[Federal Register: February 23, 2009 (Volume 74, Number 34)]
[Notices]
[Page 8124-8129]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23fe09-117]
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POSTAL REGULATORY COMMISSION
[Docket No. R2009-2; Order No. 180]
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 rate adjustments for essentially all products in the market
dominant category, which includes the First-Class stamp, and limited
classification changes. The adjustments are generally based on a method
that relies on a price cap tied to annual changes in the consumer price
index and, in some instances, also draws on unused or ``banked''
pricing authority. This document invites public comment and discusses
other matters related to the Commission's review and the Postal
Service's anticipated implementation of new rates.
DATES: March 2, 2009: Deadline for public comments.
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 stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION: Regulatory History, 73 FR 9363 (February 20,
2008).
I. Overview
A. Background
On February 10, 2009, the United States Postal Service (Postal
Service) filed with the Postal Regulatory Commission (Commission) a
document captioned United States Postal Service Notice of Market-
Dominant Price Adjustment (Adjustment Notice). This document was filed
pursuant to 39 U.S.C. 3622 and 39 CFR part 3010. It announces the
Postal Service's intention to adjust rates for all market dominant
products in amounts that are, on average, within a 3.8 percent
statutory price cap plus the unused pricing authority remaining from
Docket No. R2008-1 for each class. The planned price adjustment for
most market dominant products will take effect on May 11, 2009. The
exceptions are new
[[Page 8125]]
prices related to a full-service option of Intelligent Mail which will
take effect on November 29, 2009, and Personalized Stamped Envelopes
options which will have their effective dates established by separate
notice. The Commission notes that the average change, in some
instances, includes significant percentage changes within a class. The
Commission further notes that several worksharing discounts vary
significantly from passing through 100 percent of avoided costs.
The Adjustment Notice also addresses several mail classification
changes the most sweeping of which provides a price differential for
mailers who use the full-service option of Intelligent Mail and comply
with mail preparation requirements. The Postal Service plans a November
29, 2009 price reduction of 0.3 cents for full-service option
Intelligent Mail within First-Class Mail, and 0.1 cents for full-
service option Intelligent Mail within Standard Mail, Package Services,
and Periodicals Mail.\1\ Address Change Service (ACS) will be included
with the full-service option of Intelligent Mail for Periodicals,
providing the additional benefit of not having to incur the separate
cost of ACS which is required for all Periodicals. Mailers can avail
themselves of this price differential if they meet specific criteria,
including a requirement that each piece have a unique Intelligent Mail
barcode, be part of a mailing with unique container labels, and use
electronic documentation.
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\1\ Although the Adjustment Notice does not discuss a price
differential for Package Services, Appendix A at 49 and 51 indicates
the availability of the price differential for certain Bound Printed
Matter Flats.
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Additional class-specific classification changes also are planned.
A minor classification change is made in First-Class Mail to separate
the current ``Canada and Mexico'' Outbound Single-Piece First-Class
Mail International Postcard category into two distinct price
categories.
Standard Mail will be subject to an additional 7 cents per-piece
charge for mailings not compliant with the Move Update requirements.
The Postal Service is planning an optional feature called ``Saturation
Mail Volume Program'' to encourage new Saturation mail volumes. It is
revising pricing categories for Standard Mail Not Flat-Machinable
(NFMs)/Parcels and slightly modifying Domestic Mail Manual eligibility
rules for those categories.
The Postal Service plans to change the Single-Piece Parcel Post
price structure by merging the Intra-BMC [bulk mail center] and Inter-
BMC prices into a single Parcel Post price category and deleting the
non-machinable surcharge. Also descriptions for Zones 1-8 are added to
the Mail Classification Schedule.
Within special services, the Postal Service plans to modify Confirm
by adding a new Bronze subscription level, and make changes to the Gold
and Platinum levels to differentiate between mail owners and mail
agents. The Stamped Envelopes product is supplemented with premium
options available for personalized stamped envelopes. Finally, changes
are made to Address Correction Service to incorporate the full-service
option of Intelligent Mail.
