

Customer Support Center at (800) 238-3150. The National Customer

Support Center can also provide information on a variety of other

address quality improvement products and services.

Four commenters indicated that improvements in address correction

service are needed, one of whom stated that carriers often do not

provide address corrections if they can deliver the mailpiece. Although

changes to address correction service are beyond the scope of this

rulemaking, the Postal Service is mindful of the need for quality

address corrections, especially to addresses beyond those corrections

generated by a change of address order.

One commenter wanted confirmation that the 100% delivery point

barcoding requirement applies to bulk outgoing mailings and not

courtesy reply, business reply, and Business Reply Mail Accounting

System (BRMAS) mail. The 100% delivery point barcoding requirement for

letters applies only to letter-size mailings entered as Automation

First-Class Mail or Standard Mail. Under Classification Reform, BRMAS

mail will continue to be required to bear a ZIP+4 barcode assigned by

the Postal Service. However, as part of Classification Reform, the

Postal Service does plan to implement a requirement that, by January 1,

1997, all reply letters and cards included as enclosures to Automation

subclass mailings must bear a proper facing identification mark (FIM)

and correct barcode. This would apply to courtesy reply mail and

current non-BRMAS business reply mail. A further discussion of this

requirement is in a later section of these comments.

One commenter requested that 5-digit and unique ZIP+4 codes be

permitted to qualify as a delivery point barcode so as not to limit

internal sorting opportunities. Another commenter wanted continued

acceptance of unique 5-digit and ZIP+4 barcodes at barcoded rates,

stating that software can recognize and count these barcodes as

delivery point barcodes.

Currently, barcodes must be 11-digit delivery point barcodes in

order to qualify for letter-size barcoded rates. Although unique 5-

digit and certain ZIP+4 codes may represent the final delivery point

for some mailpieces, it would not be possible to determine at the time

of acceptance whether a 5-digit or ZIP+4 barcode was a unique barcode

or a coding error if they were permitted in mailings. Furthermore,

CASS- or MASS-certified software is capable of returning 11-digit

delivery point barcodes for unique ZIP Codes and ZIP+4 codes.

Accordingly, the Postal Service plans to retain the requirement that

only 11-digit delivery point barcodes may qualify for Automation

subclass rates for letter-size pieces. Mailers wishing to utilize

internal sortation abilities by assigning their own 4-digit add-on

codes to unique 5-digit ZIP Codes may do so if they have the ZIP+4

codes added to the Postal Service ZIP+4 database. To have internal

ZIP+4 codes added to the ZIP+4 database, the mailer must develop

rational internal addresses to be matched to a particular ZIP+4 add-on

in a rational manner, and have the address configuration and +4 codes

approved by the district address management office. There will be one

exception to the 11-digit delivery point barcode rule: courtesy reply

mail bearing a FIM and a preapplied unique 5-digit or unique ZIP+4

barcode will be considered to have a proper delivery point barcode and

will not be counted as an error at acceptance. Because of the FIM, this

mail can be easily identified at acceptance.

Four commenters indicated that splitting their mail lists into two

separate mailstreams, one with delivery point barcodes and one without,

will increase their mail preparation expenses. One of these commenters

was concerned that the separate mailstreams will slow their processes,

resulting in some mail having to be remetered. This commenter requested

that an extra day on meter dates be given so that mailers can use

encoding systems to barcode mail initially rejected from multiline

optical character readers (MLOCRs). DMM P030.4.12 currently contains

procedures to allow mailers to correct meter dates. This may be done

either by remetering the mail with a ``.00'' meter impression in

authorized locations or by using an ink jet printer to apply the

correct meter date, city, state, and 3-digit ZIP Code of the office of

mailing, preceded by two asterisks, above the address and below the

meter impression. Because meter dates are used to measure Postal

Service service performance and because mail recipients rely on them to

indicate the date of mailing, an option of submitting mail with a stale

meter date will not be provided.

One commenter stated that the 100% delivery point barcoding

requirement should be deleted to prevent nonqualifying mail from

flooding post offices at the single-piece rates. Two commenters

indicated that this requirement will result in more residual mail being

processed at origin. One commenter stated that the cost-effectiveness

of point-of-origin MLOCR processing of nondelivery point barcoded mail

is overstated because the Postal Service is still using multiposition

letter sorting machines (MPLSMs). One commenter indicated that this

requirement should not be implemented until the Postal Service is in a

``full-up'' environment for equipment deployment. One commenter stated

that this requirement might have the effect of third-class mailers

removing uncodable names from their advertising lists, resulting in

decreased revenue for the mailer and the Postal Service. Two commenters

requested that the 100% barcoding requirement be phased in. One

commenter indicated that 90% barcoding would be a more realistic

requirement and would be more in keeping with the concept of lowest

combined cost.

As indicated in the comment response section of the August 30

notice, when

[[Page 66588]]

mailers mix delivery point barcoded mail and nondelivery point barcoded

mail within the 3-digit and residual portions of their barcoded rate

mailings, as is currently permitted, the nondelivery point barcoded

mail is rejected from barcode sorters and must be rerun on MLOCRs or

MPLSMs. (Mail presorted to 5-digit packages and trays must currently be

100% delivery point barcoded.) Requiring mailers to prepare a separate

mailing for nondelivery point barcoded mail eliminates these extra

handlings and allows this mail to be directed properly from the start,

resulting in more efficient Postal Service processing. These

efficiencies are recognized in the lower Automation subclass rates

proposed under Classification Reform. Furthermore, the Postal Service

put mailers on notice several years ago that, in the near future, the

Postal Service would require a 100% barcoded mailstream. Accordingly,

the Postal Service does not believe that phasing in this requirement is

appropriate.

If the 100% barcoding requirement results in more nonbarcoded mail

presented for OCR processing at the origin post office, the Postal

Service believes that it has the operational capacity to process this

mail. Furthermore, because the origin post office will not have to OCR-

process the current volume of mailer-prepared pieces without delivery

point barcodes (that are rejected from that plant's barcode sorters),

there should be an offsetting lessening of mail volume presented to a

plant's OCRs for processing. The fact that the Postal Service is still

using MPLSMs and has not deployed all its planned barcode sorting

equipment does not negate the operational advantages for the majority

of plants where MLOCRs and barcode sorters are in place. The processing

efficiencies that the Postal Service will gain from a 100% barcoded

mailstream are reflected in the lower rates proposed for the Automation

subclasses. In return for the lower rates proposed for Automation

subclass mail, mailers will have to perform the additional work of

separating nondelivery point barcoded mail and presenting it as a

separate mailing under different subclass requirements. If mailers

remove uncodable names from their address lists, it is not certain that

net revenue will be lost by either the mailers or the Postal Service.

It is probable that many addresses for which delivery point barcodes

cannot be obtained would be undeliverable. If sent as Standard Mail,

these pieces would not be delivered. If sent as First-Class Mail, these

pieces would add costs to the Postal Service to determine the delivery

point and forward the mail to that point or return the pieces as

undeliverable-as-addressed mail.

One commenter wanted to know whether 98% barcoding would be the

actual requirement when tolerances for mailer errors are taken into

consideration, and another commenter wanted to know the error tolerance

level. In terms of tolerance for mailer error, at least initially, it

is planned that Automation subclass letter mail will be subject to the

current business mail entry unit acceptance procedures. If pieces in

the sample selected during verification of Automation subclass mailings

are found not to bear a delivery point barcode, these pieces will be

counted as errors. When the acceptable tolerance for all presort errors

is surpassed, the mailer will be given the same two choices currently

available: (1) Take the mailing back, correct it, and resubmit it to

the Postal Service; or (2) pay additional postage at the appropriate

rate for the proportion of the mailing found to be in error during the

verification process.

One commenter requested that the Postal Service provide delivery

performance data to all mailers so that they can measure process

changes. This comment is beyond the scope of this proposed rule and

will not be addressed here.

b. Courtesy and BRM Barcoded Envelopes

Seven commenters had questions or cited concerns about the proposed

requirement that courtesy and business reply letters or cards included

in an Automation First-Class or Standard mailing must be automation-

compatible and bear a FIM and a correct barcode for the address to

which the piece is returned.

One commenter said that this new requirement was unneeded,

reasoning that business reply mail does not pose a major problem

because the Postal Service provides automation-compatible, camera-ready

addresses for mailpieces and also places restrictions on how reply mail

can be used. Four commenters questioned the relationship of enclosed

pieces to host pieces. One questioned whether requirements for an

enclosed First-Class piece are relevant to an outgoing third-class

piece because the processing costs are independent. A second commenter

asked why a barcoded return piece could disqualify an outgoing piece

and also questioned the Postal Service's ability to administer the

rule. This commenter and one other said that they were confused about

the requirements concerning barcodes that appear through a window.

Another felt that the requirement is content-based in nature.

Other concerns were also raised. For example, one commenter was of

the opinion that the proposal penalizes the wrong party when a client

has a mailing that contains ``partner'' reply pieces for which printing

and return postage is paid by a third party. An owner of a lettershop

said that his customers should have a choice whether to barcode reply

pieces. A state agency said that it is not possible for government

agencies using courtesy reply mail to stock and insert the number of

different preprinted envelopes that would be required by this rule. The

commenter went on to say that software would have to be developed and,

if the proposal were adopted, the lead time needed before

implementation would have to be long. Two commenters whose concerns

pertained to the timing of the requirement agreed with the Postal

Service's proposal for a phased implementation. One commenter urged the

Postal Service to remove the requirement that the barcode ``match'' the

address on the reply piece because the printed address plays no role in

the delivery of an automation-compatible reply piece. This commenter

indicated that flexibility is needed when business growth requires more

than one fulfillment location for the same business entity.

The Postal Service is retaining its proposal that reply letters and

cards that are included within either letter-size or flat-size

mailpieces entered as Automation First-Class and Standard mailings must

be automation-compatible and bear a FIM and a correct barcode for the

reply address. In addition to the customer convenience of a reply

vehicle, increasing the use of barcoded reply vehicles is expected to

keep postage rates down by making this mail more efficient to process.

Moreover, because Automation mailers have the demonstrated ability to

prepare automation-compatible barcoded mailpieces, they should be able

to prepare barcoded reply pieces with ease.

The Postal Service recognizes that mailers will need to work with

their customers, and possibly modify their contracts with advertisers

and others to ensure that this requirement is met. To allow time for

this and for utilization of existing reply mail stock, the Postal

Service is proposing an implementation date for this requirement of

January 1, 1997. At that time, mailers of Automation First-Class and

Standard

[[Page 66589]]

Mail will be required to certify that enclosed reply pieces are

properly prepared when the mailing is presented to the post office. For

this purpose, the mailer is defined as the party who presents the mail

to the post office.

The barcode on reply mail must match the address. A piece with a

nonconforming address could be mistakenly forwarded to the printed

address rather than delivered to the address represented by the

barcode. Accordingly, the mail could be misdelivered or incur

additional processing and transportation costs if the barcode and

address do not match.

The Postal Service will provide free of charge camera-ready

positives of appropriate FIMs and correct barcodes for the production

of reply mail pieces. Mailers should contact their local Postal Service

account representatives or postal business centers to obtain the

positives and additional information on preparation standards.

Obtaining the correct barcode for mailpieces is extremely important.

The Postal Service assigns ZIP+4 barcodes to BRMAS reply pieces.

Publication 353, Designing Reply Mail, contains information on

correctly preparing barcoded courtesy reply mail and business reply

mail. DMM S922 contains additional information on business reply mail.

c. Barcoded Tray Labels

The Postal Service proposes that Automation First-Class and

Standard Mail and Publications Service Periodicals must be prepared

with barcoded tray or sack labels. Nine comments were received

concerning this proposal.

One of the commenters expressed outright support and another said

that if the Postal Service plans to provide preprinted barcoded tray

labels, they have no problem with the proposal but would like to have

this expressly confirmed. Five commenters wanted the requirement to use

barcoded labels phased in or made optional. Two commenters indicated

that they would have to buy new equipment to produce the labels.

The Postal Service plans to require the use of barcoded tray and

sack labels on barcoded mailings with implementation of Classification

Reform. Use of barcoded tray labels speeds the processing of First-

Class Mail at the ``scan where you band'' step of the presort breakdown

operation. Barcoded labels will also be used to sort trays of Standard

Mail at BMCs. Finally, barcoded tray labels will be an integral part of

the planned tray management system. Barcoded tray labels are currently

being scanned on existing tray management systems at several plants.

