In the Matter of the Petition by ) August 24, 1984 ) CABLEDAY PUBLISHING COMPANY ) 2942 North 24th Street, Suite 109 ) Phoenix, AZ 85016-7849 ) ) Denial of Application for Second- ) Class Mail Privileges for "CABLEDAY" ) P.S. Docket No. 19/14 APPEARANCE FOR PETITIONER: Richard N. Brandes, Esq. Bentley, Brandes & Brandes, P.C. 3003 North Central Avenue Suite 2300 Phoenix, AZ 85012-2912 APPEARANCE FOR RESPONDENT: Jeffrey H. Zelkowitz, Esq. Law Department United States Postal Service Washington, DC 20260-1143 Duvall, William A.
In this case, Cableday Publishing Company, 2942 North 24th Street, Suite 109, Phoenix, AZ (Petitioner) appeals a decision of the Director, Office of Mail Classification, United States Postal Service (Respondent) denying Petitioner's application for secondclass mail privileges for its publication "Cableday", (hereinafter, sometimes, "the publication"; Letter of Jan. 23, 1984, which is Ex. R-12). The reasons for the denial of the application were stated as follows in the last paragraph on page 2 of the letter of denial:
It is concluded that CABLEDAY is primarily designed for advertising purposes, consists principally of advertising and articles about advertisers in the publication, is issued under a license from Storer Cable Communications and controlled by that firm, is used primarily to promote the pay television services of that firm, and conducted as an auxiliary to and essentially for the advancement of its Cable television business. Accordingly, it is ineligible for second-class privileges under section 422.231, Domestic Mail Manual, as a publication primarily designed for advertising purposes, and is also ineligible under subsections b, c, and e of that section.
At Petitioner's request, for good cause shown, the hearing was held in Phoenix on May 14, 1984. Both parties were represented by Counsel who called and examined their witnesses and who cross examined witnesses appearing for the opposing party. Proposed findings of fact, conclusions of law, and supporting arguments were submitted on behalf of both parties. These proposals and arguments have been carefully considered and, to the extent herein indicated, they have been adopted. Otherwise such proposed findings, conclusions and arguments are rejected for the reason that they are unsupported by, or contrary to the evidence or law, or because of their immateriality or irrelevance.
Cableday is 8 1/2 by 11 inches in size and usually has 80 pages. It follows the format frequently found in TV guide publications. More specifically, it consists, in ascending order based on the number of pages in each category, of articles, advertising, and program listings. The advertising content of one issue was tabulated by Petitioner as follows:
AD LINEAGE
November 12, 1983 - Total
TYPE Cable Ads Other Ads Storer Total Filler
Mktg. - Nets Retail - Nets
8 1/3 5 12 2/3 1 2/5 1 28 2/5 1
This count is representative of all magazines in that the majority of the time the cable marketing and cable networks were less than other ads. (Ex. P-11)
The issue of Cableday from which the above count was taken is not a typical issue because it has 96 pages, including front and back covers. The percentage of advertising matter to total number of pages in the publication, however, is somewhat representative. In the usual 80-page issue there are 12 - 14 pages of articles; 13 - 15 pages of advertising; 6 pages consisting of the inside and outside of the front and back covers, the index page, and the page on "How to Use Cableday"; and the remaining approximately 42 - 44 pages present the program listings and fillers, however they may be defined. None of the above figures is precise for each issue, but the numbers state reasonable ranges. (Tr. 111-113) Complainant did not seriously question the foregoing testimony and no persuasive affirmative evidence to the contrary was offered.
It is pointed out that under DMM § 422.231(a) if a publication is otherwise qualified for second-class mail privileges, it does not lose its eligibility for those privileges unless and until it contains "more than 75 percent advertising in more than half of the issues published during any twelve month period." Thus, in this respect, and depending on one's definition of "advertising," there is room for considerable expansion of the amount of advertising that may be included in Cableday before its advertising content becomes a problem related to its second-class mail qualification. In Respondent's letter of January 23, 1984 (Ex. R-12), however, Section 422.231(a), DMM, was not cited as a basis for denial of Petitioner's application.
The regulations on which Respondent relies for support in its denial of Petitioner's application will be considered individually in relation to the publication at hand.