B. Context
The filing of the Adjustment Notice marks the second instance in
which the Postal Service is exercising its authority, under the Postal
Accountability and Enhancement Act of 2006 (PAEA) and related
Commission rules, to make an annual adjustment in rates for products in
the market dominant category under a new streamlined, index-based
approach. The market dominant product category is one of two business
lines established in the PAEA. It includes, generally, First-Class Mail
letters and sealed parcels; First-Class Mail cards; Periodicals;
Standard Mail; Single-Piece Parcel Post; Media Mail; Bound Printed
Matter; Library Mail; Special Services; and Single-Piece International
Mail. 39 U.S.C. 3621. The second business line is the competitive
products category, which includes Priority Mail; Expedited Mail; Bulk
Parcel Post; and Bulk International Mail. Specific market dominant
product and the competitive product lists are published at 39 CFR
Appendix A to Subpart A of Part 3020--Mail Classification Schedule.
Rate and fee adjustments for each business category are governed by
different procedures.
C. Statutory Price Cap
The statutory price cap limits the increase in rates for market
dominant products to the change in the CPI-U for the past 12 months,
calculated under Commission rules implementing the PAEA.\2\ For the 12
months ending December 2008, the price cap is 3.8 percent.
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\2\ The reference to CPI-U is to the Department of Labor's
Consumer Price Index for All Urban Consumers.
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II. Impact on Mailers
Summary. The planned adjustments, summarized in terms of average
percentage change at the class level, are First-Class Mail, 3.771
percent; Standard Mail, 3.781 percent; Periodicals, 3.966 percent;
Package Services, 3.800 percent; and Special Services, 3.837 percent.
The unused pricing authority remaining from Docket No. R2008-1 by class
are First-Class Mail, 0.014 percent; Standard Mail, 0.062 percent;
Periodicals, 0.176 percent; Package Services, 0.025 percent; and
Special Services, 0.052 percent. When combined with the current 3.8
percent statutory price cap, the total price adjustment authority by
class are First-Class Mail, 3.814 percent; Standard Mail, 3.862
percent; Periodicals, 3.976 percent; Package Services, 3.825 percent;
and Special Services, 3.852 percent. As calculated by the Postal
Service, each percentage adjustment is below the allowable total price
adjustment authority. Adjustment Notice at 3-5.
The First-Class stamp. The planned change in the First-Class
postage stamp, which is widely used by the general public for eligible
mail weighing 1 ounce or less, is an increase of 2 cents. This raises
the rate from its current level of 42 cents to 44 cents. The additional
ounce price and the non-machinable surcharge will be held at current
levels. Id. at 12.
The Forever Stamp. As a result of Docket No. R2006-1, the Postal
Service introduced a First-Class Mail ``Forever Stamp.'' The price of
this stamp at the time of its introduction was 41 cents, which equated
to the Docket No. R2006-1 price for the first ounce of single-piece
First-Class Mail. The price of this stamp increased to 42 cent as a
result of the Docket No. R2008-1 price adjustment. This stamp will
continue to be sold for 42 cents through May 10, 2009, and will cover
postage for mailing single-piece First-Class Mail even after the
anticipated price increase to 44 cents on May 11, 2009. On and after
May 11, under the planned adjustments, a new purchase of a Forever
Stamp will be at the 44-cent rate. These stamps, like the original
issue, will continue to cover the mailing of 1-ounce single-piece
First-Class Mail, regardless of future increases in the underlying
rate.
III. Unused Rate Adjustment Authority
The Postal Service states that the unused price adjustment
authority remaining following this price change is accordance with the
following schedule.
Table III-1
------------------------------------------------------------------------
Percent
Class change
------------------------------------------------------------------------
First-Class Mail.............................................. 0.043
Standard Mail................................................. 0.081
[[Page 8126]]
Periodicals................................................... 0.010
Package Services.............................................. 0.025
Special Services.............................................. 0.015
------------------------------------------------------------------------
Id. at 6.
IV. Consistency of Adjustment Notice With Commission Rules
Relationship of streamlined procedures to intended implementation
date. Commission rules implementing the PAEA require the Postal Service
to file notice of its intention to adjust market dominant rates at
least 45 days prior to the intended implementation date. The Commission
notes, in this instance, that the Postal Service is providing more than
the minimum amount of notice, given that the anticipated effective date
is May 11, 2009.