The Postal Service will supply barcoded tray and sack labels.

Customers must complete Form 1578-B and submit it to the business mail

entry unit to order barcoded labels from the Postal Service. The labels

will be delivered in approximately 6 weeks. Alternatively, mailers

having a personal computer and modem can obtain free Passport software

from the Postal Service to order labels directly. In addition, the

Passport system allows mailers to print barcoded labels on demand if

they use a Monarch 9425, Monarch 9445, or Intermac 3000 printer. The

Passport system also includes free updates to the DMM labeling lists.

Passport software or further information about Passport may be obtained

from the National Customer Support Center at (800) 238-3150.

3. Letter Mail

a. Automation (Barcoded) Carrier Route Rates

The Postal Service is proposing to limit Carrier Route Automation

rates to ZIP Codes where mail will be sequenced either manually or by a

carrier sequence barcode sorter (CSBCS). Four commenters opposed the

limits on eligibility for Carrier Route Automation rates. Two of these

commenters believed that this requirement should be removed because it

seemed to represent the inability of the Postal Service to provide

necessary equipment on a national basis. One commenter was concerned

that the Postal Service is penalizing mailers based on the geography of

the mailings lists, something the mailer cannot change.

The limits on the availability of Carrier Route Automation letter

rates are necessary for efficient Postal Service processing. For an

increasing number of 5-digit ZIP Code areas, the Postal Service sorts

mail to delivery point sequence (DPS), the sequence in which carriers

deliver the mail, using two passes on delivery barcode sorters (DBCSs).

Where this takes place, the carrier does not have to sort this mail

manually into delivery or walk sequence, which saves carrier in-office

time. At postal facilities where DPS processing is being performed, it

is to the Postal Service's advantage to have as much mail as possible

DPS processed on the automated equipment. Currently, at 5-digit ZIP

Code areas for which DPS processing on DBCSs has been implemented, all

mailer-prepared carrier route and walk-sequence presorted letter mail

received with barcodes is processed on DBCSs rather than directed to

carriers for manual sequencing. Carrier route and walk-sequence sorted

letter mail without barcodes is directed to MLOCRs for application of

barcodes and subsequent DPS processing. In many cases, this process

results in the Postal Service backflowing mail from a delivery unit to

the place where the DBCS or MLOCR is located. Thus, there is no

additional value provided to the Postal Service by mailer presortation

to carrier route or walk-sequence versus a 5-digit presortation for

automation-compatible letter mail at destinating DBCS sites.

Carrier route discounts are based in part on steps avoided by the

Postal Service during processing. Carrier route presorted mail needs

only the final step of sortation into the sequence of carrier delivery.

When the Postal Service sequences mail using DBCSs at general mail

facilities (GMFs), presortation by the mailer to carrier route groups

is not needed. Therefore, for those 5-digit ZIP Code areas sequenced on

DBCSs, presortation to carrier routes by the mailer saves no processing

steps for the Postal Service and is no longer going to be either

permitted or encouraged by a discount. Accordingly, even though this

process means that Automation Barcoded rates will be based in part on

geography, the Postal Service will not give reduced rates for mail

preparation that provides the Postal Service no value. Therefore, under

Classification Reform, Carrier Route Automation rates will not be

provided to barcoded carrier route mail at those 5-digit ZIP Code areas

where DPS sequencing is performed on DBCSs. This is not a matter of the

inability of the Postal Service to provide necessary equipment on a

national basis. Rather, it is at those places where the Postal Service

has deployed DBCS equipment and has implemented DPS processing that

carrier route rates will be restricted.

CSBCSs are smaller barcode sorting machines that also sequence mail

to delivery point. However, mail must already be sorted to the carrier

route level before it can be processed on a CSBCS. Therefore, it will

still be useful for the Postal Service to offer carrier route discounts

for barcoded mail that it sorts on CSBCSs and for mail on carrier

routes that are sequenced manually.

One of the commenters indicated that matching mail to a list of

places where Carrier Route Automation rates can and cannot be obtained

is an additional processing step and therefore a financial burden to

mailers, particularly when the Postal Service plans to revise the list

periodically. Matching mailing lists with a list of ZIP Codes where

Carrier Route Automation rates are not

[[Page 66590]]

available should not be a significant burden to mailers. This list will

be provided to software vendors and mailers as part of the City/State

file provided with the CRIS and ZIP+4 database updates. It will be up

to each mailer to make the decision whether the level of discount is

worth the expense of preparing the mail in this manner.

Two commenters asked for the expected list. One requested that the

list be broken down by 3-digit ZIP Code areas and the relative volume

of addresses for each ZIP Code. The preliminary list available at this

time, printed as part of this notice, is grouped by 3-digit ZIP Code

and then in ascending numeric order by 5-digit ZIP Code. This list of

ZIP Codes where the Carrier Route Automation rates are not available

has also been placed on the Postal Service Rapid Information Bulletin

Board System (RIBBS). Mailers will need to match their address lists

against the list of ineligible ZIP Codes to determine their own levels

of qualification. When doing so, however, mailers should also keep in

mind that this preliminary list does not represent the list of

ineligible ZIP Codes that will be in effect at the time of

implementation. The list will change as barcode sorting equipment is

deployed to the field and DPS processing is implemented. Information

about the City/State file that contains the eligible/ineligible ZIP

Code information and a printed list of these ZIP Codes will be provided

in the final rule.

Two commenters were concerned with the update frequency. One

commenter opposed updates as frequent as monthly and suggested that the

list of 5-digit areas for which Carrier Route Automation rates are

available should be provided on the CRIS files. One commenter simply

wanted information on how frequent the updates will be and how the

information will be provided. As indicated above, information on the

ZIP Codes where these rates will/will not apply will be identified in

the Postal Service City/State product. Updates to the ZIP Codes where

carrier route rates are available for letters will occur with the same

frequency that CRIS and ZIP+4 databases are updated. Mailers will be

required to incorporate this information into their mailings no more

than 90 days before the date of mailing using a current City/State

file.

b. 150-Piece/Full Tray Requirement

Fourteen commenters voiced concern over the proposal to require 150

pieces per 5-digit or 3-digit ZIP Code destination to qualify for 5-

digit or 3-digit Automation barcoded rates for letters.

The proposed mailing standards in this notice reflect the Postal

Service's desire to maintain a consistent standard of 150 pieces per

rate qualification level for 5-digit and 3-digit Automation subclass

letter rates. However, the Postal Service recognizes that this might be

an issue for some Standard mailers. As noted below, several commenters

pointed out that some Standard mailers may experience a rate increase

as a result of Classification Reform because of the higher 150-piece

qualification standard and the fact that not all 5-digit ZIP Codes may

qualify for carrier route rates. Other commenters have argued that

pieces in a physically full tray should qualify for the rate. Although

the rules in this notice reflect retention of the 150-piece

qualification standard, based on the mailer comments discussed below,

the Postal Service is seeking additional information on the impact of

allowing a physically full tray to qualify for rates as an alternative

to the 150-piece standard. The Postal Service is asking that affected

mailers provide information on the thickness of various mailings that

they produce and might wish to qualify under a physically full tray

eligibility standard. Because of the desire not to reduce the number of

pieces to a destination more than necessary, mailers would likely have

to physically fill a 2-foot tray to qualify for a rate if a physically

full tray rule were implemented. Also, in the interest of making it

easy to verify such mailings, documentation listing each tray in the

mailing along with the number of pieces contained in each tray would

likely be required if such a rule were implemented. The Postal Service

is asking that mailers who want a rate eligibility standard based on

physically full trays provide additional information indicating how

they will be affected as part of their comments to this notice.

Particularly, information is sought about the usual thickness of

pieces, how many can be put in a tray, whether the mailer has the

ability to prepare full 2-foot trays, whether the mailer can or cannot

provide overflow trays, and what type of documentation can be provided.

A discussion of all the comments follows.

Nine commenters requested that the requirement be changed from 150

pieces to 150 pieces or a physically full tray. One commenter indicated

that different qualification levels are needed for First-Class Mail and

Standard Mail because Standard Mail is inherently thicker than First-

Class Mail. One commenter indicated that accommodating MLOCR users by

imposing the 150-piece rule unfairly penalized Standard mailings that

can meet full tray requirements with fewer than 150 pieces. Another

commenter argued that because 150 average-weight Standard Mail pieces

cannot fit into a 1-foot tray, the Postal Service should adopt a ``full

tray'' requirement instead of its proposed 150-piece qualification.

However, this commenter did not recognize that this thicker mail does

not need to be prepared in 1-foot trays because both 1- and 2-foot

trays may be used to prepare letter mailings and overflow trays are

permitted.

The 150-piece minimum represents the average number of letter-size

pieces that can fill \3/4\ of a 1-foot tray. Under the proposal, the

150-piece average is applied uniformly to determine both the rate

qualification and the particular sortation level of tray for presort.

The requirement applies rates to tray levels and eliminates the

preparation of packages within full trays. The Postal Service also

desires to apply rates on an equal basis to all mailers. Accordingly,

the application of the 150-piece standard allows card-size or other

thin pieces to qualify for rates in the same way that thicker pieces

can qualify. The application of a 150-piece standard with the use of

overflow trays also makes it easier for mailers whose mailings are made

up of pieces having different thicknesses, such as MLOCR users, to

determine when a rate qualification level has been met, and assists

such mailers to complete a mailing statement.

The 150-piece standard also facilitates acceptance and verification

by applying a single standard and method of documentation to all

mailings within the subclass. The Postal Service also expects to

achieve efficiencies by having only one method of preparing mailings

for Automation subclass letter rates for both First-Class and Standard

Mail. Currently, there are three separate methods for presorting

barcoded letter mail, which lead to 17 different possible tray

configurations for barcoded letter mail. Having a single method of

preparation that requires only four tray levels for the noncarrier

route portion will simplify postal operations as well as mailer

preparation requirements.

One third-class mailer association stated that the restrictions on

Carrier Route Automation rate availability will cause more mail to

default to the 5-digit and 3-digit sortation levels. This association

further commented that because of the 150-piece minimum for the 5-digit

Barcoded rate, most of this previously carrier route sorted mail will

fall to 3-digit Barcoded rates, significantly increasing postage for

Automation Standard mailers. This commenter was further concerned that

this move from carrier route sortation to

[[Page 66591]]

3-digit sortation would affect the service for Standard Mail.

The rate structure for Automation subclass letters would provide

significantly reduced rates for barcoded mailings. Those rates are

based, in part, on more stringent preparation standards that allow more

efficient Postal Service processing of that mail. Under the proposed

Automation Standard Mail (A) letter rates, certain mailers could

experience a minor increase in postage over what they pay today,

assuming that all mail not eligible for a carrier route rate moves to

the 3-digit Barcoded rate level and that there are neither Basic rate

pieces in the mailing nor pieces currently qualifying for 3-digit

Barcoded rates that would continue to qualify for 3-digit rates under

the new standards. However, any such potential increase would be offset

by savings from pieces in the mailing that could qualify for 5-digit

Barcoded rates and pieces that now qualify for 3-digit Barcoded rates

and would continue to do so under Classification Reform. This

theoretical postage increase would also be offset by pieces that the

mailer now qualifies for basic rates, because of a significant decrease

in the Basic Automation rates under Classification Reform. A mailer's

cost to prepare Automation mail is also expected to decline because of

the elimination of package preparation in full trays.

With reference to the concern over degradation of service for

pieces moving from carrier route sortation to 3-digit sortation,

established postal operating plans are designed to achieve stated

service commitments, regardless of the level of sortation of the mail.

Two commenters who mail both First- and third-class mail indicated

that 95% of their letter mail that now qualifies for 5-digit Barcoded

rates will move to 3-digit Barcoded rates. One commenter indicated that

70% of his mail now qualifying for 5-digit Barcoded rates will move to

the 3-digit qualification level. One commenter indicated that the loss

of presort and associated discounts could cause his company to stop

offering credit cards to their customers due to the anticipated

increase in postage for the credit card bills. One commenter stated the

belief that if his mail could not be sorted to qualify for the 5-digit

or 3-digit Barcoded rates, the 30-cent Retail Presort rate would apply

to the remaining pieces.

