[Federal Register Volume 74, Number 85 (Tuesday, May 5, 2009)]
[Rules and Regulations]
[Pages 20834-20858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-9590]
[[Page 20833]]
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Part IV
Postal Regulatory Commission
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39 CFR Parts 3001 and 3050
Periodic Reporting Rules; Final Rule
Federal Register / Vol. 74 , No. 85 / Tuesday, May 5, 2009 / Rules
and Regulations
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POSTAL REGULATORY COMMISSION
39 CFR Parts 3001 and 3050
[Docket No. RM2008-4; Order No. 203]
Periodic Reporting Rules
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Commission is adopting a set of rules to address the need
for periodic reports from the Postal Service. Adoption of these rules
will facilitate accountability and transparency of Postal Service
operations, consistent with a new postal law. This document
incorporates a revision to an internal reference in the rules. This
revision was identified in a recent notice.
DATES: Effective June 4, 2009.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-7689-6824 and [email protected].
SUPPLEMENTARY INFORMATION: Regulatory History, 73 FR 53324 (September
15, 2008).
I. Introduction
Under the Postal Accountability and Enhancement Act (PAEA), Public
Law 109-435, 120 Stat. 3218 (2006), the Postal Regulatory Commission
was given enhanced information gathering and reporting
responsibilities. To implement its information gathering and reporting
functions under the PAEA, the Commission issued its Notice of Proposed
Rulemaking Prescribing Form and Content of Periodic Reports on August
22, 2008 (Order No. 104).
Initial comments on these proposed rules were filed by seven
participants.\1\ Reply comments were filed on November 14, 2008 by
eight participants.\2\ Comments were generally supportive of the
proposed rules as appropriate and reasonable requirements on which to
base financial reporting under the new regulatory regime under the
PAEA. The Postal Service commends the rules for leaving the existing
financial reporting structure essentially intact while adapting it from
a subclass-based format to a product-based format. It notes that the
fundamental building blocks of cost reporting will remain the same,
separating accrued costs into segments, applying variability studies to
form pools of attributable costs, and using data collection systems to
distribute those pools to products, as summarized in the Cost and
Revenue Analysis (CRA) Report and the Cost Segments and Components
(CSC) Report. Costs avoided by worksharing and other characteristics
will continue to be estimated, for the most part, by down-flow models
supplemented by special studies. Postal Service Comments at 1-2.
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\1\ Comments of the Department of Defense in Docket No. RM2008-
4, filed on October 15, 2008 (DOD Comments); Initial Comments of the
Public Representative (Public Representative Comments); Initial
Comments of the Greeting Card Association (GCA Comments); Initial
Comments of Time Warner Inc. in Response to Order No. 104 (Time
Warner Comments); Initial Comments of the United States Postal
Service in Response to Order No. 104 (Postal Service Comments);
Valpak Direct Marketing Systems, Inc. and Valpak Dealer's
Association, Inc. Initial Comments Regarding Proposed Rules
Prescribing Form and Content of Periodic Reports (Valpak Comments);
and Initial Comments of Major Mailers Association (MMA Comments),
filed on October 16, 2008.
\2\ Reply Comments of Time Warner Inc. in Response to Order No.
104 (Time Warner Reply Comments); Reply Comments of the Public
Representative (Public Representative Reply Comments); Reply
Comments of United Parcel Service on Notice of Proposed Rulemaking
Prescribing Form and Content of Periodic Reports (UPS Reply
Comments); Reply Comments of Magazine Publishers of America, Inc.,
Alliance of Nonprofit Mailers and American Business Media (MPA/ANM/
ABM Reply Comments); Reply Comments of Pitney Bowes Inc. (Pitney
Bowes Reply Comments); Valpak Direct Marketing Systems, Inc. and
Valpak Dealers' Association, Inc. Reply Comments Regarding Proposed
Rules Prescribing Form and Content of Periodic Reports (Valpak Reply
Comments); and Reply Comments of the United States Postal Service in
Response to Order No. 104 (Postal Service Reply Comments), all filed
on November 14, 2008.
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The Postal Service also commends the rules for giving appropriate
recognition to the transitional status of data reporting, providing a
flexible approach for converting from subclass- to product-based
reporting, and integrating negotiated service agreement (NSA) data into
the larger reporting system. Id. The Postal Service concludes that
overall the proposed new rules establish ``a workable framework for the
ACR and periodic reporting.'' Id. at 2. Some participants argue that a
few of the proposed rules should be pared back until experience
indicates that there is a need for more robust versions of the rules
while other participants argue that the proposed rules need to be made
more robust in some respects. Comments are discussed in the context of
the specific proposed rule to which they apply.
II. Proposals To Revise Specific Reporting Rules
A. Proposed Rule 3050.1 (Definitions)
Definition of ``Analytical Principle.'' Proposed rule 3050.1
defines certain terms used in the periodic reporting rules. Proposed
paragraph (c) of this section defines ``analytical principle'' as:
A particular economic, mathematical, or statistical theory,
precept, or assumption applied by the Postal Service in producing a
periodic report to the Commission.
Valpak argues that this definition is too narrow. Noting that the
Commission considers a change in the specification of a regression
model to be a change to an ``analytical principle,'' Valpak argues that
a regression analysis ``may be viewed as a tool or a technique, or even
a method, but it is not commonly understood to be a `theory,'
`precept,' or `assumption.' '' Valpak Comments at 21. Valpak's argument
is supported by the Public Representative. Public Representative Reply
Comments at 17.
The Commission believes that the ambiguity that Valpak and the
Public Representative perceive is resolved when the definition of
``analytical principle'' in final rule 3050.1(c) is read together with
the definition of ``quantification technique'' in final rule 3050.1(f).
Final rule 3050.1(f) reads:
Quantification technique refers to any data entry or
manipulation technique whose validity does not require the
acceptance of a particular economic, mathematical, or statistical
theory, precept, or assumption. A change in quantification technique
should not change the output of the analysis in which it is
employed.
Together, the definitions of ``analytical principle'' and
``quantification technique'' divide the data manipulation techniques
used to produce the Postal Service's periodic reports into two
categories--those whose validity requires acceptance of a causal
theory, and those whose validity does not.
Explanatory terms are included in a regression equation because
they are assumed to ``explain,'' or partially cause, the phenomenon
being measured. Because explanatory terms are assumed to influence the
phenomenon being measured (or are being tested to see if they do), they
fit the definition of ``analytical principle.'' In contrast, choosing a
standard statistical package, such as SAS or STATA, to fit the
regression equation to the data (using the standard mathematical
formula for calculating least squares) does not depend on any
assumption about what causes the phenomenon being measured and should
not affect the result. The statistical package chosen to run the
regression, therefore, fits the definition of ``quantification
technique.'' This should clarify how the definitions in final rule
3050.1 fit together as a comprehensive whole. Because the Commission
does not believe that the definition of ``analytical principle'' in
Sec. 3050.1(c) needs to be modified, it declines to accept Valpak's
proposal.
[[Page 20835]]
Definition of the term ``product.'' Proposed rule 3050.1 defines
terms that are of unique relevance to part 3050 of the Commission's
rules. The Public Representative argues that the definitions contained
in proposed rule 3050.1 should be consistent with and not redundant of
those found in Sec. 3001.5--the main definitional section of the
Commission's rules. He notes, in particular, that the term ``product''
is defined in proposed rule 3050.1 and in Sec. 3001.5, and that the
definitions are not precisely the same. The Commission agrees that the
term ``product'' does not need to be defined in its periodic reporting
rules. Accordingly, it has eliminated the term ``product'' from the
definitions provided in final rule 3050.1.
Definitions of ``Annual Report'' and ``section 3652 report.''
Proposed rule 3050.1(e) defined the term ``Annual Report'' as ``the
report that section 3652 of the Postal Accountability and Enhancement
Act requires the Postal Service to provide to the Commission each
year.'' In its discussion of revisions to Sec. 3050.20, infra, the
Commission observes that the analysis that Sec. 3050.20 requires the
Postal Service to provide is meant to implement Sec. 3652 of the PAEA.
Generally, Sec. 3652 requires the Postal Service to analyze how rates
and service in the previous year complied with the requirements of
title 39 of the United States Code.
The comments received concerning proposed rule 3050.20 have
persuaded the Commission that instead of ``Annual Report,'' its
periodic reporting rules need to employ two standard references to the
annual reports that the Postal Service is required to file with the
Commission--one broader than the term ``Annual Report,'' and one that
is slightly more narrow. Where a broader definition is intended, the
final rules use the phrase ``annual periodic reports to the
Commission.'' Where the narrower definition is intended, the final
rules use the phrase ``section 3652 report.'' That phrase, however,
will be used to encompass all of the Postal Service reports required by
Sec. 3652 except for the program performance reports referenced by
Sec. 3652(g). Those reports are also required to be reported at the
time that the Postal Service files its comprehensive statement with
Congress. See 39 U.S.C. 2804(a) and 2401(e). To avoid redundant
reporting, ``section 3652 report'' is understood to exclude program
performance reporting under Sec. Sec. 2803 and 2804. See final rule
3050.1(g).
B. Proposed Rule 3050.2 (Corrections and Changes in Input Data or
Quantification Techniques)
Proposed rule 3050.2 requires that the Postal Service document its
periodic reports. Paragraph (a) requires it to list and explain
corrections, changes in input data, and changes in quantification
techniques made since the report was last filed. Paragraphs (b) and (c)
require the submission of workpapers and spreadsheets that meet certain
standards. Paragraph (d) allows portions of the documentation required
by ``this section'' that are not time critical to be filed up to two
weeks late if the Postal Service gets advance approval of the
Commission.
Delayed filing of documentation. Valpak observes that it is less
appropriate to file the material required by paragraph (a) 2 weeks
later than the other material required by proposed rule 3050.2. The
Commission agrees. Final rule 3050.2 applies the deferral option only
to paragraphs (b) and (c).
Tracking the impact of errors. Valpak argues that where errors have
been corrected, the impact of the correction could be masked by other
changes in the relevant periodic report. It argues that proposed rule
3050.2 would lead to more transparency if it were to state:
Corrections should be presented in a manner that permits
replication of the calculation both before, and after, correction of
the error.
Id. at 22.
The Postal Service argues that complying with the proposed
requirement might be a straightforward exercise if a model with an
error consisted of a single spreadsheet. The spreadsheet program would
allow the program to be run both with the error and with the error
corrected. It points out, however, that where there is an elaborate set
of linked models, as occurs in the CRA, complying with the proposal
might require a large number of time-consuming model runs if there were
multiple errors whose impact needed to be separately demonstrated.
Under this circumstance, the Postal Service argues that complying with
the proposal would be a large waste of effort and resources. Postal
Service Reply Comments at 7-8. The Commission agrees. Accordingly, it
declines to adopt the revision to proposed rule 3050.2 that Valpak
proposes.
Duty to explain variations in results that exceed a quantitative
threshold. MMA argues that the Postal Service's choices of what input
data to use can be as significant in their impacts as what analytical
methods the Postal Service chooses to apply to data. As an
illustration, it complains that the Postal Service's insistence on
using theoretical Delivery Point Sequencing (DPS) percentages rather
than actual DPS percentages has had a major impact on the cost of the
kind of mail that it sends. It notes that proposed rule 3050.2 would
require the Postal Service to identify input data or quantification
techniques and to list any corrections that it has made since a
periodic report was last submitted and to explain the change or
correction. The listing and explanation are to be provided when the
Postal Service submits the relevant periodic report. It argues that
where the impact of such changes is sufficiently large, this proposed
procedure is inadequate. It proposes that there be an opportunity for
advance review of changes to input data, quantification techniques, or
corrections that impact avoided costs by more than 0.1 cent. MMA
Comments at 2-4. It argues that this issue will grow with the adoption
of the Intelligent Mail barcode. Id. at 4-5.
The Postal Service opposes the proposal, arguing that it is
impossible to identify the complete set of input changes that cause
changes to cost avoidance estimates in excess of a particular threshold
until the workshare models are finalized. It asserts that there is
``virtually no lag time between finalization of the workshare models
and filing of the ACR.'' Postal Service Reply Comments at 22. The
Commission accepts the Postal Service's representation that there is
not a sufficient interval between the finalization of its avoided cost
model results and the filing of its Sec. 3652 report to accommodate
MMA's proposal.
Valpak offers a related proposal. It asks that the Postal Service
be required to identify and explain its Sec. 3652 report results that
are anomalous from a logical perspective, and to explain results that
change a product's unit attributable costs from year to year by more
than the change in the Consumer Price Index plus or minus 5 percent.
Otherwise, Valpak states, in the brief time available to mailers, they
``would need to search for such peculiarities on their own and, even if
found, mailers would be left wondering about the relevant facts and
their significance, because they would have received no explanation
from the Postal Service.'' Valpak Comments at 20.
The Postal Service responds by arguing that the definition of a
logical anomaly is too subjective to serve as a workable rule. It also
argues that the plus-or-minus 5 percent standard for variations in unit
attributable costs is too objective; that is, it cannot be varied for
small mail classes whose unit cost
[[Page 20836]]
results vary substantially due to the problem of small sample size. It
also questions the value of pursuing such details of cost analysis in a
price cap regulatory regime. Postal Service Reply Comments at 7.
The Commission urges the Postal Service to include in its Sec.
3652 report, to the maximum extent possible, explanations of both
logical anomalies and unusually large swings from year to year in its
unit attributable cost results. Nevertheless, it declines to adopt a
quantitative threshold triggering this obligation as arbitrary. It also
agrees that logical anomalies are too subjective to serve as a workable
rule. It, therefore, declines to adopt periodic reporting rules with
quantitative thresholds as Valpak requests.
C. Proposed Rule 3050.3 (Confidential Treatment of Periodic Reports)
Part 3007, proposed in Docket No. RM2008-1, would implement the
provisions of the PAEA that generally authorize the Postal Service to
designate information in the periodic reports that it provides to the
Commission as confidential within the meaning of 5 U.S.C. 552(b) or as
commercially sensitive within the meaning of 39 U.S.C. 410(c). See 39
U.S.C. 3654(f). Proposed part 3007 would resolve the issue of how
information so designated could be made public. The Commission
contemplates initiating a series of rulemakings designed to identify in
part 3050 specific categories of information that would be
presumptively confidential and specific categories of information that
presumptively would not, as a guide to future submissions by the Postal
Service and third parties.
D. Proposed Rule 3050.11 (Procedures for Changing Accepted Analytical
Principles)
Proposed rule 3050.11 sets forth procedures governing Commission
review of a petition or notice of proceeding to change an accepted
analytical principle. It would evaluate proposals to change accepted
analytical principles under the informal rulemaking procedures of 5
U.S.C. 553. The proposed rule would allow the Commission, its Public
Representative, the Postal Service, or private parties, to file a
petition or notice of proceeding to change accepted analytical
principles used in the Postal Service's annual reports to the
Commission. The rule goes on to identify content that the petition
should contain and the procedures to be followed in obtaining
additional information that would support the petition.
Methodological rulemakings initiated by the Commission. Valpak
points out that proposed rule 3050.11 would allow the Commission to
institute this process on its own behalf although the rule has
provisions with respect to the content of the instituting document and
the procedures for gathering supporting information that are explicitly
related only to ``petitions.'' It correctly observes that this leaves
it unclear whether these provisions are meant to apply to proceedings
begun by the Commission on its own initiative. Valpak Comments at 14.
To remove this ambiguity, final rule 3050.11 explicitly relates these
provisions not just to a ``petition,'' but to a ``notice of
proceeding'' issued by the Commission.
Methodological rulemakings initiated by a Public Representative.
