Governors of the United States Postal Service v. United States Postal Rate Commission

Opinion for the Court filed by Circuit Judge ROBB.

Dissenting opinion filed by Circuit Judge J. SKELLY WRIGHT.

ROBB, Circuit Judge:

In this case we must resolve a dispute between two governmental agencies, the United States Postal Service and the Postal Rate Commission. Both these agencies have responsibilities under the Postal Reorganization Act, Pub.L. 91-375, 84 Stat. 719 (1970), codified at 39 U.S.C. § 101 et seq. (1976). Pursuant to that statute the Postal Service submitted to the Rate Commission a mail classification proposal to add to the Domestic Mail Classification Schedule a new “electronic mail” service known as “E— COM”, an acronym for Electronic Computer Originated Mail. After the hearing required by sections 3623 and 3624 of the Act, 39 U.S.C. §§ 3623, 3624, the Commission transmitted to the Governors a decision recommending that the E-COM service be designated as “experimental” with a fixed terminal date. The Board of Governors contends on this appeal that the Commission has no authority to make such a recommendation. We hold that the Board is right.

By passing the Postal Reorganization Act in 1970 Congress abolished the old Post Office Department and created in its place the United States Postal Service and the Postal Rate Commission. One of the principal reasons for this sweeping revision of the postal establishment was inadequate or diffused management authority in the Post Office.

In 1970 postal management was beset with the problem of inadequate authority to perform the task of delivering the mail. For example, the practices and procedures of local post offices were often dictated by antiquated statutes and rules. Report of the President’s Commission on Postal Organization, Towards Postal Excellence 18, 34 (1968) (President’s Commission Report). Postmasters and other postal employees were often selected because of political loyalty rather than merit, id. at 40 — 41. The decision to build a postal facility was made by Congress, id. at 145. See H.R.Rep.No. 91-1104, 91st Cong. 2d Sess. 5 (1970), U.S. Code Cong. & Admin.News 1970, p. 3649. Management decisions were shared by eight different governmental agencies, dividing up finance, transportation, and other functions. See Note, The Postal Reorganization Act: A Case Study of Regulated Industry Reform, 58 Va.L.Rev. 1030, 1032 (1972). In short, postal managers were given broad duties but their powers were insufficient to enable them to fulfill those duties. See President’s Commission Report, supra at 33-34, 43 — 46; H.R.Rep.No.91-1104, supra, at 5.

The Postal Reorganization Act of 1970, an outgrowth of the President’s Commission Report, was designed to free postal management from entangling red tape and to concentrate management authority so as to provide an efficient and economical postal system. See H.R.Rep.No.91 — 1104, supra, at 5-6; S.Rep. 91-912, 91st Cong., 2d Sess. 2, 4-5 (1970). To accomplish these purposes the Postal Service was established and charged with the duty to “plan, develop, promote, and provide adequate and efficient postal services at fair and reasonable rates and fees.” 39 U.S.C. § 403(a). Among other powers the Postal Service was given the power “to adopt, amend, and repeal such rules and regulations as it deems necessary to accomplish the objectives of this title”; to enter into and perform contracts; to acquire personal or real property; to construct, operate, lease, and maintain buildings and facilities; and to determine the need for post offices, and postal and training facilities. 39 U.S.C. § 401(3), (5), (6); § 404(a)(3).

The Postal Service is governed by an eleven-member Board of Governors, nine of whom are appointed by the President. 39 U.S.C. § 202(a). One of the two remaining members, the Postmaster General, is appointed by the nine governors. 39 U.S.C. § 202(c). The eleventh member, the Deputy Postmaster General, is appointed by the nine governors and the Postmaster General. 39 U.S.C. § 202(d). The Governors oversee the Postal Service as it plans, develops, promotes, and provides mail service throughout the United States. 39 U.S.C. §§ 202(d), 403(a).

The Postal Rate Commission was created as an independent establishment and charged with the duty of making recommendations to the Governors of the Postal Service with respect to rate, fee and classification matters. 39 U.S.C. §§ 3601, 3622, 3623 and 3624.

