Eligibility Requirements for Standard Mail

AGENCY:

Postal Service.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule would amend the Domestic Mail Manual (DMM) standards concerning material eligible for mailing at Standard Mail postage rates. Specifically, it would clarify the circumstances in which mail containing “personal” information may be eligible for Standard Mail rather than First-Class Mail rates. The proposal also reorganizes and renumbers other provisions for First-Class Mail and Standard Mail to better describe the service provided under each class.

DATES:

Written comments must be received on or before June 18, 2004.

ADDRESSES:

Written comments should be mailed or delivered to the Manager, Mailing Standards, U.S. Postal Service, 1735 N Lynn St Rm 3025, Arlington VA 22209-6038. Copies of all written comments will be available for inspection and photocopying at USPS Headquarters Library, 475 L'Enfant Plaza SW., 11th Floor N, Washington DC between 9 a.m. and 4 p.m., Monday through Friday. Comments may not be submitted via fax or e-mail.

FOR FURTHER INFORMATION CONTACT:

Sherry Freda, Manager, Mailing Standards, U.S. Postal Service, 703-292-3648 or Sherry.L.Freda@usps.gov.

SUPPLEMENTARY INFORMATION:

Certain types of mail, such as bills, statements of account, and handwritten and typewritten material, are required to be mailed as First-Class Mail (which includes Priority Mail) or Express Mail. In addition, material having the character of actual and personal correspondence must be mailed as First-Class Mail or Express Mail.

As technology has evolved, mailers have been able to increase the amount of personal information in computer-generated mailings, including advertising material typically entered as Standard Mail. These advances in technology have motivated some Postal Service customers to request more explicit guidance on Standard Mail eligibility. The Postal Service has reviewed the standards and proposes the following revisions to the Domestic Mail Manual to clarify the distinction between First-Class Mail and Standard Mail.

Background

Postal Service standards for First-Class Mail and Standard Mail are based, in part, on laws enacted by Congress. These regulations specify that printed material weighing less than 16 ounces may be sent as Standard Mail if it is not required to be entered as First-Class Mail. Generally, mail wholly or partially in writing or typewriting, mail closed against postal inspection, material having the character of actual and personal correspondence, and bills and statements of account must be mailed as First-Class Mail or Express Mail.

Printed material, most of which is prepared by computers, often qualifies at the Standard Mail rates. If it includes personal information, printed material may have the character of actual and personal correspondence and be subject to the First-Class Mail rates. However, under certain conditions, printed material containing personal information may be eligible for Standard Mail rates.

The distinction is based on a regulation adopted by the Postal Service in the early 1980s. At that time, as computers were becoming increasingly sophisticated and commonplace, mailers were able to include personal information to individuals in an otherwise generic mailing. Marketers began to use personal information, such as information concerning previous purchases, to influence an addressee to make new purchases. Since such materials, albeit without the personal information, usually had been sent at Standard Mail rates, mailers sought to continue to use those rates.

These efforts resulted in the adoption of the standards in current DMM E610.2.3, which create a limited exception to the general principle that material containing personal information be entered as First-Class Mail. Over the last several years this provision has become more significant. As mailers have been able to build more complex data files on customers, they have increasingly sought to include personal information in Standard Mail mailings. Furthermore, questions have been raised recently concerning printed material, including computer-generated personal information in mailpieces such as tax materials, warranties, proxy materials, financial services mailings such as credit card and equity loan advertisements, and others. Some of these mailings included advertising, while others did not. Given the potential consequences of a decision that a mailing is not eligible for Standard Mail rates, mailers have sought, and the Postal Service proposes, the following guidance to distinguish First-Class Mail from Standard Mail.

The classification of a mailpiece is based upon an examination of its specific contents. This rulemaking is intended to help mailers and Postal Service employees determine how to design and decide whether mail may be sent as Standard Mail or First-Class Mail, and help mailers plan and budget for their mailing campaigns.

Summary of Standard Mail Eligibility Decisions and the Scope of the Proposed Changes

As the Postal Service has discussed with customers, the proposed changes are intended to create a “bright line” concerning the inclusion of personal information in Standard Mail. Other eligibility standards are left unchanged, although we reorganized them for clarity and to better describe our services.

This proposal concerns the content limits for Standard Mail. However, before considering whether the content of printed material qualifies for entry as Standard Mail, there are basic requirements to consider. First, there is a weight limit on Standard Mail: each piece must weigh less than 16 ounces. There are also volume and preparation requirements. Mail that does not comply with any of these standards is not eligible for Standard Mail rates, regardless of content. These provisions are not affected by the proposal.

To be eligible for Standard Mail rates, printed material must be sent in identical terms to more than one person. This standard has not changed.

Mail that is authorized to be entered as Periodicals mail is ineligible for Standard Mail rates. The proposal does not affect this restriction.