Proposed rule 3050.11 lists a ``Public Representative'' among those who
would be authorized to petition for a rulemaking to change an accepted
analytical principle. Valpak notes that the current Commission practice
is to appoint public representatives only after a formal docket has
been established. It says ``[i]n such a situation, it is unclear
whether anyone among the Commission's rotating Pubic Representatives
could initiate a change in an `accepted analytical principle.' ''
Valpak Comments at 24. The Public Representative makes a related
recommendation that a public representative should be appointed in a
methodology rulemaking immediately after the Commission has concluded
that a petition should move from the evaluation stage (see paragraphs
(a) and (b) of proposed rule 3050.11) to the notice of proposed
rulemaking stage (see paragraph (c)(2) of proposed rule 3050.11).
Public Representative Comments at 7.
The Commission appoints a public representative in every
proceeding. 39 U.S.C. 505. Thus, the public will be represented in
strategic rulemakings as described in this order. Furthermore, public
representatives are appointed in Annual Compliance Determination (ACD)
dockets as well as dockets established to consider rate and
classification adjustments. A public representative in any such
proceeding could determine that petitioning to initiate a rulemaking
would be an appropriate exercise of responsibility.
Discovery. Paragraph (b) of proposed rule 3050.11 provides:
To better evaluate a petition to change an accepted analytical
principle, the Commission may order that it be made the subject of
discovery. By request of any interested person, or on its own
behalf, the Commission may order that the petitioner and/or the
Postal Service provide experts on the subject matter of the proposal
to participate in technical conferences, prepare statements
clarifying or supplementing their views, or be deposed by officers
of the Commission.
This paragraph allows the Commission to make a petition for a
methodological rulemaking the subject of discovery at its discretion.
Valpak argues that ``optional discovery provides neither protection nor
due process.'' Valpak Comments at 33. It comments that:
This provision implicitly assumes that the Commission will be
able to decide on its own, from the face of a petition to change,
whether mailers should have the due process right to investigate the
proposed change. But such an assumption is unlikely to be accurate.
Mailers often focus on changes which appear significant to them,
giving greater attention to details than the Commission staff can
devote to the issues and consequences presented by such changes.
Moreover, not all weaknesses are apparent of the face of each
proposal.
Id. Accordingly, Valpak contends that discovery should be provided
for as of right. It recommends that this be accomplished by applying
the formal hearing procedures of part 3001, subpart A, of the
Commission's rules to methodological rulemakings. Id. at 12.
As explained in Order No. 104 at 30-35, the Commission has drafted
proposed rule 3050.11 to accommodate methodological rulemakings that
run the gamut from broad surveys of the Postal Service's need for new
data and research into analytical issues (which Order No. 104 labels
``strategic rulemakings'') to narrow relatively minor methodological
changes that could be placed on a ``fast track'' to be evaluated in
time to incorporate them into the next section 3652 report. Where
technical issues are complex or controversial, technical conferences
are likely to be the first procedure authorized as a vehicle for
interested parties to identify issues that need to be explored. Where
technical conferences demonstrate a need for follow up in more depth,
discovery requests will be entertained and, very likely, granted. Where
proposed methodological changes are relatively minor and non-
controversial, and time is of the essence, however, making discovery a
``right'' could take away the Commission's ability to adapt review
procedures to fit the underlying issues presented. This could
ultimately hinder, rather than improve, the compliance review process
if it results in a diversion of the technical resources of all
concerned from more pressing issues. The Postal Service generally
agrees. Postal Service
[[Page 20837]]
Reply Comments at 4-6. For these reasons, final rule 3050.11 retains
the Commission's discretion to order discovery in evaluating petitions
for review of changes in analytical principles.
``Missing role of other parties.'' In Valpak's comments on
paragraph (b) of proposed rule 3050.11, the topic heading ``Missing
Role of Other Parties'' appears. Valpak Comments at 26. Under that
heading, Valpak notes that paragraph (b) authorizes the Commission to
``order'' the ``petitioner'' and/or the ``Postal Service'' to provide
experts on the subject matter of the petition ``to participate in
technical conferences, prepare statements * * * or be deposed.'' Id.
Valpak complains that ``there is no express authority in this rule
for expert testimony to be filed by other parties.'' Id. From the fact
that the rule does not require the expert testimony of third parties,
Valpak seems to conclude that the rules do not permit such testimony.
To remedy this alleged defect, it proposes that the language of
paragraph (b) be expanded from ``the Commission may order that the
petitioner and/or the Postal Service'' to ``the Commission may order
that the petitioner, any interested persons, and/or the Postal Service
[provide experts to participate in the process.]'' Id. at 27.
As Valpak recognizes, the Commission does not have the authority to
order experts employed by third parties to participate in a
methodological rulemaking. Therefore, the fact that Sec. 3050.11 does
not do so should not give rise to any inference that third-party
experts would not be permitted to participate in the petition
evaluation stage of a rulemaking. Such participation will be
encouraged, but the Commission does not believe that it is something
that it can require. As the Commission noted in its notice of proposed
rulemaking in this docket, it views collaboration as the ideal approach
to the development and evaluation of analytical principles in postal
ratemaking. See Order No. 104 at 30-31.
Referring to the procedures that it had to follow in vetting
analytical issues under the Postal Reorganization Act (PRA), the
Commission made the following observation:
[T]he Commission was required to resolve an analytical issue by
accepting or rejecting competing analyses submitted by opposing
witnesses. * * * In almost all cases, analyses were presented as
faits accomplis, with no opportunity for input or feedback from
either the Commission or interested third parties. The process was
cumbersome and the results were often less than satisfactory.
Id. at 30. Valpak reads this comment as a Commission preference for a
procedure that ``eliminates all counter-proposals'' to those contained
in a petition. Valpak Comments at 32, n.13. Valpak contends:
The new process is likely to be more satisfactory only if
various parties (i) are allowed to, and (ii) do, participate
vigorously in the proposed process, from the outset. Otherwise,
Postal Service studies will go largely unchallenged, and the
Commission will be unaided by input from the parties.
Id.
The Commission agrees that broad and vigorous public participation
is beneficial. The Commission believes this goal can be more fully
realized by expanding the informal rulemaking process. In ``on the
record'' hearings under the PRA, the Commission was required to choose
one from among what typically was a very limited set of models that was
sponsored ``on the record'' by the Postal Service or an intervenor. Any
correction of a model, or synthesizing of competing models that the
Commission tried to do to support a decision, was likely to be
challenged as procedurally infirm because it was not ``sponsored by a
witness on the record.'' The PAEA, on the other hand, allows
methodological issues to be resolved through informal rulemakings which
allow collaborative research and multi-party input. That is the
Commission's goal in conducting methodological rulemakings under Sec.
3050.11.
Deposing witnesses. Among other things, paragraph (b) of proposed
rule 3050.11 provides that the petitioner or the Postal Service provide
witnesses on the subject matter of the petition to be ``deposed by
officers of the Commission.'' Valpak associates the term ``depose''
with adversarial interrogation. It asserts that if the Commission's
officers were to depose witnesses, it would put them in the untenable
position of being both litigators and decision-makers.
To call informal rulemaking such as that which proposed rule
3050.11 would authorize ``litigation'' mischaracterizes that process.
Nevertheless, it may be beneficial to replace the phrase ``deposed by
officers of the Commission'' with the phrase ``or answer questions
posed by the Commission or its representatives'' as the Postal Service
proposes. See Postal Service Reply Comments at 9. This should eliminate
the inference that Valpak draws. Final rule 3050.11 incorporates that
change.
Oral input. Valpak notes that proposed rule 3050.11 gives the
Commission discretion to prescribe the form of input (oral or written)
that it will receive from interested parties. It does this at two
points in the informal rulemaking process. In paragraph (a)(2), it
allows the petitioner to request access to Postal Service data to
support its petition, and gives the Commission discretion to require
that the Postal Service's answers or objections be presented orally or
in writing. In paragraph (c)(1), the rule allows interested parties to
comment on any notice of proposed rulemaking that is issued based on a
petition to change accepted analytical principles. It gives the
Commission discretion to require that their comments be made orally as
well as in writing. Valpak Comments at 24-25.
Valpak argues that requiring a petitioner to make its requests for
Postal Service data to support its petition orally (paragraph (a)(1))
and requiring interested parties to comment on notices of proposed
rulemaking orally (paragraph (c)(1)) ``almost certainly would add
confusion to a proceeding and, possibly, would restrict the due process
rights of interested parties'' because the answers could address ``some
of the most complex, sometimes arcane, and significant matters that
come before the Commission.'' Id. at 25. It also argues that oral
comments presented by lawyers would rarely be as useful as
``thoughtful, written commentary.'' Id., n.11. It requests that the
discretion to require oral rather than written responses be eliminated
from the two paragraphs referenced above. Id. at 25-26.
The answer to Valpak's concerns is that where complex or arcane
matters are under review, the Commission is likely to reflect those
considerations in its decision, and allow comments to be submitted in
written form. While it might share Valpak's skepticism of the value of
oral comments presented by attorneys, the Commission notes that oral
comments on technical matters could be presented by technical experts.
The Commission notes that 5 U.S.C. 553(c) affords interested persons a
right to submit written comments in rulemakings covered by its
procedures. Accordingly, the Commission has revised proposed rule
3050.11(c) \3\ to provide interested persons with the right to submit
written comments in response to a notice of proposed rulemaking issued
under Sec. 3050.11. Final rule 3050.11, however, preserves the
Commission's discretion to require answers or objections to data
requests
[[Page 20838]]
made under Sec. 3050.11(a)(2) \4\ to be oral or in writing. This will
allow the Commission to adjust procedures and review periods to fit the
issues presented by a particular petition.
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\3\ Proposed rule 3050.11(c) has become final rule 3050.11(d).
\4\ Proposed rule 3050.11(a)(2) has become final rule
3050.11(b)(2).
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Notice of pending studies. The purpose of proposed rule 3050.11 is
to provide for the input of mailers and the Commission before the
Postal Service settles upon the analytical principles that it will
apply in its annual reports to the Commission. Valpak argues that the
rule will not be effective in accomplishing that purpose unless it
requires the Postal Service to notify mailers and the Commission of
special studies that are intended to result in changes to accepted
analytical principles while those studies are still in their formative
stage. Id. at 30-35. It proposes that the Postal Service be required to
publish a ``short status report'' on all special studies that it
proposes or are already underway, regardless of whether they would have
to be submitted as Sec. 3050.11 proposals. It proposes that the list
be updated quarterly, and include the ``unit within the Postal
Service'' that is responsible for conducting the study, the study's
beginning date, current status, and expected completion date, and the
analytical principles that the study ``may affect.'' Id. at 35.
The Postal Service considers adding such a requirement to Sec.
3050.11 as impractical, burdensome and unnecessary. It argues that it
has little incentive under the current regulatory system to keep its
pending special studies secret until completed. It asserts that:
The Commission has ample authority to discourage such
inclinations simply by rejecting the resulting methodologies when
the Postal Service `unveils' its proposals. Consequently, not
wishing to waste time, effort, and money, the Postal Service is not
going to proceed with major new studies in the PAEA regulatory
environment without engaging in what it believes will be deemed by
the Commission to be an appropriate amount of prior consultation.
This entire portion of the Valpak comments is written as if Valpak
did not bother to read the Commission's careful discussion of
Strategic Rulemakings. Order No. 104 at 32-33.
Postal Service Reply Comments at 10-11 (footnote omitted).
The Postal Service validly comments that strategic rulemakings are
intended to provide mailers and the Commission with a description of
its plans for new special studies and status reports on any special
studies that are already underway. This is because a strategic
rulemaking's main task is to obtain an overview of the Postal Service's
research efforts, take inventory of its research needs, and set
priorities for future research. In the interim between strategic
rulemakings, the Postal Service is expected to keep mailers and the
Commission current on major special studies, planned or pending, that
are expected to lead to proposed changes in the analytical principles
that it will use to prepare its annual reports to the Commission. If
its voluntary efforts to provide mailers and the Commission notice of
its plans for special studies should falter, the Commission could
always reconsider Valpak's proposal to make notice mandatory.
Advance review of changes to data reporting systems. The periodic
reporting rules proposed by the Commission make an important
distinction between analytical principles and mere quantification
techniques. Analytical principles are methods that reflect a theory,
precept, or assumption about causation. Changing analytical principles
can be expected to change the results of an analysis. Quantification
techniques, in contrast, are the mechanics of calculating numbers that
are theory neutral. The classic example would be multiplying two
numbers with a hand calculator versus multiplying the same two numbers
with a slide rule. The technique used should not change the result. See
proposed rules 3050.1 and 3050.2. The Commission's periodic reporting
rules are designed to allow the Commission and the public to review
changes to analytical principles before they are applied by the Postal
Service to estimate its financial results. These rules intend to make
this a manageable task by exempting mere quantification techniques from
advance review and acceptance by the Commission.
In Order No. 104, the Commission used a number of examples designed
to illustrate the distinction between analytical principles, for which
advance review is required, and quantification techniques, for which
advance review is unnecessary. The Postal Service questions the
appropriateness of several of these examples.
One example used was a major change that the Postal Service
recently made to the way that it collects Mail Processing Data System
(MODS) data. MODS data is primarily used by postal managers to estimate
plant workload so that the manager can adjust his staffing to match
that workload. MODS data has long played a central role in modeling
volume-variable mail processing costs, distributing those costs to
subclasses, and in determining mail processing productivities in cost
avoidance models.
For decades, the Postal Service has relied on calculating First
Handled Pieces (FHP) from MODS data as a proxy for how much volume was
being handled by each processing plant. Finding a valid plant-wide
estimate of FHP required that collection mail be weighed and the weight
converted to the equivalent of pieces. This process was cumbersome,
time consuming, and became less accurate if conversion factors were not
updated. Nevertheless, for decades FHP has been the only reasonable
proxy for plant-level volume that is available for modeling the volume
variability of mail processing labor costs.
Without knowing how much volume is coming in to mail processing
plants, there is little chance of accurately estimating the share of
the nearly $22 billion of variable mail processing costs for which each
product is responsible. If the Postal Service cannot successfully model
how different products incur different shares of system mail processing
costs, it cannot know how profitable its various products are at the
rates it has chosen. Not surprisingly, to lose the empirical basis for
modeling how mail processing costs are caused is of concern to the
Commission, which is charged by the PAEA with the responsibility of
determining cost estimation methods.
The Postal Service emphasizes that MODS is a management data system
first, and a ratemaking data system second. It asserts that this makes
it inappropriate for the Commission to require advance review of its
decisions about how and when this data collection system should be
modified. Postal Service Comments at 30-31.\5\
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\5\ It is worth pointing out that it is the Postal Service that
has made the decision to have MODS perform dual service as both a
management data system and a data system that plays a central role
in ratemaking. To find mail processing volumes, it could have chosen
to establish a data system that is designed primarily as a
ratemaking data system comparable to the In-Office Cost System
(IOCS) or the City Carrier Cost System (CCCS). As long as it has
made this choice, it should recognize that it has made the
Commission and the mailing public a stakeholder in the way that MODS
is administered.
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Time Warner expands on the theme that the Commission should play a
more passive role in the decisions that are made to modify the Postal
Service's basic data collection systems. It extends that theme to data
systems, like the IOCS, that were established primarily for ratemaking
purposes. Time Warner argues that there are myriad minor changes to the
IOCS that the Postal Service implements at the beginning of each fiscal
year, and that it would be burdensome and unnecessary for the Postal
Service to have to get advance
[[Page 20839]]
approval in an informal rulemaking before implementing most of these
changes. As a substitute for that approach, Time Warner makes this
---------------------------------------------------------------------------
proposal:
A sounder, more moderate approach would be for the Postal
Service, at the beginning of each fiscal year, to announce changes
it is making in the instructions to IOCS data collectors and for
interested parties to have an opportunity at that time to petition
for the initiation of a rulemaking proceeding to review changes that
seem questionable. Advance knowledge of the changes in format and
content of the IOCS sample data would facilitate analysis by the
Commission and interested parties of such data when it becomes
available after the fiscal year is ended.
