B-202339.OM, SEP 30, 1981

B-202339.OM, SEP 30, 1981

SUBJECT: ZIP 4 TESTIMONY (CODE TBA; B-202339) DIGESTS: 1. MAILER NOTIFICATION OF NEW NINE DIGIT ZIP CODES (ZIP 4) IS NOT PROHIBITED BY OMNIBUS RECONCILIATION ACT OF 1981, PUB.L. NO. 97-35, TITLE XVII, SECTION 1726, 95 STAT. 357, 761. RECONCILIATION ACT PROHIBITS "IMPLEMENTATION" OF ZIP 4 BEFORE OCTOBER 1, 1983, BUT SPECIFICALLY DOES NOT PRECLUDE POSTAL SERVICE FROM TAKING STEPS "PREPARATORY" TO IMPLEMENTATION. 2. RECONCILIATION ACT CONFERENCE REPORT NOTES THAT "PREPARATORY" STEPS INCLUDE "DISSEMINATION OF INFORMATION" ABOUT THE ZIP 4 PROGRAM, AND "ASSISTANCE TO MAILERS WHO CONVERT MAILING PROCEDURES TO ZIP 4." CONFERENCE REPORT ALSO EXPLAINS THAT THE PROHIBITION AGAINST IMPLEMENTATION DOES NOT AUTHORIZE OFFERING OF PREFERENTIAL DISCOUNTS OR USE OF COMPUTERS IN CONNECTION WITH ZIP 4 BEFORE THE OCTOBER 1, 1983 AUTHORIZED IMPLEMENTATION DATE. IF PRE-IMPLEMENTATION DISCLOSURE OF ZIP 4 CODES WERE ILLEGAL, THERE WOULD BE NO 9-DIGIT CODED MAIL TO APPLY PREFERENTIAL RATES TO, AND THESE EXPRESSION OF INTENT CLEARLY WOULD HAVE BEEN UNNECESSARY. SEE H.R.CONF.REP. 97-208, 97TH CONG., 1ST SESS. 918- 919 (1981).

ASSOCIATE DIRECTOR, GGD - ARNOLD JONES:

BOB PRICE OF YOUR STAFF ASKED TWO BASIC QUESTIONS ABOUT THE STATUS OF ZIP 4 UNDER THE OMNIBUS RECONCILIATION ACT OF 1981, PUB.L. NO. 97-35: (1) IS MASS NOTIFICATION OF MAILER 9-DIGIT ZIP CODES ILLEGAL; AND (2) WHAT CONSTITUTES "IMPLEMENTATION" OF THE 9-DIGIT ZIP?

SECTION 1726 OF THE OMNIBUS RECONCILIATION ACT OF 1981, PAGE 430, AUTHORIZES THE POSTAL SERVICE TO TAKE SUCH PREPARATORY STEPS AS MAY BE REQUIRED TO IMPLEMENT A ZIP 4 SYSTEM. THESE STEPS MAY BE TAKEN BEFORE OCTOBER 1, 1983. SECTION 1726 GOES ON TO PROVIDE, HOWEVER, THAT AS A MATTER OF LAW THE POSTAL SERVICE IS PROHIBITED FROM IMPLEMENTING ZIP 4 BEFORE OCTOBER 1, 1983.

THE TERMS "PREPARE" AND "IMPLEMENT" ARE NOT SELF-DEFINING, AND THEY ARE NOT DEFINED BY THE LEGISLATION. WE THEREFORE TURNED TO SECTION 1726'S LEGISLATIVE HISTORY, AND FOUND THAT THE CONFERENCE REPORT (H.R.CONF.REP. 97-208, 97TH CONG., 1ST. SESS. 918-919) DOES PROVIDE SOME GUIDANCE REGARDING THE INTENDED OPERATION OF EACH TERM:

"*** THESE (PREPARATORY) STEPS INCLUDE, BUT ARE NOT LIMITED TO, THE PURCHASE OF OPTICAL CHARACTER READERS *** AND ALL OTHER NECESSARY EQUIPMENT; THE DISSEMINATION OF INFORMATION CONCERNING THE PROGRAM, ASSISTANCE TO MAILERS WHO CONVERT THEIR MAILING PROCEDURES TO CONFORM TO THE NEW PROGRAM; THE TRAINING OF PERSONNEL ***; AND ANY NECESSARY LITIGATION ***"

THERE ARE TWO IMPORTANT POINTS TO NOTE IN THIS LEGISLATIVE HISTORY. FIRST, THE LIST OF PREPARATORY STEPS IS NOT EXCLUSIVE; IT IS CLEARLY ONLY A PARTIAL LISTING, PRESUMABLY AN ILLUSTRATIVE ONE, OF STEPS THAT THE POSTAL SERVICE MAY TAKE BEFORE THE AUTHORIZED IMPLEMENTATION DATE OF OCTOBER 1, 1983. SECOND, IT SPECIFICALLY CONTEMPLATES THE DISSEMINATION OF INFORMATION ABOUT ZIP 4, AND ASSISTANCE TO MAILERS WHO CONVERT THEIR MAILING PROCEDURES TO CONFORM TO ZIP 4 IN ADVANCE OF IMPLEMENTATION.

