[Federal Register Volume 75, Number 217 (Wednesday, November 10, 2010)]
[Notices]
[Pages 69143-69145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28362]
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POSTAL REGULATORY COMMISSION
[Docket No. R2011-1; Order No. 577]
Postal Rate and Classification Changes
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: This document addresses a recently-filed Postal Service
request for three postal rate and classification changes. One change
will affect certain senders of First-Class Mail Presort and Automation
Letters. Another change will affect Standard Mail and High Density
milers. The third change affects the Move Update Charge threshold. This
document provides details about the anticipated changes and addresses
procedural steps associated with this filing.
DATES: Comments are due: November 22, 2010.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at http://www.prc.gov. Commenters who cannot submit their
views electronically should contact the person identified in the For
Further Information Contact section by telephone for advice on
alternatives to electronic filing.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 and [email protected].
SUPPLEMENTARY INFORMATION:
I. Introduction
II. Postal Service Filing
III. Commission Action
IV. Ordering Paragraphs
[[Page 69144]]
I. Introduction
On November 2, 2010, the Postal Service filed with the Commission a
notice of three price adjustments and related classification changes
for market dominant products.\1\ The adjustments affecting First-Class
Mail and Standard Mail are scheduled to become effective January 2,
2011.
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\1\ United States Postal Service Notice of Market Dominant Price
Adjustment, November 2, 2010 (Notice).
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These three adjustments and changes were previously filed and
included with the Postal Service's recent request to adjust market
dominant rates due to extraordinary or exceptional circumstances.\2\ In
rejecting that exigent rate request, the Commission noted that its
decision made it unnecessary to address the merits of the
classification change requests, but stated that the Postal Service may
refile one or more of the requests as separate proposals and may
designate relevant testimony or supporting documents filed in that case
as part of supporting materials.\3\
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\2\ Docket No. R2010-4, Exigent Request of the United States
Postal Service, July 6, 2010.
\3\ Docket No. R2010-4, Order Denying Request for Exigent Rate
Adjustments, September 30, 2010, at 30.
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II. Postal Service Filing
Reply Rides Free. This pricing initiative is available for mailers
of First-Class Mail Automation Letters. Automation Letters weighing
more than one ounce but not more than one and two-tenths (1.2) ounces
when the letters include a reply card or reply envelope will qualify
for postage payment at the one-ounce rate. A typical reply envelope
weighs 0.2 ounces. For participating mailers, Automation Letters would
qualify until May 1, 2010, and thereafter only with the full-service
Intelligent Mail barcode (IMb). All presort and automation letter
volumes will quality for an annual incentive. Mailers must agree to
meet a volume threshold of First-Class Mail Presort and Automation
Letters, and enclose either a reply card or envelope as a courtesy
reply or business reply which may be a reusable envelope. For
compliance purposes, samples must be presented with each mailing.
Notice at 1-2.
Only customers who mailed First-Class Mail Presort and Automation
Letters in FY 2009 and FY 2010 qualify for this initiative. The volume
commitment is the trend of those volumes between FY 2009 and FY 2010
plus 2.5 percent. Id. at 4.
In support, the Postal Service states that the initiative is
designed to slow mailers' diversion of mail to online bill and
statement delivery, and payment acceptance. Mailers include promotional
inserts only if a mailpiece remains subject to the one-ounce rate.
Allowing up to 1.2 ounces for qualifying envelopes will offer mailers
an incentive to retain reply envelopes in mailings in order to generate
revenues and offset mailing costs. Reply Rides Free would increase the
value of the mail for marketing purposes and encourage mailers to use
mailings for direct marketing purposes. It would also encourage
customers to reply with single-piece First-Class Mail and slow
electronic diversion of responses. Id. at 3-4.
Saturation and High Density incentive. The Standard Mail and High
Density incentive provides a rebate on incremental mailpieces above a
predetermined volume baseline, which each participant is equal to the
aggregate total Standard Mail Saturation and High Density volume in
calendar year 2010 plus 5.0 percent. Volumes above the baseline will be
eligible for a rebate of 22 percent of participant's average revenue
per piece for commercial Saturation Mail and 13 percent for commercial
High Density mail. For nonprofit High Density and Saturation volumes,
the rebate is 8 percent. Id. at 4. This discount is less than the
discount for commercial mailers, but the ratio between nonprofit and
commercial mailers will meet the statutory requirement of 60 percent.
39 U.S.C. 3626(a)(6). Id. at 13.
To participate, mailers who apply must meet several requirements:
1. To identify current and frequent mailers of this product,
mailers must be current Saturation and High Density customers with at
least six mailings in FY 2010;
2. Mailers must be holders of a permit imprint advance deposit
account or owners of qualifying volume entered through a similar
account by a mail service provider at a facility having PostalOne!
capability;
3. Only the volume of mail owners will be eligible. Mail service
providers and customers supplying inserts or the components of
Saturation or High Density mailings of another mailer are not eligible;
and
4. Mailers must electronically submit postage statements and mail
documentation to the PostalOne! system during the specified period.
Mailers using defined market area(s) must use Mail.dat or Mail.XML.
Other applicants may submit postal statements via Postal Wizard. Id. at
5.
During participation in this incentive, customers may not
participate in any other Standard Mail incentive or ``sale'' including
Saturation or High Density products to prevent receiving two incentives
for the same mail volume. Id.
