In the Matter of the Petition by                                )
                                                                               )
WESTCHESTER INTERCONNECT, INC.                   )
201 King Street                                                      )
Chappagua, NY 10514-3430                                 )
                                                                               )
Denial of Application for Second-                          )
Class Mail Privileges for "PREVIEW"                      )  P.S. Docket No. 18/75

APPEARANCES FOR PETITIONER:                        Rodney O. Thorson, Esq.
                                                                              Allen Schole, Esq.
                                                                              Skadden, Arps, Slate,
                                                                              Meagher & Flom
                                                                              919 - 18th Street, N.W.
                                                                              Washington, DC 20006-5503

APPEARANCE FOR RESPONDENT:                      Jeffrey H. Zelkowitz, Esq.
                                                                              Law Department
                                                                              United States Postal Service
                                                                              Washington, DC 20260-1143

Cohen, James A.

POSTAL SERVICE DECISION

Respondent, United States Postal Service, has appealed from the Initial Decision of an Administrative Law Judge which set aside the decision of the Director, Office of Mail Classifica tion, United States Postal Service, denying Petitioner's applica tion for second-class mail privileges with respect to the publication "PREVIEW." The Director had determined that "PREVIEW" was ineligible for second-class mail privileges as a requester publication under Domestic Mail Manual (DMM), § 422.6c because it was controlled by the owners of certain cable television systems and conducted as an auxiliary to and essentially for the advance ment of the main business of those cable systems.

The Administrative Law Judge found that Petitioner was not owned or controlled by the cable system operators or conducted as an auxiliary to and essentially for the advancement of the main business of those cable systems. Thus, he concluded that DMM § 422.6c does not disqualify the publication "PREVIEW" from obtaining second-class mail privileges.

On appeal, Respondent argues that the Director correctly interpreted § 422.6c and properly applied that regulation to the facts of this case. Respondent requests the Judicial Officer to adopt the Director's interpretation of § 422.6c and overrule the decision of the Administrative Law Judge. Respondent also asks that the decision in this case establish appropriate guidelines for the resolution of future cases.

DMM § 422.6 establishes the criteria for eligibility for second-class mail privileges for requester publications. Under DMM § 422.6c:

"The publication must not be owned or controlled by one or more individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control it; . . ."

The requirements of this provision are stated in the conjunc tive. Therefore, in order for a publication to be disqualified from obtaining second-class mail privileges, ownership or control of a publication must be established together with the additional requirement that the publication is "conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control it."

The applicability of DMM § 422.6c to a cable guide magazine has recently been considered in TV Host, Inc., P.S. Docket No. 17/25 (P.S.D. Jan. 30, 1985). With regard to the existence of control within the meaning of DMM § 422.6c, TV Host, Inc., stated that the determination should be

". . . based on consideration of the actual overall relationship between TV Host and the cable companies, as presented in the record, including the impression conveyed through the magazine's format and content regarding the publisher's identity; the exercise of editorial discretion over the format and content; the publication's economic dependence on support by the various cable companies; the degree and type of benefit derived by the cable companies from the publication, including distribution of advertising revenues; and the degree and type of direct relationship between Petitioner and readers of the publication" (P.S.D. at pp. 14-15).

The entire record has been reviewed to determine the actual overall relationship between "PREVIEW", Petitioner and the various cable systems with whom Petitioner has contracts. While the agreements between Petitioner and the cable systems allow for a small measure of control over the content of the various issues of the publication, they do not permit the cable systems to guide or manage "PREVIEW". See TV Host, Inc., (P.S.D. at p. l0). More over, actual control by the cable systems over the content of the publication has not been established in this record. The evidence presented is persuasive that the Petitioner alone controls the editorial content and all but a very small amount of the advertis ing content. The inclusion of system specific program listings which is required by contract and comprises the bulk of the contents of the publication, does not establish control. Progra listings have previously been held to be essentially informational and for the benefit of readers, not promotional. See Cableday Publishing Co., P.S. Docket No. l9/14 (P.S.D. May 23, l985); Willamette TV & Cable Guides, P.S. Docket No. l6/97 (P.S.D. Feb. l3, l985). Neither the evidence nor the arguments presented establishes that a different conclusion should be reached in this case. Thus, control over the contents of the publication by the cable system operators has not been shown.

The method of distribution of the publication presents a more difficult question. Petitioner does not have direct contact with readers, but rather distributes its publication to a subscriber base provided by and paid for by the cable systems. Thus, Petitioner obtains a portion of its income from sales to the cable operators, although its principal source of income is advertising. While this method of distribution could provide the cable systems with a degree of control, the evidence does not establish that this control exists. The record supports Petitioner's contention that in fact it alone guides, manages, and exercises authority over the bulk of the contents of "PREVIEW". Accordingly, taking into consideration the relationship of the principals involved, the format and content of the publication, editorial discretion, and economic dependence, it is concluded that the cable system operators do not control "PREVIEW".

Inasmuch as it has been found that cable system operators do not own or control "PREVIEW", it is unnecessary to consider whether it is conducted as an auxiliary to and essentially for the advancement of the cable systems. Nonetheless, this requirement of the regulation has been considered since it was decided by the Administrative Law Judge and has been addressed by both parties on appeal. This issue was also considered in TV Host, Inc., supra. Based on the evidence presented in that case, consideration was given to

". . .the degree to which the publication's format and content are designed to promote the cable companies services, whether for the purpose of obtaining new cable users or user renewals and purchase of additional cable services by current cable users; the dependence of Petitioner on the cable systems; the financial benefits of advertising flowing directly to the cable systems; and petitioner's failure to present rebuttal evidence showing that its essential purpose in publishing TV Host is other than as an auxiliary to and essentially for the advancement of the individual cable companies" (P.S.D. at p. l5).

Using these factors Petitioner's publication would not be dis qualified from obtaining second-class privileges under § 422.6c. The format of "PREVIEW" is designed principally to provide compre hensive program information in an easily accessible manner. The program listings are essentially informational, not promotional. The articles and advertisements are a mix of cable related and non-cable related subjects which are not controlled by the cable operators and in total cannot be considered to be essentially for the advancement of the cable systems. While Petitioner is depend ent on the cable systems for distribution, and its own evidence establishes that direct subscriber distribution would not be economical, it and its publication are not organizationally allied with the cable systems so as to be considered an auxiliary of those cable systems. Moreover, Petitioner's principal source of income is derived from advertising, the entire proceeds of which it retains.

Accordingly, the record does not support a finding that "PREVIEW" is conducted as an auxiliary to or essentially for the advancement of the cable operators.

Respondent asks that the decision in this case provide guidance for the resolution of future cases. This decision together with TV Host, Inc., supra, Willamette, supra, and Cableday, supra, should provide some guidance for future cases. However, as Respondent is fully aware, each case depends on its particular facts. Moreover, it is not the function of this pro ceeding to answer questions not presented for the purpose of providing future guidance.

Respondent has presented several exceptions to findings and conclusions of the Administrative Law Judge. Respondent contends that certain of the findings and conclusions are not supported by the record or are the result of inferences drawn by the Admin istrative Law Judge which do not follow from the evidence pre sented. Each exception has been reviewed. While there is merit to some of Respondent's exceptions, they do not alter the ultimate conclusion reached by the Administrative Law Judge or the Judicial Officer that the publication "PREVIEW" is not disqualified from obtaining second-class mail privileges under DMM § 422.6c. Accord ingly, Respondent's appeal is denied.