The following is a perspective by postal commentator Gene Del Polito. The views expressed are the author's.

Abstract: The Postal Service and policy makers find themselves confounded by the confusion resulting from the use of two dialects of the same language based on a perpetuation of a PRC fiction that single-piece and presort First-Class Mail are both a part of one subclass, rather than two distinctively different subclasses. The matter can be resolved simply by instructing the USPS to provide its ratemaking data based on CRAs generated for every separately scheduled rate, and by giving the USPS sole authority to define what is and what isn't a subclass.

I grew up in a home in which Italian as well as English was one of the languages spoken in the house. But while my mother and father would often speak to each other in Italian, they would not teach me or my brothers the language, because they wanted us to "grow up American." Consequently, it was a secret code they kept all to themselves. Now, my mother and father didn't speak what some would call Tuscan Italian, the official language of Italy. Rather, they spoke dialects that were particular to their familial points of origin. For my mother, that was Sicilian; for my father, it was Neapolitan.

While the dialects are close, there are some differences. And every once in a while my mother or my father would use a word or phrase that was either unfamiliar to the other or that had some different subtler meaning. It was a real hoot to see them go back and forth on the matter of difference until one of them would break out in clear English exclaiming: "Who ever taught you Italian?" Yes, I came from a family divided by two dialects of the same language.

Now, you would think that once I reached adulthood, this fascinating experience would have evaporated from memory. Except, now, as an adult, I find myself a member of a community that often finds itself confounded when it insists on using two dialects of the same language. I'm talking, of course, about the "dialects" that form the jargon of the postal community. You can see the confusion everywhere. It virtually litters the landscape of the postal reform debate, particularly when the topic is mailer worksharing.

This dialectical confusion stems from the fact that the U.S. Postal Service (USPS) does not have the authority to define (i.e., classify) its scope of services. Rather, that is a responsibility that is shared with the Postal Rate Commission (PRC), whose rules largely shape American postal morphology. Under current PRC rules, the foundation for postal ratemaking is based on mail subclasses. These subclasses serve as the fundamental elements upon which the determination of costs and revenues are made. All other determinations, such as the rates the USPS charges for its various categories of mail, flow from the more preeminent definition of subclasses.

Mail categories, in today's postal jargon, are defined by various kinds of worksharing activities in which mailers engage that substitute private sector for public sector labor at some lower cost. These categories are manifested as "discounted" rates that are part of the Domestic Mail Classification Schedule, which are meant to reflect the savings, or costs the USPS avoids, as a result of mailer worksharing. The size of the discount often is expressed as a percentage of the avoided costs that are "passed through" to mailers in the rates they pay. A pass-through of 100% means that the rates mailers pay are reduced by an amount that reflects 100% of the costs that are avoided by the USPS from mailers undertaking work that ordinarily would have to be performed by postal labor. Probably the best example of one form of worksharing is the presorting of mail done by mailers before mail is entered for USPS processing and distribution.

Today, however, there are some rates for which the cost avoidance pass-throughs exceed 100%. You might wonder how this could be. After all, a pass-through greater than 100% seems to suggest a postal rate that reflects much more than just the savings that resulted from mailer worksharing.

Right? Well, believe it or not, it's actually wrong. After all, if one could not definitively prove that the worksharing undertaken by mailers was not leaving the Postal Service in some better place, the Postal Rate Commission would never approve the rates. How, then, is it possible to justify granting mailers rates that are determined by the PRC to reflect more than 100% of their worksharing avoided costs?

Understanding this becomes a little easier once you recognize that problem of two dialects of the same language. Indeed, the dialects that are used to discuss the cost and rate determinations of subclasses is different than the dialect used for rate categories.

The Postal Service typically generates what some within the private sector might liken to a profit-loss statement through its Cost and Revenue Analysis (CRA) reports. CRAs, however, are routinely generated only for data collected at the subclass level. Rate categories within subclasses typically are not distinguished by category-specific CRAs.