Domestic Mail Manual § 422.231, in its first sentence, provides as follows:
"General publications primarily designed for advertising purposes may not qualify for second-class privileges."
DMM § 422.21 requires that --
"General publications must be originated and published for the purpose of disseminating information of a public character or they must be devoted to literature, the sciences, art, or some special industry."
Respondent's definition of advertising is set forth at DMM § 422.232:
" .232 Definition of Advertising.
a. General. The term advertising includes all material for the publication of which a valuable consideration is paid, accepted, or promised; that calls attention to something for the purpose of getting people to buy it, sell it, seek it, or support it.
b. Specific. If an advertising rate is charged for the publication of reading matter or other material, such material shall be deemed to be advertising. Articles, items, and notices in the form of reading matter inserted in accordance with a custom or understanding that textual matter is to be inserted for the advertiser or his products in the publication in which a display advertisement appears, are deemed to be advertising. If a newspaper or periodical advertises its own services or issues, or any other business of the publisher, whether in the form of display advertising or editorial or reading matter, this is deemed to be advertising. Public service advertisements for which no consideration has been paid are not considered advertising for postal purposes."
Thus, there is for consideration a publication comprised of, in round numbers, 17.5 percent of articles and editorials, 20 percent of advertising, and 62.5 percent of TV program listings, with a few filler ads and articles taking up a relatively minor portion of the latter. The publisher is told that his application for second-class mail privileges is denied because it is "primarily designed for advertising purposes," and that the entity it is primarily designed to advertise is Storer Cable Communications (Storer).
Storer has a franchise which authorizes it to engage in the Cable T.V. installation and sales business in Phoenix, Arizona. The Assistant Manager in Phoenix for Storer stated that earlier, when she was Director of Marketing, Storer was looking for a vehicle to use to get its program listings to its subscribers. At that time the only guide that Storer had was a projection on the Cable T.V. system, itself, of three hours of programming. This type of program notification was not satisfactory, and that was the reason Storer sought other means of getting programming information out to its subscribers. A number of local, and some nationally known guides submitted proposals, and from that group a guide submitted by a Mr. Paul Beress was chosen. A contract (Ex. R-5) was entered into by Storer with Messrs. Beress and Albert J. Smith. After a short time, Mr. Smith and his brother acquired full ownership of the publishing business known as Cableday Publishing, Inc.
The reasons why Storer picked that company included the fact that the large publication, T.V. Guide, did not have any listings of cable at that time and had no plans to initiate such listings. The Phoenix newspaper guides also did not have any immediate plans to list cable programs. The nationally known guides published in Pennsylvania were monthly guides and, in addition, they did not carry any local listings. The result was that none of the above guides met Storer's needs, which were, primarily, to get out information to its subscribers as to coming programs to be available on cable television. Cableday was best suited to, and has met Storer's needs in this regard. The chief such need was described by Storer's Assistant Manager in Phoenix as the need to "get our program to our subscribers, program listings." (Tr. 12)
Storer also uses Cableday magazine in marketing. When Storer acquires a new cable T.V. subscriber, the subscriber receives the publication for two months free of charge. If a new subscriber takes the standard cable system plus one or more premium channels, such as HBO or Showtime, he receives the two months' issues of Cableday plus a remote control device. The giving of these "bonuses" is a standard practice in the cable television industry. (Tr. 17, 51)
Based upon the testimony of Storer's representative, the evidence is that Storer's purposes in seeking out Petitioner were, in the following order of importance:
1. To secure a vehicle by which it could advise its subscribers of forthcoming programs on cable television; and
2. To provide itself with a tool to use as an added inducement to persons to become cable T.V. subscribers.
In Paragraph 5 of the Agreement between Petitioner and Storer the publisher agrees to give storer 500 copies of each issue of Cableday at no charge for the term of the Agreement. These copies will be for the use of, among other purposes, Storer's sales division. Obviously, Petitioner obtains an advantage over the publishers of other guides by having its product in the hands of Storer's subscribers beginning on the very day the cable connection is installed. When Storer's needs exceed 500 copies per issue Storer pays for the excess. Mr. Smith spoke as if this marketing service performed for Petitioner by Storer is of appreciable value. (Tr. 74-75, 119)
Under the contract between Petitioner and Storer, the latter receives one page to use as Storer sees fit and one full column for editorial comments and one subscription card for Cableday magazine. (Ex. R-5, par. 11) Such a provision is not unusual in contracts between cable stations and the publications with which they contract.
