[Federal Register Volume 74, Number 210 (Monday, November 2, 2009)]
[Rules and Regulations]
[Pages 56544-56547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-26271]
[[Page 56544]]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2010-1 and CP2010-1; Order No. 323]
New Postal Product
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Commission is adding Priority Mail Contract 19 to the
Competitive Product List. This action is consistent with changes in a
recent law governing postal operations. Republication of the lists of
market dominant and competitive products is also consistent with new
requirements in the law.
DATES: Effective November 2, 2009 and is applicable beginning October
26, 2009.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 or [email protected].
SUPPLEMENTARY INFORMATION:
Regulatory History, 74 FR 54108 (October 21, 2009).
I. Introduction
II. Background
III. Comments
IV. Commission Analysis
V. Ordering Paragraphs
I. Introduction
The Postal Service seeks to add a new product identified as
Priority Mail Contract 19 to the Competitive Product List. For the
reasons discussed below, the Commission approves the Request.
II. Background
On October 13, 2009, the Postal Service filed a formal request
pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add Priority
Mail Contract 19 to the Competitive Product List.\1\ The Postal Service
asserts that the Priority Mail Contract 19 product is a competitive
product ``not of general applicability'' within the meaning of 39
U.S.C. 3632(b)(3). This Request has been assigned Docket No. MC2010-1.
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\1\ Request of the United States Postal Service to Add Priority
Mail Contract 19 to Competitive Product List and Notice of Filing
(Under Seal) of Contract and Supporting Data, October 13, 2009
(Request). The Postal Service filed an errata to the supporting data
on October 15, 2009. Errata to Supporting Data, October 15, 2009.
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The Postal Service contemporaneously filed a contract related to
the proposed new product pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR
3015.5. The contract has been assigned Docket No. CP2010-1.
In support of its Request, the Postal Service filed the following
materials: (1) A redacted version of the Governors' Decision,
originally filed in Docket No. MC2009-25, authorizing the Priority Mail
Contract Group; \2\ (2) a redacted version of the contract; \3\ (3) a
requested change in the Mail Classification Schedule product list; \4\
(4) a Statement of Supporting Justification as required by 39 CFR
3020.32; \5\ (5) a certification of compliance with 39 U.S.C. 3633(a);
\6\ and (6) an application for non-public treatment of the materials
filed under seal.\7\ The redacted version of the contract provides that
the contract is terminable on 30 days' notice by either party, but
could continue for 3 years from the effective date subject to annual
price adjustments. Request, Attachment B.
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\2\ Attachment A to the Request, reflecting Governors' Decision
No. 09-6, April 27, 2009.
\3\ Attachment B to the Request.
\4\ Attachment C to the Request.
\5\ Attachment D to the Request.
\6\ Attachment E to the Request.
\7\ Attachment F to the Request.
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In the Statement of Supporting Justification, Mary Prince Anderson,
Acting Manager, Sales and Communications, Expedited Shipping, asserts
that the service to be provided under the contract will cover its
attributable costs, make a positive contribution to coverage of
institutional costs, and will increase contribution toward the
requisite 5.5 percent of the Postal Service's total institutional
costs. Request, Attachment D, at 1. W. Ashley Lyons, Manager,
Regulatory Reporting and Cost Analysis, Finance Department, certifies
that the contract complies with 39 U.S.C. 3633(a). Id., Attachment E.
The Postal Service filed much of the supporting materials,
including the supporting data and the unredacted contract, under seal.
The Postal Service maintains that the contract and related financial
information, including the customer's name and the accompanying
analyses that provide prices, certain terms and conditions, and
financial projections, should remain confidential. Id., Attachment F at
2-3.
In Order No. 313, the Commission gave notice of the two dockets,
appointed a public representative, and provided the public with an
opportunity to comment.\8\
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\8\ PRC Order No. 313, Notice and Order Concerning Priority Mail
Contract 19 Negotiated Service Agreement, October 15, 2009 (Order
No. 313).
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III. Comments
Comments were filed by the Public Representative.\9\ No comments
were submitted by other interested parties. The Public Representative
states that the Postal Service's filing comports with title 39 and the
relevant Commission rules. Public Representative Comments at 1, 3. He
further states that the agreement employs pricing terms favorable to
the customer, the Postal Service, and thereby, the public. Id. at 3-4.