V. Commission Action
In Docket No. RM2007-1, the Commission developed a set of
procedures to carry out its review of an adjustment notice in
accordance with the PAEA and pertinent provisions of the Administrative
Procedure Act. Pursuant to these procedures, the filing of an
adjustment notice triggers a requirement that the Commission establish
a formal docket to review the consistency of the planned adjustments
with regulations that subsume legal provisions, policy issues, and
technical matters. Requirements related to public notice, official
publication, public representation, a public comment period, and other
matters also attach to the review.
The Commission takes several steps at this time in conformance with
these requirements. First, it has posted the Postal Service's
Adjustment Notice on its Web site, http://www.prc.gov. It also has made
the Adjustment Notice available for copying and inspection during
regular business hours (8 a.m. to 4:30 p.m.) at the Commission, 901 New
York Avenue, NW., Suite 200, Washington, DC 20268-0001. Any subsequent
Postal Service filings in this docket, along with any written comments
and filings by others, also will be posted on the Commission's Web site
and made available for public inspection and copying at the Commission
during regular business hours.
Second, the Commission establishes the requisite formal docket,
captioned Docket No. R2009-2, Notice of Price Adjustment, to conduct
its mandatory review of the Postal Service's planned rate adjustments.
It notes that this review is conducted under the legal authority of 39
U.S.C. 3622.
The Commission's intention is to conduct this review by bringing
its judgment to bear on the basis of the material presented in the
Adjustment Notice, the objectives, factors and requirements of the
PAEA, including referenced postal policies, Commission rules, and
public comments.
Third, the Commission issues this notice addressing the Adjustment
Notice and related matters, in conformance with 39 CFR 3010.13. It also
directs the Secretary of the Commission to arrange for prompt
publication of this notice and order in the Federal Register. It
appoints Kenneth E. Richardson, Pamela A. Thompson, and William C.
Miller to represent the interests of the general public in conformance
with 39 CFR 3010.13(a)(4).
Public comment period; focus of comments. The Commission provides a
20-day comment period starting from the date of the filing of the
Adjustment Notice in conformance with 39 CFR 3010.13(a)(5). The comment
period extends through close of business on March 2, 2009. Rule
3010.13(b) provides that public comments should focus primarily on
whether planned rate adjustments comply with the following mandatory
requirements of 39 U.S.C. chapter 36, subchapter 1, including:
(1) Whether the planned rate adjustments measured using the
formula established in section 3010.23(b) are at or below the annual
limitation established in section 3010.11; and
(2) Whether the planned rate adjustments measured using the
formula established in section 3010.23(b) are at or below the
limitations established in section 3010.28.
Method for filing comments. The formal intervention process set out
in the Commission's rules does not apply in this type of docket.
Instead, interested persons are to submit comments electronically via
the Commission's Filing Online system. The Commission will provide
assistance to anyone not familiar with this method of filing. Those
seeking assistance should contact the Docket Section at 202-789-6846.
Additional procedural steps; timetable. Rule 3010.13(c) provides
that the Commission, within 14 days of the conclusion of the public
comment period, will determine, at a minimum, whether the planned rate
adjustments are consistent with the annual limitation set forth in
section 3010.11; the limitations set forth in section 3010.28; and 39
U.S.C. 3626, 3627 and 3629, and issue an order announcing its findings.
In this instance, the deadline for the Commission's determination is
March 16, 2009. If the planned rate adjustments are found consistent
with applicable law by the Commission, they may take effect pursuant to
appropriate action by the Postal Service. In the event the Commission
determines that planned rate adjustments are not consistent with
applicable considerations, additional procedures apply. See 39 CFR
3010.13(c) through 3010.13(i).
VI. Summary of Postal Service Adjustment Notice
Background. Commission rule 3010.14 requires the Postal Service to
include certain explanatory and supporting information in each
adjustment notice, but leaves organization of the notice and
presentation of the requisite material to the discretion of the Postal
Service. The purpose of the information the Postal Service provides is
to facilitate expeditious review of the consistency of the adjustment
notice with pertinent considerations.
Organization of adjustment notice. The Adjustment Notice in this
docket consists of an introductory section; three sections designated
as parts; three appendices; and five attachments.
Introductory section. The Postal Service identifies the planned
effective date as May 11, 2009 for most price adjustments. It states
that the new prices related to a full-service option of Intelligent
Mail will take effect on November 29, 2009, and the Personalized
Stamped Envelopes options will have their effective dates established
by separate notice. It also represents, in conformance with the notice
requirements of 39 CFR 3010.14(a)(3), that it will issue public notice
of the planned rate changes at least 45 days before the effective date
via several means in addition to its Adjustment Notice. Specifically,
it states that this includes issuing notice of the price changes, on
the same day of its filing with the Commission, 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 (March/April issue), the Postal
Bulletin, and Federal Register. Id. at 1-2.