It is now appropriate to examine the Petitioner's purpose and design in starting and publishing Cableday. Mr. Smith stated that his purpose in publishing Cableday is "To make money, and to build integrity in a company with large circulation." It is his "philosophy that what the world needs is a good magazine that gives all the information that can be found on the T.V. set, especially if you have cable. The marketing thought was if you are going to succeed you have to be different, so we went with the 8 1/2 by 11 magazine size. We went bi-weekly instead of weekly so that our annual cost per subscription would be less proportionately to the subscribers, the ultimate users. We found a place in the marketplace where we could market it effectively." (Tr. 57)
Insofar as advertising for Storer is concerned it previously has been pointed out that advertising occupies 13 - 15 pages fo the 80 pages in the usual issue. Of these 13 - 15 pages, Storer advertisements comprise a maximum of 4 pages (1 free and 3 paid for by Storer) and it usually is less. (Tr. 111-112) Other advertisers include motorcycle dealers, insurance agents, lawyers, Sears, restaurants, stereo equipment dealers, local TV networks, and dealers in furniture, television sets, and T.V. discs. While it is likely that not all of these businesses advertise in every issue, the above list represents a rather large group of advertisers to occupy the remaining 12 - 14 pages of available advertising space. (Tr. 114-116)
Section 422.231(a), DMM, provides that "Publications which contain more than 75 percent advertising in more than half of the issues published during any twelve month period" may not qualify for second-class mail privileges. Thus, in this respect, depending upon one's definition of "advertising," there is room for considerable increase in the amount of advertising that may be carried in Cableday before its advertising content becomes an impediment to its eligibility for second-class qualification. It, therefore, is not surprising that Mr. Smith characterized the percentage of advertising to the total content of the remaining portions of the issues of Cableday as "very low," and it is also not surprising that he said he is "absolutely not" opposed to selling more advertising. (Tr. 56)
There is another viewpoint from which an assessment may be made as to whether the publication under consideration is "primarily designed for advertising purposes." That viewpoint is the perception of the readership. Cableday is sold and circulated (1) to regular subscribers through the mail; (2) to subscribers of Storer's through the various bonus arrangements; and (3) bulk purchases through other systems. There are also sales through news stands, supermarkets, retail stores, and convenience stores. In the year May 1983 - May 1984, one-year subscriptions averaged 12,000 - 13,000 per issue; about 5,000 per issue were sold in the Storer packaging program; and about 2,000 of each issue were sold through retail outlets or news stands. (Tr. 47-48) In May 1983, the full subscription rate was $15.95 per year, with renewals at $17.95. In February 1984 the annual rate became $21.95, and that was the planned rate for future renewals as of the date of the hearing. It is expected that the annual subscription rate eventually will reach a maximum of about $24.95. (Tr. 117-118)
Regardless of the art and skill with which a publication is put together, if it is "primarily designed for advertising purposes" that fact will be readily apparent and obvious to its readers. It is contrary to reason and common sense to take the position that 19,000 - 20,000 persons would pay Cableday's substantial subscription costs for a publication the primary purpose of which is to advertise Storer. The public is far too sophisticated and too accustomed to being cajoled, courted and enticed to patronize businesses by being given various forms of gifts and inducements to permit themselves to be lured into paying for a magazine designed primarily as an advertising gimmick. It is evidence that Cableday contains some other characteristic which causes so many readers to be willing to pay such prices to obtain it.
Without intending to be disparaging, it is believed to be fair to say that it is not the articles and editorials that have created the demand for Cableday. The only ingredient of the magazine that remains is that portion devoted to the listings of various TV programs. The largest segment of this feature is known as the "rolling log," consisting of the hour-by-hour listing of T.V. programs on numerous channels and stations for each day of the period covered by the particular issue of the publication. In separate places in Cableday, as shown in the Table of Contents, certain types of programs are grouped together on one or two pages to inform eaders having special tastes of the upcoming programs that will be of interest to them, such as, Family Day, sports, and others. By these listings and groupings Cableday brings to its subscribers news and "information of a public character" (DMM § 422.2) as to what day, what time of day, and on what T.V. channels or stations particular programs will be available.