The Public Representative also believes that the Postal Service has
provided appropriate justification for maintaining confidentiality in
this case. Id. at 3.
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\9\ Public Representative Comments in Response to United States
Postal Service Request to Add Priority Mail Contract 19 Negotiated
Service Agreement to the Competitive Product List, October 23, 2009
(Public Representative Comments). The Public Representative also
filed a Motion of the Public Representative for Late Acceptance of
Comments in Response to United States Postal Service Request to Add
Priority Mail Contract 19 to the Competitive Product List, October
23, 2009. That motion is granted.
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IV. Commission Analysis
The Commission has reviewed the Request, the contract, the
financial analysis provided under seal that accompanies it, and the
comments filed by the Public Representative.
Statutory requirements. The Commission's statutory responsibilities
in this instance entail assigning Priority Mail Contract 19 to either
the Market Dominant Product List or to the Competitive Product List. 39
U.S.C. 3642. As part of this responsibility, the Commission also
reviews the proposal for compliance with the Postal Accountability and
Enhancement Act (PAEA) requirements. This includes, for proposed
competitive products, a review of the provisions applicable to rates
for competitive products. 39 U.S.C. 3633.
Product list assignment. In determining whether to assign Priority
Mail Contract 19 as a product to the Market Dominant Product List or
the Competitive Product List, the Commission must consider whether
the Postal Service exercises sufficient market power that it can
effectively set the price of such product substantially above costs,
raise prices significantly, decrease quality, or decrease output,
without risk of losing a significant level of business to other
firms offering similar products.
39 U.S.C. 3642(b)(1). If so, the product will be categorized as market
dominant. The competitive category of products consists of all other
products.
The Commission is further required to consider the availability and
nature of enterprises in the private sector engaged in the delivery of
the product, the views of those who use the product, and the likely
impact on small business concerns. 39 U.S.C. 3642(b)(3).
[[Page 56545]]
The Postal Service asserts that its bargaining position is
constrained by the existence of other shippers who can provide similar
services, thus precluding it from taking unilateral action to increase
prices without the risk of losing volume to private companies. Request,
Attachment D, para. (d). The Postal Service also contends that it may
not decrease quality or output without risking the loss of business to
competitors that offer similar expedited delivery services. Id. It
further states that the contract partner supports the addition of the
contract to the Competitive Product List to effectuate the negotiated
contractual terms. Id., para. (g). Finally, the Postal Service states
that the market for expedited delivery services is highly competitive
and requires a substantial infrastructure to support a national
network. It indicates that large carriers serve this market.
Accordingly, the Postal Service states that it is unaware of any small
business concerns that could offer comparable service for this
customer. Id., para. (h).
No commenter opposes the proposed classification of Priority Mail
Contract 19 as competitive. Having considered the statutory
requirements and the support offered by the Postal Service, the
Commission finds that Priority Mail Contract 19 is appropriately
classified as a competitive product and should be added to the
Competitive Product List.
Cost considerations. The Postal Service presents a financial
analysis showing that Priority Mail Contract 19 results in cost savings
while ensuring that the contract covers its attributable costs, does
not result in subsidization of competitive products by market dominant
products, and increases contribution from competitive products.
Based on the data submitted, the Commission finds that Priority
Mail Contract 19 should cover its attributable costs (39 U.S.C.
3633(a)(2)), should not lead to the subsidization of competitive
products by market dominant products (39 U.S.C. 3633(a)(1)), and should
have a positive effect on competitive products' contribution to
institutional costs (39 U.S.C. 3633(a)(3)). Thus, an initial review of
proposed Priority Mail Contract 19 indicates that it comports with the
provisions applicable to rates for competitive products.
Application for non-public treatment. The Commission has repeatedly
held that applications for non-public treatment for an indefinite time
period are premature finding that if the need for non-public treatment
remains well into the future due to ongoing business relationships, the
Postal Service may submit a motion to the Commission to extend the
duration at the appropriate time.\10\ Nonetheless, the Postal Service
continues to request indefinite non-public treatment of materials.\11\
The Commission finds its prior rulings on this topic to be clear and
sufficiently precedential to avoid the necessity of continually ruling
on this issue in every case. Accordingly, if the Postal Service
continues its requests for indefinite non-public treatment of materials
in the future, the Commission's silence on that matter (or any similar
request to deviate from the default rules) shall not be deemed to be a
ruling on the merits.
