10288 BEFORE THE POSTAL RATE COMMISSION _________________-X In the Matter of: POSTAL RATE AND FEE CHANGE : Docket No. R2000-1 ____________-____ -X Third Floor Hearing Room Postal Rate Commission 1333 H Street, N.W. Washington, D.C 20268 8 Volume XXIII 9 Friday, July 7, 2000 10 The above-entitled matter came on for hearing, 11 pursuant to notice, at 9:31 a.m. 12 13 14 BEFORE : HON. EDWARD J.GLEIMAN, CHAIRMAN 15 HON. GEORGE A. OMAS, VICE CHAIRMAN HON. W .H. "TREY" LeBLANC, COMMISSIONER 16 HON. DANA E. "DANNY" COVINGTON, COMMIS$IONER HON. RUTH GOLDWAY, COMMISSIONER 17 18 19 20 21 22 23 24 25 ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 10289 1 APPEARANCES: On behalf of the National Association of Letter 2 Carriers, AFL-CIO: KEITH SECULAR, ESQ. 3 Cohen, Weiss & Simon 330 W. 42nd Street 4 New York, NY 10036 On behalf of the Newspaper Association of America: ROBERT J. BRINKMANN, ESQ. Newspaper Association of America 429 14th Street, NW Washington, DC 20045 8 WILLIAM B. BAKER, ESQ. Wiley, Rein & Fielding 9 1776 K Street, NW, Suite 1100 Washington, DC 20006 10 On behalf of the National Association of Presort 11 Mailers : HENRY A. HART, ESQ. 12 Reed, Smith, Shaw & McClay, LLP 1301 L Street, NW 13 East Tower, Suite 1100 Washington, DC 20005 14 On behalf of the Classroom Publishers Association: 15 STEPHEN F. OWEN, JR., ESQ. 5335 Wisconsin Avenue, NW 16 Suite 920 Washington, DC 20015 17 On behalf of OCA-PRC: 18 KENNETH E. RICHARDSON, ESQ. EMMETT RAND COSTICH, ESQ. 19 SHELLEY S. DREIFUSS, ESQ. TED P. GERARDEN, DIRECTOR 20 Office of the Consumer Advocate Public Rate Commission 21 1333 H Street, NW Washington, DC 20005 22 On behalf of Hallmark Cards, Incorporated: 23 DAVID F. STOVER, ESQ. SHELDON BIERMAN, ESQ. 24 2970 S. Columbus Street, Suite 1B Arlington, VA 22206 25 ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 10290 1 APPEARANCES:(continued) On behalf of ADVO, Incorporated; and the 2 Saturation Mail Coalition: JOHN M. BURZIO, ESQ. 3 THOMAS W. MCLAUGHLIN, ESQ. Burzio & McLaughlin 4 1054 31st Street, NW, Suite 540 Washington, DC 20007 5 On behalf of the American Postal Workers Union, 6 AFL-CIO: SUSAN L. CATLER, ESQ. 7 O'Donnell, Schwartz & Anderson, P.C. 1300 L Street, NW, Suite 1200 8 Washington, DC 20005 9 On behalf of the American Bankers Association: IRVING D. WARDEN, ESQ. 10 1120 Connecticut Avenue, NW Washington, DC 20036 11 On behalf of the Amazon.com: WILLIAM B. BAKER, ESQ. 12 Wiley, Rein & Fielding 1776 K Street, NW, Suite 1100 13 Washington, DC 20006 14 On behalf of the Association of American Publishers: 15 MARK PELESH, ESQ. JOHN PRZYPYSZNY, ESQ. 16 Drinker, Biddle & Reath, LLP 1500 K Street, NW, Suite 1100 17 Washington, DC 20005 18 On behalf of the Alliance of Nonprofit Mailers; American Library Association: 19 DAVID M. LEVY, ESQ. CHRISTOPHER T. SHENK, ESQ. 20 Sidley & Austin 1722 Eye Street, NW 21 Washington, DC 20006 22 On behalf of the McGraw-Hill Companies, Incorporated: 23 TIMOTHY W. BERGIN, ESQ. Squire, Sanders & Dempsey, LLP 24 P.O. Box 407 Washington, DC 20044 25 ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue. NW..