[Federal Register Volume 74, Number 89 (Monday, May 11, 2009)]
[Notices]
[Pages 21837-21838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-10862]
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POSTAL REGULATORY COMMISSION
[Docket No. R2009-3; Order No. 209]
Postal Service Price Changes
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is conducting a review of the Postal Service's
planned Standard Mail Volume Incentive Pricing Program (Summer Sale).
This document invites public comment.
DATES: Comments are due May 21, 2009.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at http://www.prc.gov.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 and [email protected].
SUPPLEMENTARY INFORMATION:
I. Overview
On May 1, 2009, the Postal Service filed with the Commission a
notice announcing its intention to adjust prices for Standard Mail
letters and flats pursuant to 39 U.S.C. 3622 and 39 CFR part 3010.\1\
The proposed adjustment is in the form of a ``Standard Mail Volume
Incentive Pricing Program'' (also known as the Summer Sale program)
with a planned implementation date of July 1, 2009 and a planned
expiration date of September 30, 2009. This proposal represents an
innovative approach by the Postal Service to utilize greater pricing
flexibility for market dominant products under the Postal
Accountability and Enhancement Act (PAEA), Public Law 109-435, 120
Stat. 3218 (2006).
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\1\ United States Postal Service Notice of Market-Dominant Price
Adjustment, May 1, 2009 (Notice).
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II. Postal Service Filing
Summer Sale Program. The proposed Summer Sale program will provide
a 30 percent rebate to eligible mailers on Standard Mail letters and
flats volumes above a mailer specific threshold. Id. at 3. The
threshold is calculated based on the percentage change between the
mailer's volume during the current fiscal year (through March 2009) and
the volume for the same period last year (trend), and applying that
percentage to the volume mailed during the summer months the previous
year (July 1, 2008 and September 30, 2008). Id. at 3-4. To discourage
mailers from shifting planned October 2009 mailings into the Summer
Sale program, the Postal Service will measure each mailer's October
2009 volume against the prior year's volume for that month and reduce
the rebate if the mailer is found to have mailed less in October 2009.
Id. at 4.
Eligibility for the Summer Sale program is limited to mailers who
are permit holders, i.e., owners of a permit imprint advance deposit
account and who have a demonstrable volume of at least 1 million
Standard Mail letters and flats between October 1, 2007 and March 31,
2008 for one or more permit imprint advance deposit accounts, pre-
canceled stamp permits, or postage meter permits. Id. at 4. Mail
service providers are not eligible for the program due to the
significant administrative cost to the Postal Service. Id. at 5.
However, applicants may qualify for the program with volume mailed
through an account owned by a mail service provider if the applicant
can adequately demonstrate that it is the owner of the mail. Id. at 4.
In support of the proposal, the Postal Service notes that the
economy has adversely affected many postal customers, resulting in a
precipitous decline in Standard Mail volume. Id. at 2. The Postal
Service believes the Summer Sale program may help its customers
increase use of Standard Mail during what is typically a low volume
period for Standard Mail. Id. at 2-3. The Postal Service also believes
it will receive intangible benefits from the proposed program,
including learning information which may improve postal data systems,
gathering feedback from customers, which may help fine tune future
programs, and improving customer relations. Id. at 3.
Conformance with 39 CFR 3010. The Postal Service's proposed
schedule of prices appears in Appendix A, attached to the Notice. Id.
at 1. It also represents, in conformance with the notice requirements
of 39 CFR 3010.14(a)(3), that it will issue public notice of the price
changes at least 45 days before the effective date via several
additional means, including issuing notice of the price changes on the
Postal Service's Web site (http://www.usps.com), the Postal Explorer
Web site (http://www.pe.usps.com), the DMM [Domestic Mail Manual]
Advisory, and the P&C [Producers and Consumers] Weekly, and a press
release announcing the changes. The Postal Service also states that it
plans to provide public notice of the price changes in future issues of
the PCC [Postal Customer Council] Insider, MailPro, the Postal
Bulletin, and the Federal Register. Id. at 1-2. The Postal Service
identifies Greg Dawson, Manager, Pricing Strategy, as the official
available to provide prompt responses
[[Page 21838]]
to requests for clarification from the Commission.
Impact on the Price Cap. The Postal Service proposes to treat the
program, for purposes of the price cap, as if it were a negotiated
service agreement subject to 39 CFR 3010.24. Id. at 8. The Postal
Service signals its intent to ignore the net price decrease resulting
from the program, and for purposes of the price cap, calculate revenues
for the volumes as though they paid the appropriate non-discounted
rates. Id. at 8; 39 CFR 3010.24(a). Therefore, the Postal Service makes
no calculation of cap or price changes as described in 39 CFR
3010.14(b)(1) through (4). Notice at 8.
Objectives and Factors, Workshare Discounts, and Preferred Rates.
The Postal Service lists the relevant objectives and factors of 39
U.S.C. 3622, and claims that the program supports several factors and
is unlikely to impact the ability of Standard Mail (as a class) to
cover its costs. Id. at 8-13. The Postal Service also asserts that, to
the extent it affects workshare discounts, the program will shrink
them, keeping discounts with a passthrough of 100 percent or less in
compliance, and bringing passthroughs over 100 percent closer to
compliance. Id. at 13. The Postal Service also indicates that Standard
Mail letters and flats entered at nonprofit prices will be eligible for
the same rebate, and since the rebate is a fixed percentage, the 60
percent differential between regular and nonprofit prices will remain
unchanged. Id.
Mail Classification Schedule (MCS) Language. The Postal Service
addresses 39 CFR 3010.14(b)(9) in Appendix A of its Notice. Id. at 1.
This rule requires that the notice include all the changes to the
product descriptions within the MCS that are necessitated by the
planned price adjustments. These changes are presented based on draft
MCS language being developed by the Commission in cooperation with the
Postal Service. The draft MCS will be the subject of a future
rulemaking, which will include the opportunity for public comment. The
Postal Service provides the proposed MCS revisions in Appendix A.
III. Commission Action
The Commission establishes Docket No. R2009-3 to consider all
matters related to the Notice as required by 39 U.S.C. 3622. The
Commission's rules provide for a 20 day comment period starting from
the date of the filing of the Notice. See 39 CFR 3010.13(a)(5).
Interested persons may express views and offer comments on whether the
planned changes are consistent with the policies of 39 U.S.C. 3622 and
39 CFR part 3010. Comments are due no later than May 21, 2009.
The Commission appoints Richard A. Oliver and Kenneth R. Moeller to
represent the interests of the general public in this proceeding. See
39 U.S.C. 505. Pursuant to rule 3010.13(c), the Commission will issue
its determination in this proceeding by June 4, 2009.
IV. Ordering Paragraphs
It is Ordered:
1. The Commission establishes Docket No. R2009-3 to consider
matters raised by the Postal Service's May 1, 2009 filing.
2. Interested persons may submit comments on the planned price
adjustments. Comments are due May 21, 2009.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Richard A.
Oliver and Kenneth R. Moeller to represent the interests of the general
public in this proceeding.
4. The Commission directs the Secretary of the Commission to
arrange for prompt publication of this Notice in the Federal Register.
By the Commission.
Steven W. Williams,
Secretary.
[FR Doc. E9-10862 Filed 5-8-09; 8:45 am]
BILLING CODE 7710-FW-P