The Commission is composed of five commissioners appointed by the President. 39 U.S.C. § 3601. It is empowered, upon request from the Postal Service, to submit to the Service a recommended decision on changes in rates or fees. 39 U.S.C. § 3622. Upon such a request or on its own initiative, the Commission may submit a recommended decision on changes in the mail classification schedule. 39 U.S.C. § 3623(b).

In considering Postal Service requests for recommended decisions on rates, fees, and classifications under sections 3622 or 3623 the Commission is required to‘accord to the Postal Service, users of the mails, and an officer of the Commission representing the public, an opportunity for a hearing under 5 U.S.C. §§ 556-57. 39 U.S.C. § 3624(a), (b). The recommended decision which the Commission submits must address specifically the statutory criteria established under 39 U.S.C. § 3622 or § 3623. 39 U.S.C. § 3624(d).

Upon receiving a recommended decision of the Commission the Governors have several options. They may approve the Commission’s recommendation and order it to take effect, 39 U.S.C. § 3625(b), or reject the decision and return it to the Commission for reconsideration. 39 U.S.C. § 3625(d). As an alternative the Governors may, under protest, allow the recommended decision to take effect and either seek judicial review under 39 U.S.C. § 3628 or return the decision to the Commission for reconsideration and a further recommended decision. 39 U.S.C. § 3625(c). If the Governors return the decision for reconsideration they may seek judicial review of the Commission’s further recommended decision. 39 U.S.C. § 3625(c) & (d).¹

At issue in this case is the scope of the Commission’s authority in recommending decisions to the Governors pursuant to 39 U.S.C. § 3624. As we have said, the controversy arises out of a postal service proposal to enter the field of electronic mail and the Commission’s recommended decision in response to that proposal.

As its name implies, Electronic Computer Originated Mail, or E-COM, is essentially a bulk mail service, whereby large quantities of computer-generated letters can be sent out. The messages need not be identical, because the computer can handle the insertions of differing addresses, amounts due (e. g., on bills) or other items from message to message. Upon reception at a specially equipped post office the electronic impulses representing the messages are converted by a printer into hard copy, placed in envelopes, and delivered as letters in the first class mail.

On September 8, 1978 the Postal Service requested the Commission to make and submit to the Governors a recommended decision on a change in the classification schedule to establish electronic computer originated mail as a new subclass of first class mail, known as E-COM. The Postal Service proposal contemplated a sole-source contract between the Postal Service and Western Union Telegraph Company. Under this contract the Service would accept E-COM messages at the site of Western Union’s computer in Middletown, Virginia, and the messages would then be transmitted to one of twenty-five specially equipped post offices, known as Serving Post Offices or SPO’s where they would be printed, inserted in envelopes and delivered as first class mail.

A number of intervenors appeared in the case, including the United States Department of Justice, the Federal Communications Commission, and the National Telecommunications and Information Administration of the Commerce Department, as well as a number of telecommunications firms. The Officer of the Commission, representing the interests of the general public pursuant to 39 U.S.C. § 3624(a), proposed an alternative system which he considered superior to the Service’s plan. His plan was to distribute the data-processing equipment among the twenty-five specially equipped post offices, rather than limit it to Western Union’s computer site. He believed his system was superior to the Service’s plan because it contemplated free entry into the telecommunications phase by any qualified carrier and permitted the use of more modern and less expensive computers and lower rates.

After extensive hearings on the record the Commission recommended the Officer’s proposal in preference to the Service’s plan. The Commission also concluded that whatever system was chosen E-COM should be recommended as an “experiment”, to provide for a resolution of questions which the Commission thought were left unanswered on the record. The Commission said that “the volumes to be expected for electronic mail are still the subject of speculation”, and that it was also necessary to develop “a means for assuring fair and equal access to the postal service delivery system by all carriers willing and able to participate.” Finally, the Commission agreed with its officer that “market testing” of the rapidly developing technology was necessary, together with further exploration of “technical issues regarding privacy and mail security”. (J.A. 600-602) The Commission thought that

[ejxperimental approval ... is consistent with the regulatory practice approved in such cases as United Telegraph Workers v. FCC, 436 F.2d 920 (D.C.Cir.1970) and American Tel. & Tel. Co., et al. (Data-phone), 50 F.C.C.2d 501 (1974). In our own case, we think that our general authority to “take any . .. action . . . necessary and proper” to the execution of our functions under chapter 36 (§ 3603)² amply authorizes the recommendation of the electronic mail program as an experimental one of limited duration.