Mail that is required to be mailed as First-Class Mail, and is therefore ineligible for Standard Mail, includes material containing the following: (1) Bills and statements of account; (2) handwritten or typewritten material; (3) mail sealed against postal inspection; and (4) material having the character of actual and personal correspondence. This proposal would not affect any of the first three categories.

The Domestic Mail Manual does not provide any exceptions to the requirement that mail having the character of actual and personal correspondence be entered as First-Class Mail other than the stipulation that the inclusion of the date and name of the addressee and sender does not render a piece ineligible for Standard Mail. However, as explained above, the Postal Service created standards in the early 1980s recognizing technological advancements that permitted the inclusion of personalized information in advertising material historically sent as Standard Mail. Customers sought to include such personal information in their mailings, without forfeiting eligibility to mail at Standard Mail rates, because the inclusion of this information increased the effectiveness of their advertising.

An example of such a mailpiece is one produced by a firm that markets and ships candies. Rather than sending a generic catalog to potential customers, the company includes with the catalog a list of the specific purchases the addressee made the previous year (i.e., the items purchased and the names and addresses of the recipients) and asks whether the addressee wishes to duplicate or add to that order. The previous year's purchases are considered to be personal information for the addressee. However, that information is directly related to the mailer's advertising for the sale of its products, has no intended use other than to increase the effectiveness of the advertising, and has no purpose other than to promote additional sales of candy. Consequently, the mailing is eligible for Standard Mail rates.

The “Exclusive Purpose” Test

The Postal Service continues to believe that this example mailpiece should be entitled to Standard Mail rates, and this proposal would not change its eligibility. The mailpieces that are the subject of recent concerns are certain pieces with the dual purpose of conveying personal information to the addressee while advertising a product or service or soliciting donations. Postal Service standards did not provide guidance for accepting dual-purpose pieces that convey personal information.

Clarifying the standards should benefit mailers and consumers. For mailers, this lack of guidance for dual-purpose mailpieces has led to two consequences. First, they might be uncertain if a piece would be accepted at Standard Mail rates, making budgeting and marketing decisions difficult. And second, a competitive advantage might be created if they are required to mail at First-Class Mail rates while a business competitor is permitted to mail a similar piece at Standard Mail rates. Clarifying the standard should ensure that nonmarketing, personal material is mailed as First-Class Mail. First-Class Mail is sealed against postal inspection and is the most secure class of mail. Clarifying the standard has become increasingly important given the heightened awareness and sensitivity about the need to safeguard personal information.

While reviewing the cases that prompted customer concerns it became clear that it was important to establish a “purpose” test. Customer comments confirmed that this issue needed to be addressed. After careful review, the Postal Service proposes that personal information be permitted in advertising and solicitation mail sent at Standard Mail rates only when advertising or solicitation is the exclusive purpose of the piece, and personal information is included solely to increase the effectiveness of the advertising or solicitation.

There are three reasons for this choice. First, but of least importance, it is consistent with the spirit of the original rulemaking in the 1980s. We caution that this is the least important reason since the standard could be changed if there are worthy reasons for changing it.

Second, it is open to question whether dual-purpose pieces—pieces intended to convey personal information to the addressee as well as to advertise products or services or solicit donations—are eligible for Standard Mail rates. The authority on which the DMM standards are based, the Domestic Mail Classification Schedule and, before that, federal statute, provides that material having the character of actual and personal correspondence is not eligible for Standard Mail rates. It is questionable whether such material is eligible for Standard Mail rates by “piggybacking” on advertising or solicitation matter that, by itself, is eligible for that rate.

Finally, an “exclusive purpose” test lends itself to clearer administration. It will promote consistent classification decisions by Postal Service personnel and an understanding among customers of how their mail will be classified. In turn, this will promote two of the goals that mailers have advised are important to them: (1) Certainty in planning and budgeting mailing campaigns; and (2) minimizing situations where a business, because of mail classification decisions, gains a competitive advantage over another business.

Explanation of Proposed Changes

The proposed standards reorganize and renumber Domestic Mail Manual E110 and E610, which provide the basic descriptions of First-Class Mail and Standard Mail. These revisions, which do not effect any substantive changes, are intended to better describe our services and allow customers to compare the characteristics and benefits of each.

The clarification of the circumstances in which personal information may be included in Standard Mail is in proposed E610.3.1. In addition, the provisions for First-Class Mail, E110.3.4, would clearly explain that mail eligible for Standard Mail rates under new E610.3.1 would not be required to be entered as First-Class Mail.

One change between the existing and proposed standards is that the proposed provisions no longer differentiate between “circulars” and other types of printed material as do current E610.2.1 and E610.2.2. Similar standards apply to all printed material entered as Standard Mail.