~ Suite 1014 washing ton,^ D.C. 20036 (202) 842-0034 10291 1 APPEARANCES:(continued) On behalf of the American Business Press: 2 DAVID STRAWS, ESQ. MERCIA ARNOLD, ESQ. 3 Thompson, Coburn 700 14th Street, NW, Suite 900 4 Washington, DC 20005 5 On behalf of the Florida Gift Fruit Shippers Association: 6 MAXWELL W. WELLS, JR., ESQ. Maxwell W. Wells, Jr., PA 7 14 E. Washington Street, Suite 600 Orlando, FL 32802 8 On behalf of the Association for Postal Commerce; 9 Pitney-Bowes and the Recording Industry Association; R.R. Donnelly & Sons Company: 10 IAN D. VOLNER, ESQ. FRANK WIGGINS, ESQ. 11 HEATHER MCDOWELL, ESQ. Venable, Baetjer, Howard & Civiletti 12 1201 New York Avenue Washington, D.C. 20005 13 On behalf of the Direct Marketing Association: 14 DANA T. ACKERLY, ESQ. GERARD N. MAGLIOCCA, ESQ. 15 Covington & Burling 1201 Pennsylvania Avenue, NW 16 Washington, D.C. 20004 17 On behalf of Time Warner, Inc.: JOHN M. BURZIO, ESQ. 18 TIMOTHY L. KEEGAN, ESQ. Burzio & McLaughlin 19 1054 31st Street, NW, Suite 540 Washington, DC 20007 20 On behalf of ValPak Direct Marketing Systems, 21 Inc.; ValPak Dealers Association, Inc.; Carol Wright Promotions, Inc.; Association of Priority 22 Mail Users, Inc.; District Photo, Inc.; Cox Sampling; and Mystic Color Lab: 23 WILLIAM J. OLSON, ESQ. JOHN S. MILES, ESQ. 24 William J. Olson, PC 8180 Greensboro Drive, Suite 1070 25 McLean, VA 22102 ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 10292 1 APPEARANCES : (continued) On behalf of the United Parcel Service: 2 JOHN E. McKEEVER, ESQ. Piper, Marbury, Rudnick & Wolfe, LLP 3 3400 Two Logan Square 18th & Arch Streets 4 Philadelphia, PA 19103 5 On behalf of the DOW Jones & Company, Inc.: MICHAEL F. MCBRIDE, ESQ. 6 BRUCE W. NEELY, ESQ. JOSEPH FAGAN, ESQ. 7 LeBoeuf, Lamb, Greene & MaCrae, LLP 1875 Connecticut Avenue, NW, Suite 1200 8 Washington, DC 20009 9 On behalf of the Parcel Shippers Association; and E-Stamp Corporation: 10 TIMOTHY J. MAY, ESQ. Patton Boggs, LLP 11 2550 M Street, NW Washington, D.C. 20037 12 13 On behalf of Stamps.com: DAVID P. HENDEL, ESQ. 14 Wickwire Gavin, P.C. 8100 Boone Boulevard, Suite 700 15 Vienna, VA 22182 16 On behalf of the National Newspaper Association; and the Professional Football Publication 17 Association: TONDA F. RUSH, ESQ. 18 King & Ballow 6054 N. 21st Street 19 Arlington, VA 22205 20 On behalf of Key Span Energy; Long Island Power Authority; and Major Mailers Association: 21 MICHAEL W. HALL, ESQ. 34693 Bloomfield Avenue 22 Round Hill, VA 20141 23 On behalf of the Mail Advertising Services Association International; and Smart Mail, Inc.: 24 GRAEME W. BUSH, ESQ. Zuckerman, Spader, Goldstein, Taylor & Kolken, LLP 25 1201 Connecticut Avenue, NW Washington, DC 20036 ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 10293 APPEARANCES: (continued) On behalf of the Coalition for Religious Press Associations: JOHN STAPERT, ESQ. 1215 17th Street, NW Washington, D.C. 20036 STEPHEN FELDMAN, ESQ. Law Offices of Stephen M. Feldman 601 Pennsylvania Avenue, NW Building SJE 900 Washington, D.C. 20004 On behalf of the Magazine Publishers of