Time Warner Reply Comments at 4-5 (footnote omitted).
The procedure that Time Warner describes seems to be similar to the
one in proposed rule 3050.2 for handling changes made by the Postal
Service in the quantification techniques that it uses. In that proposed
rule, the change is listed and briefly described after the Postal
Service has already incorporated it into its analysis and it is, for
all practical purposes, a fait accompli.
A procedure of this kind is appropriate for quantification
techniques that have changed because quantification techniques are, by
definition, not supposed to affect the results of an analysis. Changes
to a basic data system such as IOCS, however, could affect the results
of an analysis that relies on IOCS data. For that reason, if the Postal
Service plans myriad minor changes to the IOCS or other basic data
systems used in ratemaking, the Postal Service should treat them as
changes to analytical principles and solicit public comment on them
early enough that revisions can be made, if needed, without
jeopardizing the planned implementation date for the changes.
Accordingly, the proposal of Time Warner is not accepted.
E. Proposed Rule 3050.12 (Obsolete Special Studies)
Proposed rule 3050.12 was inspired by some recent examples of cost
estimates with important rate consequences that were significantly
inaccurate because the Postal Service had relied on a one-time study or
one-time data collection effort that had become grossly non-
representative with the passage of time. An example is the bundle-flow
model that the Postal Service continued to use for Periodicals. It
reflected a flat-processing environment that had largely disappeared
roughly 5 years before the Postal Service began a field study to update
the bundle-flow model to reflect post-AFSM 100 bundle flows. Another
example is the Barcode Sorter accept rate for letters, which has a
major impact on estimates of avoided costs for workshared letters.
Nearly a decade passed before the Postal Service updated an accept rate
that was originally based on a special survey.\6\ Proposed rule 3050.12
would have required the Postal Service to list such one-time studies or
one-time data collection efforts that it relies on to produce its
annual periodic reports to the Commission and the study's completion
date. The proposed rule would have required the Postal Service to
either certify that each one-time study on which it continues to rely
still reflects the current operating environment or provide a timetable
for updating the study so that it does. The proposed rule included a
presumption that a one-time study or data collection effort that is
more than 5 years old is obsolete. It also included liberal waiver
provisions. See Order No. 104 at 36, 43.
---------------------------------------------------------------------------
\6\ The same data are now collected automatically and routinely
updated.
---------------------------------------------------------------------------
Even though one-time cost variability and cost avoidance studies
are not routinely updated, the Postal Service asserts that they are
``tied to'' basic data reporting systems that are updated every year,
thus minimizing the need for the proposed rule. Postal Service Comments
at 15-16. It also argues that the proposed rule would be burdensome and
unworkable.
To make that case, it focuses on cost avoidance models that
underlie the calculation of worksharing discounts. It asserts that it
would be impractical to list such models and identify the completion
date of each because it continually refines such models in minor ways
which, it claims, would make it difficult to determine their vintage.
Id. at 15-20. It says that cost avoidance models ``have evolved over
decades of postal litigation and incorporate new data as possible.''
Id. at 18. For example, ``wage rates, total mail processing costs by
shape, piggyback factors, MODS data, and other inputs to these models
are updated every year.'' It then asks ``[w]hat is the date that the
Commission will use as a reference? * * * If one input in a study is
more than five years old, is the study presumed to be obsolete?'' Id.
It argues that such difficulties make it prudent to make proposed rule
3050.12 a mere placeholder, to be available when the need for such a
rule becomes more compelling. Id. at 14-15, 17.
The Postal Service's argument that the vintage date of cost
avoidance models is difficult to identify is essentially a ``straw
man.'' It works only if one chooses to disregard the clearly drawn
distinction in these periodic reporting rules between changed
analytical principles on the one hand, and mere updating of input data
on the other. See Order No. 104 at 27-29. The string of examples cited
by the Postal Service all fall clearly into the latter category and,
therefore, would not have a bearing on the ``completion date'' of a
cost avoidance model. Postal Service Comments at 18. The completion
data of a cost avoidance model is determined by the analytical method
on which it is based. As Order No. 104 explains, changed analytical
principles are those that change a causal theory or assumption. With
respect to cost avoidance models, this would include a change in the
underlying operations that are being modeled, piggybacking a type of
cost for the first time, a redefined MODS pool, a new CRA adjustment
factor, or a new density study. The Commission's recent experience with
cost methodology rulemakings has demonstrated that the distinction
between changing the analytical principles underlying cost models and
updating the data that are input to those models is comprehensible and
workable.
The Commission, however, recognizes that the Postal Service's
technical staff has limited time and resources to devote to the problem
of updating the cost studies. Final rule 3050.12, therefore, is revised
to impose the minimum reporting requirement that will still give the
Commission a systematic indicator of the potential scope of the problem
of reliance on obsolete special studies. Only paragraph (a) of the
proposed rule (see Order No. 104 at 43) is retained in final rule
3050.12. It now requires the Postal Service to list each special study
relied on to produce its annual periodic reports to the Commission and
its completion date. It requires the Postal Service to indicate whether
the special study still reflects current operating conditions and
procedures. It also requires the Postal Service to annually update the
list. This will indicate to the Commission and the postal community
where potential obsolescence problem areas might be.
In paring back the requirements of Sec. 3050.12, the Commission
accepts the suggestion of the Postal Service (Postal Service Comments
at 17 and Time Warner (Time Warner Reply Comments at 2-3) that the
problem of what to do about obsolescent special studies be addressed as
part of a ``strategic rulemaking'' such as that described in Order No.
104 at 32. A strategic
[[Page 20840]]
rulemaking would be one designed to make a comprehensive evaluation of
the costing research needed by the Postal Service, prioritize those
needs, and reach a consensus within the postal community on a timetable
for achieving them.
F. Proposed Rule 3050.13 (Explanation of Changes Made to Accepted
Analytical Principles)
Proposed rule 3050.13(a) states:
At the time the Postal Service files its Annual Report, it shall
include a brief narrative explanation of any changes to accepted
analytical principles that have been made since the most recent
Annual Compliance Determination was issued, and the reasons that
those changes were accepted.
Valpak proposes adding to the proposed rule a requirement that the
Postal Service provide a table of analytical principles that have been
changed since the last section 3652 report, that specifies the docket
in which the change was approved, and estimates the effect of the
change using current-year data. Valpak comments that the latter
requirement would be especially useful since the analytical principle
would have been approved on the basis of the previous year's data.
Valpak Comments at 36-37.
The Postal Service vigorously objects to adding the latter
requirement. It emphasizes that Valpak is proposing that the Postal
Service be required to run multiple versions of the current-year models
for each approved change, one version with the change, and one version
without. The Postal Service argues that this would be a waste of effort
because these changes would have all been approved in advance.
The Commission agrees with the Postal Service that the benefit of
requiring this information is limited since the analytical principles
will have already been approved in an informal rulemaking. The burden
on the Postal Service could be substantial, however, if it were
required to run its current-year model multiple times in the very brief
period that it has to prepare its section 3652 report for the previous
year. See Postal Service Reply Comments at 13-14. Because the burden
appears to outweigh the benefit, the Commission declines to adopt the
change proposed by Valpak.
Paragraph (b) of proposed rule 3050.13 stated that the Postal
Service's annual report was subject to proposed rule 3050.2. Proposed
rule 3050.2 requires the Postal Service to identify changes in input
data, quantification techniques, and corrections of errors in its
periodic reports. Since the section 3652 report is a periodic report,
the Commission concludes that paragraph (b) of this section is
superfluous. Accordingly, paragraph (b) of this section has been
deleted from final rule 3050.13.
G. Proposed Rule 3050.14 (Reporting the CRA in a More Disaggregated
Format)
Proposed rule 3050.14 states that the Postal Service's Cost and
Revenue Analysis (CRA) report shall be presented in a format that
reflects the current Mail Classification Schedule, but should also be
presented in an alternative, more disaggregated format that is capable
of reflecting the classification structure that was in effect prior to
the adoption of the PAEA. The purpose is to report data in a way that
can serve as building blocks. This would allow the data to be
structured to coincide with historical data, which would facilitate
analysis of trends in postal finances and operations and support model
building with the use of time series and panel data. It would also
accommodate future changes in the Mail Classification Schedule without
destroying the usefulness of historical data for analysis and modeling
going forward. The alternative, disaggregated format is illustrated by
the Appendix to Order No. 104 entitled ``Products and Categories.'' A
comparable Appendix accompanies this order.
The Public Representative proposes that the Commission clarify the
status of the Appendix. He argues that it should be made a formal
appendix to part 3050 of the Commission's rules for inclusion in the
Code of Federal Regulations (CFR), or that the Appendix be issued as a
guidance document, consistent with OMB Bulletin 07-02, 72 FR 3432
(January 25, 2007). Otherwise, he says, the mailing public might be
unaware of the alternative information that it contains. Public
Representative Comments at 8.
The Commission believes that it would be inappropriate to make the
Appendix a formal appendix that would appear in the CFR because it
would be too cumbersome to update, should that become necessary. The
Commission, however, will consider making it a guidance document.
The Postal Service suggests that the Commission make minor
refinements to the categories of international mail listed in the
alternative reporting format in the Appendix, ``Products and
Categories,'' accompanying Order No. 104. Postal Service Comments at
41. The Postal Service proposes that product names in the Appendix
conform to the new product names that it gave to its ``rebranded''
outbound international mail products on May 14, 2008. See 72 FR 16604
(April 4, 2007). The Postal Service also seeks to update the Appendix
to reflect the elimination of outbound economy mail services that use
surface transportation. Id. Additional refinements requested include
the use of a consistent naming convention for reporting purposes, and
the elimination of reporting categories for which ``neither revenue nor
cost information exists.'' Id. at 43.
Most of the Postal Service's suggested refinements are adopted in
the revised Appendix. However, the Commission adds certain inbound
Special Services categories for which data should be reported. The
revised Appendix replaces ``International First-Class Mail'' and
``International Priority Mail'' with the rebranded names ``First-Class
Mail International'' and ``Priority Mail International,'' respectively.
The revised Appendix also removes references to ``surface'' under
First-Class Mail International for outbound single-piece letters,
flats, IPPs, and parcels, and outbound single-piece cards.\7\ However,
the revised Appendix shows that data for ``air'' and ``surface''
categories should be reported under ``Inbound Single-Piece Mail (Letter
Post)'' because air and surface were not eliminated as service
offerings for inbound First-Class Mail International.
---------------------------------------------------------------------------
\7\ The acronym ``IPPs,'' or irregular parcels and pieces,
refers to parcels that ``do not meet the dimensional criteria of
machinable parcels and other parcels that cannot be processed by
parcel sorters.'' Glossary of Postal Terms, Publication 32, May 1977
(Updated With Revisions through July 5, 2007) at 56.
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In keeping with the rebranded naming of outbound mail products, the
Commission adds a reporting requirement for Global Express Guaranteed
(GXG) and Express Mail International (EMI) under ``Outbound
International Expedited Services'' in the Competitive Products section
of the Appendix. This added reporting requirement is consistent with
the Postal Service's existing reporting of GXG and EMI in the FY 2007
and FY 2008 International Cost and Revenue Analysis (ICRA) reports.
The revised Appendix adopts a consistent, new naming convention for
reporting data related to outbound and inbound international mail. The
new naming convention preserves the Commission's proposed reporting of
disaggregated cost, volumes, and revenue data separately by terminal
dues regime. See Order No. 104 at 18. The new naming convention also
simplifies reporting by reducing the number of categories, primarily
for inbound single-piece mail. Thus, the following naming convention is
[[Page 20841]]
adopted: Target System Countries at UPU rates, Transition System
Countries at UPU rates, Subject to Agreement, Canada, Other.
The new naming convention is applicable to First-Class Mail
International, outbound single-piece letters, flats, IPPs, and parcels,
outbound single-piece cards, and inbound single-piece mail (i.e.,
``letter post'') separately for inbound air and surface letter post;
and Priority Mail International for outbound Priority Mail subject to
terminal dues. For Inbound Air Parcel Post, the naming convention
replaces ``At Non-UPU Rates'' with ``Subject to Agreement.''
The new naming convention reference ``Subject to Agreement''
throughout the revised Appendix is intended to encompass the separate
reporting of data by negotiated agreements that are both bilateral and
multilateral in nature.\8\ In this regard, ``Canada'' is listed for the
relevant products and categories of mail covered by an existing
bilateral agreement, while ``Other'' is intended as a placeholder for
reporting data in response to future bilateral or multilateral
agreements.
---------------------------------------------------------------------------
\8\ For purposes of this category, the term ``multilateral''
refers to an agreement other than the multilateral agreement of the
UPU convention.
---------------------------------------------------------------------------
International Ancillary Services is currently defined as a product
on both the market dominant and competitive product lists. Among the
component categories of that product are Inbound International Return
Receipt and Inbound International Insurance. The FY 2008 ICRA includes
line items for these services as well, although no revenue or cost
information is reported.\9\ The Postal Service asserts that these
categories should be dropped from the Appendix because revenue and cost
information for them ``does not exist.'' Postal Service Comments at 43-
44. As long as these categories remain components of International
Ancillary Services, and appear as line items in the ICRA, the
Commission prefers that they appear in the alternative format as well.
If there is no data to report, the Postal Service may enter an ``N/A''
notation.
---------------------------------------------------------------------------
\9\ FY 2008 ICRA Report, December 29, 2008, worksheet tab A
Pages (md) and A Pages (c).
---------------------------------------------------------------------------
At the Postal Service's request, the Appendix is revised to include
``Inbound International Delivery Confirmation'' as a reporting category
for data on ``revenue from the delivery confirmation surcharge for
[inbound] Xpresspost and Expedited Services [from] Canada.'' Id. at 44.
Pitney Bowes proposes that the Commission attach a 3-year sunset
provision to the Appendix, following up on the Commission's remark in
Order No. 104 at 16, that the alternative format might not be needed
after a few transitional years. The Commission prefers to watch events
unfold to see how quickly the Mail Classification Schedule stabilizes,
after which it will make a decision about the usefulness of the
alternative format in the longer run.
H. Proposed Rule 3050.20 (Compliance and Other Postal Service Analyses)
Time Warner provides several intricate arguments in support of what
it terms ``a relatively clear-cut jurisdictional issue'' that it sees
in Sec. 3050.20 as originally proposed. Time Warner Comments at 13. At
the center of its discussion is concern over the types of circumstances
where Commission action might be appropriate in response to a finding
of ``noncompliance'' under 39 U.S.C. 3653(b). While some of Time
Warner's arguments are unpersuasive, the Commission finds that the
language of proposed rule 3050.20 should be modified to eliminate
confusion in this area.
The Commission finds misguided Time Warner's suggestion that the
Postal Service is not required to develop and implement rates that
comply with the rate policies of Sec. 3622. Id. at 9-10. The PAEA
provides an integrated set of policy guidelines for the Postal Service
to follow in setting rates. Although the Commission is responsible for
reviewing the Postal Service's performance, most commenters believe
that the initial responsibility for balancing and achieving these
policies is, and should be, with the Postal Service rather than the
Commission.
Section 3622(a) does direct the Commission to establish, and when
necessary revise, a system of ratemaking to foster achievement of the
requirements, objectives, and factors spelled out in subsequent
paragraphs. Order No. 43 implemented such a system, directing that the
Postal Service accompany each planned rate increase with a
demonstration of compliance with those policies. See 39 CFR 3010.14.
However, even if no regulations had been implemented by the
Commission, the Governors would have to establish rates that comply
with the policies of Sec. 3622. 39 U.S.C. 404(b) only authorizes the
Governors to establish rates that are in accordance with the policies
of chapter 36 of title 39 of the United States Code.