Under the Postal Service's proposal, delivery point barcoded First-

Class and Standard Mail that cannot be sorted into a group of at least

150 pieces to a 5-digit or 3-digit ZIP Code destination must be sorted

to AADC and mixed AADC trays. This mail will qualify for a Basic

Automation presort rate. For First-Class Mail, the rate proposed by the

Postal Service for this Basic rate mail is 3.5 cents below the rate

(30.5 cents) currently applied to barcoded residual pieces in a

barcoded rate mailing. The proposed carrier route, 5-digit, and 3-digit

rates are also significantly lower than the current corresponding

rates. Thus, First-Class Mail under the scenarios presented above

should receive a reduction in postage. Standard mailers having 95% of

their mail move from a 5-digit qualification to a 3-digit qualification

could experience a very minor increase in postage for that portion of

the mailing, under the rates proposed by the Postal Service. However,

that increase would be offset by savings from the lower rate applicable

to Basic Automation Standard letters. Standard mailers experiencing a

70% shift in mail from 5-digit Barcoded rates to 3-digit Barcoded rates

will experience a reduction in postage for this portion of the mailing,

and can expect an additional reduction for the Basic rate portion.

One commenter indicated that 90% of his mail now qualifies for a

presort rate but after Classification Reform only 75% will qualify, and

another indicated that his presort qualification would drop from 90% to

40%. It is not clear what these mailers mean by presort. As indicated

above, all pieces in Automation First-Class and Standard mailings will

qualify for a reduced rate. To the extent that these mailers are

describing an expected degradation from one presort level to another,

the above analysis would apply to them.

Overall, the Postal Service believes that the Automation letter

discount levels and preparation standards will lower postage and

preparation costs for barcoded mailings for most mailers. Under current

Barcoded rate mailing standards, a large percentage of mail qualifying

for 5-digit and 3-digit rates is already prepared in full trays without

packages. Because the proposed 150-piece requirement is based on a 1-

foot tray, these mailers should be able to place even more mail in full

5-digit and 3-digit trays.

One commenter believed that if mail is barcoded and all mixed

together on machines, there are no cost differences between 10 sorted

pieces and 150 sorted pieces. This view is incorrect. When packages for

different levels of sort are mixed together in a tray, these trays must

be emptied and the packages sorted and retrayed before they can be

directed to the proper barcode sorting machine. This process is not as

efficient as being able to direct an entire tray without package

handling. In return for the lower rates being proposed, the Postal

Service expects to gain efficiencies in its operations by eliminating

package sortation and retraying of mail prior to directing it to the

proper barcode sorting scheme. Currently, when trays contain presort

packages, the packages are often not sorted by postal personnel because

it is deemed more efficient to remove the packaging material and run

the pieces in the tray through the appropriate barcode sorting scheme.

It is for this reason that the Postal Service proposed to eliminate

rate discounts that are based on package preparation and to base

Automation rates instead on the sortation level of a tray.

One commenter requested clarification as to whether 150 pieces to a

tray level may still be trayed to that level even if they do not fill a

1-foot tray. Under the proposed standards published below, 150 pieces

to a sortation level must be placed in that level of tray. One less-

than-full tray is permitted for tray levels where the 150-piece

minimums are applied. Such pieces must be prepared in rubber-banded

packages to maintain their orientation in the tray during transit and

handling.

One commenter requested that the definition of a full tray

currently used in PAVE testing be added to the DMM language of the next

proposed rule. PAVE testing currently indicates that 15\3/4\ inches of

mail (i.e., \3/4\ of the bottom inside length of a 2-foot tray) is the

minimum amount of mail for a full tray, and that, where possible, 2-

foot trays should be further filled to contain 21 inches of mail. Upon

implementation of Classification Reform, PAVE testing instructions

would indicate that, for 1-foot trays, 7\9/10\ inches of mail would be

considered the minimum amount of mail for a full tray and, where

possible, trays should be further filled to contain 10\1/2\ inches of

mail. Definitions of standard tray sizes are provided in the DMM

language proposed in this notice and will be included in the PAVE

instructions that mailers receive with PAVE testing material. It should

be noted, however, that these definitions do not relate to rate

qualification standards under the proposed rule.

c. Scheme Sortation

Ten commenters responded to the proposal to allow or require scheme

sortation for Automation subclass (barcoded) letters. Five of these

commenters had basic misunderstandings of what this scheme sortation

list represents. One stated that it was not very different from the

[[Page 66592]]

current SCF sortation and asked what it will do for his mailings.

Another stated that this list looks like the DMM L802 labeling list (an

SCF list used for certain ZIP+4 rate mailings) which means that 80% of

his mail would end up in mixed AADC trays. Accordingly, this commenter

wanted to use the current DMM L803 labeling list (an AADC list used for

certain ZIP+4 rate mailings) to obtain full trays to qualify for 3-

digit Barcoded rates. Two commenters indicated that there must be at

least three different 3-digit ZIP Codes per scheme for mailers to be

able to qualify as much mail for 3-digit rates under the 150-piece

minimums as they can qualify using the current 50-piece per 3-digit

package rules. These two commenters indicated that the 150-piece

minimum rules should be held in abeyance until the scheme sorts are

workable in this manner. One of the commenters believed that the

purpose of scheme sort was to reduce the number of MLOCR or barcode

sorter pockets used by the Postal Service to sort mail, and suggested

that a better way to achieve this would be to scheme-sort to ADCs or

AADCs.

The 3-digit scheme list is made up of 3-digit ZIP Codes that are

processed on the same barcode sorter incoming primary sort plan

(scheme) used to sort 3-digit mail to 5-digit ZIP Codes. The

determination of which, if any, combination of 3-digit ZIP Codes can be

sorted on the same barcode sort plan is based on the number of 5-digit

ZIP Codes served by each 3-digit ZIP Code and the physical limitation

of the number of bins on barcode sorters. Therefore, it is not possible

for the Postal Service to adjust the scheme list to cause each scheme

to contain at least three different 3-digit ZIP Codes. It is also not

possible for the Postal Service to substitute the published 3-digit

scheme list with any of the labeling lists suggested by commenters. The

purpose of this scheme sortation was not to arbitrarily find a way to

allow mailers to qualify as much mail for 3-digit rates under

Classification Reform as they do based on the current 50-piece package

minimums for 3-digit barcoded letter rates. The purpose is to allow

mailers to prepare mail for processing in the same manner that the

Postal Service processes it on barcode sorters (not MLOCRs) and thereby

increase their potential for qualifying mail for a 3-digit automation

discount. As published, the scheme sort list will allow mailers to use

the total number of pieces for any or all of the 3-digit ZIP Codes that

are combined on the list to qualify for 3-digit Barcoded rates. For

example, ZIP Codes 068 and 069 are combined on the 3-digit scheme list

and labeled to STAMFORD CT 068. This means a mailer having 75 pieces

for ZIP Code 068 and 75 pieces for ZIP Code 069 could combine these

pieces into a single tray to meet the 150-piece minimum. Without the

scheme sort option, those pieces would not be eligible for the 3-digit

Barcoded rate.

One commenter believed that the 3-digit scheme sort should be

mandatory. Two commenters indicated that scheme sort should be

optional. One of these indicated that use of the 3-digit scheme sort

could be an insurmountable barrier to participation by Federal

government mailers, and the other indicated that it should be a

business decision because many mailers have a lot of volume to

individual 3-digit areas or may not want to upgrade software to do

these mailings. Another commenter indicated that making scheme sort

mandatory for Automation subclass mailings means that the same presort

software could not be used for the upgradable Retail Presort portion of

the mailing since scheme sorts are not permitted for Retail Presort

mailings. One commenter indicated that it only made a 1.5% difference

in the qualification levels of his mailings. Another commenter

indicated that it would help presort qualification. One commenter asked

whether Publications Service mailers would use the same schemes as

other classes of letter mail. One commenter stated that he needed the

final tables for 5-digit and 3-digit sort schemes with the next notice,

or at least before the implementation date, to test the software that

incorporates these schemes.

Based on these comments, the Postal Service has proposed that 3-

digit scheme sort be optional. Mailers may use scheme sort for only

those schemes they select prior to preparing individual 3-digit trays

for the remainder of the mailing. Mailers expressing concern over

needing different software if they add scheme sortation are advised

that they will not be able to use existing software to sort letter mail

under Classification Reform anyway, because the tray levels are

different from current standards, packaging is allowed only in less-

than-full trays, a residual portion of the mailing is not allowed, and

both 1-foot and 2-foot trays must be used. Furthermore, the sortation

standards for Retail Presort First-Class and Regular Standard mailings

are significantly different from the Automation subclass standards set

forth in this notice. Therefore, mailers will not be able to use the

same software to sort to these two subclasses.

As information, the Postal Service is currently investigating the

future provision of 5-digit scheme sorts for barcoded letter mailings.

However, because of the volatility of 5-digit schemes while the Postal

Service is deploying new equipment over the next 3 years, 5-digit

scheme sorts will not be available until some time after Classification

Reform is implemented. The Postal Service is also investigating the

feasibility of providing a 3-digit scheme sort for barcoded flat-size

mailings. If there appears to be a benefit to scheme sort for flats, it

also would not be made available until after implementation of the

current Classification Reform proposals.

d. Use of Trays

Eight commenters had concerns over the standards for the use of

trays for Standard letter mail. Two commenters wanted to use trays for

letter-size Enhanced Carrier Route Standard Mail. One commenter wanted

the option to sack nonupgradable mail to assist noncomputerized

customers. This commenter also indicated that for nonautomation-

compatible mail, traying makes it impossible to achieve package testing

results. Five commenters expressed a desire to allow sacking for all

mail except Automation subclass letters. Three of these commenters did

not want to tray nonautomation subclass mail because they believe that

trayed Standard Mail must be palletized. Five commenters were concerned

that traying mail can cause a loss of cube in trailers with a resulting

impact on their qualifying for destination entry discounts.

The August 30 notice erroneously implied that mailers could not

tray letter-size Enhanced Carrier Route Standard Mail. It had been

previously agreed that Enhanced Carrier Route mailers would have the

option to tray letter mail. Since that time, the Postal Service has

reconsidered this position. Because the Postal Service prepares letter

mail in trays, it is important that all mailer-prepared letter mail be

trayed. Accordingly, the proposed DMM standards set forth in this

notice would require that all letter mail, including Enhanced Carrier

Route and Periodicals letters, be prepared in trays. It should also be

noted that, although encouraged, it is not required that Standard

letters prepared in trays be palletized. Mailers will be permitted to

bedload trays of letter mail. However, if a mailer wants to palletize

Standard letter mail, the mail must be prepared in trays on pallets,

with one exception. If, as described in the section on flat-size mail,

the letter-size piece also meets the definition of an automation-

compatible flat, and a portion of the mailing job is

[[Page 66593]]

mailed at the Automation subclass rate for flats, all the pieces in the

mailing job may be prepared in packages placed directly on pallets if

all pieces pay the applicable rates as flats. However, the amount of

Regular Standard Mail meeting the size standards for both letters and

flats that can be prepared as packages on pallets is limited to 10% of

the mailing job for reasons described in the section on flats. The

Postal Service acknowledges that trayed mail can sometimes fill

trailers more quickly than the same amount of mail prepared in sacks,

and that the number of pieces that can be placed in a trailer might

affect a mailer's decision whether to prepare mail for destination

entry discounts. However, trays are the most efficient method of

containerizing letter mail for the Postal Service. Because the Postal

Service now uses trays for letter-size mail in its internal operations,

it is proposing to require that mailers submit all letter-size mailings

in trays for consistency and efficiency. The requirement to use both 1-

foot and 2-foot trays will ensure the most efficient use of trailer

space under the traying environment. The Postal Service does not

understand the comment that traying would affect the ability to monitor

package testing results.

e. Use of Both 1-Foot and 2-Foot Trays

The Postal Service is proposing that for all trayed letter-size

mailings, a combination of full 2-foot and 1-foot trays must be used in

a manner that results in the fewest possible trays. Eleven comments

were received concerning this proposed requirement. Four commenters

stated that this requirement will increase their handlings or cause

problems in their production lines. One of these commenters indicated

that this will create another mailstream, which, added to the 100%

barcoding requirement for the Automation subclass, would result in four

separate mailstreams. One commenter stated that he hoped this

requirement could be canceled if it did not work. Another commenter

stated that he did not want to handle two sizes of trays. Two

commenters indicated that this requirement is not supported by current

software, including software for MLOCRs. Two commenters were concerned

about the availability of the appropriate size trays. One of these

commenters requested clarification, for software writing purposes, of

what to do if tray sizes are not available. The other commenter

indicated that shortages of any type of tray will complicate processing

when the mailer has software programmed to handle two sizes. One

commenter indicated that he did not understand the need for this

requirement. Three commenters asked how a stable pallet can be built

when there is a mix of two different size trays. One commenter asked

whether a 1-foot tray could be placed upside down on a pallet next to a

right-side up 1-foot tray to allow the two trays to take up the same

amount of space as a 2-foot tray.