(J.A. 605) [Footnote supplied] Accordingly the Commission recommended that the classification schedule for first class mail be amended to include the following:

Electronic Computer Originated Mail (E-COM) is an experimental service which will commence at such time as the necessary facilities are available and shall terminate on October 1, 1983, unless before that date the Governors of the Postal Service shall have acted, following a recommended decision under 39 U.S.C. § 3624, to (i) extend the experimental period for a further definite time, or (ii) institute E-COM as a permanent service offering.

(J.A. 617)

On February 22, 1980 the Governors of the Postal Service rejected the Commission’s recommended decision. Although the Governors stated that they concurred “in the basic structure” of the recommended decision, they objected to the Commission’s designation of E-COM as an experimental service. (J.A. 714) The Governors explained

The Postal Rate Commission shall promulgate rules and regulations and establish procedures, subject to chapters 5 and 7 of title 5, and take any other action they deem necessary and proper to carry out their functions and obligations to the Government of the United States and the people as prescribed under this chapter. Such rules, regulations, procedures, and actions shall not be subject to any change or supervision by the Postal Service.

Fixing a terminal date for the evaluation of the viability of such a new, important, and expensive service may well affect the short-term effort and seriously impair the chances of ultimate success. Further, there appears to be no statutory authority for this procedure. Although the law clearly permits the PRC or the Postal Service to initiate changes in the DMCS [Domestic Mail Classification Schedule], effective dates for the implementation of rate and classification decisions are explicitly the responsibility of the Board of Governors. The law is silent on ending dates.

From a practical point of view, the investment risks for the Postal Service, communications carriers, and customers, and the time needed to obtain satisfactory operation of the system, promote business, and obtain conclusive favorable results militate against a specified time limit for E-COM.

(J.A. 716) The Governors directed the Postal Service to resubmit the matter to the Commission, requesting modifications.

On April 8, 1980 the Postal Rate Commission issued its reconsidered recommended decision. The Commission adhered to its position that E-COM should be designated as an experimental service. Conceding that the statute contains no “specific provision .. . permitting the approval of proposals on an ‘experimental’ basis of limited duration” the Commission argued that “situations have arisen in the work of other regulatory agencies — none of them endowed by statute with explicit power to authorize time-limited experiments — in which the need to gain more information regarding a potentially beneficial new service has led to the issuing of an order similar to ours. The courts have approved this practice. See, e. g., Delta Air Lines, Inc. v. CAB, 455 F.2d 1340 (D.C.Cir.1971); American Airlines, Inc. v. CAB, 359 F.2d 624 (D.C.Cir.1966); Network Project v. FCC, 511 F.2d 786 (D.C.Cir. 1975).” (J.A. 731-32) The Commission stated “[w]e are sympathetic to the potential problems that an unexplained ‘experimental’ designation could present for management and marketing personnel who must promote the new service and for customers who must commit some of their own resources to use it.” (J.A. 733) Neverthe-' less, the Commission said its “use of the terms ‘experiment’ and ‘experimental’ was to insure that an adequate opportunity for later review of the costs and characteristics of the E-COM system will be available, and, at the same time, to assure potential customers, connecting carriers, and the Service itself, that the Service’s involvement in electronic mail is not a short-lived phenomenon.” (J.A. 733) [Emphasis in original] The Commission extended the experimental period one year, from 1983 to 1984. The two Commissioners who dissented from the first recommended decision continued their dissent.

On August 15, 1980 the Governors allowed the Commission’s further recommended decision to take effect under protest and petitioned for review of the decision in this court pursuant to 39 U.S.C. §§ 3625(d) and 3628.³ In announcing their decision to seek review the Governors asserted that the Postal Rate Commission’s decision to designate the E-COM system as experimental was “far outside the Commission’s statutory authority.” (J.A. 775) Continuing, the Governors said:

Under the Postal Reorganization Act, the Commission has a very important, but expressly limited, role. Its fundamental responsibilities are in the areas of recommending rates and classifications, although it also performs some advisory and hearings functions under certain other specified conditions. Unlike other administrative agencies, it does not have a broad power to regulate. It is, instead, an agency operating within a statutory .framework that envisions explicit roles for two other units, namely the Postal Service and the Governors. See Dissent of Commissioner O’Doherty, Postal Rate Commission, Recommended Decision Upon Reconsideration at 1 — 2; United Parcel Service v. United States Postal Service, 455 F.Supp. 857, 874 (E.D.Pa. 1978), aff’d 604 F.2d 1370 (3d Cir. 1979).