The Postal Service identifies Joseph D. Moeller, Manager of
Pricing, as the
[[Page 8127]]
Postal Service official who will be available to provide prompt
responses to requests for clarification from the Commission. In the
remainder of the Adjustment Notice, it provides supporting technical
information and justifications, including workpapers where applicable.
39 CFR 3010.13(a)(1), 3010.13(a)(3), 3010.13(a)(4), and 3010.14(b). Id.
at 2.
Part I. The Postal Service represents that the material presented
in part I, captioned Price Cap Compliance, complies with 39 CFR
3010.14(b)(1) through (4) by identifying the amount of the applicable
price cap; the amount of any unused rate (price) adjustment authority
available for each class of mail; the percentage change in prices for
each class of mail; and the amount of any unused rate adjustment
authority generated by this price change. Id.
Part II. The Postal Service represents that the material presented
in part II, captioned Description of the Prices, responds to 39 CFR
3010.14(b)(7) and (8). These rules require the Postal Service to
discuss how the planned prices ``help achieve'' the objectives of
section 3622(b) and ``properly take into account'' the factors of
section 3622(c); and how the planned prices are consistent with
sections 3626, 3627 and 3629. In addition, the Postal Service discusses
the workshare discounts included within the planned price adjustments
as required by 39 CFR 3010.14(b)(5) through (6). Id. at 6-7.
Part III. The Postal Service represents that part III, captioned
MCS [Mail Classification Schedule] Product Description Changes,
responds to the requirement in 39 CFR 3010.14(b)(9) that the instant
notice include all the changes to the product descriptions within the
MCS that are necessitated by the planned rate adjustments. These
changes are presented based on draft MCS language that is 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. Id. at 45.
Appendices. The Adjustment Notice is accompanied by three
appendices. Appendix A provides the schedules of new prices and
classification changes in Mail Classification Schedule format; Appendix
B provides workshare discounts, cost differentials, and passthroughs;
and Appendix C provides the price cap calculation.
Attachments. The attachments consist of workbooks the Postal
Service prepared to demonstrate that the prices identified in the
appendices comply with the price cap. The five attachments are
identified as USPS-R2009-2/1: Cap Compliance for First-Class Mail Price
Changes; USPS-R2009-2/2: Standard Mail Cap Compliance; USPS-R2009-2/3:
Periodicals Cap Compliance; USPS-R2009-2/4: Package Services Cap
Compliance; and USPS-R2009-2/5: Special Services Cap Compliance.
VII. Class-Specific Summary of Price Adjustments and Classification
Changes
A. First-Class Mail
The Postal Service identifies six First-Class Mail products:
Single-Piece Letters/Postcards; Presorted Letters/Postcards; Flats,
Parcels; Outbound Single-Piece First-Class Mail International; and
Inbound Single-Piece First-Class Mail International. The planned price
changes for these products, in percentage terms, range from 2.567
percent to 4.616 percent. Product-specific changes appear in the
following table.
Table VII-1
------------------------------------------------------------------------
Percent
Product change
------------------------------------------------------------------------
Single-Piece Letters & Cards.................................. 4.616
Presort Letters & Cards....................................... 3.080
Flats......................................................... 3.882
Parcels....................................................... 2.567
International *............................................... 4.136
Overall....................................................... 3.771
------------------------------------------------------------------------
* This includes Inbound and Outbound Single-Piece First-Class Mail
International.
Id. at 11-12.
The Postal Service states that a major driver of the overall
increase for First-Class Mail is the price of a stamp for 1-ounce,
single-piece letters. It plans to increase this price by 2 cents (4.8
percent). This increase also reflects the integer (cent) rounding
constraint traditionally applied to this price. The Postal Service
asserts that the additional ounce price and the non-machinable
surcharge are held at current levels, thus tempering the increase
caused by the 2-cent increase on the first-ounce price for letters. Id.
at 12.
Presort Letters and Cards. The Postal Service plans less-than-
average increases in automation prices to help maintain letter volume.