By the foregoing circuitous route the crux of this case is reached. The problem is posed for the first time near the end of the hearing at page 133 of the transcriptin one short paragraph in the testimony of Respondent's witness. The paragraph reads, with the most crucial matter being underscored:
"Storer is an advertiser in the publication. There are stories which feature the programs offered through Storer Cable Communications. In addition, we believe that all of the program listings themselves constitute advertising. In accordance with the regulations they call attention to something for the purpose of getting someone to buy it, sell it, seek it, or support it. The regulation also requires that there will be valuable consideration paid. In this case there is valuable consideration paid in terms of the subscriptions which the cable system buys, the bulk copies which it purchases, and there are other types of consideration which are not necessarily monetary such as providing a ready-made market for the publication."
It has dimly appeared in some earlier cases to be an idea germinating in a mail classifier's mind (e.g. Willamette TV & Cable Guides, P.S. Docket No. 16/97, Init. Dec. now on appeal) but it is believed that this is the first instance in which it has been openly, affirmatively stated that program listings by which persons are informed as to the dates and times when future TV programs will be shown, are being regarded and treated as having in some way been transformed and converted from its generally known and accepted category of public information into some bizarre and esoteric form of advertising. It is also believed to be the first instance in which this newly created anomalous concept has been used to deny second-class mail qualification to a type of publication, some examples of which have for years enjoyed eligibility and recognition as valid second-class mail matter. (See Exs. P-2 through P-10)
This new approach requires measurement by the older yardstick found in DMM § 422.232 - Definition of Advertising, quoted earlier. Perhaps the best way to approach this problem is to eliminate portions of this definition which do not, or at least in reason ought not apply.
The uncontroverted testimony of Mr. Smith removes paragraph a. of § 422.232 from consideration. This is the paragraph which defines as advertising "all material for the publication of which a valuable consideration is paid, accepted or promised;" followed by illustrations of the kinds of such material that the drafter of the regulation had in mind. Mr. Smith stated that Petitioner does not pay Storer or the networks for the program information nor do Storer or the networks pay Petitioner for publishing it. The networks furnish this information to guide companies, including T.V. Guides and the two Phoenix newspapers. The networks furnish this information to anyone who wants it so that the listings will be produced and disseminated to the general public. Petitioner contacts the networks and asks for their programming. Petitioner then puts this information, for which nothing is paid, into a computer and produces it. A different network, if asked to do so, would supply its program listings to Petitioner which, if it had the space available, could publish it in the same issues of Cableday that carry the current contents. (Tr. 107) The point of the foregoing review of testimony is that program listings as they appear in Cableday are not advertising even by Respondent's definition under DMM § 422.232a. because that definition excludes matter for the publication of which no valuable consideration is paid, accepted, or promised. Respondent's witness did state that in his view there is valuable consideration that flows to Petitioner in the form of the subscriptions which Storer buys, the bulk copies which it purchases, and the provision of a ready-made market for the publication. These items are contractual matters which must be presumed to have been worked out at the time of the negotiation of the Agreement of September 14, 1982. In any event, there is no support in the record for the statement of Respondent's witness.
The first sentence of DMM § 422.232b. is rendered inapplicable to this proceeding for the same reasons, discussed above, that are dispositive of paragraph a. of that section.
Paragraph b. provides in its second sentence that:
"Articles, items, and notices in the form of reading matter inserted in accordance with a custom or understanding that textual matter is to be inserted for the advertiser or his products in the publication in which a display advertisement appears, are deemed to be advertising."
It has been noted earlier that in paragraph 11(a) of the Agreement Petitioner agrees to provide to Cable in each issue, free of charge, one full page to use as Storer desires, and one full column for editorial comments. The evidence of record in this case, however, is that Storer has never used the column thus provided for it. (Tr. 75) It follows that there are not, and there have never been any "Articles, items, and notices in the form of reading matter inserted in accordance with a custom or understanding that textual matter is to be inserted for the advertiser or his products in the publication ***." Accordingly, the second sentence of § 422.232b. is likewise academic insofar as this proceeding is concerned since it provides no support, and is irrelevant to Respondent's charge that Cableday is ineligible for second-class mail privileges.
