In the Matter of the Petition by May 16, 1980

THE ALBANY HERALD
202 Oak Street
Box K
Albany, Green County, WI 53502

Proposed Revocation of Second-Class
Mailing Privileges for "THE ALBANY
HERALD"

P.S. Docket No. 7/162

APPEARANCE FOR PETITIONER:                         Ms. Diane Smith
                                                                            The Albany Herald
                                                                            202 Oak Street, Box K
                                                                            Albany, Wisconsin 53502

APPEARANCE FOR RESPONDENT:
                                                                            Jeffrey H. Zelkowitz, Esq.
                                                                            Law Department
                                                                            United States Postal Service
                                                                            Washington, D.C. 20260

APPEARANCE FOR COMPLAINANT:
                                                                           Thom as A. Ziebarth, Esq.
                                                                           Consumer Protection Division
                                                                           Law Department
                                                                           United States Postal Service
                                                                           Washington, D.C. 20260

Grant, Quentin E.

INITIAL DECISION ^1/

This proceeding was initiated in February of 1980 when Ms. Diane Smith, acting on behalf of the Albany Herald, a newspaper published in Albany, Wisconsin, filed a petition appealing from a notice that the second-class mail permit for the Albany Herald was going to be revoked. In substance, the ground for the revocation was that the publisher did not maintain records adequate to establish that the publication is not designed primarily for free circulation or circulation at nominal rates.

The requirement for maintaining these records is set forth in Section 447 and its subsections of the Domestic Mail Manual. The type of information that is required to be contained in these records is set forth in Section 447.2 of the Domestic Mail Manual.

In Section 422.221 of the Domestic Mail Manual a legitimate list of subscribers is defined as a list of those "who have paid or promised to pay, at a rate above a nominal rate for copies to be received during a stated time." In 422.223 of the Domestic Mail Manual there is the following statement:

"Publications are considered primarily designed for free circulation and/or circulation at nominal rates when one-half or more of all copies circulated are provided free of charge to the ultimate recipients, or are paid for at nominal rates by the ultimate recipients, or when other evidence indicates that the intent of the publisher is to circulate the publication free and/or at nominal rates. The distribution of all copies of a publication is considered, whether circulated in the mails or otherwise."

One of the witnesses who testified at the hearing was Mr. Gordon S. Proud, who is a Senior Mail Classification Specialist in the Office of Mail Classification in the Postal Service headquarters. Mr. Proud testified that he first became aware of the situation in respect to the albany Herald in 1978. (Tr. 8) There was a problem at that time with respect to the kinds of records maintained by the publisher. It was impossible to determine from the periodic verifications that were carried on, and from the records that were maintained by the publisher, whether the publication had, in fact, circulation more than 50 percent of which was to persons who had paid or agreed to pay for the publication.

Mr. Proud testified at some length about voluminous cor- respondence that was carried on with the publisher of this newspaper over a period of approximately two years. (Tr. 8-34; Ex. R-2 - R-6; R-8 - R-11; R-13, 14, 16) There were extensions of time granted for the publisher to bring the recordkeeping system into such condition that it could be examined at periodic verifications and a determination made with respect to (1) the numbers of copies sent to legitimate subscribers and (2) the numbers of copies sent to persons by whom no subscription rate had been paid. (Ex. R-6, R-9, R-10; Tr. 18, 26)

Throughout the course of this whole period of time, although written and oral explanations were made about the types of records that would have to be kept, the required record system was never installed. (Tr. 56, 57, and the various notices of proposed revocation, Ex. R-2, 8, 13, 15 and 17) The most recent of the attempts at verification of the Petitioner's records was performed on April 18, 1980. (Ex. R-17) Attached as part of this report is a Form 3548 which is designed for review and verification of circulation. It is shown in this report that 724 copies of the publication were mailed, and that the total number of direct subscribers which could be accounted for by records in the office of the publisher was 154. Twenty (20) advertiser proof copies were sent out; 15 exchange copies were mailed; and there were 16 gift subscriptions. It is also reported that 450 copies were furnished to news agents and dealers with return privileges, which means that of those copies furnished to news dealers, those remaining unsold could be returned to the publisher.

It is obvious from the fact that 724 copies were mailed, or which only 154 could be positively identified as mailed to direct subscribers, that the records indicate at least two things: First, the recordkeeping is sorely inadequate; Secondly, even if the records as shown on this Form 3548 are correct, and admittedly some of these circulation figures shown on this form are incorrect, (Tr. 74) the publisher would not have established that of all the copies mailed at least one half of them were sent to addressees who had paid, or who had promised to pay, the subscription rate for the publication for a definite period of time.

The figures quoted above with respect to the circulation of the publication appear on a verification form that was filled out by Mr. John Briggs, Jr., who is the Postmaster at Albany, Wisconsin. Mr. Briggs pointed out, in addition, that there were no records by which he could determine what the cash income was from those copies sold by news dealers or news agents. There was no way to determine how many copies of the paper were taken without anybody paying for them at all. (Tr. 65) And there were no records in the form of cash receipt books or bank deposit slips from which it could be determined what income was derived from those copies that were furnished to news agents and dealers. (Tr. 58, 59, 62)

In short, the conclusion is inescapable that the recordkeeping system employed at the office of the Albany Herald with respect to its subscription list is utterly inadequate. It may be, and it probably is, a fact that the person who is now putting out the newspaper has so many different duties relating to the paper, and duties relating to other enterprises, that it is impossible for the present staff of the newspaper to maintain an adequate set of records. If that is the case it is unfortunate, but it does not provide an excuse for making an exception in regard to the Albany Herald. In other words, the Albany Herald cannot be permitted no to comply with Postal Service regulations with which other publishers must comply.

In view of all of the foregoing considerations, I conclude that the decision of the Director of the Office of Mail Classification to revoke the second-class mail privileges for the Albany Herald of Albany, Wisconsin, was correct, and that decision is sustained.

Duvall, William A.

1/ This decision was rendered orally at the close of the hearing. It has been edited and transcribed for formal issuance.