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\10\ See, e.g., Docket No. MC2009-40, Order Concerning Parcel
Select & Parcel Return Service Contract 2 Negotiated Service
Agreement, September 4, 2009, at 7; Docket No. MC2009-42, Order
Concerning Priority Mail Contract 18 Negotiated Service Agreement,
September 28, 2009, at 7; Docket No. N2009-1, P.O. Ruling N2009-1/8,
September 25, 2009, at 4.
\11\ See e.g., Request, Attachment F, at 1, 7; Docket No.
CP2009-64, Notice of United States Postal Service Filing of
Functionally Equivalent Global Expedited Package Services 2
Negotiated Service Agreement and Application for Non-public
Treatment of Materials Filed Under Seal, September 15, 2009; Docket
No. CP2009-66, Notice of United States Postal Service Filing of
Functionally Equivalent Global Expedited Package Services 2
Negotiated Service Agreement and Application for Non-public
Treatment of Materials Filed Under Seal, September 25, 2009; and
Docket No. N2009-1, Notice of United States Postal Service Filing of
Library Reference N2009-1/17 and Application for Non-public Status,
September 29, 2009.
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Other considerations. The Postal Service shall notify the
Commission if termination occurs prior to the scheduled termination
date. Following the scheduled termination date of the agreement, the
Commission will remove the product from the Competitive Product List.
In conclusion, the Commission approves Priority Mail Contract 19 as
a new product. The revision to the Competitive Product List is shown
below the signature of this order and is effective upon issuance of
this order.
V. Ordering Paragraphs
It is ordered:
1. Priority Mail Contract 19 (MC2010-1 and CP2010-1) is added to
the Competitive Product List as a new product under Negotiated Service
Agreements, Domestic.
2. The Postal Service shall notify the Commission if termination
occurs prior to the scheduled termination date.
3. The Secretary shall arrange for the publication of this order in
the Federal Register.
List of Subjects in 39 CFR Part 3020
Administrative practice and procedure; Postal Service.
By the Commission.
Shoshana M. Grove,
Secretary.
0
For the reasons discussed in the preamble, the Postal Regulatory
Commission amends chapter III of title 39 of the Code of Federal
Regulations as follows:
PART 3020--PRODUCT LISTS
0
1. The authority citation for part 3020 continues to read as follows:
Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.
0
2. Revise Appendix A to Subpart A of Part 3020--Mail Classification
Schedule to read as follows:
Appendix A to Subpart A of Part 3020--Mail Classification Schedule
Part A--Market Dominant Products
1,000 Market Dominant Product List
First-Class Mail
Single-Piece Letters/Postcards
Bulk Letters/Postcards
Flats
Parcels
Outbound Single-Piece First-Class Mail International
Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
High Density and Saturation Letters
High Density and Saturation Flats/Parcels
Carrier Route
Letters
Flats
Not Flat-Machinables (NFMs)/Parcels
Periodicals
Within County Periodicals
Outside County Periodicals
Package Services
Single-Piece Parcel Post
Inbound Surface Parcel Post (at UPU rates)
Bound Printed Matter Flats
Bound Printed Matter Parcels
Media Mail/Library Mail
Special Services
Ancillary Services
International Ancillary Services
Address List Services
Caller Service
Change-of-Address Credit Card Authentication
Confirm
International Reply Coupon Service
International Business Reply Mail Service
Money Orders
Post Office Box Service
Negotiated Service Agreements
HSBC North America Holdings Inc. Negotiated Service Agreement
Bookspan Negotiated Service Agreement
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Inbound International
Canada Post--United States Postal Service Contractual Bilateral
Agreement for Inbound Market Dominant Services
Market Dominant Product Descriptions
[[Page 56546]]
First-Class Mail
[Reserved for Class Description]
Single-Piece Letters/Postcards
[Reserved for Product Description]
Bulk Letters/Postcards
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Parcels
[Reserved for Product Description]
Outbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Inbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Standard Mail (Regular and Nonprofit)
[Reserved for Class Description]
High Density and Saturation Letters
[Reserved for Product Description]
High Density and Saturation Flats/Parcels
[Reserved for Product Description]
Carrier Route
[Reserved for Product Description]
Letters
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Not Flat-Machinables (NFMs)/Parcels
[Reserved for Product Description]
Periodicals
[Reserved for Class Description]
Within County Periodicals
[Reserved for Product Description]
Outside County Periodicals
[Reserved for Product Description]
Package Services
[Reserved for Class Description]
Single-Piece Parcel Post
[Reserved for Product Description]
Inbound Surface Parcel Post (at UPU rates)
[Reserved for Product Description]
Bound Printed Matter Flats
[Reserved for Product Description]
Bound Printed Matter Parcels
[Reserved for Product Description]
Media Mail/Library Mail
[Reserved for Product Description]
Special Services
[Reserved for Class Description]
Ancillary Services
[Reserved for Product Description]
Address Correction Service
[Reserved for Product Description]
Applications and Mailing Permits
[Reserved for Product Description]
Business Reply Mail
[Reserved for Product Description]
Bulk Parcel Return Service
[Reserved for Product Description]
Certified Mail
[Reserved for Product Description]
Certificate of Mailing
[Reserved for Product Description]
Collect on Delivery
[Reserved for Product Description]
Delivery Confirmation
[Reserved for Product Description]
Insurance
[Reserved for Product Description]
Merchandise Return Service
[Reserved for Product Description]
Parcel Airlift (PAL)
[Reserved for Product Description]
Registered Mail
[Reserved for Product Description]
Return Receipt
[Reserved for Product Description]
Return Receipt for Merchandise
[Reserved for Product Description]
Restricted Delivery
[Reserved for Product Description]
Shipper-Paid Forwarding
[Reserved for Product Description]
Signature Confirmation
[Reserved for Product Description]
Special Handling
[Reserved for Product Description]
Stamped Envelopes
[Reserved for Product Description]
Stamped Cards
[Reserved for Product Description]
Premium Stamped Stationery
[Reserved for Product Description]
Premium Stamped Cards
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
Address List Services
[Reserved for Product Description]
Caller Service
[Reserved for Product Description]
Change-of-Address Credit Card Authentication
[Reserved for Product Description]
Confirm
[Reserved for Product Description]
International Reply Coupon Service
[Reserved for Product Description]
International Business Reply Mail Service
[Reserved for Product Description]
Money Orders
[Reserved for Product Description]
Post Office Box Service
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Class Description]
HSBC North America Holdings Inc. Negotiated Service Agreement
[Reserved for Product Description]
Bookspan Negotiated Service Agreement
[Reserved for Product Description]
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Part B--Competitive Products
2,000 Competitive Product List
Express Mail
Express Mail
Outbound International Expedited Services
Inbound International Expedited Services
Inbound International Expedited Services 1 (CP2008-7)
Inbound International Expedited Services 2 (MC2009-10 and
CP2009-12)
Priority Mail
Priority Mail
Outbound Priority Mail International
Inbound Air Parcel Post
Royal Mail Group Inbound Air Parcel Post Agreement
Parcel Select
Parcel Return Service
International
International Priority Airlift (IPA)
International Surface Airlift (ISAL)
International Direct Sacks--M-Bags
Global Customized Shipping Services
Inbound Surface Parcel Post (at non-UPU rates)
Canada Post--United States Postal Service Contractual Bilateral
Agreement for Inbound Competitive Services (MC2009-8 and CP2009-9)
International Money Transfer Service
International Ancillary Services
Special Services
Premium Forwarding Service
Negotiated Service Agreements
Domestic
Express Mail Contract 1 (MC2008-5)
Express Mail Contract 2 (MC2009-3 and CP2009-4)