In addition, the Postal Service will make optional some requirements
for presortation of automation First-Class Mail Id. at 13.
Classification changes. To facilitate the adoption of the full-
service option of Intelligent Mail the Postal Service has added a price
differential to the MCS for customers who use this option with First-
Class Mail presorted letters and flats. The price when using this
option is reduced by 0.3 cents from what otherwise would have been
paid. The specific mail preparation requirements for this
classification have not been fully specified. Id. at 14.
B. Standard Mail
The Postal Service identifies six Standard Mail products: Letters;
Flats; Parcels and Not-Flat Machinables (NFMs); High Density and
Saturation Letters; High Density and Saturation Flats and Parcels; and
Carrier Route Letters, Flats, and Parcels. The planned price changes
for these products range from 1.248 percent to 16.425 percent. Product-
specific changes appear in the following table.
Table VII-2
------------------------------------------------------------------------
Percent
Product change
------------------------------------------------------------------------
Letters...................................................... 3.829
Flats........................................................ 2.306
Parcels and NFMs............................................. 16.425
High Density/Saturation Letters.............................. 1.248
High Density/Saturation Flats and Parcels.................... 2.233
Carrier Route Letters, Flats and Parcels..................... 4.310
Overall...................................................... 3.781
------------------------------------------------------------------------
Id.
The Postal Service states that the price change for the Flats
product is lower than the price cap (2.306 percent) to moderate the
increase for catalog mailers, whose volume fell considerably in FY
2008. Although FY 2008 data shows a cost coverage below 100 percent,
the Postal Service asserts it is mitigating the price increase to
maintain the viability of the catalog industry. It also is either
reducing or limiting the increase of the pound rate category for the
Flats product. Id. at 15.
The Postal Service notes that it is working to improve contribution
for the Parcels and NFMs product. It plans a 16.425 percent average
increase. However, incentives to more efficient transportation and
entry practices dropship deeper into the system are enhanced to
encourage. Id. at 16.
Classification changes. The Postal Service has planned new price
incentives targeted at encouraging new Saturation mail volumes. The
incentives will reduce the price for new Saturation letters mailed
during defined periods by 3.7 cents (2.2 cents for nonprofit Saturation
letters). Id.
The Postal Service is revising the pricing categories for Standard
Mail Parcels/NFMs. There no longer will be a separate price for
machinable parcels, irregular parcels, and NFMs presorted to 5-digit
and entered at origin. For such pieces, the lowest price available will
be the BMC price. Separate prices also will
[[Page 8128]]
be eliminated for origin entered SCF [sectional center facility]
irregular parcels and NFMs, DSCF [destination section center facility]
entered BMC irregular parcels and NFMs, and DSCF and DBMC [destination
bulk mail center] entered Mixed BMC irregular parcels and NFMs. Id. at
17.
To facilitate the adoption of the full-service option of
Intelligent Mail, the Postal Service has added a price differential to
the MCS for customers who use this option with Standard Mail. The price
when using this option is reduced by 0.1 cents from what otherwise
would have been paid. The specific mail preparation requirements for
this classification have not been fully specified. Id. at 17-18.
The Postal Service changed mail preparation standards in November
2008 to require Standard Mail customers to use an approved Move Update
method. Customers not complying with the Move Update standard will be
subject to a charge of 7 cents per piece. Id. at 18.
C. Periodicals
The Postal Service identifies two Periodicals products: Within
County Periodicals and Outside County Periodicals. The planned price
changes are relatively close and both are below the cap. Product-
specific changes appear in the following table.
Table VII-3
------------------------------------------------------------------------
Percent
Product change
------------------------------------------------------------------------
Outside County................................................ 3.973
Within County................................................. 3.802
Overall....................................................... 3.966
------------------------------------------------------------------------
Id. at 19.
The Postal Service asserts that the Periodicals class has been
challenging in terms of cost coverage. The Postal Service states that
Periodicals is the only class of mail failing to cover attributable
costs in FY 2008. It also is cognizant of the value of the class to the
public. It contends the adjusted prices are designed to balance the
impact on publications, while taking advantage of the new price
structure that will improve the efficiency of the product. Id.
Classification changes. To facilitate the adoption of the full-
service option of Intelligent Mail, the Postal Service has added a
price differential for customers who use this option with Periodicals.