(J.A. 781) In Commissioner O’Doherty’s dissent, referred to by the Governors he urged them “to repel the majority’s continued attempts to arrogate the basic statutory powers of Postal Service management.” (J.A. 770-71)

Thus we are presented with a question of law: when the Postal Service submitted to the Postal Rate Commission a proposal to enter the electronic mail field, did the Commission have authority under the statute to approve the program as an experiment of limited duration only?⁴

Examination of the background and legislative history of the Postal Reorganization Act does much to make plain the answer to our question.

As we have noted the origin of the Postal Reorganization Act was in the Report of the President’s Commission. This Commission, consisting of ten members, was headed by Frederick R. Kappel, retired chairman of the Board of Directors of the American Telephone & Telegraph Company.⁵ The Commission found that

[t]he Post Office’s principal failure is one of management. . . . The organization of the Post Office as an ordinary Cabinet department guarantees that the nominal managers of the postal service do not have the authority to run the postal service .... A hodgepodge of postal laws two hundred years in the making constrains managerial judgment and initiative .... A diffusion of management authority at the top distinguishes the Post Office from other enterprises. In appearance many people are responsible for running the Post Office; in fact, no one is.

Such fragmentation of authority comes not from a conscious determination that this is the best way to run the Post Office. Most Government administration is properly subject to a series of controls which in the aggregate foster [sic] caution rather than innovation.

The continued application of these restrictions precludes responsible business management in the Post Office. The absence of responsible management having normal operating authority is, we believe, the primary cause of the deficiencies noted ....

President’s Commission Report, 33, 34. [Emphasis in original]

The Commission recommended that Congress charter a government-owned corporation to operate the Postal Service and that “[f]ull management responsibility and authority ... be vested in the Board of Directors” of the corporation. “The essential element for the success of the Postal Corporation” said the Commission, “is a Board of Directors with full authority for postal management. . . . Whatever the structure of the Board, the important requirement is that it be given the authority to run the postal system. ...” President’s Commission Report, 55-56. [Emphasis in original]

The Report of the Senate Committee on Post Office and Civil Service on the bill which became the Postal Reorganization Act acknowledged the “helpful” background information furnished by “the views and findings appearing in the four-volume report of the President’s Commission on Postal Organization”; and like the Commission the Senate Committee referred to the tangle of postal laws that made it impossible for the Postmaster General to “function in the public interest as a responsible manager”. S.Rep.No.91-912, 91st Cong., 2d Sess. 2 (1970). Although differing from the recommendations of the President’s Commission in some respects, the Senate Report echoed the Commission by stating (p. 5):

The committee recommends that all authority for operations be vested in the Board of Governors of the U.S. Postal Service. . . . ******

The Board of Governors shall have broad authority and shall not, except as specified, be subject to Federal laws dealing with contracts, property, the civil service system, the Budget and Accounting Act of 1921, apportionment of funds, and other laws which in most instances apply to Government agencies and functions. Among other powers, the Board may issue rules governing the Postal Service, provide for the collection and delivery of mail, establish postal rates and mail classification, establish postal facilities and services, investigate postal offenses, sell property, borrow money, hire and direct its employees, and take such other actions as it deems necessary and proper to operate the Postal Service.

Turning to the Postal Rate Commission the Committee said:

The Rate Commissioners shall be independent of the Board of Governors. . . . The committee envisions the Commission to be an integral part of the postal service, to be a true partner of the Board of Governors in every aspect of postal operations. If a bureaucratic struggle between the Board and the Commissioners develops, then the whole theory of independent ratemaking judgments will have failed and the Congress will probably be called upon to revise the system. But if the individuals appointed to the Board on the one hand, and the Commission on the other, recognize the constitutional and legal responsibilities of their position and work together to achieve a truly effective postal service, then the independence of the Commission will serve a vitally important function by permitting them to view the overall impact of postal costs with a degree of detachment which the committee considers vitally important to preserve the public interest and public investment in the largest civilian agency of the Federal Government.

