In the Matter of the Petition by

CABLEDAY PUBLISHING COMPANY
2942 North 24th Street, Suite 109
Phoenix, AZ 85016-7849

Denial of Application for Second-Class Mail Privileges for "CABLEDAY"

P.S. Docket No. 19/14

05/23/85

Cohen, James A.

APPEARANCE FOR PETITIONER:
Richard N. Brandes, Esq.;
3003 N. Central Avenue, Suite 2300,
Phoenix, AZ 85012-2912

APPEARANCE FOR RESPONDENT:
Jeffrey H. Zelkowitz, Esq.;
Law Department,
United States Postal Service,
Washington, DC 20260-1141

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 Classification, United States Postal Service, (hereafter "the Director"), denying the application of Cableday Publishing Company (Petitioner) for second-class mail privileges for the publication Cableday. The Director had determined that Cableday was ineligible for second-class mail privileges under Domestic Mail Manual (DMM) § 422.231 and subsections b, c, and e thereof because he found Cableday to be primarily designed for advertising purposes.

The Initial Decision setting aside the Director's decision was based on the finding that Cableday is a general publication originated and published for dissemination of information of a public character and that it is not designed primarily for advertising purposes. As a result it was concluded in the Initial Decision that Cableday is not disqualified from obtaining second-class mail privileges by DMM § 422.231.

Section 422.231 of the DMM provides:

".231 Publications Designed for Advertising Purposes. General publications primarily designed for advertising purposes may not qualify for second-class privileges. These include, but are not limited to:

a. Publications which contain more than 75 per-cent advertising in more than half of the issues published during any twelve month period.

b. Publications owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of any other business or calling of those who own or control them.

c. Publications that consist principally of advertising and articles about advertisers in the publication.

d. . . .

e. Publications published under a license from individuals or organizations and that feature other businesses of the licensor."

In its appeal from the Initial Decision, Respondent argues that the Administrative Law Judge incorrectly interpreted these provisions and erred in setting aside the Director's decision. Respondent generally alleges that cable guides are designed to promote the services of cable operators and when produced under a contract between a cable operator and a publisher should be denied second-class eligibility. Respondent has presented specific arguments and exceptions in support of its position. Petitioner filed a timely reply in which it opposes Respondent's arguments and exceptions on appeal.

All of Respondent's arguments and exceptions have been considered. Respondent's exception to the Administrative Law Judge's finding that the Director's decision constitutes a new policy or interpretation requiring publication in the Federal Register pursuant to 5 U.S.C. § 552(a)(1) is sustained. * In all other respects, Respondent's exceptions are denied.

* Assuming without deciding that the Director's decision constitutes a new policy or ruling, it was issued in the course of an adjudicative proceeding and need not be published in the Federal Register. See NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974); Cheshire Hospital v. New Hampshire-Vermont Hospitalization Service, Inc., 689 F.2d 1112, 1123 (1st Cir. 1983).

Respondent argues that the Administrative Law Judge (1) misunderstood the Director's holding in several respects; (2) improperly considered the nature of program listings to be critical and erroneously concluded that such listings are not articles or advertisements promoting cable operators; (3) incorrectly established as a criteria for second-class eligibility a requirement for a specific percentage of advertising content; (4) erroneously found that Cableday is not owned or controlled by cable operators and conducted as an auxilliary to and essentially for the advancement of such operators; and (5) improperly failed to find that Cableday is published under a license from a cable operator.

The record does not support the contentions of Respondent. A review of the Director's decision and the Initial Decision does not reflect any misunderstanding on the part of the Administrative Law Judge. The Initial Decision correctly characterizes the Director's holding and is supported by the testimony of the author of that decision.

The nature of program listings is an important consideration in determining the applicability of DMM § 422.231 to a program guide, since the listings comprise the bulk of the contents of the publication. Subsections a and c are expressly tied to the amount of advertising content in a publication and a determination of primary design includes an analysis of the content of a publication. Willamette TV and Cable Guides, P.S. Docket No. 16/97 (P.S.D. Feb. 13, 1985) at pp. 9-10. Thus, no error is perceived in the importance attributed to this question by the Administrative Law Judge in the Initial Decision. Furthermore, the Administrative Law Judge's conclusion that the program listings in Cableday are not advertising is correct. See Willamette, supra., at p. 6. The program listings in Cableday are informational in nature and do not fall within Respondent's definition of advertising as articulated in DMM § 422.232. See Willamette, supra., at pp. 2-6.

Contrary to Respondent's argument, we do not read the Initial Decision as establishing a specific percentage of advertising content as a requirement for second-class mail privileges. As previously stated, DMM § 422.231 a and c are expressly tied to the percentage of advertising content. Such is not the case with respect to subsections b and e and the Initial Decision does not hold otherwise.

The issue of ownership or control and auxilliary conduct under DMM § 422.231b and the issue of publication under a license under DMM § 422.231e were discussed in the Postal Service decision in Willamette, supra. at pp. 15-21, 23-24. In that case neither subsection of DMM § 422.231 was found to disqualify the publication from obtaining second-class mail privileges. The facts of this case as established in the record and found in the Initial Decision are equally as favorable to this Petitioner. Thus, it is concluded that DMM § 422.231 b and e do not disqualify Cableday from obtaining second-class mail privileges.

CONCLUSION

An examination of (1) the various issues of Cableday which have been admitted into the record, (2) the motive of the publisher in establishing the publication, (3) the design and content of the publication, (4) the contractual arrangements and actual relationships between the publisher and the various cable operators, and (5) the methods of distribution of the publication are persuasive that Cableday is not primarily designed for advertising purposes. Accordingly, with the exception stated herein, the Administrative Law Judge's findings and conclusions are affirmed and Cableday is entitled to obtain second-class mail privileges as a general publication.