Customers have the option of participating under one of two market
models:
1. Total Market (or National) volume. Customers must demonstrate
increased total Saturation and High Density mail volume letters and
flats over the base year for their total market.
2. Specific Geographic Markets. Subject to Postal Service approval,
customers designate specific geographic target markets of specific
Postal Service Sectional Center Facilities (SCFs) for increased volume
over the base year. Up to 20 SCFs may be selected or up to five target
markets (consisting of multiple contiguous SCFs). Customers must have
made the qualifying six mailing during FY 2010 for each market in which
they participate. Id. at 6.
Increases in Move Update Assessment Charge threshold. For First-
Class Mail subject to Move Update Standards and all Standard Mail, the
threshold below which the Move Update Assessment Charge is assessed is
increased from 70 to75 percent. That is, the tolerance will be reduced
from 30 percent to 25 percent. The Postal Service states that the
change is consistent with plans announced in a previous docket,\4\ is
needed to encourage the use of Move Update processes, and will affect
few mailings. Notice at 6-7.
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\4\ Docket No. R2010-1, United States Postal Service Notice of
Market Dominant Price Adjustment and Classification Changes, October
15, 2009, at 3-4.
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Impact on price cap. To comply with 39 CFR 3010.14(b)(1), the
Postal Service discusses and provides tables listing the amount of
unused price adjustment authority available for First-Class Mail and
Standard Mail, the percentage change in prices for each of those
classes of mail, and the amount of any new unused price adjustment
authority for those two classes generated by this price change. Id. at
7-9.
Workpapers intended to demonstrate how the prices comply with the
price cap are designated in the Notice as follows: USPS-R2011-1-1/1--
First-Class Worksheets; USPS-R2011-1-1/2--Standard Mail Worksheets; and
USPS-R2011-1-1/3--Impact of Move Update Assessment Charge. Id. at 8.
The Postal Service states the workpapers demonstrate that the
calculated negative price changes serve to increase the banked amount
for First-Class and Standard Mail and thus comply with the available
overall price adjustment authority. Id. at 9.
Objectives and factors. The Postal Service lists and discusses the
[[Page 69145]]
objectives and factors of 39 U.S.C. 3622 and their relationship to the
proposed changes. The Postal Service asserts that changes do not
substantially alter the degree First-Class Mail rates address the
objectives and factors. Id. at 11. Reply Rides Free is an example of
increased flexibility allowed the Postal Service (Objective 4), and it
is an initiative to enhance the Postal Service's financial position
(Objective 5). The incentive to mailers to continue using First-Class
Mail (Factor 3) encourages increased mail volume (Factor 7), but does
not imperil the coverage of attributable costs (Factor 2). Move Update
improves overall efficiency of mail processing (Objective 1, Factors 5
and 12). Id. at 11-12.
Similarly, for Standard Mail, the changes do not alter the degree
that prices and system design already address the objectives and
factors of section 3622. Move Update improves overall efficiency
(Objective 1, Factors 5 and 12). The Saturation and High Density
initiative is also an example of increased flexibility allowed the
Postal Service (Objective 4) and provides an incentive to mailers to
enhance the financial position of the Postal Service (Objective 5). It
also encourages increased mail volume (Factor 7), incents the use of
Standard Mail (Factor 3), and will not inhibit coverage of attributable
costs (Factor 2). Id. at 12.
Workshare discounts. The Postal Service states that none of the
price changes impacts workshare discounts for First-Class Mail or for
Standard Mail. Id. at 13.
Conformance with 39 CFR part 3010. The Postal Service provides
notice pursuant to section 3622 and 39 CFR part 3010 that the Governors
have authorized the Postal Service to adjust the classification
language and prices for these market dominant products. The Postal
Service represents that, in conformance with the notice requirements of
39 CFR 3010.14(a)(3), it will publish notice of these changes at least
45 days prior to the planned implementation date. The Notice will be
published at USPS.com, the Postal Explorer Web site, the DMM Advisory,
the P&C Weekly, and a press release. Public notice will also be
provided in future issues of PCC Insider, MailPro, the Postal Bulletin,
and the Federal Register. Id. at 1. Pursuant to 39 CFR 3010.14(a)(4),
the Postal Service identifies Greg Dawson, Manager, Pricing Strategy,
as the official available to provide prompt responses to requests for
clarification from the Commission. Id. at 2.
Pursuant to 39 CFR 3010.14(b)(9), the changes in the product
descriptions within the Mail Classification Schedule are included in
Appendix A attached to the Notice.
III. Commission Action
The Commission establishes Docket No. R2011-1 to consider all
matters related to the Notice as required by 39 U.S.C. 3622. Interested
persons may express views and offer comments on whether the planned
changes are consistent with the policies of 39 U.S.C. 3622 and the
Commission's applicable regulations. Comments are due no later than
November 22, 2010.
The Commission appoints James Waclawski to represent the interests
of the general public in this proceeding. See 39 U.S.C. 505.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. R2011-1 to consider the
matters raised by the Postal Service's November 2, 2010 Notice.
2. Interested persons may submit comments on the planned
adjustments to classification language and price changes. Comments are
due November 22, 2010.
3. Pursuant to 39 U.S.C. 505, the Commission appoints James
Waclawski to represent the interests of the general public (Public
Representative) in this proceeding.
4. The Commission directs the Secretary of the Commission to
arrange for prompt publication of this Notice in the Federal Register.
By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2010-28362 Filed 11-9-10; 8:45 am]
BILLING CODE 7710-FW-P