Time Warner contends that the concept of ``compliance'' is not
easily applicable to such things as objectives and factors, which by
their nature must be weighed and balanced. To ease concerns over the
potential misuse of the Commission's broad remedial powers, Time Warner
requests a Commission statement on how or when it might find the Postal
Service to be not in compliance with such subjective terms. The
Commission believes that Time Warner's request is well intentioned, but
this rulemaking is not an appropriate vehicle for such a discussion.
The Postal Service joins Time Warner in arguing that it should not
have to analyze the extent to which it has achieved its program
performance goals established under Sec. Sec. 2803 and 2804 as part of
the compliance analysis required by proposed rule 3050.20. It argues
that these sections already require the Postal Service to discuss its
performance goals and evaluate its achievement of those goals in the
comprehensive statement that it is required to file with Congress by 39
U.S.C. 2401(e). When evaluating whether the Postal Service has met its
program performance goals, the Postal Service argues, it is the
Commission's duty to review the Postal Service's comprehensive
statement. Postal Service Comments at 49.
Sections 2803 and 2804 require the Postal Service to evaluate the
degree to which its individual programs have met their objectives, by
quantitative criteria where possible. The comprehensive statement that
the Postal Service must file with Congress under Sec. 2401(e) includes
these program performance evaluations. Those evaluations, if done
properly, would allow the Commission to determine whether the
performance goals established under Sec. Sec. 2803 and 2804 have been
met. Because it is redundant, the requirement in proposed rule 3050.20
that the Postal Service analyze whether it has met the program
performance goals established under Sec. Sec. 2803 and 2804 has been
deleted from final rule 3050.20. The Commission does this on the
understanding that the Postal Service's comprehensive statement filed
under Sec. 2401(e) will be sufficiently specific and concrete to allow
the Commission to make an informed determination as to whether the
Postal Service has met the performance goals established for specific
programs, as Sec. Sec. 2803 and 2804 contemplate.
Section 3653(d) authorizes the Commission annually to make
``recommendations'' to the Postal Service ``related to the protection
or promotion of public policy objectives set out in this title.'' This
authorization is broader in subject matter than the Postal Service's
comprehensive statement, which is limited to an analysis of how the
Postal Service's
[[Page 20842]]
programs have met the public policy objectives of Sec. 101 of title 39
of the United States Code. Because it is not redundant of the analyses
required in the Postal Service's comprehensive statement, the
requirement in proposed rule 3050.20 that the Postal Service analyze
how its products (individually or collectively) have promoted the
public policy objectives of title 39 remains in final rule 3050.20.
Section 3653 allows the Commission the latitude to evaluate
compliance ``for products individually or collectively.'' This language
appears to authorize the Commission to determine what level of
disaggregation makes sense when analyzing compliance with a particular
criterion derived from the statute. The Commission believes that it
will be beneficial to harmonize the analyses required of the Postal
Service under proposed rule 3050.20 with the evaluations that Sec.
3653 authorizes the Commission to make. Therefore, the Commission
revises the language of final rule 3050.20 to allow the Postal Service
to analyze whether its products have complied with a particular
statutory goal, objective, or mandate, both at the individual product
level, or for products collectively, where analysis at that level is
appropriate.
The Commission agrees with Time Warner that using the term
``compliance'' in the title of proposed rule 3050.20 does not
appropriately describe the task it assigns to the Postal Service--to
analyze how its products have promoted the public policy objectives of
title 39 of the United States Code. The Public Representative agrees.
See Public Representative Reply Comments at 3. The solution is to
broaden the title of proposed rule 3050.20. Final rule 3050.20 is now
entitled ``Compliance and other analyses in the Postal Service's
section 3652 report to the Commission.'' This broadened title indicates
that an analysis can be required annually by Sec. 3050.20 without
constituting a ``compliance'' issue. In this regard, the Commission
notes that the set of rules adopted in this docket are generally
referred to as ``periodic reporting rules'' rather than ``compliance
rules'' because they are intended to provide the information needed for
all reports that the Commission is obligated by the PAEA to produce,
whether or not they are compliance related.
Special reporting requirements for products out of compliance.
Valpak proposes to amend proposed rule 3050.20 to require the Postal
Service to provide supplemental information about products that ``do
not comply with all applicable provisions of PAEA.'' For such products,
it proposes that the rule:
i. Require the Postal Service to explain the most important
circumstances underlying the failure to meet the applicable
provisions of PAEA;
ii. Explain what steps the Postal Service plans to take to bring
the products into full compliance with PAEA; and
iii. Indicate the time frame within which the Postal Service
contemplates * * * achieving full compliance.
Valpak Comments at 39.
For example, for a product that failed to cover its costs, Valpak
would require the Postal Service to (1) explain why it did not cover
its costs; (2) explain what steps the Postal Service plans to take to
ensure that it will cover its costs; and (3) indicate when it expects
those steps to bring the product's revenues above costs. Valpak argues
that unless proposed rule 3050.20 is strengthened in this way, neither
mailers who are cross-subsidizing such products, nor the Commission,
will know how to respond to the failure of a product to comply with the
requirements of the PAEA. Id. at 39-40.
The Postal Service responds only briefly to Valpak's proposal. It
notes that Valpak would have the Postal Service give public notice in
proposed rule 3050.20 of forward-looking remedial steps. It argues that
such requirements are not appropriate for that rule since it is
intended to implement a section of the PAEA (3652) that is focused on
the past year. Postal Service Reply Comments at 14 and n.7.
MPA/ANM/ABM criticize Valpak's proposal as one that misconstrues
the role that Sec. 3622(c)(2) plays in the statutory structure.
(Section 3622(c)(2) requires each ``class or type'' of mail to cover
its attributable costs.) Though Sec. 3622(c)(2) is characterized in
the PAEA as a ``requirement,'' the coalition argues that it is little
more than advisory in nature, since the price cap overrides it and all
other objectives and factors that are found in the statute. They argue
that failing to comply with an objective or factor in the course of
complying with a more important one (the cap) does not give rise to a
Postal Service obligation to explain anything in the context of
compliance analysis.\10\ The coalition, however, considers it ``not
unreasonable'' for the Commission to add a new paragraph (k) to
proposed rule 3050.21 requiring the Postal Service to:
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\10\ The coalition does not address scenarios in which a type of
mail service does not cover its costs even though it, or the
``class'' to which it belongs, has cap room. Congress, however,
contemplated scenarios under which a ``loss-making'' product could
be out of compliance with the PAEA. See 39 U.S.C. 3662(c).
[p]rovide an explanation when revenues for a mail class or
service do not cover attributable costs, and provide any other
explanation that the Postal Service believes will be helpful to
clarify how the Postal Service has considered the objectives of 39
---------------------------------------------------------------------------
U.S.C. Sec. 3622(b) and the factors of 39 U.S.C. 3622(c).
MPA/ANM/ABM Reply Comments at 4.
With respect to a product with a history of non-compliance with
some requirement of the PAEA, the Commission agrees with Valpak that it
would be helpful in the compliance review process to know what the
Postal Service considers to be the causes of that product's non-
compliance, what the Postal Service plans to do to bring that product
into compliance, and how long it expects that process to take. In the
Commission's view, providing such information with the section 3652
report itself would greatly benefit the review process. As the
Commission observed in its FY 2007 ACD at 91:
The Postal Service should support its annual report with more
complete explanations, and discuss data which may be perceived as
anomalous, such as large variations in unit costs. With only 90 days
available for the Commission to make its findings and even less time
for interested parties to analyze the data and submit comments, it
is crucial to the process that the data filed by the Postal Service
is accompanied by accurate descriptions and a thorough analysis.
To encourage the Postal Service to provide a more thorough analysis of
high priority topics relating to whether particular products have met
particular standards articulated in the PAEA, the Commission has added
paragraph (c) to final rule 3050.20. That paragraph provides:
(c) [The Postal Service] shall address such matters as non-
compensatory rates, discounts greater than avoided costs, and
failures to achieve stated goals for on-time delivery standards,
particularly where the Commission observed and commented upon the
same matter in its Annual Compliance Determination for the previous
year.
This provision reflects the revision by Valpak to proposed rule 3050.20
in the sense that it establishes a specific duty to include in the
section 3652 report an analysis of results for products that do not
satisfy certain provisions of the PAEA.
The Commission is mindful of the burdens that the Postal Service
faces in preparing its section 3652 report and, therefore, the duty
that it imposes on the Postal Service is narrower than that which
Valpak's proposal would have imposed. Rather than require the Postal
[[Page 20843]]
Service to explain the reasons that an outcome did not meet a
particular standard of the PAEA, its plans for curing that deficiency,
together with an expected timetable, it merely requires the Postal
Service to ``address'' a very brief list of outcomes that do not
satisfy a particular, objective PAEA standard.
The purpose of the provision is essentially to provide interested
persons and the Commission with salient information when a particular
PAEA standard is not satisfied by a particular result involving a
particular product. The breadth of the explanations will vary with each
factual situation. Paragraph (c) is framed in a manner that does not
require a conclusion that a product that fails to comply with some
statutory policy does or does not ``comply'' with the PAEA as a whole.
It merely calls for relevant facts in those instances in which certain
PAEA standards were not satisfied. Because the Commission has added
paragraph (c) to final rule 3050.20, it declines to adopt Valpak's
proposed revision of proposed rule 3050.20 or the related suggestion by
MPA/ANM/ABM to revise proposed rule 3050.21.
I. Proposed Rule 3050.21 (Period for Measuring Institutional Cost
Contribution of NSAs)
Proposed rule 3050.21(f) prescribed the reporting requirements for
market dominant NSAs. Among other things, the proposed rule requires
the Postal Service to report results for the NSA's contract year where
that does not correspond to a fiscal year. The Postal Service observes
that:
it may also be possible to devise a means of conducting
contribution assessments based directly on the fiscal year. If so,
NSA data linked to the fiscal year would be more amenable to
integration with the rest of the fiscal year reporting presented in
the ACR. Therefore, the Postal Service requests that the proposed
rule be amended to allow it the option to report on either a fiscal
year basis or on the most recent year of operation. Building this
flexibility into the rule could result in reporting procedures that
are more efficient for both the Postal Service and the Commission.
Postal Service Comments at 36 (footnote omitted).
The Commission agrees with the goal expressed by the Postal Service
of being able to report NSA results in a way that can be synchronized
with the fiscal year report for the rest of the system. The problem
appears to be that the Postal Service has not yet found a way to do
that without sacrificing the accuracy of the resulting estimates.
In library reference USPS-FY08-30, the Postal Service provides
financial results for NSAs that were active in FY 2008. Consistent with
its proposal, the Postal Service provided volume data on a fiscal year
basis. The analysis that used this volume information is, however, a
flawed method of analyzing the compliance of volume-based NSAs with
Sec. 3622(c)(10) because it does not compare apples to apples. The
Commission has approved application of a price elasticity test to NSAs
as an objective way to measure the net contribution from any discount
offered. The purpose of the elasticity test is to develop a meaningful
before-rates forecast to measure possible revenue leakage from the
discount. Applying the elasticity test to fiscal year volumes that do
not align with the discount schedule, however, severs the connection
between discounts and volumes, making any net contribution analysis
meaningless. This approach creates a before-rates volume that does not
correspond to any discount earned. The disconnect between contract
years and fiscal years prevents a meaningful estimate of the net
institutional cost contribution of NSAs. Accordingly, the Commission
defers the Postal Service's proposal until it can demonstrate that it
has found a way to adjust data for NSAs that are out of phase with the
fiscal year to a fiscal-year basis without substantially distorting the
resulting estimates.
J. Proposed Rule 3050.25 (Volume and Revenue Data)
Proposed rule 3050.25 identifies the data reports that the
Commission needs to estimate volumes and revenues, such as the Revenue,
Pieces, and Weight System (RPW) reports, the Quarterly Statistics
Reports, and the billing determinants. The Postal Service objects only
to the proposal that it provide billing determinants on a quarterly
basis. It explains that meeting this requirement would require added
expense to generate special weight reports and other input data that it
now generates only annually. It argues that the added expense is not
warranted in view of the limited benefits of this requirement. Id. at
37-39.
Time Warner supports the Postal Service's comments in this regard.
It points out, however, that most of the volume and mail characteristic
data on bulk mail comes from electronically filed reports by bulk
mailers. It suggests that quarterly billing determinants for bulk mail
classes could be produced at little additional expense, with the
understanding that revisions might need to be made to the results at
the end of the year. It says that such information might provide useful
indications ``of the extent to which mailers are taking advantage of
the various worksharing discounts offered by the rate structure[,]''
which ``might indicate the cost trends to anticipate for the various
classes of mail.'' Time Warner Reply Comments at 5-6.
The Commission proposed that the Postal Service provide quarterly
billing determinants primarily as an aid to analyzing the consistency
of proposed rates with the price cap constraint. Because rate increases
under the current calendar are out of phase with the annual billing
determinant data, quarterly data are helpful in isolating what revenue
changes are the result of changes in rates. The Commission believes
that the benefits of this form of reporting outweigh its burdens,
absent a more definitive estimate of the extra time and resources that
providing quarterly billing determinants would entail. Therefore, final
rule 3050.25 requires the Postal Service to provide billing
determinants quarterly within 40 days of the close of the quarter.
Annual billing determinants are required to be broken out by quarter as
well.
Additionally, it would be extremely helpful if the Postal Service
could develop billing determinant data separated between periods when
different sets of rates were in effect. The Commission requests that,
if possible, the Postal Service provide this information on a voluntary
basis.
An example of the separation that the Commission requests is the
set of new market dominant prices that will go into effect on May 11,
2009, roughly in the middle of the third quarter of FY 2009. If the
Postal Service were able to separate the quarterly data between pre-May
11 and post-May 11 revenue and volume information, the Commission would
be able to develop a set of volume weights that correspond to the
periods in which different prices were in effect. These weights could
be used to develop weighted-average-rates per piece by class for
comparison with the planned weighted-average-rate per piece by class,
developed using historic billing determinant data in accordance with
the Commission's rules in Docket No. R2009-2. Of course, data for one
part of a quarter would not be sufficient for such a comparison, but
since the rates generally stay in effect for a year, the Commission and
the public, by virtue of the periodic reporting rules, would eventually
have access to data for a full year reflecting one set of rates.\11\
[[Page 20844]]
These data would prove useful for the evaluation of the efficacy of the
price cap. They would be particularly useful 7 years from now when the
Commission must re-evaluate the current system of ratemaking. See 39
U.S.C. 3622(d)(3).
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\11\ The Commission is not asking the Postal Service to make
this separation in billing determinant data to reflect new price
categories, new discounts, or new surcharges. The post-
implementation data can be compared with the pre-implementation data
based on current reporting techniques. For example, the quarterly
data that will include volume and revenue data subject to the
planned Intelligent Mail barcode (IMb) discount will not require
separate reporting for the IMb discount because no corresponding
revenue and volume will exist in the quarter until the discount goes
into effect. Thus, any data that are reported for the IMb discount
can only reflect the effect of the new discount. However, if the
level of that discount is subsequently changed, the quarterly data
would have to be separated between the two discount regimes for
accurate comparisons of actual weighted-average-rate per piece with
planned weighted-average-rate per piece.
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Although the Postal Service implements price changes for
competitive products at a different time of year and although these
prices are not subject to the price cap, competitive product billing
determinants split between the pre- and post-rate implementation date
would also be helpful. It would enable the Commission to evaluate more
accurately the effects of price changes on the financial condition of
the Postal Service and how such pricing activities help the Postal
Service meet the requirements of 39 U.S.C. 3633(a).