The 150-piece minimum quantity to qualify for Automation subclass

letter rates is based on the preparation of a 1-foot tray so that

mailers may more easily qualify for those rates. That quantity per tray

also is intended to yield more full trays to direct destinations, thus

lessening any loss of presort to the Postal Service. In order to

increase the number of direct trays to sortation destinations for all

letter mailings, the proposed DMM language would require use of both 1-

foot and 2-foot trays for all mailings of letter-size pieces in all

reformed subclasses. However, the Postal Service does not want to

increase its potential number of tray handlings by allowing a mailing

to be prepared entirely in 1-foot trays, nor to increase transportation

costs by shipping in more less-than-full 2-foot trays. Accordingly, the

requirement to use both 1-foot and 2-foot trays where appropriate is

considered necessary by the Postal Service. Under the proposed rule,

mailers would be required first to fill as many 2-foot trays as

possible before filling 1-foot trays.

The Postal Service recognizes that this requirement will cause

mailers to make major changes to their production lines and to maintain

a supply of both 1-foot and 2-foot trays. It is believed that presort

software developed to accommodate the Classification Reform presort

structure will include mail documentation that provides information

about the tray size to be used and where tray breaks occur. If this

type of software is used, it may not be necessary to create two

separate production lines for the different tray sizes. The Postal

Service anticipates an increased need for both sizes of trays and has

purchased additional supplies while continuing to review the need to

purchase still more. If local shortages develop for a particular size

tray, mailers will have to use the trays provided the Postal Service.

This may require working out individual mailing solutions locally.

Mailers must use their own judgment when building pallets of trays

containing both sizes of trays. The elimination of the proposal to

require separate layers of trays on pallets for the different

subclasses should facilitate building stable pallets. The requirement

to place destination delivery unit trays on the top of the pallet has

also been eliminated. Accordingly, mailers may build pallets of trays

solely by the weight of the trays (heavier trays must be on the bottom)

and the pallet destination. Mailers will not, however, be permitted to

place a 1-foot tray upside down on a pallet next to a right-side-up 1-

foot tray because this could damage the mail.

f. Banding Material

(1) Automation Compatible Mailings. One commenter asked whether

mail in overflow and less-than-full trays must be prepared with rubber

bands. The use of rubber bands will be required for automation-

compatible pieces, i.e., for Automation First-Class or Automation

Standard Mail, upgradable Retail Presort First-Class and upgradable

Regular Standard Mail, automation-compatible Publications Service

Periodicals, and barcoded Regular Periodicals. Letter mail placed in

less-than-full trays must be prepared with rubber bands or elastic

strapping. In addition, because of their small size and their likely

becoming unfaced even in full trays, card-size pieces in the previously

named automation-compatible mailings must be prepared with rubber bands

or elastic strapping in all trays. For barcoded carrier route rate

mailings, separator tabs must be used to separate the carrier route

groups within 5-digit carrier routes trays. If a 5-digit carrier routes

tray is less-than-full, rubber bands or elastic strapping must be used.

For Regular Periodicals barcoded letter mailings, separator cards must

be used to delineate presort groups in all full trays. Pieces in less-

than-full mixed AADC trays in any mailing must be prepared with rubber

bands or elastic strapping. Plastic strapping and string will not be

permitted for these automation-compatible mailings. When prepared,

packages should be between 4 and 6 inches thick.

(2) Other Mailings. For Enhanced Carrier Route letter mailings,

mailers may use separator cards or rubber bands or other permissible

banding material to delineate carrier route groups within full 5-digit

carrier routes trays. In less-than-full 5-digit carrier routes trays,

separator cards will not be permitted and banding material must be

used. For nonupgradable mailings, separator cards are not permitted;

banding material must be used for packages in these mailings.

g. Overflow Trays

One commenter asked whether overflow trays will be required to

[[Page 66594]]

contain a minimum number of pieces; they will not.

One commenter noted that overflow trays are allowed for AADC trays

in the Automation letters subclass but not in Retail Presort mailings

and asked whether this inconsistency was an error. This difference is

not an error. Within the Automation subclass, AADC trays are prepared

based on the 150-piece minimum standard. The Postal Service wants to

apply this standard consistently for all trays of barcoded mail except

the last level of tray. Allowing an overflow tray when the 150-piece

standard is applied makes presort simpler and facilitates documentation

and acceptance of that mail. For Retail Presort First-Class Mail, there

is just one rate, and pieces at all tray levels are trayed based on

filling 2-foot and 1-foot trays without regard to the 150-piece

standard. To make Regular Standard Mail traying more consistent with

First-Class Retail Presort preparation, the Postal Service has

determined that pieces at the ADC and AADC (upgradable) tray level will

also be trayed based on filling 2-foot and 1-foot trays without regard

to the 150-piece standard and the need for overflow trays.

h. Request for Elimination of AADC Trays

One commenter requested that, for Automation subclass letters, the

less-than-full AADC tray be replaced with mixed AADC trays. Another

commenter indicated that sorting to AADC or mixed AADC destinations is

difficult to do in a manual operation.

Overflow trays are provided for certain tray levels to permit

mailers to qualify all mail to a sortation level, once the 150-piece

minimum has been met, when rates are based on the level of tray in

which a piece is placed. Overflow trays are also provided to ensure

that the mail is presorted to the finest level possible. For this

reason, when overflow trays are allowed at required levels of

sortation, such as the 3-digit and AADC sortation levels of Automation

subclass mailings, preparation of overflow trays will be required. The

Postal Service recognizes that preparation of ADC packages and trays

and preparation of AADC trays may be more difficult to do in a manual

operation than in an automated one. However, ADCs and AADCs are the

next stop for transportation and in-plant processing of pieces that are

not sorted to the 3-digit destination plant level. The Postal Service

believes that preparing mail to this level of sortation is necessary

and appropriate to qualify for the basic presorting rates. It should

also be noted that, with the exception of current Presorted First-Class

and Carrier Route sorted mail, today's bulk mailings require

preparation of AADC, ADC, SDC or state trays and, in some instances,

corresponding packages.

i. Request for Elimination of Required Tray Sortation Levels

One commenter indicated that tray sortation levels should not be

required and that the size of the mailing should determine the

breakdown levels.

The proposed presort rates requested in the Classification Reform

case are based on presorting mail to the finest extent possible.

Accordingly, mailers will be required to prepare 3-digit trays any time

there are at least 150 pieces for a 3-digit ZIP Code before preparing

AADC and mixed AADC trays. It is not permissible to begin sortation at

the AADC level and qualify for the proposed rates.

j. Grouping of Pieces in AADC and Mixed AADC Trays

One commenter stated that for ``piece sequencing'' requirements the

Postal Service needs to have a minimum mailing in mind, such as 10,000

pieces nationwide, before it insists that the mailer breakdown a

mailing, and that the cost to prepare this mail is not worth the

discount. Another commenter wanted clarification as to why 3-digit

groupings within AADC trays need not be in numeric order. This

commenter anticipated acceptance problems.

Presort discounts are based on mailers performing presort to the

finest level. For automation letter mail, presort to 3-digit level is

required before preparing mail to the AADC level. In order to determine

whether a 3-digit tray should be made, the mailer must first group

pieces by 3-digit levels. Therefore, it should not be a burden for

mailers to maintain those groupings when placing that mail in AADC

trays. This grouping also helps the Postal Service verify that mail has

been sorted correctly (although it is still possible to verify mail

that is not grouped in numeric order). Therefore, Postal Service is not

requiring that 3-digit groups be placed in ascending numeric order,

although it is encouraging mailers to do so. It should also be noted

that, within mixed AADC trays, in addition to grouping by 3-digit or 3-

digit scheme, as applicable, the 3-digit/scheme groups must be further

grouped by AADC area. Few acceptance problems are anticipated because

acceptance personnel will receive training on the new sortation and

acceptance procedures. The Postal Service believes that the Basic rates

proposed for First-Class and Standard Mail should encourage mailers to

prepare the mail in this manner. However, it is the mailer's decision

to determine whether this preparation would be less expensive than

mailing such pieces at single-piece rates.

k. Pallet Preparation

Four commenters requested clarification as to whether letter mail

prepared on pallets for different subclasses could be combined on the

same pallets with a single mailing statement and corresponding

documentation as allowed for flats on pallets. It is proposed that

letter mail of different subclasses prepared in trays may be presorted

to the same pallets, excluding 5-digit pallets. Trays of automation-

compatible letter mail (Automation Standard and upgradable Regular

Standard Mail, barcoded Regular Periodicals, and automation-compatible

Publications Service Periodicals) must be placed on 5-digit pallets

separate from nonautomation mail in the same mailing job because it is

more efficient for the Postal Service to move whole pallets directly to

where the mail is processed. Pallets of automation-compatible mail may

be processed at postal facilities different from facilities that

process pallets of nonautomation-compatible letters. In many cases,

pallets of automation-compatible mail are broken down at different

locations in the same plant, or if barcoded carrier route mail, the

pallets are sent directly to the postal facility where a CSBCS or DBCS

is located. When trays are palletized in this manner, they may be

reported on a single mailing statement with the same corresponding

documentation as allowed for palletized packages of flats.

l. Carrier Route Rate Eligibility

One commenter agreed with the Postal Service's promise to consider

allowing carrier route rates for routes that have fewer than 10

delivery stops. The Postal Service has decided to propose that such

mail may be prepared to qualify for the Saturation Enhanced Carrier

Route rates if it meets the applicable density and documentation

standards.

m. Enhanced Carrier Route Traying Requirements

One commenter asked, in response to the June 29 notice, whether

letter-size Enhanced Carrier Route mail would require packaging in full

direct trays. The Postal Service deferred an answer to this question

until completion of the DMM standards. Under the presort standards set

forth in the proposed rule, Enhanced Carrier Route letter mail is

[[Page 66595]]

prepared in full 2-foot and/or 1-foot carrier route trays. Mail that

cannot be placed in full carrier route trays must be placed in 5-digit

carrier routes trays, which may be less than full when necessary.

n. Machinable Addressing/Upgradable

The Postal Service has proposed optional presort requirements for

Retail Presort First-Class and Regular Standard Mail that meets the

Postal Service criteria of ``upgradable'' mail. (Upgradable mail is

mail that can be processed on Postal Service MLOCRs.) Four commenters

voiced concerns about the requirement for a machine-printed address on

a mailpiece before it could be considered upgradable.

One commenter opposed the proposal, arguing that presort bureaus

will have to separate their automation reject mail on the basis of

physical characteristics and then prepare it under two sets of rules.

This commenter requested that mailers be given an extra day to attempt

to barcode the automation rejects, without redating metered mail, in

order to increase the barcoded volume. By adopting this approach,

according to the commenter, mailers will be positioned to benefit from

soon-to-be-available technology that will make it possible to barcode

more rejected mailpieces. In much the same vein, a government agency

said that the requirement is too restrictive and that several federal

agencies have purchased encoding systems in order to place barcodes on

typewritten and handwritten mail.

The proposed DMM standards specify that preparation of mail under

the provisions for upgradable mail is optional. Accordingly, First-

Class and Standard mailers may prepare all their mail not qualifying

for the Automation subclass under the basic preparation standards for

the corresponding Retail Presort or Regular rates. Naturally, mailers

are encouraged to apply delivery point barcodes to such pieces using

CASS-certified encoding systems and thereby enter as many pieces as

possible as Automation First-Class or Standard Mail. However, for the

reasons set forth in the preceding discussion of 100% barcoding, the

Postal Service cannot allow mail to be presented with stale meter

dates. The current procedures for allowing mailers to print a new meter

date will remain in effect for all mail, including upgradable and

automation-reject pieces. The proper subclass marking must also appear

on these pieces.

o. Machinability

One commenter asserted that the Postal Service will not achieve its

objective of encouraging more automation-compatible mail unless it

relaxes machinability standards to allow more mailers to prepare

automation-compatible mail.

