1. Implications of USPS Changes to CASS TM Certification Presented by: Kristi Kanitz, General Manager Flagship Software Ltd.

2. The Current Situation  CASS TM is required to access almost all levels of postal discounts, including  First Class Mail  Standard Mail  Periodical Mail  USPS has been slowly moving to a CASS TM system that makes it more difficult BUT NOT IMPOSSIBLE for Canadian mailers to enter the US market

3. The CASS TM Cycles Developers of CASS TM -certified software must re- certify their software each year Developers of CASS TM -certified software must re- certify their software each year These re-certifications periods are called Cycles These re-certifications periods are called Cycles We are currently in Cycle K We are currently in Cycle K Cycle L starts August 1, 2007 Cycle L starts August 1, 2007 This new cycle requires that CASS TM software validates against two additional databases: This new cycle requires that CASS TM software validates against two additional databases: Delivery Point Validation (DPV TM )Delivery Point Validation (DPV TM ) Locatable Address Conversion System (LACS Link TM )Locatable Address Conversion System (LACS Link TM )

4. Delivery Point Validation (DPV TM ): Database containing over 145 million deliverable addresses in the United States Database containing over 145 million deliverable addresses in the United States There are many valid addresses which cannot or do not receive mail There are many valid addresses which cannot or do not receive mail The CASS TM process will mark whether or not an address in the mailing list is actually deliverable The CASS TM process will mark whether or not an address in the mailing list is actually deliverable If an address is not deliverable, it cannot receive a ZIP + 4 code If an address is not deliverable, it cannot receive a ZIP + 4 code

5. Locatable Address Conversion System (LACS Link TM ) Database containing addresses converted by local municipalities Database containing addresses converted by local municipalities Most updates are 911 address conversions from rural to city-style addresses Most updates are 911 address conversions from rural to city-style addresses Also includes municipal renaming or renumbering of streets Also includes municipal renaming or renumbering of streets Updated address information is provided to the mailer through the CASS TM software Updated address information is provided to the mailer through the CASS TM software

6. The Problem DPV TM and LACS Link TM are considered highly sensitive data files and are encrypted DPV TM and LACS Link TM are considered highly sensitive data files and are encrypted Because of the sensitivity of the data and the encryption, they are not allowed to be exported from the United States Because of the sensitivity of the data and the encryption, they are not allowed to be exported from the United States This is mandated by privacy legislation and Homeland Security This is mandated by privacy legislation and Homeland Security

7. Where does that leave Canadian Mailers? To continue receiving bulk mail discounts, Canadian mailers MUST continue to use CASS TM - and PAVE TM -certified software To continue receiving bulk mail discounts, Canadian mailers MUST continue to use CASS TM - and PAVE TM -certified software Choices: Choices: 1.Discontinue US mailings 2.Outsource data work to US companies 3.Access DPV TM and LACS Link TM remotely 4.Something else?

8. Outsourcing data work to US companies Increase in cost to Canadian mailersIncrease in cost to Canadian mailers Loss of control over mailingsLoss of control over mailings

9. Outsourcing data work to US companies Increase in cost to Canadian mailersIncrease in cost to Canadian mailers Loss of control over mailingsLoss of control over mailings Accessing DPV TM and LACS Link TM remotely Requires high-speed, secure connectionRequires high-speed, secure connection Slows processing of data files, especially as file size increasesSlows processing of data files, especially as file size increases Are software vendors willing and able?Are software vendors willing and able? Software pricing issues: Higher prices for international mailers or transaction-based pricing?Software pricing issues: Higher prices for international mailers or transaction-based pricing?

10. The Bottom Line August 1, 2007 is not the end! August 1, 2007 is not the end! There are vendors willing to supply software with remote access to DPV TM and LACS Link TM There are vendors willing to supply software with remote access to DPV TM and LACS Link TM Make sure you check with your vendor as soon as possible – software must be released by May 1, 2007 Make sure you check with your vendor as soon as possible – software must be released by May 1, 2007

11. Just when you thought it was safe…. USPS is on a mission to reduce Undeliverable-As- Addressed (UAA) mail USPS is on a mission to reduce Undeliverable-As- Addressed (UAA) mail Their next step is ensuring names match addresses Their next step is ensuring names match addresses Currently Move Update is required to qualify for First Class discounted rates Currently Move Update is required to qualify for First Class discounted rates There is momentum within USPS to: There is momentum within USPS to: Extend Move Update requirements to all classes of mailExtend Move Update requirements to all classes of mail Make NCOA Link a mandatory CASS requirementMake NCOA Link a mandatory CASS requirement

12. Move Update Mandatory since 1997 for First Class discounted mail Mandatory since 1997 for First Class discounted mail Certification that names and addresses have been checked for change of address (several methods available including NCOA Link TM ) Certification that names and addresses have been checked for change of address (several methods available including NCOA Link TM ) NCOA Link TM Equivalent to the Canadian NCOA process Equivalent to the Canadian NCOA process Very strict licensing requirements Very strict licensing requirements

13. HOT OFF THE PRESS! USPS issued a clarification to licensing restrictions November 20, 2006: USPS position: international mailers MAY access databases, including NCOA Link TM, remotely USPS position: international mailers MAY access databases, including NCOA Link TM, remotely Affected USPS databases must not leave the US Affected USPS databases must not leave the US Processing of mailing lists must be done on a “backend” located within the US and updated lists can be returned to Canada Processing of mailing lists must be done on a “backend” located within the US and updated lists can be returned to Canada NCOA Link TM licensees (software vendor or service provider) must request written permission for each customer from USPS NCOA Link TM licensees (software vendor or service provider) must request written permission for each customer from USPS

14. To make Move Update or NCOA Link TM mandatory for CASS certification, USPS must provide only an 18 month lead-time. NAMMU needs to be vigilant and continue a dialogue with the USPS to ensure Canadian mailers have fair access to the US market.

15. Possible Action: Work through UPU to allow access to the territorially restricted databases? Work through UPU to allow access to the territorially restricted databases? Lobby USPS to prevent Move Update or NCOA Link TM from becoming mandatory? Lobby USPS to prevent Move Update or NCOA Link TM from becoming mandatory? In the meantime, work with software vendors to ensure remote access to mandatory databases is available at a fair price In the meantime, work with software vendors to ensure remote access to mandatory databases is available at a fair price Other options? Other options?

16. Q & A