K. Proposed Rule 3050.26 (Demand Elasticity and Volume Forecasting)
The proposed periodic reporting rules would have required the
Postal Service to provide econometric estimates of demand elasticity
for all postal products accompanied by the underlying econometric
models and input data sets used. The provision establishing these
requirements was proposed rule 3050.26. To accommodate the Postal
Service's internal operational preferences, proposed rule 3050.26
requires that this information be filed with the Commission by January
20 of each year. Proposed rule 3050.26 is not associated specifically
with the Postal Service's section 3652 report. The specific information
items (other than avoided cost information) that the Commission deems
necessary for it to carry out the compliance analysis required of it by
Sec. 3653 are found primarily in proposed rule 3050.21. For the sake
of completeness, the requirement that the Postal Service provide a
demand elasticity estimate for each postal product was included there
as well. See Order No. 104, proposed rules 3050.21(f) and (g), at 45-
46.
The Postal Service points out that proposed rules 3050.21(f) and
(g) are redundant of proposed rule 3050.26, but require the same demand
information to be filed with the Commission several weeks in advance of
January 20 in late December of each year. It urges the Commission to
resolve this redundancy in favor of the January 20 due date
incorporated in proposed rule 3050.26. Postal Service Comments at 29.
We accept the Postal Service's suggestion, and delete the references to
demand elasticities from final rule 3050.21.
Explanatory narrative. The Postal Service emphasizes that it
includes an explanatory narrative of its methods for estimating demand
in its January 20 filing under proposed rule 3050.26 (even though that
proposed rule did not explicitly require a narrative explanation of
methods). It then notes that proposed rule 3050.60(f) requires a brief
narrative explanation of how the estimates in the most recent ACD were
calculated and the reasons that particular analytical principles were
followed (due on July 1 of each year). Id. at 24-25.
Based on the Commission's narrative in Order No. 104, the Postal
Service correctly concludes that the Commission had intended the term
``analytical principle'' to be broad enough to encompass the analytical
principles used in econometric models of demand. The Postal Service
argues that the brief narrative explanation of analytical principles
underlying its demand analysis that proposed rule 3050.60(f) would
require is redundant of the narrative explanation that it provides to
the Commission in January of each year under proposed rule 3050.26. It
urges the Commission to interpret proposed rule 3050.60(f) as not
requiring a brief narrative explanation of analytical principles used
in estimating demand elasticities. Id. at 29-30.
The Commission had intended the brief narrative explanations called
for by proposed rule 3050.60(f) as explanations ``in a nutshell''
similar to those traditionally provided in Library Reference 1 in rate
cases under the PRA. The main value of a set of such explanations of
methods is that they would serve as a quick guide to the non-expert in
understanding the arcane world of postal cost, volume, and revenue
analysis. Therefore, it is not entirely accurate to characterize the
Sec. 3050.60(f) narrative as redundant of the more technical and
detailed narrative that the Postal Service provides in January under
proposed rule 3050.26. The Commission believes that this ``quick
guide'' is quite helpful in making postal analysis more accessible to
the lay public, and that this is as true of demand analysis as of other
kinds of analysis. It therefore continues to interpret final rule
3050.60(f) \12\ as applicable to analytical principles underlying the
Postal Service's estimates of demand elasticity. Because a ``nutshell''
explanation is all that is expected, it is unlikely to significantly
add to the Postal Service's reporting burden.
---------------------------------------------------------------------------
\12\ Proposed rule 3050.60(f) has become final rule 3050.60(g).
---------------------------------------------------------------------------
Advance review of analytical principles underlying demand and
volume forecasting models. With respect to demand elasticity estimates,
the Postal Service's major criticism is not redundancy, but the
Commission's inclusion of demand elasticity estimates in its
requirement that analytical principles used in its periodic reports be
reviewed in advance by the Commission and the public. See proposed rule
3050.11. The Postal Service argues that the econometric models that it
uses to estimate demand elasticity and to forecast volume are not like
econometric models that it uses to estimate volume-variable costs. It
asserts that the former are respecified, reworked, or tweaked almost
every time that new input data are used. Accordingly, it argues, it is
impractical for it to subject such frequent model revisions to advance
review in a rulemaking context, as proposed rule 3050.11 would
apparently require. Id. at 22-29. Although it concedes that demand
elasticities play an important role in evaluating rates under the PAEA,
it asserts that the Commission does not have authority to ``dictate''
the methods by which it forecasts volumes comparable to what it
arguably had under the PRA since the evaluations that the Commission is
obligated to make are primarily retrospective. Id. at 26. It,
therefore, asks that analytical principles that underlie its volume and
demand models be exempt from advance review.
The Postal Service contends that the goals of advance review could
largely be served by the opportunity that the Commission would have to
react to the Postal Service's demand modeling and volume forecasting
methods, either in the course of the ACD or at another time of the
Commission's choosing. It states that it would remain receptive to
Commission input as to how such modeling could be improved. Id. at 29.
The Commission agrees with the Postal Service that its mandate to
review analytical principles that the Postal Service uses to model
demand elasticity and to forecast volume is not ``parallel'' with its
mandate to review analytical principles that the Postal Service uses to
estimate its costs. Its mandate to review
[[Page 20845]]
cost principles is based directly on the language of Sec. 3652(a)(1)
that the Postal Service shall analyze ``costs, revenues, rates, and
quality of service, using such methodologies as the Commission shall by
regulation prescribe * * *.'' Its mandate to review the analytical
principles used to estimate demand elasticities arises from its duty to
evaluate rates and service in terms of the many objectives and factors
of the PAEA that implicitly incorporate elasticity of demand. See Order
No. 104 at 10-11. Elasticity of demand also provides essential evidence
of ``market power,'' which is the root concept underlying the
Commission's determinations under Sec. 3642 that certain products be
given market dominant or competitive product status under the PAEA.
The Commission's mandate to review analytical principles underlying
volume forecasting arises where forecasting volumes is an intermediate
step in estimating unit attributable costs or unit revenues.\13\ Even
though the Commission does not have rate design or revenue requirement
responsibilities that require it to use the kind of roll forward that
was part of formal rate cases under the PRA, it still has a need for
volume forecasts to carry out some of its responsibilities. One is to
review the compliance of rates proposed by the Postal Service with the
price cap. Where, as in the last general rate adjustment, the Postal
Service proposed rate increases for some products to take effect later
than others, an accurate estimate of the revenue likely to be earned
requires a product-level volume forecast. Volume forecasts are also
needed to accurately assess whether revenues for specific competitive
products with low profit margins are likely, at proposed rates, to
remain above their attributable costs. In this regard, the Postal
Service has voluntarily provided 1-year volume projections for a number
of its competitive products at new rates to allow the Commission to
more accurately verify the likelihood that they will, in fact, recover
their costs in the coming year. Finally, in establishing service
standards under Sec. 3691, the Postal Service, in consultation with
the Commission, is directed to take into account, among other things,
``mail volume and revenues projected for future years[.]'' See 39
U.S.C. 3691(c)(4).
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\13\ Volume information (with respect to market dominant
products) is also mentioned in section 3652(a)(2) as within the
Commission's purview.
---------------------------------------------------------------------------
In addition to the role that the Commission plays in evaluating
rates and service, the Commission has the duty to calculate the cost
(understood as profit impact) of the various Universal Service
Obligation (USO) mandates. Estimating the costs for at least two of
these mandates--Nonprofit Mail discounts and uniform rates for First-
Class Mail--requires analysis of volume effects. Volume forecasts are
also a necessary part of an analysis of the Postal Service's near-term
financial outlook, which is relevant to the Commission's duties under
Sec. 3651 to assess the degree to which the modern system of rate
regulation is achieving the objectives of Sec. Sec. 3622 and 3633. The
need for volume forecasts to adequately discharge this duty is obvious
from the current alarm shared by the postal community over dramatic
volume declines experienced and expected in the current fiscal year.
The extent of near-term volume declines, current and expected, is
highly relevant to a Sec. 3651 assessment, as is the method by which
those volume declines have been estimated.
Finally, volume forecasts can play an important role in the
remedial phase of compliance review under Sec. Sec. 3653(c) and
3662(c). For example, in its FY 2007 ACD, the Commission found that the
performance of several loss-making products was not consistent with all
of the applicable provisions of the PAEA. It did not take remedial
action because new rates had already been recommended for those
products before the issuance of the ACD. In that situation, volume and
cost projections are needed to determine whether or not the new rates
are likely to bring the affected products back above attributable
costs. Because of their value in accomplishing the tasks described
above, and because they are so closely related to the Postal Service's
econometric model of demand elasticity, the Commission has added to
final rule 3050.26 the requirement that the Postal Service provide its
volume forecasting model and underlying documentation in January of
each year.
As explained above, the Commission has a number of legitimate needs
for estimates of demand elasticity and for volume forecasts, and to be
able to evaluate the methods used to do them. That review, however,
should interfere as little as possible with postal management's
administration of its volume forecasting capability. Accordingly, the
Commission will not require advance review of the methods by which the
Postal Service estimates demand elasticity or forecasts volumes. To
that end, final rule 3050.10 has been revised to make it clear the
analytical principles that the Postal Service applies in estimating
demand elasticities or forecasting volumes need not be reviewed in
advance by the Commission.\14\
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\14\ The Postal Service conjectured that the Commission viewed
the presence of the term ``elasticity of demand'' in proposed rule
3050.11(a)(1) as the basis of its authority to require advance
review of the analytical principles that it applies in estimating
demand elasticities. It, therefore, requested that that term be
deleted from proposed rule 3050.11. A close reading of that
provision reveals that it is one item in a list of types of impact
that the Postal Service should estimate (where feasible) that would
arise from adopting a proposed change in an analytical principle.
However, to remove any ambiguity about the Commission's intentions
in this regard, that term has been removed from final rule
3050.11(a)(1) (renumbered as final rule 3050.11(b)(1)).
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Current-year roll forward. The Public Representative proposes that
the periodic reporting rules include a requirement that the Postal
Service provide a current-year financial forecast. He notes that Sec.
3651 requires the Commission to evaluate its own operations, including
``the extent to which regulations are achieving the objectives under
sections 3622 and 3633, respectively.'' (Emphasis omitted.) Public
Representative Comments at 3. He emphasizes that the task assigned to
the Commission is to evaluate the current, rather than the past,
success of its regulations in achieving their objectives. To do this
effectively, he argues, it would be helpful to have information about
the current year as well as historical information. He notes that the
objectives of Sec. Sec. 3622 and 3633 referred to in Sec. 3651
primarily address rate, classification, service, and other issues that
Congress expects the Commission to assess on a current basis, including
whether products cover their attributable costs and whether competitive
products are contributing an appropriate share to institutional costs.
With respect to the latter assessment, he notes, Sec. 3633 requires
the Commission to take into account ``prevailing,'' as opposed to past,
conditions in the market. He argues that to adequately meet the mandate
of Sec. 3651, current as well as historical data would be required.
Id. at 3-4. He argues that such projections will highlight any unusual
trends expected in product costs, and allow the public to better
determine whether particular products are likely to cover their
attributable costs. Id. at 5. He assumes that the Postal Service
projects costs and revenues for the current year as part of the process
of selecting new rates and to meet numerous other management needs.
Therefore, he argues, providing a current-year financial roll forward
is unlikely to add significantly to the Postal Service's reporting
burden. Id.
[[Page 20846]]
The Public Representative's logic is sound concerning the
Commission's need for a current-year financial projection. A current
assessment of the extent to which the Commission's regulations are
achieving the objectives of Sec. Sec. 3622 and 3633 would appear to
require the best available data about the current as well as past
years. Although the Public Representative is somewhat vague about the
benefits of having a current-year projection to help the Commission in
its evaluation, his general point is well taken. In its discussion of
demand and volume forecasting, the Commission explained how having
near-term cost and volume projections would improve its ability to
carry out a number of specific tasks that have been assigned to it by
the PAEA.
The Postal Service, however, takes issue with the Public
Representative's assumption that providing the equivalent of a current-
year roll forward would impose little added burden. It states that it
``does not routinely run its rate case roll-forward model, and there is
no other way to get the set of comprehensive cost projections at the
product and the rate category level that the PR describes.'' Postal
Service Reply Comments at 20. It cautions that ``the Commission should
[not] blithely add preparation and documentation of a roll-forward
model to the already crushing list of activities which the Postal
Service must complete in 90 days following the end of the fiscal year*
* *.''
Although the Commission is sympathetic to the Postal Service's
burden argument, it would prefer to have a better grasp of exactly how
much extra time and resources would be required to provide a roll
forward for the current year. The Commission believes that the benefits
of being able to predict the net revenue effect of the Postal Service's
proposed rates before it proposes them each year would be of
substantial value to postal management. At the same time, it would be
of significant benefit to the Commission in being able to more
accurately evaluate the consistency of those rates with the price cap.
Although a current-year roll forward would have these potentially
important benefits, as discussed above, it is not clear at this time
that it would outweigh the risk that this added requirement might be
more than the Postal Service can handle in the very brief window
available to it to produce the section 3652 report each year.
Therefore, the Commission declines to adopt the Public Representative's
proposal for a comprehensive roll forward for the current year at this
time.
L. Proposed Rule 3050.28 (Monthly and Pay Period Reports)
Proposed rule 3050.28 deals with monthly and pay period reports. It
would require that the Postal Service provides, among others things,
the National Consolidated Trial Balance and the Revenue and Expense
Summary. The Postal Service was originally opposed to providing them,
presuming that its enterprise-wide public disclosure obligations were
co-extensive with those of the private sector. Id. at 39-41. The Postal
Service has since publicly provided similar, but somewhat less detailed
information. That information, under the title ``Monthly Summary
Financial Report'' has been added to the list of reports required by
final rule 3050.28. The form in which that information will be reported
accompanies the text of the final rule.
M. Proposed Rule 3050.30 (Universal Service Obligation)
Proposed rule 3050.30 would have required a set of data that was
designed to facilitate modeling of the cost of various USO mandates. It
included mail flow volumes by product between each pair of mail
processing facilities. It also would have included costs, work hours,
and CCCS/RCCS volumes by sampled product, route, facility, and ZIP
Code. In addition, it would have included for sampled city routes,
actual and possible deliveries by type, actual and possible stops by
type, collection boxes, number of businesses served, and miles. Roughly
comparable data would have been required for sample rural routes.
The general objection of the Postal Service to this proposed rule
was that the USO studies underway were not yet complete (as of the
October filing date for reply comments in this docket), and that it
would be easier to isolate a set of data essential to costing the
various USO mandates after the results of those studies were in. It
reasons that the methodologies to be applied should be settled upon
before the data is collected or reported.\15\ Id. at 5-8.
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\15\ While this is generally a prudent approach, a
countervailing consideration is that where there is a lack of
relevant data, that lack of data has a tendency to drive the
selection of the method used.
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Although this was an appropriate argument at the time, the USO
studies conducted on behalf of both the Postal Service and the
Commission have since been submitted and follow-up comments received.
See Docket Nos. PI2008-3 and PI2009-1. This circumstance allows the
Commission to form at least preliminary judgments about what data are
likely to play an important role in estimating the costs of the various
USO mandates. The Commission is aware, however, that issues of what
data can reasonably be made available, and the costs and benefits of
doing so, are complex and nuanced. The Postal Service recommends that
when the studies are complete, that it, the Commission, and interested
parties confer on what methodologies are appropriate to develop the
annual USO cost estimates, what input data would be needed to apply
those methodologies, and what data are already available or obtainable
at reasonable cost. Id. at 5-6.
The Commission accepts the Postal Service's recommendation. It will
retain proposed rule 3050.30 as a placeholder, as the Postal Service
requests. It will institute a separate informal rulemaking docket to
determine what data should be reported to allow the Commission to
annually estimate the cost of the various USO mandates.
N. Proposed Rules 3050.40 and 3050.41 (SEC-Type Financial Reports)
Section 3654 of the PAEA requires the Postal Service to file with
the Commission certain standard financial reports the Securities and
Exchange Commission (SEC) normally requires publicly traded
corporations to file, including the Form 10-K and the Form 10-Q.