The Postal Service cannot spontaneously relax machinability

standards. Such standards are based on the capabilities of automated

mail processing systems and the type of mail that automation equipment

is able to process.

p. Tray Sleeving and Strapping

The Postal Service proposed that mailings of Automation letter mail

be both sleeved and strapped by the mailer, and that trayed letter mail

in other reformed subclasses be sleeved by the mailer. Five commenters

responded to this proposal. One commenter expressed wholehearted

support on the condition that the mailer, not postal employees, perform

the associated tasks. One commenter strongly recommended that where all

pieces in a mailing originate and destinate in the delivery area,

sleeving and banding of trayed letter mail should not be required. This

commenter wants continuation of the existing provision in DMM M033.3.7

(that allows local exception to the sleeving requirement when all

pieces in a mailing originate and destinate in the delivery area of the

same SCF). Another commenter contended that local post offices should

be able to determine when sleeving and strapping are required based on

mailing destinations. A third commenter wanted a phased implementation

to have time to order and install equipment needed for sleeving and

strapping. A federal government agency voiced concern about

requirements for stocking, storing, and using many different types of

equipment.

The Postal Service plans to require sleeving and strapping of all

bedloaded trayed mail under all reformed subclasses, with the exception

of mail entered at a postal facility that destinates within the service

area of that facility. Mail transported without first being sleeved is

susceptible to spillage and damage during transportation and handling.

A strap around the tray is also necessary to maintain the integrity of

the tray and its contents during transportation and handling. For

example, because trays of Periodicals and Standard Mail sorted in a BMC

move on belts and down chutes during mechanized distribution, sleeves

that are not strapped to trays could slide off and the contents of the

tray could spill. Trays transported by air are handled in many

different ways and also need to be strapped to maintain their

integrity. Because local mail is not subject to the same type or amount

of transportation as other mail, an exception may be made for the

strapping and sleeving of this mail. Local mail that destinates within

the service area of the postal facility where it is entered may be

prepared without sleeving and strapping, if prior written approval is

obtained from that facility's manager.

For palletized mailings, sleeving will be required but strapping

will be optional for mail on 5-digit, 3-digit, and SCF pallets, if

those pallets are wrapped with stretchable or shrinkable plastic wrap

to maintain their integrity during transportation and handling, because

these pallets remain intact until reaching the destination plant or

destination 5-digit delivery unit. Trays on other levels of pallet will

be required to be both strapped and sleeved.

q. ACT Tagging

The Postal Service proposed that mailers apply ACT tags to trays of

Automation First-Class letters. Six commenters responded to this

proposal. Of these, one supported the proposal as long as mailers, not

postal employees, did the work of preparing the tags. The remaining

five commenters either had serious reservations or were strongly

opposed to this proposal if it applied to trays of nonlocal letter- and

flat-size mail. One of the five strongly opposed tagging nonlocal mail,

stating that it was burdensome and difficult to comply with due to

time-sensitive airline flight schedules, and that the rates proposed

for the Automation subclass do not reflect this added worksharing

requirement. Another commenter expressed the view that requiring ACT-

tagging of all Automation subclass letter mail trays adds little value

and should not be required at this time. The commenters believed that

the proposal should be optional until a method can be developed and

implemented so that mailers could access a database of accurate postal

air contract transportation and flight data for ACT tags.

Based upon the comments, the Postal Service has determined to

remove the proposed requirement for ACT-tagging of mailings. The Postal

Service is also in the process of revising its internal systems to

replace the ACT tags with the ``Scan-Where-You-Band'' process.

[[Page 66596]]

4. Flat-Size Pieces

a. General

Under Classification Reform, the large majority of flat-size pieces

will be mailed as either Standard Mail or Periodicals. The discussion

of comments dealing with Periodicals is contained in a separate section

of this notice. Preparation of packages on pallets under the rules in

DMM M040 is the preferred method of preparing flat-size pieces. The

nonpalletized preparation requirements for Standard Mail flats under

Classification Reform will continue to require preparation of packages

placed in sacks. The package and sack levels will be 5-digit, 3-digit,

ADC, and mixed ADC, except for Enhanced Carrier Route flats which will

be prepared in carrier route packages of 10 or more pieces placed in

carrier route or 5-digit carrier routes sacks. The current 125-piece/

15-pound minimum sacking criterion will apply to flats under

Classification Reform where minimum sack volumes are prescribed. The

sortation for Automation flats differs from current preparation

requirements in that SCF packages and sacks are eliminated, and there

is no separate preparation of residual mail. For Automation flats, ADC

and mixed ADC packages will be combined with 5-digit and 3-digit

packages within ADC and mixed ADC sacks. The sortation for First-Class

flats will require 5-digit, 3-digit, ADC, and mixed ADC sortation in

both packages and flats trays.

b. Mail Meeting Standards for Both Letters and Automation-Compatible

Flats

Of the 49 commenters who responded to the August 30 notice, four

commented on issues related to flats. With only one exception, those

commenters had questions or comments focusing on pieces whose size

dimensions meet the size standards for both letters and automation-

compatible flats. This type of mail is often referred to by mailers as

``fletters.'' These comments were of essentially the same nature as

those submitted in response to the June 29 notice.

Two commenters wanted the Postal Service to develop options to

allow mailers to prepare mailpieces that meet both the letter-size

standards and the automation-compatible flats standards either in trays

or in packages on pallets.

As indicated in the section on letter mail, the Postal Service

handles letter mail in trays and, for operational efficiency, wants all

mailer-prepared letter mail placed in trays. Therefore, mailers of such

pieces always have the option of preparing them as letter-size mailings

in trays or, for Standard Mail, in trays on pallets. Mailers of such

pieces may choose to prepare one portion of their mailing job as letter

mail and another portion of their mailing job as Automation flat mail.

The Postal Service also recognizes that many mailers having pieces that

meet the dimensions for both letters and automation-compatible flats,

and who prepare a portion of their mailing jobs for the Automation

rates for flats, would have more efficient mail preparation operations

if allowed to prepare an entire mailing job in the same manner,

particularly when preparing that mail as packages on pallets.

Therefore, when mailers of these so-called ``fletters'' mail part of a

mailing job at the Automation rates for flats and prepare that mail as

packages on pallets, the Postal Service will allow the entire mailing

job, which may also include Enhanced Carrier Route mail and Regular

mail, to be prepared as packages on pallets if no more than 10% of the

total number of pieces in the mailing job are claimed at Regular rates

and if those pieces are claimed at Regular rates for nonletters, since

the mailing is prepared in a manner applicable to flat-size pieces.

This 10% limit on the number of Regular pieces in such a mailing is

designed to permit a small part of a mailing job to be prepared in this

manner while minimizing the amount of these letter-size pieces on

pallets; as stated earlier, letter-size pieces are more efficiently

handled by the Postal Service as trayed letter mail. If the percentage

of such letters-size pieces exceeds 10% of a mailing job, it must be

prepared and presented as a separate mailing under the standards for

letter mail. Mailers who prepare mail in sacks or trays must prepare

that mail in the manner appropriate to its processing category, as

defined in DMM C050, i.e., mail meeting both letter-size and

automation-compatible flats dimensions may be sacked and otherwise

prepared as a flat only if mailed as part of a mailing at an Automation

rate for flats.

c. Revisions to Automation-Compatible Flats Criteria

One commenter stated that the Postal Service should allow pieces

that can be processed on FMS 1000 flat-sorting equipment to be eligible

for barcoded rates when that equipment is retrofitted with barcode

readers. This commenter further indicated that the Postal Service

should allow letter-size catalogs that can be processed on FSM 1000s to

be eligible for Automation rates for flats, thereby allowing mailers to

avoid the tabbing requirements associated with the Automation rates for

letters.

The FSM 1000 machines were not intended to replace the FSM 881s but

to handle pieces that cannot be processed on them. Therefore, the FSM

881 machinability requirements, reflected in the current standards in

DMM C820 for barcoded rates for flats, will continue to be the basis

for barcoded rates for flats for some time, including when

Classification Reform is implemented. Letter-size pieces that do not

meet the current criteria for Automation-Compatible flats will be

considered letters under Classification Reform and will have to be

prepared under the standards for letters in DMM C810 and DMM C840 to

obtain Automation letter rates.

d. Dimensions of Trays

One commenter requested that the dimensions of flat trays be

provided so mailers can program how much mail can be placed in these

trays. The inside bottom dimensions are 14\3/4\ inches long by 10\3/4\

inches wide. Their depth is 8 inches to the handhold and 11\1/4\ inches

to the top. This information will be included in both the DMM and in

the instructions provided with PAVE testing material.

e. Copalletization and Commingling

No comments were received regarding this issue. The Postal Service

is retaining the position set forth in the August 30 notice that, for

packages prepared on pallets, packages from different Standard Mail

subclasses (Automation, Enhanced Carrier Route, and Regular) may be

placed on the same pallets, and no physical separation of the packages

on the pallets by rate category will be required. At the pallet

breakdown operation, the Postal Service will sort the packages to

containers for the proper transportation or in-plant processing

operation.

The Postal Service also erroneously indicated in the August 30

notice, that it would allow mailers to combine packages from different

mailings in the same sack. Combining packages of different mailings in

the same sack does not make operational sense for the Postal Service.

Sack labels identify the type of mail contained in the sack so that the

Postal Service can direct it to the proper in-plant operation. Enhanced

Carrier Route sacks may be sent directly to the 5-digit ZIP Code for

carrier casing, whereas barcoded flats will be sent to a barcoded flats

sorting machine. Regular mail may be sent to manual distribution

operations. Because combining this mail together in sacks would not

allow the Postal Service to direct the mail to the proper operation,

combining packages

[[Page 66597]]

from different mailings in the same sack will not be permitted.

f. Flats Mail in Trays

No comments were received regarding this issue. The Postal Service

is retaining the position set forth in the August 30 notice that First-

Class flats will be prepared in flat trays and Standard Mail flats will

be prepared in sacks. A commenter to the June 29 notice questioned the

rationale for this policy. The Postal Service plans to initially limit

the use of trays to First-Class flats to allow for a more gradual

change to a future operating environment in which all nonpalletized

flat mail will be prepared in trays. Currently, the Postal Service

processes First-Class flats in trays. Generally, flat trays are better

handled at GMFs and airmail facilities (AMFs) (where the Postal Service

has tray handling systems) than sacks, which are more amenable to

processing at bulk mail centers (BMCs). When barcoded flat mail is

distributed on flat sorting machines using the barcode, there are

instances where the flat mail is dispatched in flat trays to the next

handling or destination regardless of class. Therefore, as part of the

transition of all classes of flats mail to tray preparation, allowing

automation-compatible (barcoded) flat mail in trays would be the likely

next step, but this will not take place until after implementation of

the current Classification Reform proposals.

g. Last Package Rule

A question concerning how to label a mixed ADC sack containing only

a 5-digit package was asked in response to the June 29 notice. The

Postal Service deferred an answer to this question until completion of

the DMM standards. Under the presort standards set forth in this

proposed rule, a 5-digit package left over after filling all possible

5-digit, 3-digit, and ADC sacks will be placed in a sack bearing a

mixed ADC sack label.

h. 3-Digit Schemes

No comments were received regarding this issue in response to the

August 30 notice. The Postal Service is retaining the position that,

while a 3-digit scheme sort for flats may be investigated at a later

date, it will not be implemented with Classification Reform.

5. Addressing

a. AIS Product Cycle

Concurrent with Classification Reform, the Postal Service is

proposing to increase the frequency at which it updates all of its AIS

Products, such as ZIP+4 and CRIS. This change would increase the

frequency of required mailer updates to address matching systems.

Because this change will affect all AIS products and must be applied

universally, it will impact all mailers using AIS products for

preparing mailings, not just those mailing in the reformed subclasses.

The proposal to increase the frequency of AIS product updates is

designed to improve the currency of the data that is used during the

matching process and reflects the significant advancements in list

management technology that have been made since the original product

cycle was developed. Now that the Postal Service is experiencing more

rapid change in address information and carrier route codes, it has

become critical that mailers update their data files more frequently.