I UNDERSTAND FROM THE STAFF THAT THE POSTAL SERVICE HAS ALREADY NOTIFIED A LARGE NUMBER OF MAILERS OF THEIR ASSIGNED 9-DIGIT ZIP CODE. THIS IS NOT PROHIBITED BY THE LEGISLATION. TO THE CONTRARY, THE POSTAL SERVICE COULD JUSTIFY THE NOTIFICATION ON ANY ONE OF SEVERAL GROUNDS. FIRST, THE CONFEREES LISTING OF PREPARATORY STEPS IS ONLY PARTIAL. SECOND, IT WOULD NOT BE UNREASONABLE TO SUPPOSE THAT DISCLOSURE OF NEW ZIP CODES COULD QUALIFY AS DISSEMINATION OF A VERY CRUCIAL PIECE OF INFORMATION ABOUT THE PROGRAM. THIRD, IT IS DIFFICULT TO UNDERSTAND HOW A MAILER COULD CONVERT TO THE PROGRAM WITHOUT KNOWING WHAT ITS ZIP CODE WOULD BE. THE CONFERENCE REPORT SPECIFICALLY CONTEMPLATES DISSEMINATION OF PROGRAM INFORMATION AND CONVERSION OF MAILING PROCEDURES IN ADVANCE OF IMPLEMENTATION. AND FOURTH, THE MERE RELEASE OF ZIP CODES TO MAILERS WOULD NOT "IMPLEMENT" THE PROGRAM. SOMETHING MUST BE DONE WITH THE CODES FOR ACTUAL IMPLEMENTATION TO OCCUR, NAMELY, THEY MUST BE USED BY THE POSTAL SERVICE IN CONJUNCTION WITH THE MAIL PROCESSING EQUIPMENT DESCRIBED IN THE CONFERENCE REPORT. OTHERWISE, THE ZIP CODES WOULD BE NEXT TO USELESS. FN1.

THE CONFEREES WERE NOT UNMINDFUL OF THE CENTRAL ROLE ONLINE LINE OPTICAL SCANNING EQUIPMENT, ETC., WOULD PLAY IN IMPLEMENTING ZIP 4, AND IT IS HERE THAT THEY DREW A REASONABLY CLEAR LINE BETWEEN PREPARING FOR IMPLEMENTATION AND ACTUAL IMPLEMENTATION. WHILE THE LEGISLATION ON THIS POINT IS NOT A PARAGON OF CLARITY, THE CONFERENCE REPORT IS FAIRLY STRAIGHTFORWARD. WITH THE EXCEPTION OF 9-DIGIT TESTING, IT WAS THE STATED INTENT OF THE CONFEREES THAT THE NEW EQUIPMENT NOT BE USED TO PROCESS ZIP 4 MAIL BEFORE OCTOBER 1, 1983. ALSO, NO PREFERENTIAL DISCOUNTS WERE TO BE OFFERED BEFORE THAT DATE TO MAILERS. THESE EXPRESSIONS OF INTENT WOULD HAVE BEEN UNNECESSARY IF THE LEGISLATION PROHIBITED PRE-IMPLEMENTATION MAILER NOTIFICATION OF 9-DIGIT ZIP CODES. MAILERS OBVIOUSLY COULD NOT TAKE ADVANTAGE OF A DISCOUNT IF THEY DID NOT KNOW THEIR ZIP CODE. SIMILARLY, IF THE NEW ZIP CODES WERE TO BE KEPT SECRET UNTIL IMPLEMENTATION, THE ISSUE WHETHER THE POSTAL SERVICE COULD PROCESS ZIP 4 CODED MAIL WITH THEIR NEW EQUIPMENT BEFORE IMPLEMENTATION WOULD NOT ARISE. WE THINK IT WOULD BE USEFUL FOR THE TESTIMONY TO EXPLAIN THE KEY ROLE THE NEW PROCESSING EQUIPMENT WILL PLAY IN ZIP 4 IMPLEMENTATION. TENDS TO PLACE THIS ENTIRE ISSUE IN ITS PROPER PERSPECTIVE.

FINALLY, IT WOULD NOT BE INAPPROPRIATE FOR THE POSTAL SERVICE TO NOTIFY MAILERS OF THE ACTION TAKEN BY THE CONFEREES. BASED ON THE LANGUAGE OF THE ZIP 4 NOTIFICATIONS, WHICH WE UNDERSTAND WERE PRINTED IF NOT MAILED BEFORE PASSAGE OF THE RECONCILIATION ACT, SOME MAILERS MAY BE UNDER THE ERRONEOUS IMPRESSION THAT THE IMMEDIATE USE OF THE NEW CODES WILL MAKE THEM ELIGIBLE FOR DISCOUNTS AND ENSURE QUICKER DELIVERY OF 9-DIGIT CODED MAIL.

FN1. THE POSTAL SERVICE MAILED OUT AT LEAST SOME OF THE NEW ZIP CODES BEFORE THE RECONCILIATION ACT BECAME LAW. TO THE EXTENT IT DID SO, THE QUESTION WHETHER ZIP CODE DISSEMINATION IS "PREPARATION" OR "IMPLEMENTATION" IS LARGELY ACADEMIC FROM A TECHNICAL LEGAL STANDPOINT.