New Standards for Periodicals Mailing Services, 29256-29269 [E7-10139]

Agencies

• Postal Service

[Federal Register Volume 72, Number 101 (Friday, May 25, 2007)]
[Rules and Regulations]
[Pages 29256-29269]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-10139]


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POSTAL SERVICE

39 CFR Part 111


New Standards for Periodicals Mailing Services

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule provides the revisions to Mailing Standards of 
the United States Postal Service, Domestic Mail Manual (DMM) that we 
will adopt to support the new Periodicals prices effective on July 15, 
2007.
    The new prices enhance efficiency, offer more choices, and better 
ensure that all types of Periodicals mail cover their costs. 
Periodicals mailers have new incentives to use efficient containers and 
bundles, and copalletization becomes a permanent offering to encourage 
more publishers to combine mailings. We also add new prices for the 
nonadvertising portion of a mailing to give mailers of high-editorial-
content publications access to lower destination entry rates.

EFFECTIVE DATE: 12:01 a.m. on July 15, 2007.

FOR FURTHER INFORMATION CONTACT: Joel Walker, 202-268-7261; Carrie 
Witt, 202-268-7279.

SUPPLEMENTARY INFORMATION: The Postal Service's request in Docket No. 
R2006-1 included mail classification changes, new pricing structures, 
and price changes for most domestic mailing services. This final rule 
provides the revisions to Mailing Standards of the United States Postal 
Service, Domestic Mail Manual (DMM) that we will adopt to implement the 
Periodicals portion of the R2006-1 pricing change. We summarize and 
respond to comments on our previous Periodicals proposal, summarize all 
major changes since our proposal, update our summary of Periodicals 
mail, and update our mailing standards.
    You can find this final rule and all Periodicals rates, as well as 
our earlier proposal and the final rule effective May 14 for all other 
classes of mail, at https://www.usps.com/ratecase. Our Web site also 
provides frequently asked questions, press releases, and Mailers 
Companion and MailPro articles related to the pricing change for all 
classes of mail.

Background

    On May 14, 2007, the Postal Service implemented new prices and 
mailing standards to support the majority of the pricing change 
recommended by the Postal Regulatory Commission in Docket No. R2006-1 
and accepted by the Governors of the United States Postal Service. The 
Postal Service Board of Governors delayed the implementation of new 
Periodicals prices and mailing standards until July 15, 2007, to give 
postal employees and mailers more time to prepare for the complex 
pricing structure recommended by the Commission.
    In our request for a recommended decision filed with the Commission 
on May 3, 2006, we proposed Periodicals rates based on pieces, pounds, 
and a single container charge. The Commission recommended rates based 
on pieces and pounds but also on bundles and containers for Outside-
County pieces. Piece rates vary based on machinability, barcoding, and 
presort level. Bundle and container rates vary based on presort level 
and point of entry. The recommended rate structure explicitly 
recognizes the cost differences between various bundles, containers, 
and entry points. Ideally, mailers will respond to these price signals, 
bring down costs, and improve the efficiency of all Periodicals mail.
    For In-County Periodicals, the rate design is still based on pieces 
and pounds, as it is today. Since many publications use both Outside-
County and In-County rates, the Board established July 15 as the 
implementation date for both subclasses, and for all Periodicals fees.

Summary of Comments Received

    We received forty-six comments on our Periodicals proposal from 
thirty newspaper publishers, two associations, two software providers, 
two magazine publishers, one fulfillment and lettershop, one freelance 
writer, and one individual who did not identify a business concern. We 
appreciate all of the feedback, and we carefully considered the 
comments.

Comments on the New Prices

    Forty-one commenters objected to the new prices or the new price 
structure for Outside-County Periodicals mail.

[[Page 29257]]

Most of these commenters stated that the new prices were too expensive, 
too complex, or both too expensive and too complex for small-
circulation publications. Several commenters asked us to retain the 
piece/pound structure for Outside-County mail. One commenter objected 
to eliminating the discounts for pieces on pallets.
    The postage rates were formulated by the independent Postal 
Regulatory Commission in separate, public proceedings and are outside 
the scope of our mailing standards proposal. We do not have the 
authority in this rulemaking to change the rates that were recommended 
by the Commission and subsequently accepted by the Postal Service 
Governors. However, in response to these commenters, we emphasize that 
under Federal law, each class of mail, including Periodicals mail, must 
cover its own costs. Our handling and delivery costs for Periodicals 
mail have been increasing while the number of pieces mailed is 
decreasing, and the new rate structure reflects these changing cost 
patterns. Periodicals rates historically have not covered costs or have 
barely covered costs, and many types of pieces do not cover their 
costs. This discrepancy means that other pieces must pay more than 
their share to make up the difference, because we do not receive any 
tax dollars or other subsidies to cover our costs for Periodicals mail.
    Several commenters suggested that ``larger'' circulation 
publications should pay higher Periodicals rates to help cover the 
costs associated with the entire Periodicals class of mail. The Postal 
Regulatory Commission did not return rates that provide for one group 
of mailers to pay more postage and for another group to pay less 
postage than necessary to cover costs.
    We agree with commenters that the educational, cultural, 
scientific, and informational value of Periodicals should be recognized 
in our prices. The new prices for Periodicals mail are as low as they 
can go, while still covering our costs. In addition, the new 
Periodicals prices, like our current prices, include low rates that do 
not vary by distance for the nonadvertising portion of a mailpiece, to 
promote the dissemination of information nationwide. The new rate 
structure further provides new discounts for the nonadvertising portion 
when the publication is entered at a destination facility.
    Several commenters expressed concern that the new Outside-County 
Periodicals rate structure was designed by a large-circulation 
Periodicals mailer in closed-door proceedings. We reiterate that rate 
setting is outside the scope of our mailing standards proposal, but we 
note that the new rates for Periodicals mail were recommended by the 
independent Postal Regulatory Commission as part of the Omnibus Rate 
Case in Docket No. R2006-1, and subsequently accepted by the Postal 
Service Board of Governors. During the rate case proceedings, the 
Commission held 34 days of public hearings, and Periodicals mailers of 
all circulation sizes were represented and provided substantial amounts 
of feedback. The proceedings were on the record, announced in both the 
print and online versions of the Federal Register, open to the public, 
and broadcast live on the Internet. The Commission used a rate design 
similar to one proposed by Time Warner both in 2004 and in Docket No. 
R2006-1, but substantially modified the rates to ensure fairness and 
equity for all mailers.
    Twenty commenters objected to container charges for Outside-County 
Periodicals flat-size mail prepared in trays. These commenters said 
they would stop moving mail out of sacks and into trays as a result of 
the new charges, thereby undermining an initiative to prepare more 
Periodicals mail in trays. Our mail preparation standards provide only 
one option for preparing flat-size pieces in trays. This option is 
explained in DMM 707.22.7, and it applies only to automation-compatible 
pieces sorted to the ADC or mixed ADC levels. Because flats in these 
types of trays are not bundled, mailers can avoid the bundle charges, 
but there is no provision to avoid the container charges for this or 
any type of Periodicals mail (except for some mixed containers of In-
County and Outside-County mail and for noncontainerized mail entered at 
a destination delivery unit, as explained below).
    One commenter stated that the Commission did not recommend a 
container rate for trays, and questioned the costing data used to 
determine the tray rates. The Commission's Opinion and Recommended 
Decision included Periodicals rate design information in Library 
Reference 14 (PRC-LR-14-Periodicals). When calculating 
Periodicals revenues, the Commission used a worksheet called 
``PieceVolume(3)'' to determine the container counts (refer to the 
``Containers'' tab of the worksheet). The source, as noted in the 
worksheet, is TW-LR-5, which originally comes from USPS witness 
Loetscher's response to interrogatories from Time Warner (see TW/USPS-
T28-7&8). Loetscher included ``all other types of containers'' (other 
than pallets) in ``sacks'' (see Table 13, ``Periodicals Outside-County 
Flats Distribution of Containers by Strata, Type, Level, and Entry 
Facility Type''). The Commission's calculation used container numbers 
that included pieces in trays with pieces in sacks, and our 
interpretation and application of the container rate is consistent with 
the Commission's calculation.
    One of our goals is to encourage efficient use of containers, 
including trays, and the Commission returned rates to support this 
goal. We note that for mail properly prepared loose in trays (according 
to the appropriate mailing standards), the bundle charges do not apply 
and mitigate the effect of the container charges.
    One commenter asked how to determine the piece and bundle rates for 
automation-rate letter-size mail prepared in full letter trays. When 
prepared in full letter trays these pieces are not bundled, and mailers 
would use the tray level in place of a bundle level to calculate the 
piece charge. Unbundled pieces in full letter trays are not subject to 
bundle charges (but are subject to the container charges). Automation 
letters in less-than-full trays must be bundled and are subject to both 
bundle and container charges.
    One commenter objected to eliminating the discounts for pieces on 
pallets. We emphasize that both the old and the new rate structures for 
Periodicals mail offer incentives for mailers to put more mail on 
pallets and enter those pallets at destination facilities. Rather than 
offer discounts, the overall rates are lower for mail on pallets, and 
send the appropriate pricing signals to mailers who can prepare mail on 
pallets either in single or in combined mailings.
    One commenter agreed with our proposal not to assess bundle and 
container charges for mixed In-County and Outside-County pieces at the 
carrier route and 5-digit levels. This same commenter agreed that 
uncontainerized mail presented at a destination delivery unit should 
pay bundle charges but not container charges, and would like us to 
eliminate all bundling and container requirements and charges for this 
mail in the future. Because there is value in bundled mail to a carrier 
route entered at a DDU, we do not plan to change these mailing 
standards.