The per-piece charge when using this option is reduced by 0.1 cents
from what otherwise would have been paid. The specific mail preparation
requirements for this classification have not been fully specified. Id.
at 20.
Currently, Periodicals are required to use ACS and pay a fee of 25
cents per address change. By adopting the full-service option of
Intelligent Mail, a publication also qualifies for no-fee ACS, which,
in itself, is a substantial incentive to use the full-service option.
Id.
D. Package Services
The Postal Service identifies five Package Services products:
Single-Piece Parcel Post; Bound Printed Matter Flats; Bound Printed
Matter Parcels; Media Mail/Library Mail; and Inbound Surface Parcel
Post (at Universal Postal Union (UPU) rates). The planned price changes
range from 2.0 percent reduction to an increase of 7.468 percent.
Product-specific changes appear in the following table.
Table VII-4
------------------------------------------------------------------------
Percent
Product change
------------------------------------------------------------------------
Single-Piece Parcel Post..................................... 4.450
BPM Flats.................................................... -2.000
BPM Parcels.................................................. 2.504
Media Mail and Library Mail.................................. 7.468
Inbound Surface Parcel Post.................................. * 5.027
Overall...................................................... 3.800
------------------------------------------------------------------------
* The Postal Service notes that prices for Inbound (International)
Surface Parcel Post (at UPU rates) are determined by the Universal
Postal Union and are not under its (the Postal Service's) control. Id.
at 20, n.16.
Id.
The Postal Service states that its overall goal in Package Services
is to improve the profitability of the product. It notes that in FY
2008, Media Mail, Library Mail, and Single-Piece Parcel Post failed to
cover costs, although the class as a whole had a positive cost
coverage. Because Bound Printed Matter flats already have a healthy
cost coverage, the Postal Service plans on reducing the average price
for Bound Printed Matter flats in order to offset the needed higher
price increases for the lower performing products. Id. at 21.
Classification changes. The Postal Service plans to change the
Single-Piece Parcel Post price structure by merging the Intra-BMC and
Inter-BMC prices to create a single price at each weight level in each
zone. The separate price for the Local zone is being merged with the
Zones 1 and 2 prices. Id. at 21-22.
The current price structure for Single-Piece Parcel Post includes a
surcharge for non-machinable parcels. The Postal Service is eliminating
this surcharge and incorporating its effect into the base price. Id. at
22.
E. Special Services
The Postal Service identifies 11 Special Services products:
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; and Premium
Forwarding Service. The planned overall increase is 3.837 percent. Id.
at 22-23.
The Postal Service states that fee increases for many Special
Services are generally designed to be close to the percentage increase
in CPI-U, while maintaining consistency with historical rounding
constraints. Id. at 23. It says that Special Services affected by this
approach include Business Reply Mail, and several Ancillary Services,
including Certified Mail; Address List Services; Account Maintenance;
Application and Mailing Permit fees; Parcel Airlift Service; Post
Office Boxes; Return Receipt (green card); and Shipper Paid Forwarding.
Id. The Postal Service states the greater increases for Electronic
Return Receipt and Return Receipt After Mailing reflect their high
value of service. Id., n.17.
Address Correction Service (ACS). The Postal Service states that a
significant portion of ACS will be incorporated into the full-service
option of Intelligent Mail. It notes that manual fees are not increased
while Automated and Electronic fees have increases exceeding the cap.
Id.
Certificate of Mailing. The Postal Service asserts that for
Certificate of Mailing, it designed fees for individual pieces to
increase by a percentage as close to the cap percentage as possible,
consistent with the historical nickel rounding constraint for this
special service. However, it increases fees for Certificates of Mailing
for bulk pieces slightly above the cap to reflect the low price
compared to a high value of service. Id.
Confirm. The Postal Service plans a classification change for
Confirm by adding a new ``Bronze'' price tier, and new segments within
the two existing tiers which differentiate between mail owners and mail
agents. Id. at 24.
Insurance. The Postal Service states that the planned above-average
price increases for the $50.01 to $100 fee and the $100.01 to $200 fee
are intended to smooth the price relationships among the various
increments. It says the increase in the incremental fee reflects the
increased value of service provided as the item's value increases. Id.
[[Page 8129]]
Registered Mail. The Postal Service plans to increase fees for
Registered Mail by an average of 8.7 percent to reflect the high value
of service offered, and to improve the very low cost coverage. Id.