The existing provisions explaining when personal information may be included in Standard Mail, current E610.2.3, would be renumbered and revised as E610.3.1. Current provisions E610.2.3(a), (b), and (c) would be deleted from the proposed standards. These provisions describe certain types of personal information that might be included in Standard Mail under proposed E610.3.1. However, we do not see a reason to limit the types of personal information that might be included in Standard Mail under the revised standard. Rather, under the proposal, personal information might be included in Standard Mail if the piece meets the conditions outlined in proposed E610.3.1.

In contrast to current DMM E610.2.3, revised E610.3.1 would list the conditions that must be met for a mailpiece containing personal information to be eligible for Standard Mail rates. If a mailpiece contains personal information concerning the addressee, it will be eligible for Standard Mail rates only if it meets each of the following conditions: (1) It contains explicit advertising for a product or service for sale or lease or a solicitation for a donation; (2) all of the personal information concerning the addressee is directly related to the advertising or solicitation; and (3) advertising or soliciting is the exclusive purpose of the mailpiece.

Whether the piece contains personal information will be determined under the same policies as those that apply today. As explained in proposed E110.3.2, personal information includes any information specific to the addressee. For the purposes of applying the standard, personal information need not be unique to the addressee: for example, two addressees may share the same birthday, which is personal information specific to the addressee, but not unique to one addressee alone.

The Postal Service will make a determination of mailpiece eligibility based on the mailpiece itself. For example, numbers that are not labeled or elsewhere defined in the mailpiece are not considered to be personal, even if information provided apart from the mailpiece reveals the numbers to be PINs or other personal information. Instructions or other information in the mailpiece that are provided equally to all addressees in the mailing are not considered personal. And, finally, under the conditions in proposed E610.3.1, even if personal information is included in the mailpiece it will not disqualify it from entry at Standard Mail rates if conditions (a) through (c) are met.

The requirement that the mailpiece contain advertising for a product or service for sale or lease or a solicitation for a donation is similar to the current standard, except that the proposal states that the advertising or solicitation must be explicit. That is, the advertisement or solicitation should not be “subtle” or “implied.” Anyone reading the piece should understand that it includes advertising or a solicitation and should be able to easily identify the product or service advertised or the cause for which donations are sought.

The requirement that the personal information be directly related to the advertising or solicitation is similar to the current standard. The proposal makes clear that all of the personal information must be directly related to the advertisement or solicitation.

Proposed E610.3.1(c) explains the “exclusive purpose” test, which is discussed more fully in an earlier section of this notice. Under this standard, the personal information in the piece should have no intended purpose other than to increase the appeal of the advertising or solicitation. A finding that the personal information has an intended use other than to increase the appeal of the advertising or solicitation may be based, for example, on how the information is labeled (i.e., if the piece explains a use for the information), or on the sender's legal, contractual, or other obligation to provide the information to the addressee.

The mere fact that the information may incidentally serve some useful purpose to the addressee does not disqualify the piece from entry at Standard Mail rates. For example, in the candy shipper scenario described above, the list of the names and addresses of the previous year's purchases may remind the addressee of a relative's address he or she had misplaced. However, that was not the intended use of that information and would not disqualify the piece from entry at Standard Mail rates.

Implementation Schedule

If the proposal is adopted, the Postal Service intends to defer its implementation until January 1, 2005. This time frame is intended to provide customers adequate time to budget and plan future mail campaigns. Until then, the Postal Service will continue to apply the current standards.

As explained in previous sections of this notice, most of the current policies would remain intact under the proposed standard, with the major difference being the “exclusive purpose” test in proposed E610.3.1(c). Accordingly, if personal information is included in the mailpiece, it still must be directly related to advertising for a product or service for sale or lease or solicitation for donations to qualify for Standard Mail rates before January 1, 2005. However, until that date, the Postal Service will not employ a purpose test, and a piece in which the personal information is directly related to advertising or a solicitation will qualify for Standard Mail rates without regard to compliance with a purpose test.

If the proposal is adopted, the Postal Service will review and revise as needed existing Customer Support Rulings concerning Standard Mail and will issue new rulings as appropriate.

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 to the Domestic Mail Manual, which is incorporated by reference in the Code of Federal Regulations. See 39 CFR 111.

List of Subjects in 39 CFR Part 111

• Administrative practice and procedure
• 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, 414, 416, 3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

2. Revise the following sections of the Domestic Mail Manual (DMM) as set forth below:

E ELIGIBILITY

E100 First-Class Mail

E110 Basic Standards

[Renumber current 2.0 through 5.0 as 4.0 through 7.0. Replace current 1.0 with new 1.0, 2.0, and 3.0, as follows:]

1.0 DESCRIPTION OF SERVICE

1.1 Service Objectives

First-Class Mail receives expeditious handling and transportation. Service objectives for delivery are 1 to 3 days; however, delivery time is not guaranteed.

