[Federal Register Volume 74, Number 134 (Wednesday, July 15, 2009)]
[Notices]
[Pages 34375-34376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-16584]
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POSTAL REGULATORY COMMISSION
[Docket No. CP2009-41; Order No. 237]
New Competitive Postal Product
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is noticing a recently filed Postal Service
request to add an additional Inbound Direct Entry Contract to the
Competitive Product List. The Postal Service has also filed a related
contract. This notice addresses procedural steps associated with these
filings.
DATES: Comments are due July 10, 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. Background
On June 29, 2009, the Postal Service filed a notice, pursuant to 39
U.S.C. 3633 and 39 CFR 3015.5, announcing that it has entered into an
additional Inbound Direct Entry Contract (IDE), which it states fits
within the previously established Inbound Direct Entry Contracts.\1\
The Postal Service states that the instant constant is functionally
equivalent to previously submitted IDE contracts and is supported by
the Governors' Decision 08-6 filed in Docket No. MC2008-6.\2\ Notice at
2.
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\1\ Notice of United States Postal Service of Filing of
Functionally Equivalent Inbound Direct Entry Contracts, Negotiated
Service Agreement, June 29, 2009 (Notice).
\2\ See Docket No. MC2008-6, Decision of the Governors of the
United States Postal Service on the Establishment of Prices and
Classifications for Inbound Direct Entry Contracts with Foreign
Postal Administrations (Governors' Decision No.08-6), May 6, 2008.
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The Notice also references Order No. 105 which established the
individual IDE contracts in Dockets Nos. CP2008-14 and CP2008-15 as
functionally equivalent and added the contracts to the competitive
product list as one product under the IDE classification.\3\ The IDE
service allows the Postal Service to provide foreign postal
administrations with the ability to ship sacks of parcels that are pre-
labeled for direct entry into the Postal Service's mail stream, in
exchange for applicable domestic postage plus a sack handling
[[Page 34376]]
fee. The core of the service is the sack handling and entry as domestic
mail and it is not dependent on the underlying domestic mail services.
The Postal Service states that the instant contract is functionally
equivalent to the IDE contracts previously submitted, fits within the
Mail Classification Schedule (MCS) language included as Attachment A to
Governors' Decision No. 08-6 and should be included within the IDE
Contracts product. Notice at 2.
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\3\ See PRC Order No. 105, Order Concerning Prices Under Inbound
Direct Entry Contracts with Certain Foreign Postal Administrations,
September 4, 2008, at 8 (Order 105).
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The instant contract. The Postal Service filed the instant contract
pursuant to 39 CFR 3015.5. The contract is with P&T Express Mail
Service Joint Stock Company (VNPE). VNPE is established under the
auspices of the Vietnam Post and Telecommunications Group, the public
postal administration for Vietnam, responsible for Vietnam's compliance
with international obligations relative to Express Mail Service. The
Postal Service submitted the contract and supporting material under
seal and attached a redacted copy of the contract and certified
statement required by 39 CFR 3015.5(c)(2) to the Notice. Id.,
Attachments 1 and 2 respectively.\4\
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\4\ Attachment 1 was revised by Notice of United States Postal
Service of Filing Erratum to Attachment 1 to Notice of United States
Postal Service of Filing Functionally Equivalent Inbound Direct
Entry Contracts Negotiated Service Agreement, June 30, 2009.
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The Postal Service will notify the customer of the effective date
of the contract within 30 days after receiving all regulatory
approvals. The contract term is 1 year from the effective date. The
contract is subject to automatic renewal after the 1 year term unless
the parties determine otherwise. Id., Attachment 1.
The Notice advances reasons why the instant IDE contract fits
within the Mail Classification Schedule language for IDE contracts. The
Postal Service states that the instant contract is functionally
equivalent to the IDE contracts filed previously because it shares
similar cost and market characteristics and therefore, the contracts
should be classified as a single product. Id. at 3-4. It states that in
Governors' Decision No. 08-6, a pricing formula and classification
system were established to ensure that each contract meets the
statutory and regulatory requirements of 39 U.S.C. 3633. The Postal
Service states that the costs of each contract must conform to a common
description and the contract language of the MCS prescribes that each
IDE contract must cover its attributable costs. Id.