The committee believes that if the Board of Governors were authorized to control revenues, it would place them in a position of some businesses in the private sector of the economy — pricing with one eye er [sic] over their shoulder to the effect of the cost of an upcoming labor-management agreement.

S.Rep.91-912, supra, at 13.

We think this history demonstrates the intention of Congress to vest in the Board of Governors exclusive authority to manage the Postal Service. As a “partner” of the Board the Postal Rate Commission was assigned the duty and authority to make recommendations with respect to rates and classifications.⁶ There is no indication that Congress contemplated that either “partner” would trench on the functions and prerogatives of the other; on the contrary each was to recognize and be guided by its “constitutional and legal responsibilities”. Congress did not intend that the Postal Rate Commission regulate the Postal Service; one partner does not regulate another, and authority to assist in ratemaking and classification does not include authority to interfere in management. It follows that a management decision by the Postal Service may not be overruled or modified by the Rate Commission.

This analysis of the Postal Reorganization Act of 1970 is confirmed by the action of Congress in 1976. In 1975 the House passed a bill which required the Postal Service to

keep the Postal Rate Commission fully and currently informed with respect to the operation of the Postal Service. The Postal Service shall furnish to the Commission information with respect to — (1) internal postal service management matters; (2) plans and policies of the Postal Service with respect to proposed changes in the nature of postal service; and (3) evaluations undertaken by or at the direction of the Postal Service with respect to the operation of the Postal Service.

The bill gave the Postal Rate Commission the authority to initiate reviews and hearings with respect to the activities of the Board of Governors and the Postal Service.

H.R. 8603, 94th Cong., 1st Sess. §§ 11 and 12 (1975). Reprinted in Legislative History of the Postal Reorganization Act Amendments of 1976, 33-34 (1976). These provisions were deleted from the bill as it passed the Senate. Legislative History, supra 257, 258. Thus participation by the Rate Commission in management decisions of the Postal Service was decisively disapproved. It is not the function of the Rate Commission to regulate the management of the Postal Service.

The decision to propose E-COM service on a permanent basis rather than as an experiment of limited duration was made by the Board of Governors in the exercise of their judgment and discretion as business managers. As practical managers they were aware of the difficulties that would be encountered if the program were begun only as a short-term effort. Thus, in their response to the Commission’s first recommended decision they explained (J.A. 716):

Fixing a terminal date for the evaluation of the viability of such a new, important, and expensive service may well affect the short-term effort and seriously impair the chances of ultimate success. ******

From a practical point of view, the investment risks for the Postal Service, communications carriers, and customers, and the time needed to obtain satisfactory operation of the system, promote business, and obtain conclusive favorable results militate against a specified time limit for E-COM.

This judgment was peculiarly one for management to make, yet by its recommended decision the Postal Rate Commission attempted to overrule it. We hold that by so doing the Rate Commission exceeded its authority and strayed from its ratemaking and classification powers to intrude upon the management functions of the Board of Governors.

The Commission’s recommended decision also trenches on the authority of the Governors by usurping their exclusive statutory right to determine the date on which a change in the mail classification schedule will occur. Section 3625(f) of the Act provides:

The Board shall determine the .date on which the new rates, fees, the mail classification schedule, and changes in such schedule under this subchapter shall become effective.

39 U.S.C. § 3625(f).

The Governors proposed a permanent E— COM classification. The Commission, in response, recommended that E-COM expire on October 1, 1984 unless the Governors acted in the interim to “(i) extend the experimental period for a further definite time, or (ii) institute E-COM as a permanent service offering.” (J.A. 617) In short, the Commission has arrogated to itself the power to set a specific termination date for E-COM absent action by the Governors. The recommendation of the Commission violates section 3625(f) because under this provision the Governors a lone decide when the mail classification schedule will change. The Commission cannot impose upon the Governors the affirmative responsibility to prevent change in the schedule.