Related to the instant question is paragraph 10 of the contract, or Agreement, between Petitioner and Storer in which it is provided that --
"The editorial content, advertising format and style will be established by CP, with the consensus of Cable, whose recommendations will weigh heavily in any decision and not discriminately deny CP necessary latitude to provide the service." (Ex. R-5)
Asked to comment on any action taken by Storer based on this part of the contract Ms. McDonnell said:
"Particularly the editorial comments, there were times initially when the editorial comment was very broad about television in very general terms. We had encouraged Cableday to please talk about the upcoming movies and some of the things that were going to be on cable to localize their editorials if they could." (Tr. 15)
On cross-examination, it was developed that Petitioner adopted Ms. McDonnell's suggestion and did start to include some editorials that pertained to some features that were coming attractions on cable. Her suggestions were of a very general nature and, while it appeared that Petitioner at times talked about movies, she was not always satisfied with the editorials that appeared in the publication. (Tr. 18-19) None of the above matters constitute "reading matter inserted in accordance with a custom or understanding that textual matter is to be inserted for the advertiser or his products in the publication." The request is not sufficiently peremptory, no frequency is specified, and no penalty is provided for failure to comply with the request, and, more importantly, there is no "custom or understanding." On this point, the Executive Editor of Cableday was asked whether he woudl print a letter that was critical of Storer if Storer asked him not to print it. His reply was that he "would argue a lot and probably still print it." (Tr. 39)
As previously noted Petitioner furnishes Storer one full page to use as Storer desires and one full column, never used by Storer, for editorial comments. (Ex. R-5, par. 11; Tr. 75) There are two principal ways in which the free page in each issue is utilized. One way is as a generic reinforcement encouraging readers to subscribe to Storer Cable rather than to its competitors. Another way the page is used is for upcoming, particular, special programs which Storer would, itself, advertise on cable. Still another phase of Storer's advertising activity comes about by what are known as "co-op" ads, paid for with money furnished by programmers, of which Home Box Office (HBO) is one example. The programmers, at times, have their own special promotions. There are some times when several such advertisements of different sizes appear in Cableday and there are times when there is only one co-op advertisement. Ms. McDonnell is not required to Confine Storer's advertising to Cableday, and at times she chooses to use radio. The format or copy of the advertisement comes from the programmer or out of Storer's corporate headquarters in Miami. (Tr. 22) Along with the foregoing information there must also be kept in mind the limited percentage of the publication that consists of advertising, of which an even more limited portion is Storer's advertising. (Supra, pp. 8-9)
The last two sentences of DMM § 422.232b. deal with selfadvertising by newspapers and periodicals, on the one hand, and, on the other hand, with public sesrvice advertisements for which no consideration is paid. Further discussion of these sentences is unnecessary since they are not relevant to the issues of this case.
Nothing has been suggested by counsel nor has anything been found in the record that leads to the conclusion that the T.V. program listing as it is presented in Cableday Magazine reasonably may be defined as or equated with "advertising" as that term has long been generally known and understood, or even as it is defined in DMM § 422.232. Advertising is advertising, and a program listing, with occasional, brief, descriptive resumes of certain special features (and even a few filler ads and short articles), is information of a public character, much of which is devoted to education and to the entertainment industry, and in which there frequently are presented subjects from many areas of interest including literature, the sciences, art and other expressions of the scope and capability of the mind of man.
This is not to say that any publication with program listings contained in it is entitled to second-class mail privileges. It is intended to say that no publication, otherwise qualified as second-class mail matter, is to be denied recognition as such because it contains a program log of the quality, quantity and general character as that contained in Cableday.
The proposed denial must be set aside for additional, but different reasons which will be briefly stated.
1. Section 552 of Title 5, United States Code (Adm. Proc. Act June 11, 1946, ch. 324, § 3, 60 Stat. 238, as amended) contains, among others, the following provisions:
(a) Each agency shall make available to the public information as follows:
(1) Each agency shall separately state and currently publish in the Federal Register for the guidance of the public-- * * *
(D) substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the agency; and
(E) each amendment, revision, or repeal of the foregoing.