Comments on Mail Preparation

    Two commenters asked us to clarify our standards for mailings 
entered at destination bulk mail centers (DBMCs). We clarified the 
standards in revised DMM 707.29.2.2. One of these commenters also asked 
us to clarify whether DBMC-entered offshore

[[Page 29258]]

containers are considered origin-or destination-entered. Offshore 
containers are considered origin-entered because the DBMC does not 
service the Line 1 ZIP Code on those containers.
    One commenter asked us to raise the maximum weight for machinable 
flat-size mail. We provided machinable rates for 5-digit barcoded flats 
up to 4.4 pounds to align with our future flats sequencing equipment, 
which will be able to process heavier and thicker flats compared to the 
automated flat sorting machine (AFSM) 100. In addition, the previous 6-
pound limit for UFSM 1000 pieces was too high for efficient handling, 
even on existing equipment, and often resulted in manual processing.
    This commenter also asked us to increase the 20-ounce limit to 48 
ounces for flat-size pieces prepared under DMM 301.3.0 when the pieces 
are part of a comailing. We cannot accommodate this request because we 
cannot process these types of heavier pieces efficiently on the AFSM 
100. We do allow up to 5 percent of the pieces in a comailing to be 
over 20 ounces, but not more than 22 ounces.
    This commenter additionally objected to our standards that 
designate UFSM 1000-compatible pieces as ``nonmachinable'' at the 3-
digit, ADC, and mixed ADC levels. Our standards are intended to align 
automation flats preparation with the processing capabilities of the 
AFSM 100, currently the preferred machine for flats processing and the 
workhorse for the distribution of flats prepared in 3-digit, ADC, and 
mixed ADC bundles in our processing plants. The processing capabilities 
of the AFSM 100 are superior to those of the UFSM 1000. The throughput 
of the AFSM 100 (17,000 pieces per hour) is much higher than the 
throughput of the UFSM 1000 (5,000 pieces per hour). We have no plans 
to purchase new UFSM 1000s, and we are removing them from many plants. 
Therefore, the best rates are for AFSM 100-compatible mailpieces.
    One commenter asked us to clarify that Outside-County firm bundles 
no longer count toward the minimum number of pieces required for a 
presort destination, but In-County firm bundles do count toward presort 
minimums. We revised our standards for firm bundles to clarify this 
distinction. In-County firm bundles will count toward presort minimums, 
as they do today. Outside-County firm bundles will not count toward 
presort minimums, because the Commission assigned a single piece rate 
and separate bundle rates for Outside-County firm bundles.
    Two commenters asked us to clarify the new Periodicals terminology 
and apply it consistently throughout DMM 705 and 707. One commenter 
remarked that our terminology is confusing. We revised the terminology 
in DMM 705 and 707 for clarity and consistency. We use the term 
``machinable'' for all flat-size pieces prepared under DMM 301.3.0, and 
for 5-digit barcoded flat-size pieces prepared under DMM 707.26.0. We 
use the term ``nonmachinable'' for flat-size pieces prepared under DMM 
707.26.0 at the 3-digit/SCF, ADC, and mixed ADC levels, and for 
nonbarcoded pieces at the 5-digit level. We also use the term 
``nonmachinable'' to describe all Periodicals parcels.

Comments on Mailing Documentation

    Seven commenters said that the Periodicals postage statement, Form 
3541, was too complicated, and asked for an easy-to-use form. Two of 
these commenters objected to using presort software because of its 
cost, and asked for a simple manual form. We designed Form 3541 to be 
as straightforward as possible, but we recognize that a simple form 
cannot accommodate the complex new structure for Outside-County mail 
recommended by the Postal Regulatory Commission.
    One commenter expressed concern over the width of the USPS 
Qualification Report and asked whether the ``running total'' column 
could serve as the column that indicates which bundles and containers 
are subject to the Outside-County bundle and container rates. To 
clarify, the running total column can serve this purpose.
    This same commenter asked if PAVE will certify the new container 
and bundle reports. We do intend to certify products using the new 
documentation standards that are being developed.
    One commenter asked if firm bundles will be represented on the USPS 
Qualification Report any differently than they are today. Outside-
County firm bundles cannot count toward presort minimums and will be 
reported as separate bundles on the Qualification Report. We did not 
change the standards or documentation requirements for In-County firm 
bundles.
    One commenter asked us to remove the requirement to include postage 
information on standardized documentation. We agree with this commenter 
and made this requirement an option in revised DMM 708.1.2.
    One commenter objected to the approval requirements for ``titles'' 
prepared in combined mailings. As clarification, each publication must 
be authorized or pending authorization to mail at Periodicals rates, 
but only the mailer must be authorized to combine mailings.

Comments on Service

    Eight commenters expressed concerns about delivery delays, lost 
mail, and other service issues. One commenter detailed delivery 
problems prior to 2004 but explained that these problems were resolved 
successfully. We are committed to providing a high level of service for 
Periodicals and all types of mail. We formed a new Mailers Technical 
Advisory Committee (MTAC) workgroup, with both mailers and Postal 
Service employees, to establish service standards and recommend ways to 
measure performance for Periodicals mail. We will communicate and 
implement these service standards in the future. In the meantime, we 
will continue to work with mailers at the local and national levels 
when service problems arise to identify and resolve issues on an 
ongoing basis.

