In the Matter of the Petition by

POSTRIB CORPORATION,
342 Madison Avenue,
New York, New York 10017

Revocation of Second-Class Mail Privileges for "BOOK WORLD"

P.S. Docket No. 1/66

Roger A. Clark, Esq., of
Royall, Koegel & Wells,
Washington, D. C., for Petitioner

Arthur S. Cahn, Esq.,
Law Department, U.S. Postal Service, for Respondent

Before: John Lewis, Administrative Law Judge

INITIAL DECISION STATEMENT OF PROCEEDINGS

This proceeding was initiated by the filing of a petition pursuant to 39 C.F.R. § 954.8, by the above-named publisher (referred to herein as Petitioner), appealing a ruling made by the Manager, Mail Classification Division of the United States Postal Service (referred to herein as Respondent), revoking Petitioner's second-class mail privileges for the above-named publication.

Following the filing of an answer by Respondent, and pursuant to notice duly given, a hearing was convened before me on the issues raised by the pleadings. Both parties participated in the hearing and were afforded full opportunity to be heard and to examine and cross-examine witnesses. The Manager of the Mail Classification Division testified on behalf of Respondent and Petitioner called its business manager as a witness. prior to the convening of the hearing the parties entered into a stipulation with respect to certain of the material facts herein. Following the close of the reception of evidence, proposed findings of fact and conclusions of law were submitted by both parties.

After having carefully reviewed the evidence in this proceeding, and the proposed findings and conclusions submitted by the parties,*/ and based upon the entire record, the undersigned makes the following:

FINDINGS OF FACT

1. "Book World" is a weekly publication containing reviews of books, and news and commentary with respect to books and the literary world. It has been published since 1966 by Postrib Corporation, which is owned and operated as a joint venture by "The Washington Post" and "The Chicago Tribune." The latter are daily newspapers of general circulation published in Washington, D. C. and Chicago, Illinois, respectively.

2. "Book World" is the successor of a publication entitled "The New York Herald Tribune Weekly Book Review", which was published by The New York Herald Tribune from prior to 1930 to 1963. Its name was changed to "New York Herald Book Week" in 1963. In 1966 when The New York Herald Tribune was merged to become The New York World Journal Tribune, "Book Week" was syndicated and distributed as part of the latter publication and of several other newspapers. When The New York World Journal Tribune ceased publishing in 1967, "Book Week" was acquired by Postrib Corporation, which changed its name to "Book World."

3. "Book World" is primarily designed and distributed as a part or section of the Sunday editions of "The Washington Post" and "The Chicago Tribune", both of which also distributed separately by Petitioner to a group of subscribers consisting primarily of libraries which, due to a lack of space and for economic reasons, do not subscribe to the complete Sunday newspapers of which "Book World" is a part. The copies which are distributed as a part or section of the Sunday editions of "The Washington Post" and "The Chicago Tribune" are paid for by the subscriber or other purchaser of the two newspapers as a part of the regular price of the entire Sunday edition is $30.00. The separate copies of "Book World" which are distributed by Petitioner to its own list of subscribers are paid for by the subscribers at the annual rate of $10.00 for domestic delivery and $11.50 for foreign delivery/

4. Approximately 546,000 copies of "Book World" are distributed as a section of the Sunday edition of "The Washington Post" and approximately 1,141,000 copies are distributed as a section or part of the Sunday edition of "The Chicago Tribune". Approximately 3,630 copies of "Book World" are mailed separately by Petitioner to its list of subscribers. All but approximately 600 copies of the separate edition of "Book World" are paid for by Petitioner's subscribers at the above-indicated rates.

5. Petitioner filed applications for second-class mail privileges for "Book World" at both the Philadelphia and Chicago Post Offices, which applications were granted by Respondent on October 17, 1967, retroactive to August 25, 1967. On October 12, 1971, Petitioner applied for re-entry of the second-class mail privileges for "Book World" at the New Yok, New York, Post Office, instead of Philadelphia, which application was approved as of November 24, 1971.

6. Prior to the separate second-class permit granted for "Book World", separate second-class permits had been obtained for its predecessor publications as follows:

a. New York Herald Tribune Weekly Book Review -- from prior to 1930 to 1963.

b. New York Herald Tribune Book Week -- 1963 to 1966.

c. New York World Journal Tribune Book Week -- 1966 to 1967.

7. Respondent notified Petitioner by letter dated February 16, 1972, that its second-class mail privileges for "Book World" were being cancelled for the reasons that (a) "Book World" is primarily designed for free circulation inasmuch as the bulk of the copies are distributed free as part of the Sunday editions of the two newspapers in which it is included and, (b) as a part or section of the two newspapers, it is not itself a complete publication and, therefore, does not qualify for second-class mail privileges. A timely appeal from said proposed revocation was thereafter filed by Petitioner.

8. In distributing "Book World" to libraries and other subscribers at an annual rate of $10.00 to $11.50, Petitioner sustains an annual loss on such distribution of approximately $5,000. If Petitioner's second-class mail privileges for said publication are revoked, the postage rate for mailing copies of "Book World" to its present separate subscribers would increase at least four-fold.