Section 3654 articulates the requirement in considerable detail. In an
attempt to make the Commission's periodic reporting rules a
comprehensive reflection of the reporting requirements that the PAEA
imposes on the Postal Service, proposed rule 3050.40 essentially
restates the SEC-style reporting requirement found in Sec. 3654.
Proposed rule 3050.41 restates the audit requirements of that section.
The Postal Service argues that Sec. 3654 is detailed and
unambiguous and should be regarded as definitively expressing its
obligation to furnish the Commission with SEC-style reports. Therefore,
it argues, there is no need for an implementing regulation. It urges
the Commission to make proposed rule 3050.40 a placeholder to be
available in the event that the Postal Service's reporting should be
shown to be inaccurate or in need of modification. Id. at 9-14. In the
event that the Commission decides to retain a detailed counterpart of
Sec. 3654 in its periodic reporting rules, the Postal Service provides
alternative language as Attachment A to its initial comments.
The Commission agrees that Sec. 3654 makes the SEC-style reporting
required of the Postal Service explicit in most respects, and that it
is not of critical
[[Page 20847]]
importance that a detailed counterpart appear in the Commission's
periodic reporting rules. However, both the Commission and the Postal
Service support minor modifications of the manner in which these
requirements are stated, which makes it beneficial to restate the
requirements in the Commission's rules. There is also some value in
collecting all of the Postal Service's obligations to report
information to the Commission in one place to simplify the task of
those interested in tracking compliance with those obligations.
Accordingly, final rule 3050.40 restates the Postal Service's SEC-
style reporting obligations essentially as they appear in Sec. 3654.
One minor difference is that Sec. 3654(a)(2) is omitted from the
Commission's rule. This is done to accommodate the Postal Service's
concern that it not be defined as a ``registrant'' for purposes of
determining what SEC reports it is obligated to file. Some aspects of
some of those reports are highly specific to entities that have the
legal status of private corporations and are inapplicable to the Postal
Service because it does not share that legal status. Another minor
difference is that the Commission includes a requirement that when the
Postal Service receives the pension and post-retirement health
obligation information specified in Sec. 3654(b)(1) from the Office of
Personnel Management that it furnish copies of that information to the
Commission.
O. Proposed Rules 3050.50 et seq. (Service Performance)
Section 3691 of title 39 of the United States Code requires the
Postal Service, in consultation with the Commission, to establish and
maintain a set of service standards for market dominant products. That
section provides explicit statutory objectives for the service
standards adopted, and requires a service performance measurement
system in which the Commission plays a role. It also authorizes
complaints under Sec. 3662 for violations of the regulations that
implement these service standards and performance measurement systems.
The Commission is deferring consideration of data reporting on
service quality. Proposed rules 3050.50 et seq. are ultimately intended
to describe the service performance information that would be required
to implement the relevant provisions of the PAEA. A separate rulemaking
docket will be initiated shortly to develop these reporting
requirements.
P. Proposed Rule 3050.60 (Master List of Handbooks, Etc.)
Proposed rules 3050.60(a) through (c) would require the Postal
Service to provide a master list of publications, handbooks, and data
collection forms at the beginning of each fiscal year in hard copy and
in electronic form. Data collection forms and corresponding training
manuals would be provided ``when changed.''
The Postal Service argues that the proposed rules should only
require a comprehensive set of these materials initially, and further
materials in all the categories listed only ``when changed.'' It also
alleges that providing electronic versions of all such materials could
be a significant burden. Id. at 47-48. The Commission incorporates
these suggestions in final rules 3050.60(b) through (d). It also limits
the requirement that these items be provided in electronic format to
those already in that format.
Q. Standardized Narrative Explanations
Valpak observes that various rules proposed in this docket imply a
need for a narrative explanation of lesser or greater elaboration. It
argues that such narrative explanations should be standardized. It
proposes that the Commission express a uniform standard as a
definitional rule. The definition it advocates reads as follows:
Rule 3050.1a. Full and detailed explanation. Where the rules in
this Part require the Postal Service to file or otherwise submit an
explanation, including the explanatory reports, analyses, lists,
estimates, and other such items required by the various rules in
Part 3050, the Postal Service shall provide a narrative setting
forth a full and detailed explanation, providing the information
requested, such as how the items in question were calculated and/or
determined, how they differ from such items in the immediately
preceding report of the same type, and how they comply with the
requirements of the law and/or those imposed by the Commission.
Valpak Comments at 16-17. The Public Representative generally supports
Valpak's proposal. Public Representative Reply Comments at 16-17.
Providing full and detailed explanations everywhere an explanation
would be helpful is ordinarily a laudable goal. Imposing a one-size-
fits-all standard in the context of the periodic reporting rules,
however, would tend to work at cross-purposes with these rules.
In drafting these periodic reporting rules, the Commission is
mindful that the need for detailed explanations differs markedly from
one report to another, and that the time available to produce detailed
explanations differs dramatically from one report to another as well.
For example, the ratemaking schedule that has been adopted under the
PAEA puts the Postal Service under considerable strain to produce its
annual section 3652 report. It has 90 days to prepare its CRA, apply
the results of associated special studies, and to analyze the
significance of the overall results. Rather than impose an obligation
on the Postal Service to provide detailed explanations on every aspect
of its section 3652 report, it would be more productive to allow the
Postal Service to focus on the main issues that its report raises, and
treat those in some depth.
Valpak itself has suggested that for any rate or service that has
not complied with the standards of title 39 in the review year, the
Postal Service should provide an explanation of the causes, the remedy
that it plans to pursue, and the expected time frame for bringing the
rate or service into compliance. This is an example of where the Postal
Service's limited time in preparing a section 3652 report should be
focused. The standard that Valpak proposes would interfere with this
kind of prioritization.
The Commission views flexibility in the nature of the narrative
required as one of the strengths of its periodic reporting rules. Some
of the periodic reports required by the Commission are intended to
elicit only brief, simplified explanations to orient the lay public,
rather than in-depth, technical explanations of things that are not in
controversy and, if required, are likely to divert resources from more
important work. A good example is final rule 3050.60(f) which requires
the Postal Service to submit the equivalent of the ``Library Reference
1'' quick guide that was traditionally submitted in PRA rate cases.\16\
---------------------------------------------------------------------------
\16\ Because the section 3050.60(f) narrative is meant to serve
as a ``Cliffs Notes'' for the lay public seeking to understand
postal costing, it would not have to be comprehensively redone each
year. It would have to be updated only where accepted analytical
principles have changed. This is consistent with what Pitney Bowes
recommends. See Pitney Bowes Reply Comments at 3.
---------------------------------------------------------------------------
Final rule 3050.2(a) is another good example. It requires the
Postal Service to list corrections that it has made and input data and
quantification techniques that have changed since the pertinent
periodic report was last submitted, together with ``a brief narrative
explanation of each listed change.'' The Commission regards this
requirement as reasonable because the narrative explanation only
requires a
[[Page 20848]]
``bare bones'' explanation sufficient to give the public and the
Commission notice of the reason for the change, rather than an in-depth
discussion or defense of the change.
In fashioning the periodic reporting rules, the Commission
contemplates that in-depth technical or theoretical explanations will
be reserved for the contexts in which they are most needed. Those would
include the informal rulemakings where new analytical principles are
evaluated, and the compliance review period where significant
compliance issues have been identified. To keep the flexibility to
adapt narrative explanations to the context in which they arise, the
Commission believes it best not to impose the same standard on each.
For that reason, the Commission declines to adopt Valpak's proposal.
III. Indirectly Related Proposals
A. Substantive Proposals
The Appendix to this order contains an illustrative alternative
format for the CRA that breaks out costs, volumes, and revenues for
products and for rate categories. The rationale for requiring this more
detailed alternative format was provided in Order No. 104 at 16-17.
Time Warner notes that for Outside County Periodicals, there have been
distinct rate categories added for bundles, sacks, and pallets. It
suggests that it is both feasible and desirable to further disaggregate
the Outside County data in the Appendix by bundle, sack, and pallet. It
argues that CRA costs could be disaggregated to this level by simply
re-tabulating IOCS data that is already routinely gathered. It argues
that this disaggregation of CRA costs would provide ``better guidance
for rate setting, as well as better guidance for possible cost
reductions'' within the Periodicals class. Time Warner Comments at 14-
15.
The Postal Service opposes this proposal. It validly observes that
changing the source of the estimates for the costs of bundles, sacks,
and pallets would constitute a change in analytical principles, and,
therefore, should be handled in an informal cost methodology rulemaking
under the procedures outlined in proposed rule 3050.11. Postal Service
Reply Comments at 25. For that reason, the Commission declines to adopt
Time Warner's proposal.
Time Warner also suggests that because the alternative format
illustrated in the Appendix is highly disaggregated, particularly with
respect to international mail, some data might suffer from small-sample
variation. To overcome this problem, it suggests that the data for
small-volume categories be averaged over several years. This, too,
would constitute a change in analytical principles. Time Warner
Comments at 14. The Commission declines to adopt it in the context of
this rulemaking for the same reason.
B. Procedural Proposals
Discovery. None of the rules proposed by the Commission in this
docket involved altering the procedures by which the Postal Service's
section 3652 report is reviewed. Nevertheless, a number of procedural
proposals have been offered for the Commission's consideration,
primarily by Valpak. Some of these proposals have been endorsed by the
Public Representative.
Valpak argues that the procedures for reviewing the Postal
Service's section 3652 report do not provide enough opportunity for
private parties to participate effectively. Given the paucity of
explanatory narrative in the report itself, Valpak contends that the
Commission should adopt rules that expressly allow private parties to
engage in discovery against the Postal Service. It makes the same
recommendation with respect to informal rulemakings in which proposals
to change analytical principles are reviewed. It suggests that this be
accomplished by making the formal hearing procedures described in part
3001, subpart A applicable to annual compliance review. Valpak Comments
at 14-15.
Time Warner responds that Valpak suffers from an illusion that the
procedural due process rights that were guaranteed in rate hearings
under the PRA were carried forward by Congress in the PAEA. It contends
that Congress purposely omitted from the PAEA any right to a ``hearing
on the record'' with its attendant rights of discovery, cross-
examination, testimony, and briefs. It asserts that with respect to
compliance review, the only procedure that the PAEA guarantees third
parties is an opportunity to comment on the Postal Service's section
3652 report. It likewise asserts that no procedural due process rights
attach to an informal rulemaking reviewing changes to analytical
principles other than the right to comment. Time Warner Reply Comments
at 14-16.
The Postal Service opposes Valpak's proposal as well. It emphasizes
that the Commission is allowed only 90 days to review its section 3652
report and third parties have considerably less than that to prepare
their comments if they are to be meaningfully reviewed by the
Commission. It argues that this schedule is so compressed that the
Commission must screen third-party discovery requests so that the
limited resources of its technical staff are available to respond to
issues that the third parties and the Commission collectively view as
of the highest priority. It contends that it should only be obligated
to respond to discovery requests to the extent that they are reflected
in Commission information requests. It concludes that the Commission
should have the discretion to follow a similar approach in conducting
methodological rulemakings where there is a need to expedite the
process. Postal Service Reply Comments at 4-6.
The Commission agrees with the Postal Service that the extremely
compressed time schedules under which compliance review must be
conducted, and under which some methodological rulemakings might have
to be conducted, make it prudent for the Commission to retain the
discretion to screen the kind and amount of discovery to which the
Postal Service must respond. The Commission also agrees with Valpak and
others that effective third-party participation in both compliance
review and methodology review is extremely important. The Commission
concludes that these rules will allow it to most effectively utilize
the limited time and technical resources available to investigate the
most pressing postal issues that arise in both annual compliance
reviews and from methodological research.
Period allowed for comments in compliance review. Section 3653
requires the Commission to provide parties to a compliance review
proceeding an opportunity for comment on the Postal Service's section
3652 report. The period allowed for comment is not prescribed by the
Commission's rules. On an ad hoc basis, the Commission afforded 30 days
for initial comments and 15 days for reply comments in the first two
compliance review cycles.
Valpak argues that the Commission should adopt procedural rules
governing compliance review, and that those rules should allow 45 days
for initial comments and 15 for reply comments. It says that this would
provide a more reasonable time for interested parties to review the
complex documentation that accompanies the Postal Service's section
3652 report, and still leave the Commission with enough time to take
the comments of the public into account in its determination. Valpak
Comments at 13.
The Commission appreciates how challenging it is to evaluate the
complex documentation that the Postal Service files supporting its
section 3652 report.
[[Page 20849]]
The Commission, however, has found that the comment periods that have
been established in the notices issued in the first two compliance
review dockets have not provided it with any leeway in the amount of
time that it has reserved to itself to draft and issue its Annual
Compliance Determination. It, therefore, declines to act on Valpak's
suggestion. Appendix [Illustrative list referred to in part II.G. of
Supplementary Information.]