Express Mail Contract 3 (MC2009-15 and CP2009-21)
Express Mail Contract 4 (MC2009-34 and CP2009-45)
Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
14)
Express Mail & Priority Mail Contract 3 (MC2009-13 and CP2009-
17)
Express Mail & Priority Mail Contract 4 (MC2009-17 and CP2009-
24)
Express Mail & Priority Mail Contract 5 (MC2009-18 and CP2009-
25)
Express Mail & Priority Mail Contract 6 (MC2009-31 and CP2009-
42)
Express Mail & Priority Mail Contract 7 (MC2009-32 and CP2009-
43)
Express Mail & Priority Mail Contract 8 (MC2009-33 and CP2009-
44)
Parcel Select & Parcel Return Service Contract 1 (MC2009-11 and
CP2009-13)
Parcel Select & Parcel Return Service Contract 2 (MC2009-40 and
CP2009-61)
Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
Priority Mail Contract 1 (MC2008-8 and CP2008-26)
Priority Mail Contract 2 (MC2009-2 and CP2009-3)
Priority Mail Contract 3 (MC2009-4 and CP2009-5)
Priority Mail Contract 4 (MC2009-5 and CP2009-6)
Priority Mail Contract 5 (MC2009-21 and CP2009-26)
Priority Mail Contract 6 (MC2009-25 and CP2009-30)
Priority Mail Contract 7 (MC2009-25 and CP2009-31)
Priority Mail Contract 8 (MC2009-25 and CP2009-32)
Priority Mail Contract 9 (MC2009-25 and CP2009-33)
Priority Mail Contract 10 (MC2009-25 and CP2009-34)
Priority Mail Contract 11 (MC2009-27 and CP2009-37)
Priority Mail Contract 12 (MC2009-28 and CP2009-38)
Priority Mail Contract 13 (MC2009-29 and CP2009-39)
Priority Mail Contract 14 (MC2009-30 and CP2009-40)
Priority Mail Contract 15 (MC2009-35 and CP2009-54)
[[Page 56547]]
Priority Mail Contract 16 (MC2009-36 and CP2009-55)
Priority Mail Contract 17 (MC2009-37 and CP2009-56)
Priority Mail Contract 18 (MC2009-42 and CP2009-63)
Priority Mail Contract 19 (MC2010-1 and CP2010-1)
Outbound International
Direct Entry Parcels Contracts
Direct Entry Parcels 1 (MC2009-26 and CP2009-36)
Global Direct Contracts (MC2009-9, CP2009-10, and CP2009-11)
Global Expedited Package Services (GEPS) Contracts
GEPS 1 (CP2008-5, CP2008-11, CP2008-12, and CP2008-13, CP2008-
18, CP2008-19, CP2008-20, CP2008-21, CP2008-22, CP2008-23, and
CP2008-24)
Global Expedited Package Services 2 (CP2009-50)
Global Plus Contracts
Global Plus 1 (CP2008-8, CP2008-46 and CP2009-47)
Global Plus 2 (MC2008-7, CP2008-48 and CP2008-49)
Inbound International
Inbound Direct Entry Contracts with Foreign Postal
Administrations
Inbound Direct Entry Contracts with Foreign Postal
Administrations (MC2008-6, CP2008-14 and MC2008-15)
Inbound Direct Entry Contracts with Foreign Postal
Administrations 1 (MC2008-6 and CP2009-62)
International Business Reply Service Competitive Contract 1
(MC2009-14 and CP2009-20)
Competitive Product Descriptions
Express Mail
[Reserved for Group Description]
Express Mail
[Reserved for Product Description]
Outbound International Expedited Services
[Reserved for Product Description]
Inbound International Expedited Services
[Reserved for Product Description]
Priority
[Reserved for Product Description]
Priority Mail
[Reserved for Product Description]
Outbound Priority Mail International
[Reserved for Product Description]
Inbound Air Parcel Post
[Reserved for Product Description]
Parcel Select
[Reserved for Group Description]
Parcel Return Service
[Reserved for Group Description]
International
[Reserved for Group Description]
International Priority Airlift (IPA)
[Reserved for Product Description]
International Surface Airlift (ISAL)
[Reserved for Product Description]
International Direct Sacks--M-Bags
[Reserved for Product Description]
Global Customized Shipping Services
[Reserved for Product Description]
International Money Transfer Service
[Reserved for Product Description]
Inbound Surface Parcel Post (at non-UPU rates)
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
International Insurance
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Group Description]
Domestic
[Reserved for Product Description]
Outbound International
[Reserved for Group Description]
Part C--Glossary of Terms and Conditions [Reserved]
Part D--Country Price Lists for International Mail [Reserved]
[FR Doc. E9-26271 Filed 10-30-09; 8:45 am]
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