Under this proposal, the frequency of AIS product releases would

increase from quarterly to bimonthly. The Postal Service also proposes

to eliminate inconsistencies in the implementation dates of new product

releases. These currently range from 45 days with ZIP+4 products to 75

days for some CRIS products. Under this proposal, all products would

have to be put into use within 45 days of the release date of the

product update. There are no plans to increase the frequency with which

ZIP+4 code or delivery point code matches must be reprocessed from the

current ``within 12 months of the mailing date'' standard for any of

the unreformed subclasses.

Because these changes are systemic and because it would be costly

and confusing to maintain two different sets of product update

frequencies, the Postal Service proposes to apply these changes to all

affected mailings, regardless of whether that mail will also be

affected by Classification Reform. For example, carrier route codes

would be updated more quickly with the initiation of bimonthly CRIS

releases and with the reduction in the permissible implementation

period from 75 to 45 days. This would apply to both reformed and

unreformed subclass mailings.

Although these changes in AIS product frequency were previously

planned and could have been proposed independently, the Postal Service

has chosen to propose to implement them with the implementation of

Classification Reform to consolidate changes to mail preparation

standards.

b. Carrier Route Updates

Eight comments were received about the Postal Service's proposal

that mailings at carrier route rates incorporate carrier route codes

updated within 90 days prior to the date of mailing using certified

software. One commenter suggested that the Postal Service eliminate the

requirement for certified software, indicating that it limited the

creativity of mailers in applying the carrier route codes to their

mail. The Postal Service requires the use of certified software to

verify the accuracy of the matches and to provide documentation of the

time and age of the information being used to apply carrier route

codes. The certification process verifies the results of address

matching, not the means by which it was achieved. Thus, there are no

limits to the creativity that may be applied to the matching process if

the result represents the correct carrier route code for the address.

Four commenters suggested that the coding date should be increased

to 120 days, whereas two other commenters approved the proposal to

increase the frequency of ZIP+4 matching to 90 days. The Postal Service

has no plans to increase the frequency of ZIP+4 matching at this time.

Carrier route assignments are more frequently changed to accommodate

the operational needs of the Postal Service to balance carriers'

workload. Thus, the Postal Service believes that the 90-day coding

standard is reasonable. However, it is not the Postal Service's intent

to require mailers to update their carrier route codes if no more

current source of information is available. The Postal Service believes

that the most current data available should be used in assigning

carrier route codes. If new data files are not available, mailers

should continue to use the existing route assignments until new AIS

products have been released by the Postal Service.

c. Move Updates

Seventeen comments were received concerning the proposal to require

First-Class bulk mailers to update the addresses of their customers who

have moved within 6 months prior to the mailing date. Several mailers

seemed confused about the exact class of mail to which this standard

applies; it would apply only to Retail Presort and Automation First-

Class mailings.

The Postal Service believes that the methods currently available to

provide customers with updated address information offer a wide range

of options that can meet the needs of mailers at a reasonable cost. For

example:

(1) Use of the endorsement ``Address Correction Requested'' means

that the mailpiece will be returned to sender with the new address

information

[[Page 66598]]

affixed. This service is provided at no additional charge to the

mailer. The mailer can then update the address information and, if it

so desires, use a new envelope to mail the piece to the new address.

(2) Use of the endorsement ``Forwarding and Address Correction

Requested'' means that the mailpiece is forwarded to the new location

and the Postal Service sends a hard copy notice to the mailer with the

new address information. Each such notice costs $0.50 and can be used

to update the mailer's addresses.

(3) Use of Address Change Service (ACS) provides the mailer with an

electronic notice of new address information instead of hard copy. ACS

can also be used on mailings other than First-Class to qualify those

addresses in the mailing list that were used for Retail Presort and

Automation First-Class mailings. Electronic notices cost $0.20 each and

can be obtained on a variety of electronic media. Mailers may determine

the frequency with which they use the ACS endorsement and participant

code if the mailer can certify that each address in a First-Class

mailing has been updated for customer moves within 6 months prior to

the mailing.

(4) Use of National Change of Address (NCOA) processing service can

update mailers' address lists with corrected address information prior

to a mailing. Mailers determine how frequently they process their

address lists.

Two commenters stated that they are unable to use the current

methods, and two other commenters said that the services were too

costly. None of these commenters provided specifics in support of their

statements. The Postal Service incurs both costs to rehandle

undeliverable-as-addressed mail and service delays when mail must be

redirected to a new location. It is in the best interests of the Postal

Service and mailers to improve deliverability and reduce costs. The

options cited above, including the ``no fee'' Address Correction

Requested endorsement, provide flexibility to mailers in meeting the

proposed standard.

Six commenters asked that implementation of the requirement be

postponed to allow time to adjust and obtain move updates. The Postal

Service recognizes that many mailers will need to revise their

addressing systems to accommodate move updating. Thus, the Postal

Service will begin the move update address qualification process at the

time of Classification Reform implementation, but will not condition

the eligibility of First-Class bulk mailings on complete move update

qualification until 6 months after Classification Reform

implementation, or January 1, 1997, whichever is earlier. The Postal

Service also wants to avoid creating a semiannual ``crunch'' of demand

for NCOA and ACS services that might occur if move update was

implemented at the same time as Classification Reform. Some mailers may

need to experiment with several options for move updating, such as the

impact of the two different endorsements, to determine which option

makes the best business sense for their operations. Some will have to

learn to use electronic update systems, and others will need to use up

stocks of envelopes that do not bear an endorsement. The ``ramp-up''

period should give all concerned customers sufficient time to decide

which update method to use, obtain NCOA matching services, if

appropriate, implement internal system changes to accept electronic

move update information, and work with their internal customers or

presort customers to obtain full compliance.

Several commenters also asked that implementation of the proposed

move update standard be postponed indefinitely until other methods have

been approved to do move updating, such as the Multiline Forwarding

System (MFS). The Postal Service does not believe that such an open-

ended delay is warranted, given the wide range of current options.

However, the Postal Service is encouraged by the progress currently

being made toward implementation of MFS. The Postal Service has been

working with vendors of commercial MLOCRs on the MFS project since June

1995. Test mail has been successfully processed by several vendors to

determine the accuracy of the matching processes. The next step is

testing ``live'' mail in a production environment. The project plan for

MFS is on track, with operational issues now under review. As a result,

the Postal Service expects that MFS will be available before the end of

1996, but that outcome is not certain at this time. The Postal Service

plans to continue working on the development of MFS with MLOCR users

through the Mailers Technical Advisory Committee and the Multiline

Users Group. Moreover, as marketplace demands create a need, the Postal

Service will also consider expanding the range of options in the

existing services, for example, by additional notification options in

ACS beyond those currently available.

Five commenters asked whether their in-house address correction

centers, to which they have devoted significant resources, might be

certified as meeting the move update standard. For those mailers who

believe that their lists are up to date, the use of the ``Address

Correction Requested'' endorsement should have little or no impact on

their business practices because they are mailing to the most current

address of their customers. The simple and straightforward use of the

endorsement would meet the proposed standard with no difficulty, would

need be applied to all addresses on the list only within 6 months prior

to mailing, and expenditures would be limited to the costs associated

with preprinting the endorsement on mailing envelopes. The current

endorsement options would be an effective approach to meeting the

proposed standard for lists that are well maintained by a mailer's move

correction processes. In the future, the Postal Service may consider

the establishment of ``move update certification'' processes for

specific types of lists or businesses. The Postal Service is interested

in evaluating other options that mailers suggest to meet the move

update standard if unique situations exist that preclude the use of the

current solutions.

Three other commenters asked whether a mailer was required to use

the information provided from postal address correction processes and

apply it immediately to their address lists. They asked whether the

notification could serve as a trigger to the company to initiate an

inquiry with the customer about correcting address information. Four

commenters indicated that various state and federal government agencies

believe that they are prohibited from using corrections provided by the

Postal Service. In most cases, mailers are expected to update their

mailing addresses promptly. However, the Postal Service recognizes

that, in some industries, there are legally-mandated limits on the

address that may be used in certain customer communication. For

example, one commenter noted that, in a number of states, notices of

shareholder meetings must be sent to the address ``in the corporation

records.'' Given the concerns expressed by these mailers, the Postal

Service has decided that in circumstances where clearly demonstrated

legal constraints limit a mailer from using address changes provided by

the Postal Service, an individually-approved alternative process will

be acceptable to meet the move update standard. Alternative process

approval would be granted on a case-by-case basis, and the legal

limitation would need to be clearly identified. In this process,

mailers would receive address change

[[Page 66599]]

information from the Postal Service in any of the currently prescribed

manners. This would be followed by a prompt mailer-initiated direct

mail contact with the customer, requesting a signed verification of the

address change. For example, the mailer could provide a preprinted

barcoded business reply card that the customer signs and returns.

Address information could then be updated in the mailer's records prior

to the next mailing cycle.

d. Uniform Placement of Address Elements

During the comment period, the Postal Service decided to remove

uniform placement of address elements from consideration as a proposed

address quality standard. The Postal Service took this action in

response to extensive mailer concerns regarding the details of the

proposal and its potential adverse impact on rate eligibility.

e. Line of Travel

One commenter asked whether the line-of-travel (LOT) sequencing

requirement applied only to flat-size pieces. Because LOT sequencing

can be beneficial for casing of all carrier route mail, the proposed

standard will apply to letters, flats, and merchandise samples prepared

with detached address labels in Basic Enhanced Carrier Route mailings,

and to all Publications Service pieces except for those pieces that are

presented in a mailing of automation-compatible Publications Service

barcoded letters.

One commenter stated that the requirement would be easy to meet,

whereas two other commenters stated that it would be difficult to

maintain and would be an unnecessary burden. The Postal Service has had

assurance from the mailer and vendor communities that this requirement

is not an onerous burden. The update of sequence information could be

done through any of the established sequencing methods or through use

of the newly-developed Line-of-Travel product, which has been available

to the mailing industry since June 1995. Mailers who are interested in

obtaining the Line-of-Travel product should contact the National

Customer Support Center at (800) 238-3150 for subscription information.

Continuing update of sequence information will occur with the same

frequency that carrier route codes are updated.

Four commenters stated that there were many operational variables

in their production lines and questioned whether exact delivery order

or reverse order would be equally effective. The Postal Service will

identify mailers whose mailings are frequently in the reverse order and

deal with them on an exception basis.

Three other commenters asked whether LOT could apply to High

Density mail. Although the Postal Service believes that LOT sequencing

would accomplish most of what walk sequencing will do for High Density

mail, the Classification Reform proposal specifies walk sequencing for

High Density mail. Therefore, LOT is not an acceptable sequencing

option to qualify for High Density rates.

f. 5-Digit ZIP Code Verification

The Postal Service proposed to require a certification by the

mailer that the 5-digit ZIP Codes on addresses in a Retail Presort

First-Class, Regular Standard, or nonautomation-compatible Publications

Service Periodicals mailing have been checked for accuracy within 12

months prior to mailing. One commenter stated that because ZIP Code

verification was quick and easy, out-of-date ZIP Codes should not be

allowed access to presort rates. Another called the proposed

verification costly and intrusive on business activity. The Postal

Service believes that accurate ZIP Codes are vital to ensuring

consistent, timely delivery service. Moreover, the use of a correct ZIP

Code is currently a requirement for the affected groups of mail. Those

mailers who are unwilling to verify the correctness of the ZIP Codes

they apply to mailpieces will not be allowed access to postage rates

that require ZIP Code presortation.

Two commenters asked what some of the approved methods of

verification might be. The Postal Service has previously stated, ``A

recommended checklist of possible ZIP Code verification options for

address lists that are not computerized could be signed as a part of

the verification process. Items to appear on the list might include

manual verification using the most recent Postal Service ZIP Code

directory, a survey of the addressees currently in the address list to

inquire about changes to ZIP Code information, participation in the

current manual list correction service (DMM A910), use of a service

provider to verify ZIP Code information, and use of approved

software.''

Other options might include the use of electronic look-up services

such as those available on the Postal Service home page on the World

Wide Web and other bulletin board look-up services using certified

address matching software. Mailers will be expected to identify the

method used to verify the ZIP Code information and sign a certification

of verification. Mailers will have 3 months from the date of

Classification Reform implementation to verify the accuracy of their 5-

digit ZIP Code information. In addition, as new techniques for ZIP Code

verification are developed, they will be added to the list of

acceptable methods for verification.