CONTENTIONS AND CONCLUSIONS

1. Respondent has advanced two grounds in support of its position that Petitioner is not entitled to retain its second-class mailing permit for subject publication, viz ., (a) it is designed primarily for free circulation in violation of 39 U.S.C. 4354(c) and Section 132.227 of the Postal editions of "The Washington Post" and "The Chicago Tribune" it is not itself a complete newspaper and, therefore, does not qualify for second-class mailing privileges under Section 132.41 of the Postal Service Manual. Petitioner contests the validity of both of the grounds asserted by Respondent. Each of the grounds of revocation is separately considered below:

A. Free Circulation .

2. Respondent's contention that "Book World" is designed primarily for free circulation is based on the fact that an average of 1,665,464 copies are distributed each week as part of the Sunday Washington Post and Chicago Tribune, while only 3,630 are distributed to separate paid subscribers. Respondent contends, in essence, that the copies of "Book World" which are distributed free because the subscribers do not pay for the "Book World" portion of their newspaper but make payment for the entire newspaper. Respondent argues that:

"Any argument that 'Book World' is paid for by subscribers to the Sunday 'Post' and Sunday 'Tribune' as a part of the subscription price to these newspapers is not supportable by the plain facts."

3. Contrary to Respondent's position, "Book World" is, in my opinion, paid for as a part of "The Washington Post" and "The Chicago Tribune" and is, therefore, not distributed free. While the $30.00 fee paid by subscribers covers the entire paper and is not specifically allocable to any particular section thereof, the subscriber is, in essence, paying for the "Book World" as he is for each and every part of the newspaper. The situation in this respect is no different from that of the purchaser of an automobile who pays a lump-sum therefore which may not specifically cover various accessory items, including tires. Respondent's official agreed during his testimony that in such a situation the purchaser was not getting the tires free, but was paying for them as part of the automobile (Tr. 25).

B. Incomplete Copies .

4. Respondent's second ground of revocation rests primarily on Section 132.41 of the Postal Service Manual which provides, in pertinent part, as follows:

"Copies of the regular issues containing all of the pages may be mailed at the applicable second-class rates.... Copies which are not complete by reason of having pages or portions of pages removed must be charged with postage at the applicable third- or fourth-class rates."

Respondent contends that under this section the copies of the "Book World" are "not complete" since they are only a part of the newspapers with which the bulk of the copies are mailed.

5. In my opinion, Respondent's position begs the question and is without merit. The copies of "Book World" mailed to libraries and other similar subscribers are complete in themselves, even though other copies may be mailed to other groups of subscribers as part of the entire newspaper. Insofar as the libraries are concerned, the paper is complete. Respondent's official admits that "Book World " would qualify for second-class entry if it were not also published as part of an entire newspaper (Tr. 41). In my opinion, it does not lose its eligibility because of its circulation to another group of subscribers as part of an entire newspaper.

6. Respondent has not established that the regulation relied upon was intended to preclude second-class entry for publication which is complete in itself, merely because it is also distributed as a bona fide part of a larger publication. Respondent has suggested that the regulation was intended to preclude the "loading" or "bootstrapping" of a second-class publication with nongermane matter such as catalogs and circulars, or the "piggy-backing" of two distinct publications such as "Time" and "Life". However, none of these types of abuse is present in the instant situation, in which the legitimate needs of a bona fide class of subscribers to a periodical publication are being met. Moreover, Respondent's official concedes that he has no actual knowledge as to the purpose of the regulation, in terms of its legislative history (Tr. 63). There is, therefore, no clear indication of any intent to preclude a publication such as "Book World", which is otherwise entitled to second-class entry, from receiving a second-class permit.

7. Although the section of the Manual cited by Respondent has been in effect for a number of years, it has never previously been applied so as to preclude the granting of a second-class permit to a publication such as "Book World". The record establishes that "Book World's" predecessors have had separate second-class entry permits for a number of years, as has the "New York Times Book Review Section". Respondent suggests that the reason why these publications were granted second-class entry was because the Post Office Department was not aware they were also part of Sunday newspapers. Contrary to Respondent's position, the record establishes that the Post Office was aware that these publications were also included as a part or section of a Sunday newspaper. The only objection which it raised to such separate entry was that the copies for which separate second-class permits had been granted should not include any reference to the section of the newspaper of which they were also a part (Petitioner's Exhibits 11-A, 17-A, 18, 21, 22, 24). In view of the long-established practice of granting separate second-class entry to such book review sections, the lack of any statutory provision clearly prohibiting the granting of such entry, and the failure of Respondent to satisfactorily establish that the regulation cited by him was intended to be applicable in the instant situation, it is my opinion that Respondent has failed to establish any sound legal basis for the revocation of Petitioner's permit.

FINAL CONCLUSIONS OF LAW

1. Respondent has failed to establish that "Book World" is designed primarily for free circulation.

2. Respondent has failed to establish that "Book World" is not entitled to second-class entry by reason of the fact that it is also a part or section of another publication.

3. Respondent's proposed revocation of the second-class permit heretofore granted to Petitioner for "Book World" is erroneous and is hereby reversed.

__________________

*/ Proposed findings not herein adopted, either in the form proposed or in substance, are rejected as not supported by the evidence or as involving immaterial matters.