In the Matter of the Petition by

 NATIONAL PUBLISHING COMPANY, INC.,
 303 East 7th Street,
 Austin, Texas 78767

 for a second class mail permit for "THE OFFICIAL NATIONAL BUS GUIDE."

 P.O.D. Docket No. 3/5

 February 13, 1969

 POST OFFICE DEPARTMENT, DIVISION OF HEARING EXAMINERS,
 WASHINGTON, D.C.  20260, 

 Jesse B. Messitte Hearing Examiner

 APPEARANCES:
 C. Morris Davis, Esq. 
 McGinnis, Lockridge, Kilgore,
 Byfield, Hunter and Wilson
 Austin, Texas 78701
 for the Petitioner

 Robert F. Ciapetta, Esq.
 Office of the General Counsel
 Post Office Department
 Washington, D. C. 20260
 for the Respondent

Petitioner seeks a second class mail permit for The Official National Bus Guide (the publication) which contains mostly bus schedules. Bus companies, which order and pay for about ninety percent of each issue of the publication pay only 25 cents per copy - an unrealistically low price under the circumstances here present. This Hearing Examiner finds the publication is primarily designed for circulation at nominal rates and therefore is not now qualified for a second class mail permit. This disqualification may well prove to be remediable after Petitioner discusses the matter with Department Counsel and appropriate employees of the Post Office Department's Bureau of Operations.

The governing statutes, so far as here pertinent, say:

"Second class mail embraces *** periodical publications

***." (39 U.S.C. 4351).

* * * * * *

"(a) Generally a mailable periodical publication is entitled to be entered and mailed as second class mail if it--

(1) is regularly issued at stated intervals as frequently as four times a year and bears a date of issue and is numbered consecutively;

(2) is issued from a known office of publication;

(3) is formed of printed sheets;

(4) is originated and published for the dissemination of information of a public character, or devoted to literature, the sciences, arts, or a special industry; and

(5) has a legitimate list of subscribers.

* * * * * *

"(c) A periodical publication designed primarily for *** free circulation or for circulation at nominal rates is not entitled to be admitted as second class mail under this section." (39 U.S.C. 4354).

It is undisputed that:

(1) Petitioner on August 23, 1968, received a notice from an authorized employee of the Post Office Department's Bureau of Operations (Respondent) denying its request for a second class mail permit for the publication. Petitioner filed a timely petition which brought the dispute before this Hearing Examiner for hearing and initial decision.

(2) The publication is issued monthly with the month and year printed on the cover and each issue is numbered consecutively.

(3) The publication is issued from an office located at 303 East Seventh Street, Austin, Texas, where usual business hours are kept.

(4) The publication is formed of printed sheets.

The only matters in contention are:

(1) Is the publication a periodical within the meaning of 39 U.S.C. § 4351

(2) Does the publication have a legitimate list of subscribers within the meaning of 39 U.S.C. § 4354

(3) Is the publication designed primarily for free circulation or for circulation at nominal rates within the meaning of 39 U.S.C. § 4354

The publication is a periodical based on Post Office Department treatment beginning in 1880 of transportation guides first for railways, and later for steamships, airlines, a competing bus transportation guide. Such treatment has been recognized by the Supreme Court and perhaps even adopted by implication by the Congress. The practice of the Department speaks more loudly and clearly than current contrary contentions of Department Counsel in this proceeding.

The publication has a legitimate list of about 20 subscribers who pay 6 dollars per year for the publication. They purchase less than 1 percent of the copies of the publication printed. Six dollars per year appears to be a rate above nominal.

The publication is, however, delivered to 60 or more bus companies which pay only 25 cents per copy. They receive over 3,000 copies or about 90 percent of the publication distributed. The annual subscription price stated in the publication is 6 dollars. The single copy price stated in the publication is 1 dollar. There is no reference whatever to a 25 cent price in the publication. The 25 cent price is extremely low in relation to what publishers of other transportation guides state they charge. Most bus companies receive one free copy of the publication in addition to paying only 25 cents per copy for those they nominally buy. Over 80% of the revenue of Petitioner comes from the bus companies in the form of payment for space in the publication used to print company bus schedules. Under these and related facts, the publication is designed primarily for circulation at nominal rates. This disqualifies the publication for a second class mail permit at this time.

In support of the ultimate findings and summary set forth above a somewhat more detailed discussion with evidential findings of fact and conclusions of law follows:

I

A. Petitioner's publication is about 8 1/2 by 10 1/2 inches, contains some 225 to 250 pages, has a paper cover without substantial binding and is printed on paper which in quality resembles that generally used by newspapers.

B. The publication contains almost entirely bus schedules for various bus lines. There is a very small amount of the publication which contains advertisements and other items.

C. Other than Petitioner's publication, there is only one publication which publishes bus schedules - namely Russell's Official National Motor Coach Guide (Russell's). Russell's carries bus schedules for more bus lines than Petitioner's publication. Compared with Petitioner's publication, Russell's is more nearly national in scope. Petitioner's publication tends to concentrate on the South Central United States.