Stamped Envelopes. The Postal Service plans to increase the fees
for single-piece stamped envelopes by one cent. It says it keeps the
fees for plain envelopes in packs of 500 as close to the cap as
possible within the rounding constraints. Fees for personalized
envelopes, however, increase by more than the cap to reflect the
convenience this service provides. The Postal Service states that it is
enhancing the value of service by introducing new envelope options,
some of which will be available on a date later than May 11, 2009. Id.
at 24-25.
Stamped Cards. The Postal Service does not plan to increase the fee
for single Stamped Cards. Id. at 25.
Bulk Parcel Return Service. The Postal Service states that the
increase in the per-piece fee is similar to the general increase for
Standard Mail parcels. Id.
Restricted Delivery, Collect on Delivery Notice of Nondelivery and
Alteration of Charges, and Money Order inquiries. The Postal Service
says the fee increases for these services reflect their high value of
service. Id.
International Special Services. The Postal Service says its general
approach to international special services has been to set fees for
those services that are similar to the fees for the equivalent domestic
service, and that it has followed this approach for International
Certificates of Mailing; International Registered Mail; International
Return Receipts; and International Restricted Delivery. Id.
VIII. Compliance With Preferred Mail Requirements
The Postal Service explains its compliance with section 3626, which
sets forth pricing requirements for certain preferred categories of
mail. Id. at 25-27. It contends that the price adjustment continues to
recognize the preferential status of Within County Periodicals. 39
U.S.C. 3626(a)(3). The Postal Service states that the rate adjustments
maintain the rate preference for Nonprofit and Classroom pieces at a 5
percent discount on all components of postage except for advertising
pounds and ride-along postage. 3626(a)(4)(A)-(B). The Postal Service
continues to provide Science of Agriculture Periodicals with
advertising pound rates for DDU [destination delivery unit], DSCF, DADC
[destination area destination center] and Zones 1 & 2 that are 75
percent of the advertising pound rates applicable to regular
Periodicals. 39 U.S.C. 3626(a)(5). Nonprofit Standard Mail prices are
set to achieve a revenue per-piece ratio of 60.2 percent of the
commercial average revenue per piece. 39 U.S.C. 3626(a)(6). The Postal
Service states that it has set the prices for Library Mail to be, as
nearly as practical, equal to 95 percent of the prices for Media Mail.
39 U.S.C. 3626(a)(7). Finally, the Postal Service states that it
implemented a new ``limited circulation'' discount in 2008, which gives
Outside County pieces of Periodicals having fewer than 5,000 Outside
County pieces and at least one Within County piece a discount
equivalent to the Nonprofit and Classroom Periodicals discount.
IX. Compliance With Workshare Discount Rules
The Postal Service explains that section 3622(e) requires the
Postal Service to justify any worksharing discounts that exceed 100
percent of avoided costs by reference to the exceptions specified in
that provision. Id. at 27. In addition, 39 CFR 3010.14(b)(6) requires
the Postal Service to explain any discount set substantially below 100
percent of avoided costs. Id. at 29. The workshare discounts, cost
differentials, and passthroughs are shown in Appendix B. The
accompanying explanations are provided on a class-by-class basis in the
Adjustment Notice at pages 29-45.
X. Mail Classification Schedule Product Description Changes
The Postal Service addresses 39 CFR 3010.14(b)(9) in part III of
its Adjustment Notice. Id. at 45-47. This rule requires that the
Adjustment 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 that is 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.
Part III of the Adjustment Notice also summarizes the
classification changes identified above in this notice and previously
in the Adjustment Notice. It also identifies a further Outbound Single-
Piece First-Class Mail International classification change which splits
the current Canada and Mexico Postcard category into two distinct price
categories. Id. at 46.
XI. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. R2009-2 to consider the
planned price adjustments in rates and fees for market dominant postal
products and services identified in the Postal Service's February 10,
2009 Adjustment Notice.
2. Interested persons may submit comments on the planned price
adjustments. Comments are due March 2, 2009.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Kenneth E.
Richardson, Pamela A. Thompson, and William C. Miller 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.
Dated February 12, 2009.
By the Commission.
Steven W. Williams,
Secretary.
[FR Doc. E9-3781 Filed 2-20-09; 8:45 am]
BILLING CODE 7710-FW-P