6. Periodicals

a. Overview

Periodicals, like today's second-class mail, is designed for

newspapers and other periodical publications. Under Classification

Reform, all current categories of authorization would remain (general,

requester, institutions and societies, foreign, and state departments

of agriculture). Current subclasses would also be retained and

Publications Service, a new low-cost subclass, would be added.

No substantive change to Preferred Rates Periodicals (In-County,

Classroom, Nonprofit, Science-of-Agriculture zones 1-2) is proposed in

the current Classification Reform case. The provision will also be

retained that prescribes payment of Regular rates for advertising that

exceeds the 10% limitation.

Publishers may mail at only one subclass of outside-county rates

for each publication: Preferred (when applicable), Regular, or

Publications Service. The publication must follow the same basic

standards as today, i.e., it must be formed of printed sheets and

published from a known office of publication at a regular frequency of

at least four times per year. Current requirements by authorization

category continue to apply. General publications must have a minimum of

50% paid circulation and contain no more than 75% advertising in one-

half the issues published during a 12-month period. The publisher must

maintain a list of subscribers. Likewise, requester publications must

have a list of requesters/subscribers, with a minimum 50% of the

circulated copies either requested or paid for by the recipient.

Advertising in requester publications may not exceed 75% in any issue.

A notable change proposed for the Regular subclass pertains to the

presort levels: Basic, 3/5, and Carrier Route would replace current

levels A, B, and C, making the presort structure for Regular

Periodicals more consistent with other classes. The new 3/5 rate

replaces the current Level B3 and B5 rates. Mail presorted to all 3-

digit destinations (not just to unique 3-digit destinations) will

qualify for the 3/5 rates. Another minor change renames the current 125

walk-sequence rate as High Density.

[[Page 66600]]

Three primary criteria must be met to qualify for Publications

Service: (1) at least 75% of the mailed volume must be paid (for

general publications) or paid or requested (for requester circulation);

(2) at least 30% of the content in each issue must be nonadvertising

matter; and (3) at least 90% of each issue must be presorted in

prescribed volumes to carrier route, 5-digit, or 3-digit destinations.

An outside circulation audit is also required.

Each issue of a Publications Service periodical must have at least

30% nonadvertising content and at least 75% of the mailed circulation

(excluding copies claimed at in-county, foreign, First-Class, Priority

Mail, or Express Mail rates) must be sent to paid subscribers (or

requesters, depending on the category of authorization). Publications

that fail to meet the nonadvertising content requirement are assessed a

40% surcharge of the applicable postage for that issue. If a

publication fails to meet the 75% paid/requester standard, its

authorization to mail at Publications Service will be revoked.

The Postal Service has determined that the outside circulation

audit will be used only to validate compliance with the proposed 75%

paid/requested circulation requirement. The outside auditor will not be

responsible for confirming the advertising/editorial ratio. To ensure

compliance and reduce the amount of material reviewed before mail

acceptance, the Postal Service will include on the mailing statement a

certification block for the publisher's signature, validating that the

publication meets the 30% nonadvertising requirement. If the Postal

Service determines that an issue exceeds 70% advertising, the publisher

will be given ample opportunity to demonstrate compliance with the

requirement before any penalty is assessed.

At least 90% of each issue must be presorted to 3-digit, 5-digit,

or carrier route destinations. Copies count toward the 90% criterion if

they are part of a minimum of 24 addressed pieces for a 3-digit

destination, all properly presorted to carrier route, 3-digit, or 5-

digit destinations in packages of six or more addressed pieces each.

Any combination of six-piece or larger packages to these destinations

is acceptable (e.g., 18 pieces to a carrier route and six copies to a

5-digit, both in the same 3-digit area). Publications that fail to meet

the 90% standard are assessed a 40% surcharge of the applicable postage

for that issue.

For the purposes of the 90% criterion, an ``issue'' will be

considered to consist of all copies in the mailed volume that are

mailed within that ``window'' of time during which the main file and

most supplemental mailings for a particular title are deposited with

the Postal Service. The mailing ``window'' includes all copies,

regardless of cover date, mailed during that period. To ensure that the

entire mailed volume of a publication is considered, all mailings,

including ``supplementals,'' will be counted.

Publications may be better able to meet this density requirement by

comailing, including the comailing of Publications Service flats with

Regular Periodicals. To administer the 90% criterion in a comailing

situation, the Postal Service proposes to look at the sortation of the

individual title within the comailing. The copies reported on a single

mailing statement will not have to meet the 90% criterion. The

qualifying pieces in the comailing are added to the qualifying pieces

in the main file and any qualifying pieces in supplemental runs that

were not comailed. The final qualifying percentage is derived by

dividing the total number of qualifying pieces by the total number of

mailed pieces.

In a comailing, the 40% penalty would apply to the publication that

fails to meet the density requirements, not to all other comailed

publications. While firm packages are considered a single addressed

piece for presort and postage purposes, each copy in a firm package

counts individually toward the 90% standard.

Carrier route, nonbarcoded, and barcoded mail may be mixed on the

same pallet, and 5-digit and ZIP+4 barcoded Publications Service flats

may be combined in the same package. This is discussed further in the

analysis of comments on Periodicals.

In addition to the requirements for nonadvertising content,

circulation to paid/requester addresses, and density, all automation-

compatible Publications Service mail (except carrier route rate flats)

must bear a barcode. All pieces must bear at least a 5-digit barcode

and no less than 85% of the pieces must bear a ZIP+4 or delivery point

barcode. If the piece is not machinable, barcoding is not required.

Although the carrier route portion of the mailing will count toward the

85% criterion, it will not have to be barcoded. The 85% criterion

optimizes the proportion of pieces that can be given automated

processing. To the extent firm packages are amenable to such handling,

it would not be relevant to the objectives of the 85% criterion if the

component copies inside the firm package were barcoded. Therefore, the

85% criterion will be applied to consider the number of addressed

pieces in the mailing, not the total number of copies.

Compliance with the 85% criterion will be based on the entire

mailed volume of the issue, encompassing all editions from all sources.

Publishers will be responsible for providing the supporting information

if requested by the Postal Service.

Additional ``bundled'' requirements pertaining to such issues as

addressing, sortation, and containerization are detailed in the

proposed DMM standards in this notice.

To mail at Publications Service rates, a periodical must first be

authorized Periodicals mailing privileges in one of the existing

categories of authorization. To apply for Publications Service, the

publisher must submit a separate application (and pay an additional

$305 fee) and initiate an outside circulation audit. Once authorized,

all outside-county copies of the publication, which are not sent as

Express Mail, Priority Mail, or First-Class Mail, must be mailed at

Publications Service rates exclusively, unless the publication

voluntarily abandons its authorization. If the publication abandons the

authorization or the Postal Service revokes it, the publisher must wait

1 year to reapply. Authorization to mail at Publications Service rates

does not affect eligibility for in-county rates.

Publications currently authorized to mail at second-class rates

will not be required to mail in a pending status if it can be shown to

meet the 75% paid or requested criterion and an application to mail at

Publications Service rates is filed. Mailings will be accepted at

Publications Service rates subsequent to the application being filed.

If the Postal Service denies the application or the publisher abandons

it, a revenue deficiency will be assessed for the difference between

the amount paid at Publications Service rates and the amount due at

Regular rates.

Publications not authorized second-class mail privileges may also

apply for Publications Service rates. A publisher would be required to

file an application for a Periodicals authorization and pay a fee of

$305. A separate application for Publication Service rates must also be

filed and the publisher must pay an additional $305 fee. These

applications may be filed simultaneously or separately as desired by

the publisher. Under these circumstances, the publisher will be

required to mail under established pending procedures (i.e., the

publisher must deposit funds at the applicable third- or fourth-class

rates). When the applications are approved, the

[[Page 66601]]

publisher will be entitled to an appropriate refund.

b. Comment Analysis

A total of nine comments were received concerning the

implementation standards for Periodicals described in the August 30

notice. Of that number, five comments expressed general disapproval of

Classification Reform as it pertains to Periodicals and three were

generally favorable; such comments are beyond the scope of this

rulemaking and are not addressed here. Two of the three commenters who

expressed general satisfaction with Classification Reform as it

pertains to Periodicals, and two other commenters, offered specific

comments concerning various issues. These comments are discussed below.

(1) Automated Processing of Flats. One commenter reiterated that

the widespread availability of automation equipment capable of handling

all types of second-class flats is crucial to second-class mailers. The

commenter recommended that the Postal Service immediately undertake to

develop a nationwide plan to increase automation capacity for flat-size

mail. As explained above in the discussion on flats, although the

Postal Service would like to be able to process all types of flats on

automated equipment, new machines will not be purchased until the

current ones have been properly positioned for optimum utilization.

(2) 75% Paid Subscriber/Requester and 30% Nonadvertising

Requirements for Publications Service. Regarding the requirement that

75% of all mailed copies of Periodicals authorized to mail at

Publications Service rates must be sent to paid subscribers/requesters

(as appropriate), two commenters requested that all mailed newsstand

copies (regardless of the number returned or destroyed) be considered

paid circulation. This request has been given full consideration.

Although the Postal Service believes that it is appropriate to account

for newsstand copies sent through the mails, it is both inaccurate and

inconsistent with past postal policy to consider all such copies paid.

Rather, the Postal Service will continue to require publishers to

maintain records to distinguish between sold and unsold newsstand

copies. Those copies mailed to newsstands that are eventually sold will

count toward the 75% paid subscriber/requester requirement.

One commenter addressed the proposal to require an outside auditor

to review the proportion of mailed copies of a Publications Service

periodical that are sent to paid subscribers/requesters to verify

compliance with the 75% paid subscriber/requester requirement. This

commenter supported the Postal Service decision not to require that an

outside auditor confirm that the 30% nonadvertising minimum per issue

has been met, but instead to accept a written certification by the

publisher (included as part of the mailing statement prepared for each

issue).

(3) Commingling of 5-Digit and ZIP+4 Barcoded Publications Service

Periodicals. One commenter supported the Postal Service's decision to

allow the commingling on pallets of all types of packages of both

Regular and Publications Service Periodicals. Two commenters believed

that the volume of 5-digit barcoded pieces is relatively small in

second-class today and, therefore, warrants allowing mailers to combine

5-digit and ZIP+4 barcoded pieces in the same package.

Once a publication is authorized to be mailed at Publications

Service rates, all mailed copies (except those mailed at in-county

rates or as Express Mail, Priority Mail, or First-Class Mail) must be

prepared according to the required sortation for this subclass. Unlike

First-Class and Standard Mail where pieces not qualifying for one

subclass may be mailed in another, no copies of an authorized

Publications Service periodical may be mailed as Regular or outside-

county Preferred Periodicals. For this reason, the Postal Service

decided that setting a 100% ZIP+4 or delivery point barcoding standard

for automation-compatible Publications Service periodicals would be

difficult for publishers to achieve; therefore, the current ``85-15''

barcoding standard is retained.

Under today's second-class standards, which allow 15% of a

nominally ZIP+4 barcoded mailing to bear a 5-digit barcode, publishers

may combine ZIP+4 and 5-digit barcoded pieces in packages. The Postal

Service believes that combining such mail in packages continues to be

appropriate and will allow this preparation for Publications Service

periodicals. However, the Postal Service will continue to study the

issue and may require other packaging standards at a later date if

combining ZIP+4 barcoded and 5-digit barcoded pieces in the same

package has a negative operational impact as the barcoded flats

mailstream expands.

(4) Presort and Comailing. The Postal Service will allow the

comailing of Regular and Publications Service flat-size Periodicals. To

enable publishers to comail efficiently, the Postal Service has

determined (and has so stated in earlier notices) that it will align

the sortation standards for Regular and Publications Service flats.

This decision is reflected in the proposed DMM standards presented

below. For flats, the only difference between Regular and Publications

Service sortation requirements is that mail entered at a Regular

Barcoded rate must be prepared as a separate mailing meeting a separate

85% barcoding standard as discussed in section A of this proposal.

Although the majority of Periodicals is flat-size mail, many

publications are produced in letter-size format. The preparation

standards proposed for automation-compatible letter-size Publications

Service mail will mirror the proposed standards for Automation First-

Class and Standard Mail letter-size pieces, with the exception that a

6-piece package minimum will be applied to Publications Service carrier

route sortation rather than the 10-piece minimum applied in First-Class

and Standard Mail. In addition, new sortation criteria for

nonautomation-compatible letters have been added for Publications

Service to require packaging and traying of pieces. Preparation of

presorted packages is necessary for nonautomation-compatible mail for

efficient Postal Service processing.