Other Comments

    One commenter asked us to verify that FAST will update the mail 
direction data for Periodicals entered at DBMCs. FAST already shows the 
default BMC ZIP Code range, and does not distinguish among classes. 
FAST will allow pallet or speedline appointments for Periodicals at 
BMCs; bedloaded or ``drop and pick'' mailings will not be allowed. The 
Mail Direction file already accommodates BMC entry of Periodicals.
    One commenter agreed with the Governors' decision to delay the new 
Periodicals prices and mailing standards until July 15, to give mailers 
more time to prepare for the changes.
    One commenter raised questions about the Postal Accountability and 
Enhancement Act as it applies to Periodicals mail. The Act is outside 
the scope of our mailing standards proposed and final rules, and will 
be addressed in a separate proceeding.

Overview of Changes Since the Proposed Rule

    We made revisions throughout our mailing standards to consistently 
reflect the new Periodicals rate structure and terminology. We updated 
our standards to reflect that In-County firm bundles count toward 
presort minimums, but Outside-County firm bundles do not count toward 
presort minimums. We revised mailing standards in DMM 707.2.0 that 
described both In-County and Outside-County rates to better distinguish 
between the two and to clarify the new Outside-County piece rates. We 
revised DMM 707.2.1.8 to clarify that the container level is based

[[Page 29259]]

on the least-finely presorted bundle it contains (for example, a ``5-
digit metro pallet'' may contain 3-digit and 5-digit bundles and would 
pay the 3-digit/SCF pallet rate). We also added information about 
mailer-supplied air freight containers in 707.2.1.8. We revised DMM 
708.1.2 to make the inclusion of postage information and certain 
running totals optional on standardized documentation. We reformatted 
the Outside-County piece rate chart to separate the parcel rates from 
the flats rates. The new format better reflects that the piece rates 
for parcels do not vary based on the use of a barcode.

Overview of Outside-County Periodicals Mail

New Container Rate Structure

    The new rate structure adds container rates for Periodicals mail. 
We define a ``container'' as a tray, sack, pallet, or other equivalent 
USPS-approved container. Most of our standards for mail preparation are 
not changing as a result of the new rate structure. Mailers will still 
follow the mail preparation requirements in DMM 705, 707, and 708, 
which specify when to prepare mail in bundles and when to place it in 
trays, sacks, and pallets. We note that mailers must follow the 
preparation and entry requirements in the DMM. Mailers cannot choose to 
use certain containers (or to not use containers) to circumvent the 
rates.
    New Outside-County container rates are based on the type of 
container (tray, sack, or pallet), the level of sortation of the 
container, and where the container is entered. The container level is 
determined by the least-finely presorted bundle it contains, because 
that determines the point where the container must be opened for bundle 
sorting. We will apply the container rates to pallets, sacks, and trays 
containing Outside-County Periodicals mail (except for mixed containers 
of In-County and Outside-County pieces in carrier route, 5-digit 
carrier routes, and 5-digit/scheme containers). When trays and sacks 
are placed on pallets, we will charge for each tray and sack, but not 
for the pallets. This should encourage mailers to use pallets.
    Container rates decrease with deeper entry because there are fewer 
handlings needed. The best rates are for mail that is finely sorted on 
pallets and entered close to its destination. For example, the price 
for a 5-digit pallet entered at a DDU is $1.20, compared to $15.50 if 
entered at a DADC.
    On the other hand, when entered at the same facility level, prices 
are higher for more-finely presorted containers than for those that are 
less-finely presorted. The difference reflects the additional handlings 
that the more-finely presorted container will get before it is opened. 
For instance, for origin entry, the price for a 5-digit pallet is 
$26.95, or $8.34 higher than the $18.61 price for an ADC pallet.
    Working in the opposite direction, a bundle in a less-finely 
presorted container requires more handlings prior to piece sortation 
than the same level bundle in a more-finely presorted container, and 
bundle prices reflect this. The price for a 5-digit bundle is $0.095 on 
an ADC pallet, but only $0.008 on a 5-digit pallet, a difference of 
$0.087. The lower bundle postage will offset some, all, or more than 
all of the higher container postage.
    Taken as a whole, the inter-relationships among the per-container, 
per-bundle and per-piece prices in this rate structure provide further 
incentives for mailers to comail and copalletize.
    The rate structure also provides new rates for pallets and for 
trays or sacks on pallets entered at a destination bulk mail center 
(DBMC). These rates reflect the cost of cross-docking pallets and do 
not represent a new pallet sortation level. Mailers can enter 
Periodicals mail at the DBMCs or DASFs listed in DMM Exhibit 346.3.1, 
or at a USPS-designated facility. For DBMC entry, pieces must be 
prepared in bundles or in sacks on SCF, ADC, 3-digit, or 5-digit 
pallets, and addressed for delivery to one of the 3-digit ZIP Codes 
served by that BMC.

New Bundle Rate Structure

    We are adopting new rates for bundles of Periodicals mail, but we 
are not changing the definition of a bundle or the bundling 
requirements. A ``bundle'' is a group of addressed pieces secured 
together as a unit. Pieces are first sorted to destinations and then 
assembled into groups for bundling based on quantity and other factors. 
The term bundle does not apply to unsecured groups of pieces (for 
example, pieces prepared loose in letter or flat trays). ``Firm 
bundles'' are also groups of pieces that are secured together, but in a 
firm bundle all pieces are for delivery to the address shown on the top 
piece.
    New Outside-County bundle rates are based on the level of sorting 
of both the bundle and the container (but not on the type of 
container). More finely presorted bundles within the same container 
level have higher rates to reflect more bundle handlings before they 
are opened. For example, for pieces sorted into a carrier route bundle, 
and then placed on an ADC pallet or sack, a mailer pays 10.4 cents per 
bundle. For pieces sorted into an ADC bundle and placed on an ADC 
pallet or sack, a mailer pays 3.8 cents per bundle. A lower piece rate 
for pieces in more finely presorted bundles offsets the higher bundle 
charge.
    We will apply the bundle rates to all bundles containing Outside-
County mail, except for mixed bundles of In-County and Outside-County 
pieces in carrier route and 5-digit/scheme bundles. This exception will 
avoid imposing the Outside-County pricing structure on bundles that 
will likely contain mostly In-County pieces.
    Firm bundles are subject to both a piece charge (16.9 cents) and a 
bundle charge (2.7 cents to 7.9 cents, depending on the container 
level). Because of this new rate structure, mailers may no longer use 
firm bundles to satisfy a six-piece bundle requirement to a presort 
level for Outside-County bundles.
    We will charge bundle rates based on the actual number of bundles 
entered, so mailers must precisely document the number of bundles they 
produce. Unlike today, where there is no rate impact for a difference 
between the number of bundles implied by the presort requirements and 
the actual number of bundles created during production, under the new 
rates mailers must conscientiously modify software parameters and 
monitor physical breaks between bundles to ensure the number of bundles 
produced matches their documentation.

New Piece Rate Structure

    Periodicals Outside-County prices include new piece rates based on 
shape, machinability, barcoding, and presort level. The presort level 
of the piece is based primarily on the bundle level of the piece, with 
one exception: The presort level of pieces loose in trays is based on 
the tray level.
    While the new structure eliminates the per-piece discounts for 
pieces on pallets, including the experimental copalletization 
discounts, the container and bundle charges are designed to encourage 
copalletization. The new structure also eliminates the per-piece 
discounts for destination area distribution center (DADC), destination 
sectional center facility (DSCF), and destination delivery unit (DDU) 
entry, but recognizes instead the associated cost savings in the new 
DADC, DSCF, and DDU rates for nonadvertising pounds, as well as in the 
container rates.
    We divide the piece rates into ``letter'' rates, ``machinable 
flats'' rates, ``nonmachinable flats'' rates, and ``parcel'' rates; 
with the exception of carrier route rates, which we divide only 
according to saturation, high density, and basic rates.

