"tagged" in such a way as to provide for a determination of stamp value. This has not caused substantial problems for operations, although periodically some stamps are too hot or cold to be read or detected by our equipment,

thereby requiring this mail to be cancelled on other devices.

The Postal Service is aware that some mail is received, processed, and delivered with less than the required postage.

The Postal Service corrects this situation and other

related problems through its Revenue Protection Program. Under this program, all employees are made aware of their responsibility to intercept both short paid and uncanceled letters before the mail is being delivered. This responsibility covers all mail processing and handling up to and including the actual delivery of the mail piece. Since its inception, this program has resulted in significant revenues being recovered that otherwise would

have been lost.

I would like to point out that throughout the history of the Post Office Department and the Postal Service, the institution has never had cancellation equipment capable of determining the value of stamps. In my opinion, this is a very small problem which does not merit the

application of too much time or too many resources. The vast majority of the citizens of this country are

scrupulously honest in their dealings with the Postal

Service.

13.

We are concerned about conflicting rulings by different
regions affecting mailings and rates for educational books
such as encyclopedias. Please provide us with the number,
type and description of all decisions of local and
regional postal officials which were appealed to USPS
Headquarters and involved a situation where educational
books mailed from various postal facilities throughout the
country were not uniformly classified and thereby resulted
in different postage rates being charged in each region;
and the final disposition of each case appealed to USPS
Headquarters as well as the statutory or regulatory basis
for each decision.

Inactive cases are filed by the Postal customer's name. If the names in the appeals that concern you can be furnished, we can compile the requested information.

Depending on the nature of the sender and of the

recipient, encyclopedias and other educational books may
be mailable at different rates. Thus, under 39 U.S.c.
3683(b), an encyclopedia mailed from a publisher to a
library would qualify for the special library rate, but
would have to travel at the higher book rate if sent by
the publisher to a non-institutional recipient. The
library could mail the encyclopedia to another library at
the special library rate, but if it sent the encyclopedia
back to the publisher, it would have to pay the higher
book rate. These complexities in the statute might cause

some public perception of seeming inconsistency in the
availability of the library rate.

This is in response to your October 1 letter posing several questions to be answered for the record of this year's oversight hearing.

If you require

Enclosed please find the requested responses. additional information, please call me or have your staff contact William T. Johnstone, Assistant Postmaster General, Government Relations Department, on 245-4181.

Sincerely,

Bill

William Bolger

Enclosures

INTELPOST

1.

2.

3.

At the September Board of Governors meeting there was a discussion about changes being made in the INTELPOST service. What are these changes and why were they made?

Effective October 1, 1984, INTELPOST was changed from a store-and-forward system operating over leased lines to a dial-up system operating over the Public Switched Telephone Network. Cost reduction was the chief reason for this change. It allows the Postal Service to operate INTELPOST at a fraction of the cost of the initial system.

What is the current usage level of INTELPOST?

By the

During Fiscal Year 1984, INTELPOST originated 11,013
pages and received 20,643 pages, almost equalling the
11,616 pages originated in the previous three years
since the start of INTELPOST Commercial service.
end of the fiscal year, INTELPOST volume reached a new
monthly high of 1164 pages (September 1984), with an
average monthly volume of 950 pages.

What, in your opinion, are the reasons INTELPOST usage has failed to meet your original projection?

The decision to introduce INTELPOST service was made

without any Postal Service projection of usage and indeed in part to determine through market testing what the usage for such a new service might be.

A market

4.

estimation study done by COMSAT was not very

satisfactory. It was based on a very small sample of firms, and on a price which was lower than that now charged. It mistakenly assumed that businesses with large facsimile transmission requirements would use INTELPOST. In fact, these firms have their own facsimile capabilities and the real users of INTELPOST are smaller professional organizations. Finally, until the latter part of Fiscal Year 1984, marketing activities were experimental and limited. However, a carefully aimed and geographically limited marketing program targeted at small firms in five business

segments, featuring advertisements in the trade press, direct mailings, telemarketing, and sales calls, resulted in a tripling of the INTELPOST volume

originating from the targeted area.

How much money has the Postal Service invested in the development and operations of INTELPOST since it was first introduced in 1978?

INTELPOST is an experimental research and development program. The total amount of money invested in the development and operation of this experimental program

is $7,089,000.