D. Petitioner's publication is issued regularly each month and each issue is generally useful to the recipient so long as the bus schedules therein are current.

E. Petitioner's publication has continuity of subject matter. But the bus schedules are frequently changed. A single change in one schedule results in numerous changes in the schedules of various connecting bus lines.

F. Petitioner's publication is in substantial respects such as cover, binding, general appearance and content very much like Russell's which has long had a second class mailing permit. Because the two publications, are to some extent competitive, treating Russell's as a periodical is prejudicial to Petitioner's publication unless it too is treated as a periodical.

G. Petitioner's publication is similar in general appearance, content and format with various publications printing transportation schedules for other modes of transportation (railways, airlines, steamships, etc.). These other publications have been treated as periodicals and received second class mail permits. Indeed, the Official Guide of the Railways has had a second class permit since 1880. And the Supreme Court recognized that such treatment had been accorded the railway guide when it said:

"***the publication must be a 'periodical publication', which means, we think, that it shall not only have the feature of periodicity, but that it shall be a periodical in the ordinary meaning of the term. A periodical is defined . . . by the Century Dictionary as 'a publication issued at regular intervals in successive numbers or parts, each of which (properly) contains matter on a variety of topics and no one of which is contemplated as forming a book of itself' . . . By far the largest class of periodicals are magazines, which are defined by Webster as 'pamphlets published periodically containing miscellaneous papers or compositions'. A few other nondescript publications, such as railway guides, appearing at stated intervals, have been treated as periodicals and entitled to the privileges of second class mail matter ." (emphasis added). See: Houghton v. Payne , 194 U.S. 88 at pp. 96, 97 (1904).

H. Congress, by implication at least, has recognized and adopted the Department's treatment of transportation guides as periodicals when it provided in 39 U.S.C. 4352(c) the following:

"The Postmaster General may not accept for mailing as second class mail any publication having more than 75 per centum advertising in more than one-half of its issues during any twelve-month period and he shall revoke its entry. A charge made solely for transportation schedules, fares, and related information is not considered as advertising under this subsection."

Congress apparently accepted, as established, that transportation guides would qualify as "periodicals" and wanted to make sure they would not be disqualified on the ground that the schedules and related information which the carriers pay to have included in the periodical would be deemed disqualifying advertising matter.

I. Petitioner's publication is a periodical devoted to printing bus schedules in use by various bus lines. The current information contained in the publication concerns mainly the coming and going of the buses (public carriers). That is information of value to the travelling public and also of special concern to the bus industry.

II

The PUblication Has a Legitimate List of Subscribers

A. The publication is sold on an annual subscription rate of $6.00.

B. Petitioner has a genuine list of twenty-one individual subscribers who pay the annual subscription rate and receive at least one copy of each issue of the publication during a twelve-month period.

C. The $6.00 annual subscription rate is not a nominal rate. It is, under the circumstances here present, not a token or less than material consideration.

III

The Publication Is Designed Primarily For Circulation at Nominal Rates

A. Sixty or more bus companies receive more than ninety percent of each issue of Petitioner's publication. Most of these copies go to bus company employees or ticket agents and are useful in the performance of bus company functions and in supplying the public with current bus schedule information.

B. Generally 60 or more bus companies pay 25 cents per copy for the publication. All of these companies receive one copy free which Petitioner calls a "sample".

C. The publication discloses a $6.00 annual subscription rate and a single copy rate of $1.00. There is no mention in the publication of a 25 cent per copy rate for bus companies.

D. The 25 cent charge per copy is very much lower on a proportionate size basis than the stated rates for Russell's and transportation guides for railways, airlines or steamships. Thus, for example, Russell's contains about five times as many pages as Petitioner's publication. But the stated charges for Russell's are $21.00 for an annual subscription and single copies for $2.50 each.

E. The 25 cent charge per copy to bus companies has not been changed by Petitioner for 20 years at least. When more revenue is needed, Petitioner increases its charges to the bus companies for the space occupied by their schedules.

F. The 25 cent charge per copy plus a free copy (so-called sample) in many instances appears to make the average cost to most bus companies less than 25 percent of the published single copy rate of $1.00 and less than 50% of the published annual subscription rate of six dollars prorated on a monthly basis.

G. Petitioner's revenue from alleged publication sales, nominal or otherwise, is about: 15% of business expenditures; 30% of its printing bill; and 20% of what it receives from bus companies for space to print their schedules.

H. The 25 cent charge per copy billed to the bus companies each month is nominal - is a token payment and not a material consideration.

I. Petitioner's publication is not entitled to a second class mail permit because it is now primarily designed for circulation at nominal rates within the meaning of 39 U.S.C. 4354 and also 39 CFR 132.2(b)(8).

II. The publication otherwise meets requirements for a second class mail permit under 39 U.S.C. 4351 and 4354.

III. Upon proper redesign of the rate structure, on a realistic basis, the publication may hereafter be entitled under applicable law to a second class mail permit.