[[Page 29260]]

Letters
    We provide letter rates for ``barcoded'' and ``nonbarcoded'' 
pieces. Periodicals letters must meet the standards for all letters in 
DMM 201. Letters mailed at the barcoded rates must include a barcode 
and must meet the additional standards for automation letters in DMM 
201.3.0. Automation Periodicals letters meet these dimensions:
     Minimum height is 3\1/2\ inches. Maximum height is 6\1/8\ 
inches.
     Minimum length is 5 inches. Maximum length is 11\1/2\ 
inches.
     Maximum thickness is 0.25 inch. Minimum thickness is:
    [cir] 0.007 inch if the piece is no more than 4\1/4\ inches high 
and 6 inches long; or
    [cir] 0.009 inch if the piece is more than 4\1/4\ inches high or 6 
inches long, or both.
     The maximum weight for each piece is 3.5 ounces.
    Periodicals letters mailed at the nonbarcoded rates meet the 
standards for all letters in DMM 201 but do not include a barcode, or 
do not meet all of the automation standards in 201.3.0 (whether or not 
a barcode is used). We assigned the machinable--nonbarcoded flats rates 
to these pieces. Nonbarcoded Periodicals letters meet these dimensions:
     Minimum height is 3\1/2\ inches. Maximum height is 6\1/8\ 
inches.
     Minimum length is 5 inches. Maximum length is 11\1/2\ 
inches.
     Minimum thickness is 0.007 inch. Maximum thickness is 0.25 
inch.
     The maximum weight for each piece is 3.5 ounces.
Flats
    We divide flats rates into categories for machinable and 
nonmachinable pieces, and then provide rates for barcoded and 
nonbarcoded pieces.
    For flats prepared in 3-digit, ADC, and mixed ADC bundles and 
containers, we define ``machinable--barcoded'' flats as barcoded pieces 
that we can process on our primary flats-sorting equipment, the 
automated flat sorting machine (AFSM 100). These pieces must meet our 
standards for minimum flexibility, maximum deflection, and uniform 
thickness, and use automation-compatible polywrap (if polywrapped). 
Machinable--barcoded Periodicals flats meet these dimensions:
     Minimum height is 5 inches. Maximum height is 12 inches.
     Minimum length is 6 inches. Maximum length is 15 inches.
     For bound or folded pieces, the edge perpendicular to the 
bound or folded edge may not exceed 12 inches.
     Minimum thickness is 0.009 inch. Maximum thickness is 0.75 
inch.
     The maximum weight for each piece is 20 ounces.

These pieces are defined in DMM 301.3.0 and match our standards for 
Standard Mail flat-size pieces mailed at automation rates, with a 
different weight limit.

    ``Machinable--nonbarcoded'' flats prepared in 3-digit, ADC, and 
mixed ADC bundles and containers meet the same criteria noted above, 
but they do not include a barcode.
    For flats prepared in 3-digit, ADC, and mixed ADC bundles and 
containers, we define ``nonmachinable--barcoded'' flats as barcoded 
pieces that we can process on the upgraded flat sorting machine (UFSM 
1000) and in the future flats sequencing environment; therefore, the 
requirements are slightly more restrictive than current UFSM 1000 
requirements. These pieces must meet our standards for uniform 
thickness and use automation-compatible polywrap (if polywrapped), but 
they are not currently subject to our standards for minimum flexibility 
and maximum deflection. Nonmachinable--barcoded Periodicals flats meet 
these dimensions:
     Minimum height is 5 inches. Maximum height is 12 inches.
     Minimum length is 6 inches. Maximum length is 15 inches.
     Minimum thickness is 0.009 inch. Maximum thickness is 1.25 
inches.
     The maximum weight for each piece is 4.4 pounds.

These pieces are defined in DMM 707.26.0, and they are unique to 
Periodicals mail.

    For pieces prepared in 5-digit bundles, we define ``machinable--
barcoded'' flats as those pieces prepared under 301.3.0 that we can 
process on the AFSM 100, and those pieces prepared under 707.26 that we 
can process on the UFSM 1000 and on the future flats sequencing 
equipment. This definition will help us align Periodicals mail with the 
flats sequencing system, which will process a wider variety of flat-
shaped mail than the AFSM 100. We are not changing the standards to 
allow mailers to combine pieces defined in 301.3.0 and pieces defined 
in 707.26.0 in the same bundle.
    Machinable--nonbarcoded'' flats prepared in 5-digit bundles meet 
the same dimensions noted above, but they do not include a barcode. The 
rate design includes a price for ``nonmachinable--barcoded'' flats 
prepared in 5-digit bundles, but mailers will not use this rate because 
we allow these UFSM 1000-compatible barcoded pieces to pay the lower, 
machinable--barcoded rates for pieces sorted to the 5-digit level.
    For all sort levels, we define ``nonmachinable--nonbarcoded'' flats 
as barcoded or nonbarcoded pieces that do not meet the standards in DMM 
301.3.0 or in 707.26.0.
Parcels
    Periodicals parcels are pieces that cannot be processed on our 
primary flat-sorting equipment. This rate category includes rigid and 
parcel-like pieces, pieces in boxes, and tubes and rolls. Parcels 
exceed the weight or dimensions for flats in DMM 707.26, but cannot 
weigh more than 70 pounds or measure more than 108 inches in length and 
girth combined (for parcels, length is the longest dimension and girth 
is the distance around the thickest part).
    Parcel rates do not distinguish between barcoded and nonbarcoded 
pieces.

New Pound Rate Structure

    For advertising pounds, the new price structure retains zoned rates 
and per-pound rate incentives for DADC, DSCF, and DDU entry. For 
nonadvertising pounds, postage from any entry point upstream from the 
DADC will continue to be unzoned, but there are new per-pound rate 
incentives for DADC, DSCF, and DDU entry. There are no pound-rate 
incentives for DBMC entry.

Documentation

    We provide new documentation requirements in DMM 708.1.0, including 
a new bundle report, a new container report, and a new column on the 
USPS qualification report indicating which bundles and containers are 
subject to the Outside-County bundle and container rates. As we stated 
above, we will charge bundle rates based on the actual number of 
bundles entered, and the new documentation will help us verify that 
mailers have correctly prepared and paid for their mailings. We are not 
changing the documentation requirements for In-County mail.

Overview of In-County Periodicals Mail

    Other than changes to In-County rates, we are not implementing any 
changes to the In-County rate design or mail preparation standards.
    We provide the updated DMM standards, and how they are applied for 
Periodicals mail, below. These standards are effective on July 15, 
2007.
    We adopt the following amendments to Mailing Standards of the 
United States Postal Service, Domestic Mail Manual (DMM), incorporated 
by reference in the Code of Federal Regulations. See 39 CFR 111.1.

[[Page 29261]]

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.


0
Accordingly, 39 CFR part 111 is amended as follows:

PART 111--[AMENDED]

0
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, 
3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.