Moreover, the Commission’s recommended decision also violates section 3622(a) of the Act, which states that only the Postal Service has authority to request a recommended decision on rate changes. 39 U.S.C. § 3622(a). In the E-COM proceeding, the Commission has recommended, without any request from the Service, that the E-COM rate expire on October 1, 1984. As we have held in Dow Jones & Co., Inc. v. United States Postal Service, et al., 656 F.2d 786 (D.C.Cir. 1981), the unilateral initiation of a recommended rate change by the Commission clearly violates section 3622(a) of the Act.

The Commission concedes that no statutory provision expressly authorizes its recommendation of an experimental service. (Br. for Commission at 19) It relies solely on 39 U.S.C. § 3603 which directs the Commission to “promulgate rules and regulations and establish procedures, and take any other action they deem necessary and proper to carry out their functions and obligations to the Government of the United States and the people as prescribed under this chapter.” The argument of course is based on the premise that one of the “functions and obligations” of the Commission is to make the challenged recommendation. As we have demonstrated by our analysis of the statute and its history, however, the premise is faulty; making such a recommendation is not one of the Commission’s functions or obligations.

In this court the Commission cites several cases that purportedly stand for the proposition that experimental initiatives are by implication within the general authority of agencies involved in the process of setting rates. Network Project v. FCC, 167 U.S.App.D.C. 220, 511 F.2d 786 (1975); Delta Air Lines, Inc. v. CAB, 147 U.S.App.D.C. 272, 455 F.2d 1340 (1971); United Telegraph Workers, AFL-CIO v. FCC, 141 U.S.App. D.C. 190, 436 F.2d 920 (1970); and American Airlines, Inc. v. CAB, 123 U.S.App.D.C. 310, 359 F.2d 624 (en banc), cert. denied, 385 U.S. 843, 87 S.Ct. 73, 17 L.Ed.2d 75 (1966).

The cases cited by the Commission do not support its assertion of authority to initiate experimental programs. The cases are in-apposite because they do not involve the implied authority of a regulatory agency to initiate experimental programs or services. Nor do they deal with a statute like the Postal Reorganization Act that sets up a carefully constructed system of checks and balances between governmental agencies.

In the Delta Air Lines case we dismissed a petition challenging an experimental tariff filed by Eastern Airlines with the Civil Aeronautics Board. We did not discuss the authority of the Civil Aeronautics Board to initiate a supplemental tariff, for that was not at issue. The Board merely accepted the filing as proposed by Eastern Airlines; it made no proposal itself. In the Network Project case the FCC authorized an experimental service but it based its action on 47 U.S.C. § 303(g) which directed the Commission to “provide for experimental uses of frequencies”.

Moreover, the Commission’s reliance on these cases is misplaced because it lacks the general administrative authority found in agencies such as the FCC and CAB. In United Parcel Service, Inc. v. United States Postal Service, 455 F.Supp. 857 (E.D.Pa. 1978), aff’d 604 F.2d 1370 (3d Cir. 1979), cert. denied, 446 U.S. 957, 100 S.Ct. 2929, 64 L.Ed.2d 815 (1980), the District Court rejected an analogy between the Postal Rate Commission and other regulatory agencies with broader mandates over private industry. The Court stated:

[T]he FCC, the CAB, the ICC, and other comparable regulatory bodies are really different types of agencies from the Postal Rate Commission. Nor do we think that the difference between them can be distilled in one or two specific provisions of the agencies’ statutory charters such that the presence or absence of a particular provision is determinative. A reading of the statutes relevant to [these] agencies . . . reveals a statutory gestalt according to which the regulatory agency’s control over and involvement in the affairs of the regulated industry are much more pervasive and sweeping than are the involvement and control exercised by the Postal Rate Commission.

455 F.Supp. at 874. The District Court also noted the limited role the Postal Rate Commission plays in the statutory scheme:

The responsibilities of the Postal Rate Commission are strictly confined to relatively passive review of rate, classification, and major service changes, unadorned by the overlay of broad FCC-esque responsibility for industry guidance and of wide discretion in choosing the appropriate manner and means of pursuing its statutory mandate.

Id. at 873. Given these limited statutory responsibilities, the Postal Rate Commission may not rely on the general authority of other regulatory agencies as a legal basis for recommending an experimental service. It must be able to point to a specific grant of authority. As the Commission acknowledges, however, no such provision exists.