Products and Categories
Market Dominant Products
Domestic First-Class Mail:
Single-Piece:
Letters
Flats
Parcels
Total Single-Piece Letters, Flats & Parcels
Presort:
Letters
Flats
Parcels
Total Presort Letters, Flats & Parcels
Automation:
Letters
Flats
Parcels
Total Automation Letters, Flats & Parcels
Total Letters, Flats & Parcels
Single-Piece Cards
Presort Cards
Automation Cards
Total Cards
Total Domestic First-Class Mail
First-Class Mail International:
Outbound Single-Piece Letters, Flats, IPPs, and Parcels:
Target System Countries at UPU Rates
Transition System Countries at UPU Rates
Subject to Agreement
Canada
Other
Total Outbound Single-Piece Letters, Flats, IPPs, and Parcels
Outbound Single-Piece Cards:
Target System Countries at UPU Rates
Transition System Countries at UPU Rates
Subject to Agreement
Canada
Other
Total Outbound Single-Piece Cards
Total Outbound Single-Piece Mail
Inbound Single-Piece Mail (Letter Post):
Air:
Target System Countries at UPU Rates
Transition System Countries at UPU Rates
Subject to Agreement
Canada
Other
Surface:
Target System Countries at UPU Rates
Transition System Countries at UPU Rates
Subject to Agreement
Canada
Other
Total Inbound Single-Piece Mail
Total International First-Class Mail
Total First-Class Mail
Periodicals:
Within County
Outside County:
Regular Rate
Nonprofit
Classroom
Total Outside County
Total Periodicals
Standard Mail:
Regular Presort Mail:
Letters
Flats
Parcels
Not-Flat Machinables
Total Regular Presort Mail
Regular Automation Mail:
Letters
Flats
Total Regular Automation Mail
Total Regular Mail
Nonprofit Presort Mail:
Letters
Flats
Parcels
Not-Flat Machinables
Total Nonprofit Presort Mail
Regular Automation Mail:
Letters
Flats
Total Nonprofit Automation Mail
Total Nonprofit Mail
Total Regular and Nonprofit Mail
Enhanced Carrier Route Mail:
Basic Presort Letters
High Density Letters
Saturation Letters
Total Enhanced Carrier Route Letters
Basic Presort Flats
High Density Flats
Saturation Flats
Total Enhanced Carrier Route Flats
Basic Presort Parcels
High Density Parcels
Saturation Parcels
Total Enhanced Carrier Route Parcels
Total Enhanced Carrier Route Mail
Nonprofit Enhanced Carrier Route Mail:
Basic Presort Letters
High Density Letters
Saturation Letters
Total Non-enhanced Carrier Route Letters
Basic Presort Flats
High Density Flats
Saturation Flats
Total Non-enhanced Carrier Route Flats
Basic Presort Parcels
High Density Parcels
Saturation Parcels
Total Non-enhanced Carrier Route Parcels
Total Nonprofit Enhanced Carrier Route Mail
Total ECR and Non-ECR Mail
Total Standard Mail
Package Services:
Single-Piece Parcel Post:
Intra-Bulk Mail Center
Inter-Bulk Mail Center
Total Single-Piece Domestic Parcel Post
Inbound Surface Parcel Post (at UPU Rates)
Total Single-Piece Parcel Post
Bound Printed Matter:
Bound Printed Matter Flats:
Nonpresorted
Presorted
Carrier Route
Total Bound Printed Matter Flats
Bound Printed Matter Parcels:
Nonpresorted
Presorted
Carrier Route
Total Bound Printed Matter Parcels
Total Bound Printed Matter
Media Mail:
Single Piece
Presorted
Total Media Mail
Library Rate:
Single Piece
Presorted
Total Library Mail
Total Media and Library Mail
Total Package Services
USPS Penalty Mail
Free-for-the-Blind Mail
Negotiated Service Agreements (NSAs) (list each separately):
Total Negotiated Service Agreement Mail
Total Market Dominant Mail
Special Services:
Ancillary Services:
Address Correction
Applications and Mailing Permits:
First-Class Mail Presort Fee
Standard Mail Mailing Fee
Total Applications and Mailing Permits
Package Services Mailing Fees:
Bound Printed Matter Destination Entry Mailing Fee
Library Mail Presort Mailing Fee
Media Mail Presort Mailing Fee
Total Package Service Fees
Parcel Return Service Fees:
Account Maintenance Fee
Permit Fee
Total Parcel Return Service Fees
Parcel Select Destination Entry Mailing Fee
Periodicals Mailing Fees:
Original Entry Fee
Reentry Fee
Additional Entry Fee
News Agent Registry Fee
Total Periodicals Mailing Fees
Permit Imprint Fee
Business Reply Mail:
Per-Piece Fee
Permit/Account Maintenance Fees
Total Business Reply Mail
Bulk Parcel Return Service:
Per-Piece Fee
Account Maintenance Fee
Permit Fee
Total Bulk Parcel Return Service
Certified Mail
Certificate of Mailing
Collect-on-Delivery
Delivery Confirmation
Insurance
Merchandise Return Service:
Per-Piece Fee
Account Maintenance Fee
Permit Fee
Total Merchandise Return Service
Parcel Airlift
Registered Mail
Return Receipt
Return Receipt for Merchandise
Restricted Delivery
Shipper Paid Forwarding
Signature Confirmation
Special Handling
Stamped Envelopes
Stamped Cards
Premium Stamped Envelopes
Premium Stamped Cards
Total Ancillary Services
International Ancillary Services:
[[Page 20850]]
International Certificate of Mailing
International Registered Mail:
Outbound International Registered Mail
Inbound International Registered Mail
Total International Registered Mail
International Return Receipt:
Outbound International Return Receipt
Inbound International Return Receipt
Total International Return Receipt
International Restricted Delivery:
Outbound International Restricted Delivery
Inbound International Restricted Delivery
Total International Restricted Delivery
Inbound International Insurance
Inbound International Delivery Confirmation
Customs Clearance and Delivery Fee
Total International Ancillary Services
Address List Services:
ZIP Coding of Mailing Lists
Correction of Mailing Lists
Address Changes for Election Boards
Carrier Sequencing of Address Cards
Total Address List Services
Caller Service/Reserve Numbers
Change-of-Address Credit Card Authentication
Confirm
International Reply Coupon Services:
Outbound International Reply Coupon Service
Inbound International Reply Coupon Service
Total International Reply Services
International Business Reply Mail Services:
Outbound Business Reply Mail Service
Inbound International Business Reply Mail Service
Total International Business Reply Service
Money Orders
Post Office Boxes
Other Special Services:
Standard Mail Forwarding/Return:
Forwarding/Return Fee
Weighted Factor Forwarding/Return Fee
Total Standard Mail Forwarding/Return
Total Market Dominant Special Services
Total Market Dominant Mail and Services
Competitive Products
Priority Mail:
Domestic Priority Mail
Priority Mail International:
Outbound Priority Mail International:
Subject to UPU Inward Land Rates
Subject to Terminal Dues
Target System Countries at UPU Rates
Transition System Countries at UPU Rates
Subject to Agreement
Canada
Other
Total Outbound Priority Mail International
Inbound Air Parcel Post:
Subject to UPU Inward Land Rates
Subject to Agreement
Canada
Other
Total Inbound Air Parcel Post
Total Priority Mail International
Total Priority Mail
Express Mail:
Domestic Express Mail:
Custom Designed
Next Day and Second Day Post Office-to-Post Office
Next Day and Second Day Post Office-to-Addressee
Total Domestic Express Mail
Outbound International Expedited Services
Global Express Guaranteed
Express Mail International
Inbound International Expedited Services:
Subject to UPU Rates
Subject to Agreement
Canada
Other
Total Inbound International Expedited Services
Total International Express Mail:
Total Express Mail
Package Services:
Bulk Parcel Post:
Inter-Bulk Mail Center:
Barcoded
Origin Bulk Mail Center Presort
Bulk Mail Center Presort
Total Inter-Bulk Mail Center
Intra-Bulk Mail Center Barcoded
Parcel Select:
Destination Bulk Mail Center
Destination Sectional Center Facility
Destination Delivery Unit
Total Parcel Select
Parcel Return Service:
Return Bulk Mail Center
Return Destination Units
Total Parcel Return Service
Total Bulk Parcel Post
International Mail:
International Priority Airmail
International Surface Airlift
International Direct Sacks--M-Bags
Outbound International Direct Sacks--M-Bags
Inbound International Direct Sacks--M-Bags
Total International Direct Sacks--M-Bags
Global Customized Shipping Services
Inbound Surface Parcel Post (at Non-UPU Rates):
Canada
Other
Total Inbound Surface Parcel Post (at Non-UPU Rates)
Total International Mail
International Special Services:
International Money Transfer Service:
Outbound International Money Transfer Service
Inbound International Money Transfer Service
Total International Money Transfer Service
International Ancillary Services:
International Certificate of Mailing
International Registered Mail
International Return Receipt:
Outbound International Return Receipt
Inbound International Return Receipt
Total International Return Receipt
International Restricted Delivery
International Insurance:
Outbound International Insurance
Inbound International Insurance
Total International Insurance
Custom Clearance and Delivery Fee
Total International Ancillary Services
Total International Special Services
IV. Ordering Paragraphs
It is Ordered:
1. The Commission hereby amends its rules of practice and procedure
by deleting rules 3001.102 and 103, and adding new part 3050--Periodic
Reporting as set forth below.
2. These actions will take effect 30 days after publication in the
Federal Register.
3. The Secretary shall arrange for publication of this order in the
Federal Register.
List of Subjects
39 CFR Part 3001
Administrative practice and procedure; Confidential business
information, Freedom of information, Sunshine Act.
39 CFR Part 3050
Administrative practice and procedure, Postal Service,
Recordkeeping and reporting requirements.
Issued: April 16, 2009.
By the Commission.
Steven W. Williams,
Secretary.
0
For the reasons stated in the preamble, under the authority at 39
U.S.C. 503, the Postal Regulatory Commission amends 39 CFR chapter III
as follows:
PART 3001--RULES OF PRACTICE AND PROCEDURE
0
1. The authority citation for part 3001 continues to read as follows:
Authority: 39 U.S.C. 404(d); 503; 3622; 3633; 3652; 3661.
Sec. 3001.102 [Removed]
0
2. Remove and reserve Sec. 3001.102 in subpart G.
Sec. 3001.103 [Removed]
0
3. Remove and reserve Sec. 3001.103 in subpart G.
0
4. Add Part 3050--Periodic Reporting, to read as follows:
PART 3050--PERIODIC REPORTING
Sec.
3050.1 Definitions applicable to this part.
3050.2 Documentation of periodic reports.
3050.3 Access to information supporting Commission reports or
evaluations.
3050.10 Analytical principles to be applied in the Postal Service's
annual periodic reports to the Commission.
3050.11 Proposals to change an accepted analytical principle applied
in the Postal Service's annual periodic reports to the Commission.
3050.12 Obsolescence of special studies relied on to produce the
Postal Service's annual periodic reports to the Commission.
3050.13 Additional documentation required in the Postal Service's
section 3652 report.
3050.14 Format of the Postal Service's section 3652 report.
[[Page 20851]]
3050.20 Compliance and other analyses in the Postal Service's
section 3652 report.
3050.21 Content of the Postal Service's section 3652 report.
3050.22 Documentation supporting attributable cost estimates in the
Postal Service's section 3652 report.
3050.23 Documentation supporting incremental cost estimates in the
Postal Service's section 3652 report.
3050.24 Documentation supporting estimates of costs avoided by
worksharing and other mail characteristics in the Postal Service's
section 3652 report.
3050.25 Volume and revenue data.
3050.26 Documentation of demand elasticities and volume forecasts.
3050.27 Workers' Compensation Report.
3050.28 Monthly and pay period reports.
3050.30 Information needed to estimate the cost of the universal
service obligation. [Reserved]
3050.35 Financial reports.
3050.40 Additional financial reporting.
3050.41 Treatment of additional financial reports.
3050.42 Proceedings to improve the quality of financial data.
3050.43 Information on program performance.
3050.50 Information on service performance for domestic products.
[Reserved]
3050.51 Information on service performance for Special Services.
[Reserved]
3050.52 Information on service performance for international
products. [Reserved]
3050.53 Information on customer satisfaction and retail access.
[Reserved]
3050.60 Miscellaneous reports and documents.
Authority: 39 U.S.C. 503, 3651, 3652, 3653.
Sec. 3050.1 Definitions applicable to this part.
(a) Accepted analytical principle refers to an analytical principle
that was applied by the Commission in its most recent Annual Compliance
Determination unless a different analytical principle subsequently was
accepted by the Commission in a final rule.
(b) Accepted quantification technique refers to a quantification
technique that was applied in the most recent iteration of the periodic
report applying that quantification technique or was used to support a
new analytical principle adopted in a subsequent rule 3050.11
proceeding.
(c) Analytical principle refers to a particular economic,
mathematical, or statistical theory, precept, or assumption applied by
the Postal Service in producing a periodic report to the Commission.
(d) Annual Compliance Determination refers to the report that 39
U.S.C. 3653 requires the Commission to issue each year evaluating the
compliance of the Postal Service.
(e) Annual periodic reports to the Commission refers to all of the
reports that the Postal Service is required to provide to the
Commission each year.
(f) Quantification technique refers to any data entry or
manipulation technique whose validity does not require the acceptance
of a particular economic, mathematical, or statistical theory, precept,
or assumption. A change in quantification technique should not change
the output of the analysis in which it is employed.
(g) Section 3652 report refers to the annual compliance report
provided by the Postal Service to the Commission pursuant to 39 U.S.C.
3652, but does not include the reports required by 39 U.S.C. 2803 and
2804.
Sec. 3050.2 Documentation of periodic reports.
(a) At the time that it submits any periodic report to the
Commission, the Postal Service shall identify any input data that have
changed, list any quantification techniques that it has changed, and
list any corrections that it has made since that report was last
submitted to and accepted by the Commission. It shall provide a brief
narrative explanation of each listed change.
(b) If workpapers are required to support a periodic report, they
shall:
(1) Show all calculations employed in producing each estimate;
(2) Be sufficiently detailed to allow all numbers used in such
calculations to be traced back to public documents or to primary data
sources; and
(3) Be submitted in a form, and be accompanied by sufficient
explanation and documentation, to allow them to be replicated using a
publicly available PC application.
(c) Spreadsheets used in preparing periodic reports shall be
submitted in electronic form. They shall display the formulas used,
their links to related spreadsheets, and shall not be password
protected.
(d) Filing of portions of the documentation required by paragraphs
(b) and (c) of this section that are not time critical may be delayed
up to 2 weeks if the Postal Service obtains permission from the
Commission to defer filing of such portions at least 30 days prior to
the date on which the periodic report is due.
Sec. 3050.3 Access to information supporting Commission reports or
evaluations.
(a) The Commission shall have access to material if, in its
judgment, the information supports any report, assessment, or
evaluation required by title 39 of the United States Code, including:
(1) The working papers and supporting matter of the Postal Service
or the Postal Service Inspector General in connection with any
information submitted under 39 U.S.C. 3652; and
(2) Information that supports the Commission's annual assessment
under 39 U.S.C. 3651.
(b) [Reserved]
Sec. 3050.10 Analytical principles to be applied in the Postal
Service's annual periodic reports to the Commission.
In its annual periodic reports to the Commission, the Postal
Service shall use only accepted analytical principles. With respect to
its submissions under Sec. 3050.26, however, the Postal Service may
elect to use an analytical principle prior to its acceptance by the
Commission.
Sec. 3050.11 Proposals to change an accepted analytical principle
applied in the Postal Service's annual periodic reports to the
Commission.
(a) To improve the quality, accuracy, or completeness of the data
or analysis of data contained in the Postal Service's annual periodic
reports to the Commission, the Commission, acting on its own behalf,
may issue a notice of proceeding to change an accepted analytical
principle. In addition, any interested person, including the Postal
Service or a public representative, may submit a petition to the
Commission to initiate such a proceeding.
(b) Form and content of notice or petition. The notice of
proceeding or petition shall identify the accepted analytical principle
proposed for review, explain its perceived deficiencies, and suggest
how those deficiencies should be remedied.
(1) If the notice of proceeding or petition proposes that a
specific alternative analytical principle be followed, it should
include the data, analysis, and documentation on which the proposal is
based, and, where feasible, include an estimate of the impact of the
proposed change on the relevant characteristics of affected postal
products, including their attributable cost, avoided cost, average
revenue, or service attainment.
(2) If the petitioner requests access to data from the Postal
Service to support the assertions or conclusions in its petition, and
such data are not otherwise available, it shall accompany the petition
with a request to gain access to such data. The petitioner's request
should identify the data sought, and include the reasons for believing
that the data will support its petition. To
[[Page 20852]]
expedite its evaluation of the data request, the Commission may, after
reasonable public notice, order that answers or objections be presented
orally or in writing.
(c) Procedures for processing a notice or petition. To better
evaluate a notice or petition to change an accepted analytical
principle, the Commission may order that it be made the subject of
discovery. By request of any interested person, or on its own behalf,
the Commission may order that the petitioner and/or the Postal Service
provide experts on the subject matter of the proposal to participate in
technical conferences, prepare statements clarifying or supplementing
their views, or answer questions posed by the Commission or its
representatives.
(d) Action on the notice or petition. (1) After the conclusion of
discovery procedures, if any, the Commission shall determine whether to
issue a notice of proposed rulemaking based on the petition and the
supporting material received. Such notice shall be evaluated by
procedures that are consistent with 5 U.S.C. 553. Interested parties
will be afforded an opportunity to present written comments and reply
comments, and, if the Commission so orders, to present oral comments as
well.
(2) If accepted by the Commission, the change proposed in the
notice of proposed rulemaking shall be published in a final rule in the
Federal Register and on the Commission's Web site.
Sec. 3050.12 Obsolescence of special studies relied on to produce the
Postal Service's annual periodic reports to the Commission.
The Postal Service shall provide a list of special studies whose
results are used to produce the estimates in its annual periodic
reports to the Commission. It shall indicate the date the study was
completed and whether the study reflects current operating conditions
and procedures. The Postal Service shall update the list annually.
Sec. 3050.13 Additional documentation required in the Postal
Service's section 3652 report.
At the time the Postal Service files its section 3652 report, it
shall include a brief narrative explanation of any changes to accepted
analytical principles that have been made since the most recent Annual
Compliance Determination was issued and the reasons that those changes
were accepted.
Sec. 3050.14 Format of the Postal Service's section 3652 report.