The Postal Service reports that the instant contract covers the
same domestic services as those in Docket Nos. CP2008-14 and CP2008-15
except for the addition of the Priority Mail small flat rate box. It
asserts that in ``almost all substantive respects,'' the instant IDE
contract resembles the contracts in CP2008-14 and CP2008-15. Id. at 4.
The Postal Service contends that even though fees or the underlying
domestic services offered may be different, these distinctions do not
affect the contracts' functional equivalence because the total costs
associated with IDE Contracts are volume variable and the basic service
offered of handling inbound sacks in the domestic mail stream is the
same. Id. Other changes include language to update changes in policies
and product structures and terms to clarify the applicability of Postal
Service export requirements. Id.
The Postal Service also affirms the instant contract has material
differences reflected in the language of this agreement compared to
other IDE contracts. Id. These differences include: (1) The 1 year term
of the instant contract is subject to automatic renewal which differs
from the contracts in CP2008-14 and CP2008-15 which are automatically
renewed unless terminated; (2) Priority Mail small flat rate box has
been added as a domestic mail type which Vietnam Post can access via
IDE service while other included domestic mail services included are
the same as in previous contracts but have updated rate structures; \5\
(3) terms are included which express the parties' wish to explore
future opportunities for volume based discounts which the Postal
Service states does not represent a new commitment; (4) terms that
clarify charges for non-conforming size or weight items, and Delivery
Confirmation charges for First-Class Mail parcel items; (5) language
which explains the need for a permit application fee; (6) terms which
address changes to IDE customer payment requirements upon detention or
seizure of mail by Customs and Border Protection; and (7) terms to
explain the use of the Centralized Trust Account payment method as
applicable to Vietnam's financial regulatory requirements which were
not offered in the contract for CP2008-14. Id. at 5-6.
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\5\ The Postal Service states that the other domestic mail
services are the same as in Docket Nos. CP2008-14 and CP2008-15, but
the instant contract reflects the updated Priority Mail rate
structure based on the price adjustments for competitive products in
Docket CP2009-8.
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The Postal Service maintains that these differences only add detail
or amplify processes included in previous IDE contracts and do not
affect the fundamental service being offered or the essential structure
of the contracts. Id. at 7. It asserts that the contracts are
substantially equivalent in all pertinent respects. Id.
The Postal Service maintains that certain portions of the contract
and certified statement required by 39 CFR 3015.5(c)(2), related
financial information, portions of the certified statement which
contain costs and pricing as well as the accompanying analyses that
provide prices, terms, conditions, and financial projections should
remain under seal. Id. at 2-3.
II. Notice of Filing
The Commission establishes Docket No. CP2009-41 for consideration
of the matters related to the contract identified in the Postal
Service's Notice.
Interested persons may submit comments on whether the instant
contract is consistent with the policies of 39 U.S.C. 3632, 3622, or
3642. Comments are due no later than July 10, 2009.
The public portions of these filings can be accessed via the
Commission's Web site (http://www.prc.gov).
The Commission appoints Paul L. Harrington to serve as Public
Representative in this docket.
III. Ordering Paragraphs
It is Ordered:
1. The Commission establishes Docket No. CP2009-41 for
consideration of the issues raised in this docket.
2. Comments by interested persons in these proceedings are due no
later than July 10, 2009.
3. Pursuant to 39 U.S.C. 505, Paul L. Harrington is appointed to
serve as officer of the Commission (Public Representative) to represent
the interests of the general public in these proceedings.
4. The Secretary shall arrange for publication of this order in the
Federal Register.
Dated: July 1, 2009.
By the Commission.
Judith M. Grady,
Acting Secretary.
[FR Doc. E9-16584 Filed 7-14-09; 8:45 am]
BILLING CODE 7710-FW-P