Except to the extent that a person has actual and timely notice of the terms thereof, a person may not in any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal Register and no so published. For the purpose of this paragraph, matter reasonably available to the class of persons affected thereby is deemed published in the Federal Register when incorporated by reference therein with the approval of the Director of the Federal Register.
(2) Each agency, in accordance with published rules, shall make available for public inspection and copying-- * * *
(B) those statements of policy and interpretations which have been adopted by the agency and are not pub lished in the Federal Register; and * * *
unless the materials are promptly published and copies offered for sale. * * *
A final order, opinion, statement of policy, interpreta tion, or staff manual or instruction that affects a member of the public may be relied on, used, or cited as precedent by an agency against a party other than an agency only if--
(i) it has been indexed and either made available or published as provided by this paragraph; or
(ii) the party has actual and timely notice of the terms thereof. (Emphasis supplied)
* * *
2. It has been pointed out that Respondent is asserting for the first time its determination that program listings are advertising. (Tr. 133)
3. The determination stated in 2, above, is a new policy or interpretation.
4. The new policy or interpretation has not been published in the Federal Register.
5. The new policy or interpretation has not been incorporated by reference in the Federal Register.
6. The new policy has not been indexed and either made available or published as provided by 5 U. S. Code § 552(a)(2)(i) and (ii).
7. The Petitioner in this case had no actual or timely notice of the new policy or determination - in fact, Petitioner had no notice at all of the new policy or interpretation until the Respondent's witness stated it at page 133 of the transcript, near the close of the hearing.
8. If Respondent prevails in this proceeding, Petitioner will be "adversely affected by, a matter required to be published in the Federal Register and not so published," all contrary to the provisions of 5 U.S.C. § 552(a)(1).
The rulings made thus far in this proceeding are dispositive of the entire matter, but it is appropriate briefly to discuss the remaining grounds on which the subject proposed denial is based.
The first of the remaining reasons asserted in the letter of January 23, 1984 refers to DMM § 422.231(b), under which there are excluded from eligibility for second-class mail privileges--
"Publications owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of any other business or calling of those who own or control them."
On the subject of ownership and control of Cableday, the testimony of Storer's witness is now summarized. Storer is not in the publishing business at all, its only business is in cable T.V. and as a part of Storer Broadcasting, which has a television station. In terms of the publication of Cableday Magazine, Storer does not require Cableday to submit its articles and editorials to Storer for approval prior to publication. Storer has no control over the printing in Cableday of Letters to the Editor. In an appropriate instance, Storer might write to comment on or reply to a Letter to the Editor that was critical of Storer. Storer does not now have, nor did it ever have, an ownership interest in the Petitioner.
Cableday prints broadcasting information for stations which are not carried by Storer. Petitioner has carried articles about cable programming that was not on the Storer system. Storer's infrequent suggestions that Cableday editorials contain some comments about upcoming movies and Cableday's response thereto previously have been discussed. Nothing in the Agreement prevents Cableday from contracting with other cable systems for the sale of its magazine. It is the witness's view that Storer has no control over what goes into Cableday Magazine prior to the time it is published. (Tr. 12 - 18)
Albert J. Smith, President and Publisher of Cableday Publishing Company, and his brother own the company. No other person or organization owns any stock or any rights to purchase stock in the company. Neither Storer nor any other cable TV system or organization has had any ownership interest in Cableday Publishing Company. Neither President Smith nor his brother owns, has owned, has or has had any ownership interest in Storer Cable or any other cable T.V. system. (Tr. 52 - 53)
Although it is stated in the contract that Cableday will not publish advertising for American Cable, Petitioner may contract with other cable systems, including American, for the publication of a magazine without objection by Storer. (Tr. 16) The reason Petitioner does not publish American Cable listings is that American now furnishes a guide to all of its subscribers. If American were to stop publishing its own guide, Petitioner might attempt to get its business and, in fact, Petitioner had been trying to get American's business for seven months prior to the hearing.