The CRA provides exactly the kind of data which reform architects are seeking under the guise of "financial transparency." The CRA accurately details the costs associated with a service and the mark-up that's needed to ensure the service is fully compensatory.

The trouble is that since CRAs are generated (as a result of long-standing practice and agreement between the Postal Rate Commission and the Postal Service) at the subclass level only, another dialect must be used to round out any discussion of ratemaking at the rate category level. That dialect is cost avoidance. Here's where sound postal policy making becomes engrossed in some of the miscommunication and disinformation that has become a part of the postal reform debate.

To illustrate this further, let's take the case of First-Class Mail. Most of First-Class Mail can be described as letters (including flats) and cards. Some is categorized as "single-piece", some as "presort."

Despite efforts by the Postal Service to have resolved otherwise, as far as the Postal Rate Commission is concerned, single-piece First and presort First are part of the same subclass. This is true even though single-piece and presort First-Class Mail are marked by characteristics that clearly would have described two distinct subclasses, not one.

Over the years, there's been a running discussion between the USPS and the PRC about this matter. While the Commission has not relented on its insistence that single-piece and presort remain classified as a single subclass, it has allowed the Postal Service to present in its rate filings data collected for single-piece and presort First as if they were two distinctive subclasses. Consequently, there are CRAs for single-piece First which are distinct from the CRAs for presort First.

Yes, the Postal Service knows clearly the full measure of the costs that go into each CRA. Yes, the Postal Service is able to explain quite adequately the compensatory nature of single-piece and presort markups. And, yes, these data provide the measure of "transparency" policy makers have been seeking.

The trouble comes in when, within the context of a rate case, the PRC presents its public explanation as to why the rates between single-piece and presort First are different. Does the PRC say that the rates are appropriate for two different subclasses. Noooo. They tell the world that the difference between the two rates for single-piece and presort are the result of "discounts" provided in recognition of mailer worksharing.

Here's your problem, however, when you use the cost avoidance dialect to explain a phenomenon that's better described by the CRA dialect. The cost avoidance dialect requires you to describe every discrete event associated with worksharing along with a very precise and discrete calculation of the savings resulting from that effort.

Now, this would be no great task, if the Postal Service's data systems were finely calibrated enough to make such discrete distinctions. The fact is, they're not. Even worse, some of the cost avoidances result from synergies that are a part of the different ways in which single-piece and presort First-Class Mail are prepared, entered, and distributed in the mailstream -- synergies that are not quite as easy to distinguish in cost avoidance lingo.

Yet, because the USPS provides excellent CRA data that clearly show the cost and markup differences that are appropriate for single-piece and presort First-Class, there is no reason to fear that the rates suggested by cost and revenue analysis are wrong, or, unfairly give presort mailers advantages to which they aren't rightly entitled.

On the other hand, since the USPS' cost-avoidance data systems are not sensitive enough to discretely identify every element of worksharing and the precise dollar savings associated with that work, the "discount" given to presort sometimes must be defined as something greater than 100% of the avoided cost simply to make the rate comport with the CRA-based determination.

In other words, the Postal Service, and policy makers, now find themselves confounded by the confusion resulting from the use of two dialects of the same language based solely on the perpetuation of a PRC fiction that single-piece and presort First are part of one, rather than two distinctively different subclasses.

How can this matter be resolved? Very simply by instructing the USPS to provide its ratemaking data based on CRAs generated for every separately scheduled rate. How can we resolve the dilemma of what the USPS might say is a subclass and what the PRC might say isn't? Very simply by giving the USPS sole authority to define what is and what isn't a subclass, while retaining for the PRC the right to review the rates charged each subclass to ensure they comport with the "do not subsidize" mandate.

The result would be that we no longer would have to discuss rates as "discounts." Instead, they would simply be discussed as "rates" based on clearly defined costs and markups.

Voila, the problem of two dialects goes away, and peace can return to the postal household. Now, if there only were a similarly convenient method to eliminate the lingustic strife that was part of the Del Polito household.