America: 8 JAMES CREGAN, ESQ. ANNE NOBLE, ESQ. 9 Magazine Publishers of America Suite 610 10 1211 Connecticut Avenue, NW Washington, D.C. 20036 11 On behalf of the Mail Order Association of 12 America : DAVID TODD, ESQ. 13 Patton Boggs L.L.P 2550 M Street, NW 14 Washington, D.C. I 15 On behalf of Continuity Shippers Association: AARON C. HOROWITZ, ESQ. 16 Cosmetique 200 Corporate Woods Parkway 17 Vernon Hills, Illinois 60061 18 On behalf of the Greeting Card Association: ALAN R. SWENDIMAN, ESQ. 19 Jackson & Campbell, P.C. 1120 Twentieth Street, NW 20 Suite 300 South Washington, D.C. 20036-3427 21 On behalf of USPS 22 MARK W. RO, ESQ. United States Postal Service 23 475 L’Enfant Plaza, SW Washington, D.C. 20260-1127 24 25 ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 1 1 CONTENTS 2 WITNESS DIRECT CROSS REDIRECT RECROSS PAMELA THOMPSON 3 BY MR. RICHARDSON 10401 FRANK HESELTON 4 BY MR. HENDEL 10449 10550 BY MR. MOORE 10527 5 JUDITH MARTIN BY MR. WIGGINS 10556 6 JAMES T. HEISLER BY MR. WIGGINS 10580 7 BY MR. RO 10631 LAWRENCE G. BUC 8 BY MR. HOROWITZ 10638 BY MR. REITER 10703 9 GAIL WILLETTE BY MS. DREIFUS 10725 10 BY MR. TIDWELL 10784 LLOYD KARLS I 11 BY MR. hY' 10806 BY MR. REITER 10833 12 13 DOCUMENTS TRANSCRIBED INTO THE RECORD: PAGE Written Direct Testimony of 14 Thomas C. Kuhr, Stamps.com T-2 10296 Designated Written Cross Examination 15 of Thomas C. Kuhr 10334 Additional Designated Written Cross Examination 16 of Thomas C. Kuhr, OCA/Stamps.com-T2-4 10354 Written Direct Testimony of Leora E. Lawton 10358 17 Designated Written Cross Examination of Leora E. Lawton 10380 18 Written Direct Testimony of Sander A. Glick, RIM-T-1 10387 19 Designated Written Cross Examination of Sander A. Glick 10395 20 Direct Testimony and Supplemental Direct Testimony of Pamela A. Thompson, OCA-T-9 10402 21 Designated Written Cross-Examination of Pamela A. Thompson 10433 22 Direct Testimony of Frank R. Heselton, Stamps.com-T-1 10450 23 Designated Written Cross-Examination of Frank R. Heselton 10494 24 Direct Testimony of Judith Martin, PB-T-1 10557 Designated Written Cross-Examination of 25 Judith Martin 10567 Direct Testimony of James T. Heisler, PB-T-3 10581 ANN RILEY & ASSOCIATES, LTD. Court Reporters 1025 Connecticut Avenue, NW, Suite 1014 Washington, D.C. 20036 (202) 842-0034 ii DOCUMENTS TRANSCRIBED INTO THE RECORD: PAGE Designated Written Cross-Examination of James T. Heisler 10605 Written Direct Testimony of Lawrence G. Buc, CSA-T-1 10639 Designated Written Cross Examination of Lawrence G. Buc 10656 Additional Designated Written Cross Examination of Lawrence G. Buc, USPS/CAS-T1-39 through 41 10703 Direct Testimony of Gail Willette, OCA-T-7 10726 Designated Written Cross-Examination of Gail Willette 10766 Additional Written-Cross-Examination of Gail Willette, USPS/OCA-T7-24, USPS/OCA-T7-25,USPS/OCA-T7-26, USPS/OCA-T7-28 and USPS/OCA-T7-29 10784 8 Direct Testimony of Lloyd Karls, PSA-T-2 10808 Designated Written Cross-Examination of Lloyd Karls 10816 9 10 11 EXHIBITS EXHIBITS AND/OR TESTIMONY IDENTIFIED RECEIVED 12 Written Direct Testimony of Thomas C.