0
2. Revise the following sections of Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM), as follows:

200 Discount Letters and Cards

201 Physical Standards

* * * * *

2.0 Physical Standards for Nonmachinable Letters

* * * * *
    [Insert new 2.4 as follows:]

2.4 Additional Criteria for Periodicals Nonmachinable Letters

    The nonbarcoded letter rates in 707.1.1.2 apply to Periodicals 
letter-size pieces that have one or more of the nonmachinable 
characteristics in 2.1.
* * * * *

3.0 Physical Standards for Automation Letters and Cards

* * * * *

3.5 Weight Standards for Periodicals Automation Letters

    The maximum weight for Periodicals automation letters is 3.5 ounces 
(0.2188 pound). See 3.13.4 for pieces heavier than 3 ounces.
* * * * *

700 Special Standards

* * * * *

705 Advanced Preparation and Special Postage Payment Systems

* * * * *

8.0 Preparation for Pallets

* * * * *

8.9 Bundles on Pallets

* * * * *

8.9.3 Periodicals

    Bundle size: Six-piece minimum (lower-volume bundles permitted 
under 707.22.0, Preparing Presorted Periodicals, and 707.23.0, 
Preparing Carrier Route Periodicals), 20-pound maximum, except:
    [Revise item a to remove the option to count firm bundles as one 
piece for presort standards for Outside-County Periodicals as follows:]
    a. Firm bundles may contain as few as two copies of a publication. 
Mailers must not consolidate firm bundles with other bundles to the 
same 5-digit destination. Only In-County firm bundles may be counted as 
an addressed piece for presort standards (see 707.22.0 and 707.23.0).
* * * * *

9.0 Preparing Cotrayed and Cosacked Bundles of Automation and Presorted 
Flats

* * * * *

9.2 Periodicals

* * * * *

9.2.5 Sack Preparation and Labeling

    Nonbarcoded rate and barcoded rate bundles prepared under 9.2.2, 
9.2.3, and 9.2.4 must be presorted together into sacks (cosacked) in 
the sequence listed below. Sacks must be labeled using the following 
information for Lines 1 and 2 and 707.21.0 for other sack label 
criteria. If, due to the physical size of the mailpieces, the barcoded 
rate pieces are considered flat-size under 301.3.0 and the nonbarcoded 
rate pieces are considered parcels under 401.1.6, the processing 
category shown on the sack label must show ``FLTS.''
    [Revise item a to require scheme sorting as follows:]
    a. 5-digit/scheme, required; scheme sort required only for pieces 
meeting the criteria in 301.3.0; 24-piece minimum, fewer pieces not 
permitted; labeling:
    1. Line 1: For 5-digit scheme sacks, use L007, Column B. For 5-
digit sacks, use city, state, and 5-digit ZIP Code destination on 
pieces.
    2. Line 2: ``PER'' or ``NEWS'' as applicable and, for 5-digit 
scheme sacks, ``FLT 5D SCH BC/NBC;'' for 5-digit sacks, ``FLT 5D BC/
NBC.''
* * * * *

10.0 Preparation for Merged Containerization of Bundles of Flats Using 
City State Product

10.1 Periodicals

10.1.1 Basic Standards

    Carrier route bundles in a carrier route rate mailing may be placed 
in the same sack or on the same pallet as 5-digit bundles from a 
barcoded rate mailing and 5-digit bundles from a nonbarcoded rate 
mailing (including pieces cobundled under 11.0) under the following 
conditions:
* * * * *
    [Revise item j to remove the option to count firm bundles toward 
the six-piece minimum for rate eligibility for Outside-County 
Periodicals as follows:]
    j. For mailings prepared in sacks, mailers may not combine firm 
bundles and 5-digit scheme pieces in 5-digit scheme bundles or in 5-
digit scheme sacks. Firm bundles must be placed in a separate 
individual 5-digit sack under 10.1.4g to maintain 5-digit rate 
eligibility. Mailers may combine firm bundles with 5-digit scheme, 3-
digit scheme, and other presort destination bundles in carrier route, 
5-digit, 3-digit, SCF, ADC, and mixed ADC sacks. Only an In-County firm 
bundle can contribute toward the six-piece minimum for rate 
eligibility.
* * * * *

11.0 Preparing Cobundled Barcoded Rate and Nonbarcoded Rate Flats

* * * * *

11.2 Periodicals

11.2.1 Basic Standards

    [Revise the introductory text in 11.2.1 to require 5-digit scheme 
and 3-digit scheme sort and eliminate distinctions between AFSM 100 and 
UFSM 1000 flats as follows:]
    Mailers may choose to cobundle (see 707.18.4ab) barcoded rate and 
nonbarcoded rate flat-size pieces as an option to the basic bundling 
requirements in 707.22.0 and 707.25.0. 5-digit scheme and 3-digit 
scheme bundles also must meet the additional standards in 707.18.4i and 
707.18.4r. Mailing jobs (for flats meeting the criteria in 301.3.0) 
prepared using the 5-digit scheme and/or the 3-digit scheme bundle 
preparation must be sacked under 10.0 or palletized under 10.0, 12.0, 
or 13.0. All bundles are subject to the following conditions:
* * * * *
    [Revise item g as follows:]
    g. Within a bundle, all pieces must meet the requirements in 
301.3.0 or all pieces must meet the requirements in 707.26.0.
* * * * *

11.2.2 Bundle Preparation

    [Revise the introductory text in 11.2.2 to specify that pieces 
meeting the criteria in 301.3.0 must be scheme-sorted as follows:]
    Pieces meeting the criteria in 301.3.0 must be prepared in 5-digit 
scheme bundles for those 5-digit ZIP Codes identified in L007 and in 3-
digit scheme bundles for those 3-digit ZIP Codes identified in L008. 
Preparation sequence, bundle size, and labeling:
* * * * *

[[Page 29262]]

    [Revise item b to require 5-digit scheme bundles as follows:] b. 5-
digit scheme, required; * * *
* * * * *
    [Revise item d to require 3-digit scheme bundles as follows:] d. 3-
digit scheme, required; * * *
* * * * *

15.0 Plant-Verified Drop Shipment

* * * * *

15.2 Program Participation

* * * * *

15.2.4 Periodicals

    [Revise 15.2.4 to reflect the new rate structure for Periodicals 
mail as follows:]
    Periodicals postage must be paid at the post office verifying the 
copies or as designated by the district. Postage is calculated from the 
destination USPS facility where the mail is deposited and accepted (or 
from the facility where the Express Mail or Priority Mail Open and 
Distribute destinates). The publisher must ensure that sufficient funds 
are on deposit to pay for all mailings before their release. A 
publisher authorized under an alternative postage payment system must 
pay postage under the corresponding standards.
* * * * *

16.0 Express Mail Open and Distribute and Priority Mail Open and 
Distribute

    [Revise heading of 16.1 as follows:]

16.1 Description

* * * * *

16.1.4 Basis of Rate

    [Revise 16.1.4 to specify that container rates do not apply to 
Express Mail and Priority Mail Open and Distribute sacks as follows:]
    Mailers must pay Express Mail and Priority Mail postage based on 
the weight of the entire contents of the Express Mail or Priority Mail 
shipment. Do not include the tare weight of the external container. Do 
not apply Priority Mail dimensional weight pricing or Periodicals 
container rates to the external container.
* * * * *

707 Periodicals

1.0 Rates and Fees

1.1 Outside-County--Excluding Science-of-Agriculture

* * * * *
    [Renumber 1.1.3 through 1.1.5 as new 1.1.5 through 1.1.7. Insert 
new 1.1.3 and 1.1.4 as follows:]
1.1.3 Outside-County Bundle Rates
    Rate for each bundle containing Outside-County Periodicals mail 
(see 2.1.8 for how to apply these rates):
    [We provide all of the new rates for Periodicals mail at 
pe.usps.com (click on ``Ratefold'').]
1.1.4 Outside-County Container Rates
    Rate for each pallet, sack, tray, or other USPS-approved container 
containing Outside-County Periodicals mail (see 2.1.9 for how to apply 
these rates):
    [We provide all of the new rates for Periodicals mail at 
pe.usps.com (click on ``Ratefold'').]
* * * * *

1.2 Outside-County--Science-of-Agriculture

* * * * *
    [Renumber 1.2.3 as new 1.2.5. Insert new 1.2.3 and 1.2.4 as 
follows:]

1.2.3 Outside-County Bundle Rates

    Rate for each bundle containing Outside-County Periodicals mail 
(see 2.1.8 for how to apply these rates):
    [We provide all of the new rates of Periodicals mail to pe.usps.com 
(click on ``Ratefold'').]