In its brief in this court the Rate Commission argues that its authority to recommend a supplemental classification is supported by the opinion of the Circuit Court of Appeals in the United Parcel Service case. United Parcel Service, Inc. v. U. S. Postal Service, 604 F.2d 1370 (3d Cir. 1979), cert. denied, 446 U.S. 957, 100 S.Ct. 2929, 64 L.Ed.2d 815 (1980). We think the Rate Commission can take no comfort from that decision. All that the court held was that the Postal Service had no authority to establish a temporary experimental classification without submitting it to the Postal Rate Commission for a recommended decision. Id. at 1381-82.

In conclusion, we hold that the recommended decision of the Postal Rate Commission was in excess of its authority. Because the statute provides that we may not modify the decision but may only affirm it or “order that the entire matter be returned for further consideration”, 39 U.S.C. § 3628, it is ordered that the entire matter be returned for further consideration.

So ordered.

1 . The Postal Rate Commission is also assigned a role in advising the Governors on changes “in the nature of postal services which will generally affect service on a nationwide” basis. 39 U.S.C. § 3661(b). The Postal Service must request an advisory opinion from the Commission before instituting such changes. 39 U.S.C. § 3661(b). See Buchanan v. United States Postal Service, 508 F.2d 259, 262-64 (5th Cir. 1975).

A determination by the Postal Service to close or consolidate any post office may be appealed to the Commission by any person served by such office, and may be set aside if arbitrary, capricious, not in accordance with law, or unsupported by substantial evidence: 39 U.S.C. § 404(b)(5). The Commission is empowered to submit recommended decisions and make reports to the Postal Service on such complaints.

2 :"'39 U.S.C. § 3603.

3 . The dissent makes the point that the Governors accepted most of the changes in the Postal Service’s E-COM proposal which the Commission recommended, and have complained of only the one aspect of the Commission’s redesign of the proposed service. The fact is, of course, that the Governors need not protest every attempt by the Commission to exceed its authority; if the Governors think the result desirable they may accept it.

4 . The dissent says we should defer to the Commission’s interpretation of the statute. Of course there is authority for the proposition that the courts will defer to the Commission in interpreting the Act. (See dissent pp. 119-120) However, there is equally binding authority for the proposition that the courts should defer to the Postal Service in interpreting the Act. See Sierra Club v. United States Postal Service, 549 F.2d 1199, 1201 (9th Cir. 1976); Buchanan v. United States Postal Service, 508 F.2d 259, 263 (5th Cir. 1975); Ass'n of American Greeting Card Publishers, Inc. v. Governors of United States Postal Service, 157 U.S.App.D.C. 397, 404, 485 F.2d 768, 775 (1973). The court cannot defer to both and must in any event “decide all relevant questions of law”. 5 U.S.C. § 706 (1976).

5 . The other members were: Dean George P. Baker, Harvard University Graduate School of Business Administration; Vice President David E. Bell, The Ford Foundation; President Fred J. Borch, General Electric Company; David Ginsburg, Partner in Ginsburg and Feldman; Ralph Lazarus, Chairman of the Board of Directors, Federated Department Stores; President George Meany, American Federation of Labor and Congress of Industrial Organizations; J. Irwin Miller, Chairman of the Board of Directors, Cummins Engine Company; W. Beverly Murphy, President of Campbell Soup Company; and Rudolph A. Peterson, President of the Bank of America.

6 . A postal rate is the fee or price the Postal Service charges for its services. United Parcel Service v. United States Postal Service, 455 F.Supp. 857, 863 (E.D.Pa.1978) aff'd 604 F.2d 1370 (3d Cir. 1979), cert. denied, 446 U.S. 957, 100 S.Ct. 2929, 64 L.Ed.2d 815 (1980); H.R. Rep.No.91-1104, 91st Cong., 2d Sess. 19 (1970). A mail classification is a grouping of mailing matters according to size, weight, content, etc., for the purpose of assigning a specific rate or method of handling. Nat’I Retired Teachers Ass’n v. United States Postal Service, 430 F.Supp. 141, 146-47 (D.D.C.1977), aff'd, 193 U.S.App.D.C. 206, 593 F.2d 1360 (1979).