1.2 Rate Options

First-Class Mail offers the flexibility of single-piece rates, and discounted rates for mailings of 500 or more pieces that weigh 13 ounces or less.

1.3 Mailable Items

First-Class Mail may be used for any mailable item, including postcards, letters, flats, and small packages. Customized MarketMail under E660 and other restricted material as described in C020 may not be mailed as First-Class Mail.

2.0 DEFINING CHARACTERISTICS

2.1 Inspection of Contents

First-Class Mail is closed against postal inspection. Federal law and Postal Service regulations restrict both opening and reviewing the contents of First-Class Mail by anyone other than the addressee.

2.2 Forwarding Service

The price of First-Class Mail includes forwarding service to a new address for up to 12 months.

2.3 Return Service

The price of First-Class Mail includes return service if the mailpiece is undeliverable.

2.4 Extra Services Exclusive to First-Class Mail

First-Class Mail is the only class of mail eligible to receive the following extra services: registered mail service and certified mail service.

2.5 Additional Extra Services

Additional extra services available with First-Class Mail are certificate of mailing service, COD service, Delivery Confirmation service (parcels only), insured mail service (merchandise only), return receipt service, restricted delivery service, Signature Confirmation service (parcels only), and special handling. See S900.

3.0 CONTENT STANDARDS

3.1 Bills and Statements of Account

Bills and statements of account must be mailed as First-Class Mail (or Express Mail) as follows:

a. Bills and statements of account assert a debt in a definite amount owed by the addressee to the sender or a third party. In addition, bills include a demand for payment; statements of account do not include a demand for payment. The debt does not have to be due immediately but may become due at a later time or on demand. The debt asserted need not be legally collectible or owed.

b. Bills and statements of account do not need to state the precise amount due if they contain information that would enable the debtor to determine that amount.

3.2 Personal Information

Mail containing personal information must be mailed as First-Class Mail (or Express Mail). Personal information is any information specific to the addressee.

3.3 Handwritten and Typewritten Material

Mail containing handwritten or typewritten material must be mailed as First-Class Mail (or Express Mail).

3.4 Material Not Required to be Mailed as First-Class Mail

Mail eligible for Standard Mail or Package Services rates under E610 or E700 is not required to be mailed as First-Class Mail or Express Mail.

E600 Standard Mail

E610 Basic Standards

[Renumber current 3.0 through 9.0 as 4.0 through 10.0. Replace current 1.0 and 2.0 with new 1.0, 2.0, and 3.0, as follows:]

1.0 DESCRIPTION OF SERVICE

1.1 Service Objectives

Standard Mail may receive deferred handling. Service objectives for delivery are 2 to 9 days; however, delivery time is not guaranteed.

1.2 Quantity

Standard Mail provides economical rates for mailings of 200 or more pieces or at least 50 pounds of mail.

2.0 DEFINING CHARACTERISTICS

2.1 Mailpiece Weight Limit

All Standard Mail pieces—letters, flats, and small packages—must weigh less than 16 ounces.

2.2 Preparation Requirements

Standard Mail is subject to specific volume, marking, and preparation requirements.

2.3 Inspection of Contents

Standard Mail is not sealed against postal inspection.

2.4 Forwarding Service

The price of Standard Mail does not include forwarding service. Forwarding is available for an additional fee. Undeliverable Standard Mail with no ancillary service endorsement is disposed of by the Postal Service under F010.5.3.

2.5 Return Service

The price of Standard Mail does not include return service. Return service is available under F010.5.3 for an additional fee.

2.6 Extra Services

Extra services available with Standard Mail are insured mail service (bulk insurance only), certificate of mailing service (bulk certificate of mailing only), return receipt for merchandise service, and Delivery Confirmation service (parcels only). See S900.

2.7 Periodicals

Authorized Periodicals may not be entered as Standard Mail unless permitted by standard.

2.8 Identical Pieces

The contents of printed matter in a Standard Mail mailing must be identical to a piece sent to at least one other addressee. Standard Mail may include the addressee's name and address but may not transmit personal information except as permitted under 3.0.

3.0 CONTENT STANDARDS

3.1 Personal Information

Personal information may not be included in a Standard Mail mailpiece unless all of the following conditions are met:

a. The mailpiece contains explicit advertising for a product or service for sale or lease or an explicit solicitation for a donation.

b. All of the personal information is directly related to the advertising or solicitation.

c. Advertising or solicitation is the exclusive purpose of the mailpiece.

3.2 Bills and Statements of Account

Mail containing bills or statements of account as defined in E110.3.0 may not be entered as Standard Mail except under the conditions described in 5.2.

3.3 Handwritten and Typewritten Matter

Mail containing handwritten or typewritten matter may not be entered as Standard Mail except under the conditions described in 4.0.

An appropriate amendment to 39 CFR part 111 will be published if the proposal is adopted.