1.2.4 Outside-County Container Rates

    Rate for each pallet, sack, tray, or other USPS-approved container 
containing Outside-County Periodicals mail (see 2.1.9 for how to apply 
these rates):
    [We provide all of the new rates for Periodicals mail at 
pe.usps.com (click on ``Ratefold'').]

2.0 Rate Application and Computation

2.1 Rate Application

2.1.1 Rate Elements

    [Revise 2.1.1 to reflect the new Outside-County bundle and 
container rates and the new nonadvertising pound rate structure as 
follows:]
    Postage for Periodicals mail includes a pound rate charge, a piece 
rate charge, bundle and container rate charges for Outside-County mail, 
and any discounts for which the mail qualifies under the corresponding 
standards.
    [Renumber 2.1.2 through 2.1.5 as 2.1.4 through 2.1.7. Add new 2.1.2 
and 2.1.3 to reflect the new piece rate structure for Outside-County 
mail and to separate the piece rate application for In-County and 
Outside-County mail as follows:]

2.1.2 Applying Outside-County Piece Rates

    An addressed piece can be a single individually addressed copy or a 
firm bundle containing unaddressed or individually addressed copies for 
the same address. The per piece charge is based on the number of 
addressed pieces (not the number of copies). Outside-County piece rates 
are based on the shape of the mailpiece (letter, flat, or parcel); the 
characteristics of the mailpiece (machinable or nonmachinable, see 
18.4ac and 18.4ad); the application of a barcode; and the bundle 
presort level. For pieces properly prepared loose in trays, the rate is 
based on the tray presort level. Apply piece rates for Outside-County 
mail as follows:

    a. Letters.
    1. Apply the ``Letters--Barcoded'' rates to pieces that meet all of 
the standards for automation letters in 201.3.0 and include a barcode.
    2. Apply the ``Letters--Nonbarcoded'' rates to pieces that meet the 
standards for all letters in 201 but do not include a barcode. Apply 
these rates also to pieces that are barcoded but do not meet all of the 
automation letter standards in 201.3.0.
    b. Machinable flats.
    1. Apply the ``Machinable Flats--Barcoded'' rates to pieces that 
meet all of the standards for automation flats in 301.3.0 and include a 
barcode. Apply the 5-digit rate also to 5-digit barcoded pieces 
prepared under the alternative flats criteria in 26.0.
    2. Apply the ``Machinable Flats--Nonbarcoded'' rates to pieces that 
meet all of the standards for automation flats in 301.3.0 but do not 
include a barcode.
    c. Nonmachinable flats.
    1. Apply the ``Nonmachinable Flats--Barcoded'' rates to pieces that 
meet all of the alternative standards for flats in 26.0 and include a 
barcode.
    Exception: 5-digit barcoded pieces prepared under 26.0 pay the 
``Machinable Flats--Barcoded'' 5-digit rate.
    2. Apply the ``Nonmachinable Flats--Nonbarcoded'' rates to pieces 
that meet all of the alternative standards for flats in 26.0 but do not 
include a barcode. Apply these rates also to all nonmachinable flats, 
whether or not a barcode is used.
    c. Parcels. Apply the ``Parcels'' rates to all parcels, whether or 
not a barcode is used.

2.1.3 Applying In-County Piece Rates

    An addressed piece can be a single individually addressed copy or a 
firm bundle containing unaddressed or individually addressed copies for 
the same address. The per piece charge is based on the number of 
addressed pieces (not the number of copies). For In-County mail, piece 
rates apply to

[[Page 29263]]

each addressed piece, based on the sorting done by the publisher. Piece 
rates for automation mailings are based on the bundle level (or tray 
level for unbundled pieces in trays); piece rates for nonautomation 
mailings are based on the tray or sack level.

2.1.4 Applying Pound Rate

    [Revise renumbered 2.1.4 to reflect the new nonadvertising rate 
structure and to clarify item b as follows:]
    Apply pound rates to the weight of the pieces in the mailing as 
follows:
    a. Outside-County and Science-of-Agriculture Outside-County pound 
rates are based on the weight of the advertising portion sent to each 
postal zone (as computed from the entry office) or destination entry 
zone, and the weight of the nonadvertising portion to a destination 
entry zone or a single rate to all other zones.
    b. In-County pound rates consist of a DDU entry rate and an unzoned 
rate for eligible copies delivered to addresses within the county of 
publication.
    [Revise the heading of renumbered 2.1.4 as follows:]

2.1.5 Computing Weight of Advertising and Nonadvertising Portions

    [Revise renumbered 2.1.5 to reflect the new nonadvertising rate 
structure as follows:]
    The pound rate charge is the sum of the charges for the computed 
weight of the advertising portion of copies to each destination entry 
and zone, plus the sum of the charges for the computed weight of the 
nonadvertising portion of copies to each destination entry and all 
other zones. The following standards apply:
    a. The minimum pound rate charge for any zone to which copies are 
mailed is the 1-pound rate. For example, three 2-ounce copies for a 
zone are subject to the minimum 1-pound charge.
    b. Authorized Nonprofit and Classroom publications with an 
advertising percentage that is 10% or less are considered 100% 
nonadvertising. When computing the pound rates and the nonadvertising 
adjustment, use ``0'' as the advertising percentage. Authorized 
Nonprofit and Classroom publications claiming 0% advertising must pay 
the nonadvertising pound rate for the entire weight of all copies to 
all zones.
* * * * *
    [Insert new 2.1.8 and 2.1.9 as follows:]

2.1.8 Applying Outside-County Bundle Rates

    For Outside-County mail prepared in bundles, mailers pay the bundle 
rate according to the presort level of the bundle and the presort level 
of the container that the bundle is placed in or on. Bundle rates do 
not apply to barcoded letter-size mail prepared in full letter trays or 
to flat-size mail prepared in flat trays under the optional tray 
preparation in 705 and 707. The bundle rates are in addition to the 
container rates in 2.1.8. The following standards apply:
    a. Bundles of fewer than six pieces under 25.1.5 (including single-
piece bundles) must each pay the applicable bundle charge.
    b. For bundles containing both In-County and Outside-County pieces, 
mailers do not pay the bundle charge for carrier route and 5-digit/
scheme bundles.