These two Publications Service letter-size sortations are

significantly different from current letter sortation requirements for

second-class mail. Because these sortation requirements affect rate

eligibility, the Postal Service will not propose the alignment of

standards for Regular and Publications Service letter-size mail.

Consequently, comailing will not be allowed for Regular and

Publications Service letter-size pieces.

New sortation criteria have been developed for barcoded letters and

for nonbarcoded letters at Regular rates. These new sortation criteria

reflect the new standards for preparation of all letter-size mail in

trays and for tray sortation levels that will be implemented with

Classification reform, while allowing such mail to continue to qualify

for presort and barcoding rates under the same qualification criteria

as today.

C. Presort Summary Guide

The following charts summarize the presort requirements for

reformed subclasses. They do not reflect every presort requirement but

are a guide to the major presort points contained in the DMM standards

presented in the latter part of this notice.

BILLING CODE 7710-12-P

[[Page 66602]]

[GRAPHIC][TIFF OMITTED]TP22DE95.000

[[Page 66603]]

[GRAPHIC][TIFF OMITTED]TP22DE95.001

[[Page 66604]]

[GRAPHIC][TIFF OMITTED]TP22DE95.002

[[Page 66605]]

[GRAPHIC][TIFF OMITTED]TP22DE95.003

[[Page 66606]]

[GRAPHIC][TIFF OMITTED]TP22DE95.004

[[Page 66607]]

[GRAPHIC][TIFF OMITTED]TP22DE95.005

[[Page 66608]]

[GRAPHIC][TIFF OMITTED]TP22DE95.005

[[Page 66609]]

[GRAPHIC][TIFF OMITTED]TP22DE95.006

[[Page 66610]]

[GRAPHIC][TIFF OMITTED]TP22DE95.007

[[Page 66611]]

[GRAPHIC][TIFF OMITTED]TP22DE95.008

[[Page 66612]]

[GRAPHIC][TIFF OMITTED]TP22DE95.009

[[Page 66613]]

[GRAPHIC][TIFF OMITTED]TP22DE95.010

[[Page 66614]]

[GRAPHIC][TIFF OMITTED]TP22DE95.011

[[Page 66615]]

[GRAPHIC][TIFF OMITTED]TP22DE95.012

[[Page 66616]]

[GRAPHIC][TIFF OMITTED]TP22DE95.013

BILLING CODE 7710-12-C

[[Page 66617]]

D. Automation Carrier Route Rates--Ineligible Zip Codes

First-Class and Standard Mail (A) Automation Carrier Route and

Publications Service Carrier Route lettersize mail may not be prepared

to the 5-digit ZIP Code destinations listed below. This list will not

appear in the DMM but this information will be available in the City/

State file. Printed information may be published periodically in the

Postal Bulletin.

[GRAPHIC][TIFF OMITTED]TP22DE95.014

[[Page 66618]]

[GRAPHIC][TIFF OMITTED]TP22DE95.015

[[Page 66619]]

[GRAPHIC][TIFF OMITTED]TP22DE95.016

[[Page 66620]]

[GRAPHIC][TIFF OMITTED]TP22DE95.017

[[Page 66621]]

[GRAPHIC][TIFF OMITTED]TP22DE95.018

[[Page 66622]]

[GRAPHIC][TIFF OMITTED]TP22DE95.019

[[Page 66623]]

[GRAPHIC][TIFF OMITTED]TP22DE95.020

[[Page 66624]]

[GRAPHIC][TIFF OMITTED]TP22DE95.021

[[Page 66625]]

[GRAPHIC][TIFF OMITTED]TP22DE95.022

[[Page 66626]]

[GRAPHIC][TIFF OMITTED]TP22DE95.023

[[Page 66627]]

[GRAPHIC][TIFF OMITTED]TP22DE95.024

[[Page 66628]]

[GRAPHIC][TIFF OMITTED]TP22DE95.025

[[Page 66629]]

[GRAPHIC][TIFF OMITTED]TP22DE95.026

[[Page 66630]]

[GRAPHIC][TIFF OMITTED]TP22DE95.027

[[Page 66631]]

[GRAPHIC][TIFF OMITTED]TP22DE95.028

BILLING CODE 7710-12-C

[[Page 66632]]

E. Summary of DMM Changes

The DMM revisions shown below are based on the general proposals

described in the two advance notices of proposed rulemaking published

earlier this year by the Postal Service, on which comments have been

received and considered accordingly. Revisions are described by module,

based on the organization and content of DMM Issue 49 (September 1,

1995). This list is intended as an overview only, and should not be

viewed by commenters as defining every revision that they may need to

examine.

A (Addressing). Revisions in nomenclature are made throughout. A930

is revised to update the list of available AIS products, and A950 is

revised to show the more frequent product cycle for address coding

products.

C (Characteristics and Content). Revisions in nomenclature are made

throughout. C100 is amended to reflect the proposed new size limits for

pieces eligible for card rates. C300 and C400 are revised and merged

into new C600 to recognize the merger of third- and fourth-class into

Standard Mail. Terms used in various standards are defined in new

sections added to C810, C820, and C840.

D (Deposit, Collection, and Delivery). Revisions in nomenclature

are made throughout. D300 and D400 are revised and merged into new D600

to recognize the merger of third- and fourth-class into Standard Mail.

E (Eligibility). Revisions in nomenclature are made throughout.

E100 is amended to reflect the reorganization of First-Class Mail

(excluding Priority Mail) into the Retail and Automation subclasses

(whose specific standards are detailed in E130 and E140, respectively).

E200 is renamed to recognize the renaming of second-class mail as

Periodicals. E210, E250, and E270 are revised minimally. E220 is added

to present the standards for Publications Service. E230 is reorganized

to present the presort standards for Regular and Publications Service

in E231 and E232, respectively, and the standards retained for

Preferred Periodicals in E239. E240 is similarly revised to present the

automation standards for Regular publications in E241 and those brought

forward from existing rules for Preferred publications in E249.

(Standards for automation-compatible Publications Service mail are

included in the basic eligibility criteria in E220; there is no

separate automation rate for Publications Service.) E300 and E400 are

revised and merged into new E600 to recognize the merger of third- and

fourth-class into Standard Mail. E610 presents basic standards for all

Standard Mail in E611, for former third-class mail, now called Standard

Mail (A) in E612, and for former fourth-class mail, now called Standard

Mail (B) in E613. E620 contains standards for single-piece rates:

single-piece Standard Mail (A) (E621), parcel post (E622), bound

printed matter (E623), Special Standard Mail (currently special fourth-

class mail) (E624), and Library Mail (E625). E630 presents standards

for bulk rates: Regular Basic and 3/5 (E631); Enhanced Carrier Route

Basic, High Density, and Saturation (E632); basic and carrier route

bulk bound printed matter (E633); 5-Digit and BMC Presorted Special

Standard Mail (E634); and, consolidated but without substantive change

from current standards, for all existing Nonprofit rates (E639). E640

contains standards for automation-based rates: Automation Carrier

Route, 5-Digit, 3-Digit, 3/5 (for flats), and Basic (E641); and, also

consolidated but essentially unchanged from current standards, for all

existing Nonprofit rates (E649). E650 and E670 are revised minimally.

To avoid an anomalous and confusing situation in which current weight

limits for ``heavy letter'' barcoded mail would be applied in the

context of proposed rules (under which different weights would actually

apply), current DMM standards that are in place for the ``heavy

letter'' test (59 FR 65967-71, December 22, 1994), have been revised

for this rulemaking to reflect the DMM provisions that would become

effective if the test changes are made permanent in the future. Use of

these standards in this proposed rule does not constitute an explicit

or implicit decision on the test or the acceptability of heavy letter

mail under any circumstance; any announcement in that regard will be

made separately.

F (Forwarding and Related Services). Revisions are confined to

changes in nomenclature.

G (General Information) and I (Index Information). No revisions are

made.

L (Labeling Lists). Revisions in nomenclature are made throughout.

L003 is added to list 3-digit ZIP Code areas that are combined for

scheme sortation (only to listed destinations) under specific new

preparation standards. To reflect the wider use of the ADC network,

current L101 is relocated and renumbered as L004. To reflect other

revisions to distribution networks that have eliminated SDC, state, and

mixed states preparation, L201-203, L701-704, L706, and L707 are

deleted.

M (Mail Preparation and Sortation). Revisions in nomenclature are

made throughout. Current M011 is renumbered as M012, and new M011 is

added to consolidate basic definitions of terms used throughout other

mail preparation instructions. M012 and M013 are also updated to

include revised formats for optional endorsement lines and carrier

route information lines and to allow the inclusion of rate markings in

both. M020 is amended to provide more consistent package preparation

standards for other-than-Nonprofit mail. M033 is revised to add

consistent standards for tray preparation for letter- and flat-size

mail and to offer enhanced information about sack and tray preparation.

M040 is amended to incorporate revisions to pallet preparation

standards set forth in a final rule expected to be published on

December 20, 1995. M041 is revised to present general standards for

pallets and their use. M045 reorganizes the standards in current M042,

M043, and M044 as amended by the cited rulemaking, to present the

revised and consolidated standards for palletized mail preparation.

M050 is revised to include information about line-of-travel sequencing.

M100 is reorganized, with the standards for Retail Presort located in

new M130. Preparation standards for nonautomation Regular and

Publications Service Periodicals are in new M210; existing standards

for nonautomation Preferred Rate Periodicals are consolidated in M290.

M300 and M400 are revised and merged into new M600 to recognize the

merger of third- and fourth-class into Standard Mail. Regular Standard

Mail (A) preparation is detailed in M610, Enhanced Carrier Route

standards are in M620, and existing standards for Standard Mail (B)

(current fourth-class mail) and for Nonprofit Standard Mail are

contained in M630 and M690, respectively. Revised preparation standards

for Automation First-Class, automation-compatible Publications Service

and Barcoded rate Regular Periodicals, and Automation Standard Mail are

contained in M810 (letter-size pieces) and M820 (flat-size pieces).

M890 brings forward existing standards for Preferred Periodicals and

Nonprofit Standard Mail. Throughout, the optional city preparation

level has been eliminated (except for Preferred Periodicals); the SDC,

state, and mixed states preparation levels have been replaced with ADC

and mixed ADC levels; and increased citation to P012 has been made as

that section is being developed as the definitive standard for basic

documentation.

[[Page 66633]]

P (Postage and Payment Methods). Revisions in nomenclature are made

throughout. P012 is amended to improve the definition of

``standardized'' documentation. P300 and P400 are revised and merged

into new P600 to recognize the merger of third- and fourth-class into

Standard Mail. P710 is amended to contain new abbreviations for use

with manifest mailings.

R (Rates and Fees). Revisions in nomenclature are made throughout.

R000 contains updated stamp and stamped stationery information. R100

and R200 are amended to reflect revised rates and rate structures. R300

and R400 are revised and merged into new R600 to recognize the merger

of third- and fourth-class into Standard Mail and to show revised rates

and rate structures.

S (Special Services). Revisions in nomenclature are made throughout

with no other substantive changes.

Although exempt from the notice and comment requirements of the

Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed

rulemaking by 39 U.S.C. 410(a), the Postal Service invites comments on

the following proposed revisions of the DMM, incorporated by reference

in the Code of Federal Regulations. See 39 CFR Part 111.

List of Subjects in 39 CFR Part 111

Postal Service.

PART 111--[AMENDED]

1. The authority citation for 39 CFR part 111 continues to read as

follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-

3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

2. Revise the following sections of the Domestic Mail Manual as

noted below:

* * * * *

An appropriate amendment to 39 CFR 111.3 to reflect these changes

will be published if the proposal is adopted.

Stanley F. Mires,

Chief Counsel, Legislative.

A Addressing

A000 Basic Addressing

A010 General Information

[In 1.2d, replace ``Presorted First-Class,'' ``second-class,'' and

``bulk third-class mail; fourth-class mail'' with ``Retail Presort

First-Class,'' ``Periodicals,'' and ``bulk rate Standard Mail (A);

Standard Mail (B),'' respectively; delete the last sentence in 1.3; in

1.6 and 7.1, replace ``First-, third-, and fourth-class mail'' with

``First-Class and Standard Mail''; in 1.6, replace ``second-class''

with ``Periodicals'

This text is long and has been trimmed here. Open the source document for the complete record.