A comment that is revealing on the subject of the control that Storer has over the contents of Cableday is the remark by Petitioner's Executive Editor that if Storer asked him not to print a particular letter that was critical of Storer, he would "argue a lot and probably still print it." (Tr. 39)
All of the foregoing remarks on the subject of ownership and control go to make a clear record of mutual independence. This statement is buttressed by Petitioner's President when he said that, other factors remaining the same, the continued existence of
Storer is not necessary to Petitioner's continued existence. In fact, Mr. Smith stated that if, given the same circumstances, Storer should go out of business, Petitioner "probably would make a profit." (Tr. 110)
There is no persuasive evidence in this record of the existence of the situation proscribed by DMM § 422.231b.
Respondent alleges that Cableday is somehow in contravention of DMM § 422.231c. because it consists "*** principally of advertising and articles about advertisers in the publication."
It previously has been held that the largest segment of Cableday Magazine is the one containing the rolling log, or program listings. Similarly, it has been found that, as presented in Cableday, this segment of the publication is not "advertising," either as that term is understood and used in common parlance, or as that term is defined in DMM § 422.232. Since it is physically impossible for a publication, or anything else for that matter, to consist principally of two separate and distinct kinds or types of material, it is impossible that Cableday violates DMM § 422.231c. for the reason that non-advertising matter predominates in the publication.
Finally, Respondent asserts that Cableday is not entitled to second-class mail privileges because it falls within that class of publications described in DMM § 422.231e. as--
"Publications published under a license from individuals or organizations and that feature other businesses of the licensor."
Webster's Third New International Dictionary Unabridged (6th Ed.) 1968 defines "license" as
"1: permission to act Storer Communications nowhere claims to have, or be, a competent authority which in accordance with law may grant (or deny) Petitioner the right or permission to engage in the business of publishing. Storer and Petitioner have entered into an Agreement under which the parties have bound themselves to do certain things for themselves and for each other in exchange for certain considerations satisfactory to both, and, in the course of performance
of its part of the Agreement, Petitioner will engage in the business or occupation of publishing under a right or permission previously granted to it by a competent authority in accordance with law. The license authorizes Respondent to do that which the Agreement indicates Petitioner and Storer want to accomplish. Both the license and the Agreement are necessary for the above objective, but they are two types of concepts and documents which are intended to serve separate, disparate, distinct, individual, independent, unlike, dissimilar, varied and diverse purposes. Storer has not and can not license Petitioner to publish a TV guide.
Cableday is not a publication of the type forbidden secondclass mail entry by DMM § 422.231e.
1. Cableday Magazine is a general publication originated and published for dissemination of information of a public character. It is not designed primarily for advertising purposes. The rolling log or program listing of TV programs as it appears in Cableday Magazine is not advertising as that term is generally used and understood, or as it is defined in DMM § 422.232.
2. Even if Cableday Magazine were primarily designed for advertising purposes, it would be necessary to set aside the Director's decision set forth in his letter of January 23, 1984, because it is predicated upon a new policy or interpretation of what constitutes advertising, which new policy or interpretation was not published in nor incorporated by reference in the Federal Register, and of which new policy or interpretation the Petitioner was not given the "actual and timely notice" required by § 552(a)(1) and (2) of Title 5, United States Code.
3. No person, organization, or entity other than Petitioner owns or controls Cableday Magazine. Cableday does not come within the description in DMM § 422.231b.
4. Cableday consists primarily of information of a public character presented as news or information of coming presentations at stated times on certain days of the periods covered by the particular issues. The information is presented in such a way as to be readily ascertainable not only chronologically, but also by identification as to the type of programs to be shown. Cableday does not come within the type of publication described by DMM § 422.231c.
5. Cableday is not published under a license from Storer or any other unauthorized source; hence, it is not a publication of the type described in DMM § 422.231e.
1. Findings of Fact 1 through 5, above, are incorporated herein by reference as fully as if repeated here at length.
2. The Director's decision stated in his letter of January 23, 1984, to the Petitioner, in which the Director proposed, subject to the outcome of this proceeding, to deny Petitioner's application for second-class mail privileges for the publication Cableday Magazine is hereby set aside.
3. The application of Cableday Publishing Company for secondclass mail privileges for the publication of Cableday Magazine is granted.