2.1.9 Applying Outside-County Container Rates

    For Outside-County mail prepared in trays, sacks, pallets, and 
other USPS-approved containers, mailers pay the container rate 
according to the type of container, the presort level of the container, 
and where the mail is entered. The container level is determined by the 
least-finely presorted bundle it contains (for example, a ``5-digit 
metro pallet'' may contain 3-digit and 5-digit bundles and would pay 
the 3-digit/SCF pallet rate). For mailer-supplied air freight 
containers, mailers pay the container charge based on the original 
presort of the mail before it is transferred to the airfreight 
container. The container rates are in addition to the bundle rates in 
2.1.7. The following additional standards apply:
    a. For mailings prepared in trays or sacks, mailers pay the 
container rate for each tray or sack based on container level and 
entry.
    b. For mailings prepared on pallets under 705.8.0:
    1. For bundles placed directly on pallets, mailers pay the 
container rate for each pallet.
    2. For trays or sacks on pallets, mailers pay the container rate 
for each tray or sack, and not for the pallets. The container rate for 
each tray or sack is based on the tray or sack level and where the 
pallet is entered.
    c. For containers with both In-County and Outside-County pieces, 
mailers do not pay the container rate for carrier route, 5-digit 
carrier routes, and 5-digit/scheme pallets, sacks, and trays.

2.2 Computing Postage

* * * * *
    [Revise 2.2.5 to reflect the new piece rate structure for Outside-
County mail as follows:]

2.2.5 Piece Rate

    Determine the piece rate postage as follows:
    a. Outside-County. Multiply the number of copies by the appropriate 
rate, based on the criteria in 2.1.2a.
    b. In-County. Multiply the number of addressed pieces (not copies) 
by the appropriate rate, based on the presort of the pieces as mailed.
* * * * *
    [Renumber 2.2.7 as 2.2.8. Insert new 2.2.7 to compute the Outside-
County bundle and container rates as follows:]

2.2.7 Outside-County Bundle and Container Charges

    The Outside-County bundle charge is the sum of the number of 
bundles for each bundle level and container level in the mailing 
subject to the Outside-County bundle rates (see 1.1.3 and 1.2.3), 
multiplied by the applicable bundle rates. The Outside-County container 
charge is the sum of the number of containers for each container type, 
container level, and entry level in the mailing subject to the Outside-
County container rates (see 1.1.4 and 1.2.4), multiplied by the 
applicable container rates. Mailers must document the number of bundles 
and containers required for the rates claimed. If the documentation 
shows more bundles and containers are required than are presented for 
mailing, the mailer must pay the charges according to the 
documentation. Mailers cannot reduce the bundle and container charges 
by preparing fewer bundles and containers than standards require. 
Mailers who prepare Periodicals publications as a combined mailing by 
merging copies or bundles of copies under 27.0 may pay the Outside-
County bundle and container charges in one of the following ways:
    a. On one publisher's Form 3541.
    b. On one consolidated Form 3541. Under this option, the 
consolidator must complete the appropriate sections of the form and pay 
the charges from the consolidator's own advance deposit account.
    c. Apportioned on each publisher's Form 3541. The following 
standards apply:
    1. The qualification report must be submitted electronically via 
Mail.dat. See 708.1.0 for additional documentation requirements.
    2. The total charges on all Form 3541s in a combined mailing must 
equal the total charges for all bundles and containers subject to the 
Outside-County container rates presented for mailing.
    3. Apportion the bundle charge for each title or edition by 
determining how

[[Page 29264]]

many of each type of bundle that title or edition is in. Next calculate 
the percentage of copies in each of those bundles and convert to four 
decimal places, rounding if necessary (for example, convert 20.221% to 
.2022). Add the decimal values for each type of bundle in the mailing 
and multiply the total by the applicable bundle rate in 1.1.3 and 
1.2.3. Add the bundle charges to determine the total for each title or 
edition.
    4. Apportion the container charge for each title or edition by 
determining how many of each type of container that title or edition is 
in. Next calculate the percentage of copies in each of those containers 
and convert to four decimal places, rounding if necessary (for example, 
convert 20.221% to .2022). Add the decimal values for each type of 
container in the mailing and multiply the total by the applicable 
container rate in 1.1.4 and 1.2.4. Add the container charges to 
determine the total for each title or edition.

2.2.8 Total Postage

    [Revise renumbered 2.2.8 to reflect the new Outside-County 
container rates as follows:]
    Total Outside-County postage is the sum of the per pound and per 
piece charges, the bundle charges, the container charges, and any Ride-
Along and Repositionable Notes charges; minus all discounts; rounded 
off to the nearest whole cent. Total In-County postage is the sum of 
the per pound and per piece charges, and any Ride-Along and 
Repositionable Notes charges, less all discounts, rounded off to the 
nearest whole cent.

3.0 Physical Characteristics and Content Eligibility

* * * * *

3.5 Mailpiece Construction

* * * * *

3.5.2 Size and Weight

    [Revise 3.5.2 as follows:]
    Periodicals mail may not weigh more than 70 pounds or measure more 
than 108 inches in length and girth combined. Additional size and 
weight limits apply to letters and machinable and nonmachinable pieces. 
Requester publications must contain at least 24 pages per issue.
* * * * *

11.0 Basic Rate Eligibility

* * * * *

11.4 Discounts

    The following discounts are available:
* * * * *
    [Delete item c to eliminate the pallet discounts.]
* * * * *

12.0 Nonbarcoded/Presorted Rate Eligibility

* * * * *
    [Renumber 12.2 through 12.4 as new 12.3 through 12.5 and add new 
12.2 as follows:]

12.2 Rates--Outside-County

    Outside-County nonbarcoded/presorted rates are based on the 
following criteria (see 2.0 for rate application and computation):
    a. Piece rates are based on shape, machinability, barcoding, and 
presort level. The presort level of the piece is based primarily on the 
bundle level of the piece, except the presort level of pieces loose in 
trays is based on the tray level.
    b. Bundle rates are based on the bundle and container sortation 
level.
    c. Container rates are based on the type of container (tray, sack, 
or pallet), the level of sortation of the container, and where the 
container is entered.
    [Revise the heading in renumbered 12.3 as follows:]

12.3 Rates--In-County

* * * * *

14.0 Barcoded/Automation Rate Eligibility

    [Renumber 14.2 and 14.3 as new 14.3 and 14.4 and add new 14.2 as 
follows:]

14.2 Rates--Outside-County

    Outside-County barcoded/automation rates are based on the following 
criteria (see 2.0 for rate application and computation):
    a. Piece rates are based on mailpiece shape (letter, flat, or 
parcel), machinability, barcoding, and presort level. The presort level 
of the piece is based on the bundle level of the piece, except the 
presort level of pieces loose in trays is based on the tray level.
    b. Bundle rates are based on the bundle and container sortation 
level.
    c. Container rates are based on the type of container (tray, sack, 
pallet), the level of sortation of the container, and where the 
container is entered.
    [Revise the heading in renumbered 14.3 as follows:]

14.3 Rates--Inside-County

* * * * *

15.0 Ride-Along Rate Eligibility

* * * * *

15.3 Physical Characteristics

    The host Periodicals piece and the Ride-Along piece must meet the 
following physical characteristics:
* * * * *
    [Revise item c as follows:]
    c. A Periodicals piece with a Ride-Along must maintain the same 
processing category as before the addition of the Ride-Along.
* * * * *

16.0 Postage Payment

* * * * *

16.4 Payment Method

    [Revise 16.4 to clarify payment options in a combined mailing as 
follows:] 
    Mailers must pay Periodicals postage by advance deposit account at 
the original or additional entry post office, except under procedures 
in 16.5 for Centralized Postage Payment or in 705.15.2.4. Mailers may 
not pay postage for Periodicals using permit imprint, meter stamp, 
postage stamp, or precanceled stamps. Mailers must pay postage for 
First-Class Mail and Standard Mail enclosures under 703.9.8 through 
703.9.12 and 705.16.1. Mailers who prepare Periodicals publications as 
a combined mailing by merging copies or bundles of copies under 27.0 
may pay the Outside-County bundle and container charges on one mailer's 
Form 3541, on one consolidated Form 3541, or on each mailer's Form 3541 
(see 2.2.7).
* * * * *

17.0 Documentation

* * * * *

17.7 Additional Standards

* * * * *
    [Insert new 17.7.4 as follows:] 

17.7.4 Outside-County Bundle and Container Rate Documentation

    A complete, signed postage statement, using the correct USPS form 
or an approved facsimile, must accompany each mailing, supported by 
standardized documentation meeting the basic standards in 708.1.0. The 
documentation must show how many bundles are used and how many trays, 
sacks, and pallets are required for the rates and discounts claimed.