The Postal Service's Cost and Revenue Analysis (CRA) report shall
be presented in a format reflecting the classification structure in the
Mail Classification Schedule. It shall also be presented in an
alternative, more disaggregated format capable of reflecting the
classification structure in effect prior to the adoption of the Postal
Accountability and Enhancement Act.
Sec. 3050.20 Compliance and other analyses in the Postal Service's
section 3652 report.
(a) The Postal Service's section 3652 report shall include an
analysis of the information that it contains in sufficient detail to
demonstrate the degree to which, in the fiscal year covered by its
report, each of its products (market dominant and competitive) comply
with all of the applicable provisions of title 39 of the United States
Code and the regulations promulgated thereunder, and promote the public
policy objectives set out in title 39 of the United States Code.
(b) Its analysis shall be applied to products individually, and,
where appropriate, to products collectively.
(c) It shall address such matters as non-compensatory rates,
discounts greater than avoided costs, and failures to achieve stated
goals for on-time delivery standards. A more detailed analysis is
required when the Commission observed and commented upon the same
matter in its Annual Compliance Determination for the previous fiscal
year.
Sec. 3050.21 Content of the Postal Service's section 3652 report.
(a) No later than 90 days after the close of each fiscal year, the
Postal Service shall submit a report to the Commission analyzing its
cost, volume, revenue, rate, and service information in sufficient
detail to demonstrate that all products during such year comply with
all applicable provisions of title 39 of the United States Code. The
report shall provide the items in paragraphs (b) through (j) of this
section.
(b) The volume and revenue generated by each product;
(c) The attributable costs of, and the contribution to
institutional costs made by, each product;
(d) The quality of service received by each market dominant
product, including the speed of delivery and the reliability of
delivery;
(e) For each market dominant workshare discount offered during the
reporting year:
(1) The per-item cost avoided by the Postal Service by virtue of
such discount;
(2) The percentage of such per-item cost avoided that the per-item
workshare discount represents;
(3) The per-item contribution made to institutional costs; and
(4) The factual and analytical bases for its conclusion that one or
more of the exception provisions of 39 U.S.C. 3622(e)(2)(A) through (D)
apply.
(f) For each market dominant negotiated service agreement:
(1) Identify its rates and service features;
(2) Estimate its costs, volumes, and revenues;
(3) Analyze its effect on the operational performance of the Postal
Service, specifying the affected operations and, to the extent
possible, quantifying the effect;
(4) Analyze the contribution of the agreement to institutional
costs for its most recent year of operation. The year analyzed shall
end on the anniversary of the negotiated service agreement that falls
within the fiscal year covered by the Postal Service's annual periodic
reports to the Commission and include the 12 preceding months. The
analysis shall show all calculations and fully identify all inputs.
Inputs used to estimate the effect on total contribution to the Postal
Service, such as unit costs and price elasticities, shall be updated
using fiscal year values; and
(5) Analyze the effect of the negotiated service agreement (and
other functionally equivalent negotiated service agreements) on the
marketplace. If there were harmful effects, explain why those effects
were not unreasonable.
(g) For each competitive negotiated service agreement:
(1) Identify its rates and service features; and
(2) Estimate its costs, volumes, and revenues.
(h) For market tests of experimental products:
(1) Estimate their costs, volumes, and revenues individually, and
in aggregate, by market dominant and by competitive product group;
(2) Estimate the quality of service of each individual experimental
product; and
(3) Indicate whether offering the experimental product has created
an inappropriate competitive advantage for the Postal Service or any
mailer.
(i) For each nonpostal service, estimate its costs, volumes, and
revenues; and
(j) Provide any other information that the Postal Service believes
will help the Commission evaluate the Postal Service's compliance with
the applicable provisions of title 39 of the United States Code.
[[Page 20853]]
Sec. 3050.22 Documentation supporting attributable cost estimates in
the Postal Service's section 3652 report.
(a) The items in paragraphs (b) through (p) of this section shall
be reported when they have changed from those used in the most recent
Annual Compliance Determination.
(b) The CRA report, including relevant data on international mail
services;
(c) The Cost Segments and Components (CSC) report;
(d) All input data and processing programs used to produce the CRA
report, to include:
(1) CSC Reconciliation to Financial Statement and Account
Reallocations;
(2) Manual Input Requirement (reflecting direct accounting or
modeled costs);
(3) The CSC ``A'' report (showing how indirect costs are
distributed to products based on the distribution of direct costs);
(4) The CSC ``B'' report (showing how indirect Property Equipment
Supplies Services and Administrative (PESSA) costs are distributed to
products;
(5) The CSC ``D'' report (showing final adjustments to total
attributable and product-specific costs);
(6) The CSC ``F'' report (containing distribution keys for indirect
labor components);
(7) The control file that includes the CRA program control string
commands used to produce the CRA and the above-described CSC reports;
and
(8) The master list of cost segment components, including all of
the components used as distribution keys in the development of the CSC
report and its accompanying reports.
(e) Spreadsheet workpapers underlying development of the CSC report
by component. These workpapers shall include the updated factors and
input data sets from the supporting data systems used, including:
(1) The In-Office Cost System (IOCS);
(2) The Management Operating Data System (MODS);
(3) The City Carrier Cost System (CCCS);
(4) The City Carrier Street Time Sampling System (CCSTS);
(5) The Rural Carrier Cost System (RCCS);
(6) The National Mail Count;
(7) The Transportation Cost System (TRACS);
(8) System for International Revenues and Volumes/Outbound (SIRV/
O);
(9) System for International Revenues and Volumes/Inbound (SIRV/I);
(10) Military and International Dispatch and Accountability System;
and
(11) Inbound International Revenue Accounting Systems (IAB data).
(f) The econometric analysis of carrier street time, including
input data, processing programs, and output;
(g) The Window Service Supply Side Variability, Demand Side
Variability, and Network Variability studies, including input data,
processing programs, and output;
(h) The econometric analysis of purchased highway transportation
cost variability, including input data, processing programs, and
output;
(i) The econometric analysis of freight rail cost variability,
including input data, processing programs, and output;
(j) A list and summary description of any transportation contracts
whose unit rates vary according to the level of postal volume carried.
The description should include the product or product groups carried
under each listed contract;
(k) Spreadsheets and processing programs distributing attributable
mail processing costs;
(l) The Vehicle Service Driver Data Collection System;
(m) Input data, processing programs, and output of the Vehicle
Service Driver Cost Variability Study;
(n) Econometric analysis of postmaster cost variability;
(o) Floor Space Survey; and
(p) Density studies used to convert weight to cubic feet of mail.
Sec. 3050.23 Documentation supporting incremental cost estimates in
the Postal Service's section 3652 report.
Input data, processing programs, and output of an incremental cost
model shall be reported.
Sec. 3050.24 Documentation supporting estimates of costs avoided by
worksharing and other mail characteristics in the Postal Service's
section 3652 report.
(a) The items in paragraphs (b) through (l) of this section shall
be reported, including supporting calculations and derivations.
(b) Letter, card, flat, parcel and non-flat machinable mail
processing cost models with Delivery Point Sequence percentages
calculated, which shall include:
(1) Coverage factors for any equipment where coverage is less than
100 percent;
(2) MODS productivities;
(3) Piggyback factors and supporting data;
(4) Entry profiles, bundle sorts, and pieces per bundle;
(5) Bundle breakage, handlings, and density;
(6) Mail flow density and accept rates;
(7) Remote Computer Reader finalization costs, cost per image, and
Remote Bar Code Sorter leakage;
(8) Percentage of mail finalized to carrier route;
(9) Percentage of mail destinating at post office boxes; and
(10) Wage rates and premium pay factors.
(c) Pallet cost models for Periodicals;
(d) Sack cost models for Periodicals;
(e) Bundle cost models for Periodicals;
(f) Other container cost models for Periodicals;
(g) Analysis of Periodicals container costs;
(h) Business Reply Mail cost supporting material;
(i) Mail processing units costs for Carrier Route, High Density,
and Saturation mail;
(j) Mail processing unit costs by shape and cost pool for each
product and benchmark category;
(k) Delivery costs by product, shape, presort level, automation
compatibility, and machinability, including Detached Address Label cost
calculations; and
(l) Dropship cost avoidance models.
Sec. 3050.25 Volume and revenue data.
(a) The items in paragraphs (b) through (e) of this section shall
be provided.
(b) The Revenue, Pieces, and Weight (RPW) report, including
estimates by shape, weight, and indicia, and the underlying billing
determinants, broken out by quarter, within 90 days of the close of
each fiscal year;
(c) Revenue, pieces, and weight by rate category and special
service by quarter, within 30 days of the close of the quarter;
(d) Quarterly Statistics Report, including estimates by shape,
weight, and indicia, within 30 days of the close of the quarter; and
(e) Billing determinants within 40 days of the close of the
quarter.
Sec. 3050.26 Documentation of demand elasticities and volume
forecasts.
By January 20 of each year, the Postal Service shall provide
econometric estimates of demand elasticity for all postal products
accompanied by the underlying econometric models and the input data
sets used; and a volume forecast for the current fiscal year, and the
underlying volume forecasting model.
Sec. 3050.27 Workers' Compensation Report.
The Workers' Compensation Report, including summary workpapers,
shall be provided by March 1 of each year.
[[Page 20854]]
Sec. 3050.28 Monthly and pay period reports.
(a) The reports in paragraphs (b) through (f) of this section shall
be provided within 15 days of the close of the relevant period or as
otherwise stated.
(b) Monthly Summary Financial Report on the 24th day of the
following month, except that the report for the last month of each
quarter shall be provided at the time that the Form 10-Q report is
provided.
(1) The report shall follow the formats as shown below.
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[GRAPHIC] [TIFF OMITTED] TR05MY09.003
[[Page 20855]]
[GRAPHIC] [TIFF OMITTED] TR05MY09.004
[[Page 20856]]
[GRAPHIC] [TIFF OMITTED] TR05MY09.005
[[Page 20857]]
[GRAPHIC] [TIFF OMITTED] TR05MY09.006
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(2) [Reserved]
(c) National Consolidated Trial Balances and the Revenue and
Expense Summary (monthly);
(d) National Payroll Hours Summary in electronic form (pay period);
(e) On-roll and Paid Employee Statistics (ORPES) (pay period); and
(f) Postal Service Active Employee Statistical Summary (HAT report)
(pay period).
Sec. 3050.30 Information needed to estimate the cost of the universal
service obligation. [Reserved]
Sec. 3050.35 Financial reports.
(a) The reports in paragraphs (b) through (d) of this section shall
be provided annually at the time indicated.
(b) Annual Report of the Postmaster General (when released to the
public);
(c) Congressional Budget Submission and supporting workpapers,
including Summary Tables SE 1, 2, and 6 (within 7 days of the
submission of the Federal Budget by the President to the Congress); and
(d) Integrated Financial Plan (within 7 days of approval by the
Board of Governors).
Sec. 3050.40 Additional financial reporting.
(a) In general. The Postal Service shall file with the Commission:
(1) Within 40 days after the end of each fiscal quarter, a
quarterly report containing the information required by the Securities
and Exchange Commission to be included in quarterly reports under
sections 13 and 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
78m, 78o(d)) on Form 10-Q, as such form (or any successor form) may be
revised from time to time;
(2) Within 60 days after the end of each fiscal year, an annual
report containing the information required by the Securities and
Exchange Commission to be included in annual reports under such
sections on Form 10-K, as such form (or any successor form) may be
revised from time to time; and
(3) Periodic reports within the time frame and containing the
information prescribed in Form 8-K of the Securities and Exchange
Commission, as such form (or any successor form) may be revised from
time to time.
(b) Internal control report. For purposes of defining the reports
required by paragraph (a)(2) of this section, the Postal Service shall
comply with the rules prescribed by the Securities and Exchange
Commission implementing section 404 of the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7262), beginning with the annual report for fiscal year
2010.
(c) Financial reporting. The reports required by paragraph (a)(2)
of this section shall include, with respect to the Postal Service's
pension and post-retirement health obligations:
(1) The funded status of the Postal Service's pension and post-
retirement health obligations;
(2) Components of the net change in the fund balances and
obligations and the nature and cause of any significant changes;
(3) Components of net periodic costs;
(4) Cost methods and assumptions underlying the relevant actuarial
valuations;
(5) The effect of a 1 percentage point increase in the assumed
health care cost trend rate for each future year on the service and
interest costs components of net periodic post-retirement health cost
and the accumulated obligation;
(6) Actual contributions to and payments from the funds for the
years presented and the estimated future contributions and payments for
each of the following 5 years;
(7) The composition of plan assets reflected in the fund balances;
and
(8) The assumed rate of return on fund balances and the actual
rates of return for the years presented.
(d) Time of filing. Within 5 business days of receiving the data
listed under paragraph (c) of this section from the Office of Personnel
Management, the Postal Service shall provide two copies of that data to
the Commission.
(e) Segment reporting.
(1) Beginning with reports for fiscal year 2010, for purposes of
the reports required under paragraphs (a)(1) and (2) of this section,
the Postal Service shall include segment reporting.
(2) The Postal Service shall determine the appropriate segment
reporting under paragraph (e)(1) of this section after consultation
with the Commission.
Sec. 3050.41 Treatment of additional financial reports.
(a) For purposes of the reports required by Sec. 3050.40(a)(2),
the Postal Service shall obtain an opinion from an independent auditor
on whether the information listed in Sec. 3050.40(c) is fairly stated
in all material respects, either in relation to the basic financial
statements as a whole or on a stand-alone basis.
[[Page 20858]]
(b) Supporting matter. The Commission shall have access to the
audit documentation and any other supporting matter of the Postal
Service and its independent auditor in connection with any information
submitted under Sec. 3050.40.
Sec. 3050.42 Proceedings to improve the quality of financial data.
The Commission may, on its own motion or on request of an
interested party, initiate proceedings to improve the quality,
accuracy, or completeness of Postal Service data required under Sec.
3050.40 whenever it shall appear that the data have become
significantly inaccurate or can be significantly improved; or those
revisions are, in the judgment of the Commission, otherwise
necessitated by the public interest.
Sec. 3050.43 Information on program performance.
(a) The Postal Service shall provide the items in paragraphs (b)(1)
through (3) of this section at the same time that the President submits
an annual budget to Congress:
(b)(1) The comprehensive statement required by 39 U.S.C. 2401(e);
(2) The performance plan required by 39 U.S.C. 2803; and
(3) The program performance reports required by 39 U.S.C. 2804.
(c) Section 3050.10 does not apply to the reports referenced in
this section.
Sec. 3050.50 Information on service performance for domestic
products. [Reserved]
Sec. 3050.51 Information on service performance for Special Services.
[Reserved]
Sec. 3050.52 Information on service performance for international
products. [Reserved]
Sec. 3050.53 Information on customer satisfaction and retail access.
[Reserved]
Sec. 3050.60 Miscellaneous reports and documents.
(a) The reports in paragraphs (b) through (g) of this section shall
be provided at the times indicated.
(b) A master list of publications and handbooks, including those
related to internal information procedures, data collection forms, and
corresponding training handbooks by July 1, 2009, and again when
changed;
(c) The items listed in paragraph (b) of this section in hard copy
form, and in electronic form, if available;
(d) Household Diary Study (when completed);
(e) Input data and calculations used to produce the annual Total
Factor Productivity estimates (by March 1 of each year);
(f) Succinct narrative explanations of how the estimates in the
most recent Annual Compliance Determination were calculated and the
reasons that particular analytical principles were followed. The
narrative explanations shall be comparable in detail to that which had
been provided in Library Reference 1 in omnibus rate cases processed
under the Postal Reorganization Act (by July 1 of each year); and
(g) An update of the history of changes in postal volumes,
revenues, rates, and fees that appears in library references USPS-LR-L-
73 through 76 in Docket No. R2006-1 (by July 1 of each year).
[FR Doc. E9-9590 Filed 5-4-09; 8:45 am]
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