18.0 General Information for Mail Preparation

* * * * *

18.3 Presort Terms

    Terms used for presort levels are defined as follows:
* * * * *

[[Page 29265]]

    [Revise items e and p for scheme sorting as follows:]
    e. 5-digit scheme (bundles and sacks) for flats prepared according 
to 301.3.0: The ZIP Code in the delivery address on all pieces is one 
of the 5-digit ZIP Codes processed by the USPS as a single scheme, as 
shown in L007.
* * * * *
    p. 3-digit scheme bundles for flats prepared according to 301.3.0: 
The ZIP Code in the delivery address on all pieces is one of the 3-
digit ZIP Codes processed by the USPS as a single scheme, as shown in 
L008.
* * * * *

18.4 Mail Preparation Terms

    For purposes of preparing mail:
* * * * *
    [Revise item b to require trays to be at least 85% full as 
follows:]
    b. A full letter tray is one in which faced, upright pieces fill 
the length of the tray between 85% and 100% full.
* * * * *
    [Revise items i and r for scheme sorting as follows:]
    i. A 5-digit scheme sort yields 5-digit scheme bundles for those 5-
digit ZIP Codes identified in L007. Mailers must presort according to 
L007. Pieces prepared in scheme bundles must meet the automation flat 
criteria in 301.3.0. Mailpieces must be labeled using an optional 
endorsement line under 708.7.0. Periodicals firm bundles must not be 
combined within 5-digit scheme bundles.
* * * * *
    r. A 3-digit scheme sort yields 3-digit scheme bundles for those 3-
digit ZIP Codes identified in L008. The 3-digit scheme sort is 
optional, except under 705.12.0 and 705.13.0. For 705.12.0 and 
705.13.0, mailers must presort according to L008. Pieces prepared in 
scheme bundles must meet the automation flat criteria in 301.3.0. 
Mailers must label mailpieces using an OEL under 708.7.0. Periodicals 
firm bundles must not be combined within 3-digit scheme bundles.
* * * * *
    [Insert new items ac and ad to define ``machinability'' as 
follows:]
    ac. Machinable flats are:
    1. Flat-size pieces meeting the standards in 301.3.0 that are 
sorted into 5-digit, 3-digit, ADC, and mixed ADC bundles. These pieces 
are compatible with processing on the AFSM 100.
    2. Barcoded flat-size pieces meeting the standards in 26.0 that are 
sorted into 5-digit bundles.
    ad. Nonmachinable flats are flat-size pieces meeting the standards 
in 26.0, with the exception of barcoded 5-digit pieces under 18.4ac 
(item 2) above. Nonmachinable flats are not compatible with processing 
on the AFSM 100.
* * * * *

22.0 Preparing Nonbarcoded Periodicals

* * * * *

22.2 Bundle Preparation

    [Revise the introductory text of 22.2 to specify that pieces must 
meet the criteria in 301.3.0 for scheme sorting as follows:]
    Mailings consisting entirely of nonbarcoded pieces meeting the 
criteria in 301.3.0 may be prepared in 5-digit scheme bundles for those 
5-digit ZIP Codes identified in L007 and in 3-digit scheme bundles for 
those 3-digit ZIP Codes identified in L008. A bundle must be prepared 
when the quantity of addressed pieces for a required presort level 
reaches the minimum bundle size (except under 22.7). Smaller volumes 
are not permitted except in mixed ADC bundles and 5-digit/scheme and 3-
digit/scheme bundles prepared under 22.4. Bundling is also subject to 
19.0, Bundles. Preparation sequence, bundle size, and labeling:
* * * * *
    [Renumber items b through f as new items c through g. Insert new 
item b as follows:]
    b. 5-digit scheme (optional); six-piece minimum; OEL.
* * * * *
    [Renumber new items d through g as items e through h. Insert new 
item d as follows:]
    d. 3-digit scheme (optional); six-piece minimum; OEL.
* * * * *
    [Revise 22.3 to remove the option to count firm bundles toward the 
six-piece bundle requirement for a presort destination for Outside-
County Periodicals as follows:]

22.3 Firm Bundles

    A ``firm bundle'' is defined as two or more copies for the same 
address placed in one bundle. If each copy has a delivery address, each 
may be claimed as a separate piece for presort and on the postage 
statement, or the firm bundle may be claimed as one addressed piece. A 
firm bundle claimed as one addressed piece must be physically separate 
from other bundles and may only be used to satisfy a six-piece bundle 
requirement to a presort destination for In-County rates.
* * * * *

22.6 Sack Preparation--Flat-Size Pieces and Parcels

    For mailing jobs that also contain a barcoded rate mailing under 
301.3.0, see 22.1.2 and 705.9.0 or 705.10.0. For mailing jobs that do 
not contain barcoded rate pieces, preparation sequence, sack size, and 
labeling:
    [Renumber items a through g as new items b through h. Insert new 
item a for scheme sorting as follows:]
    a. 5-digit scheme; optional; for pieces meeting the standards in 
301.3.0; 24-piece minimum, fewer pieces not permitted.
    1. Line 1: L007, Column B.
    2. Line 2: ``PER'' or ``NEWS'' as applicable, followed by ``FLTS 5D 
SCH NON BC.''
* * * * *

22.7 Optional Tray Preparation--Flat-Size Nonbarcoded Pieces

    [Revise the introductory text in 22.7 to specify that pieces must 
meet the criteria in 301.3.0 and to add the container charge for trays 
as follows:]
    As an option, mailers may place in flat-size trays pieces meeting 
the criteria in 301.3.0 that would normally be placed in ADC, origin 
mixed ADC, or mixed ADC sacks. The trays are subject to the container 
charge in 1.1.4 or 1.2.4. Pieces must not be secured in bundles and are 
not subject to a bundle charge. Mailers must group pieces together for 
each 5-digit scheme, 5-digit, 3-digit scheme, 3-digit, and ADC 
destination as follows:
* * * * *

23.0 Preparing Carrier Route Periodicals

* * * * *

23.4 Preparation--Flat-Size Pieces and Irregular Parcels

* * * * *

23.4.2 Exception to Sacking

    [Revise the introductory text in 23.4.2 to specify when mailers do 
not pay the container charge as follows:]
    Sacking is not required for bundles prepared for and entered at a 
DDU when the mailer unloads bundles under 29.4.6. Mail presented under 
this exception is not subject to the container charge (but is still 
subject to the bundle charges). Mailers must prepare unsacked bundles 
as follows:
* * * * *

[[Page 29266]]

25.0 Preparing Flat-Size Periodicals With Barcodes

25.1 Basic Standards

25.1.1 General

    [Revise 25.1.1 to reference 301.3.0 as follows:] Ea