[Federal Register Volume 75, Number 35 (Tuesday, February 23, 2010)]
[Rules and Regulations]
[Pages 7951-7954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3475]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2010-16 and CP2010-16; Order No. 379]
New Postal Product
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Commission is adding Express Mail Contract 8 to the
Competitive Product List. This action is consistent with a postal
reform law. Republication of the Product Lists is also consistent with
a statutory provision.
DATES: Effective February 23, 2010 and is applicable beginning January
4, 2010.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6824 or [email protected].
SUPPLEMENTARY INFORMATION: Regulatory History, 74 FR 66242 (December
15, 2009).
Table of Contents
I. Introduction
II. Background
III. Comments
IV. Commission Analysis
V. Ordering Paragraphs
I. Introduction
The Postal Service seeks to add a new product identified as Express
Mail Contract 8 to the Competitive Product List. For the reasons
discussed below, the Commission approves the Request.
II. Background
Pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq., the Postal
Service filed a formal request and associated supporting information to
add Express Mail Contract 8 to the Competitive Product List.\1\ The
Postal Service asserts that Express Mail Contract 8 is a competitive
product ``not of general applicability'' within the meaning of 39
U.S.C. 3632(b)(3). The Postal Service states that prices and
classification underlying this contract are supported by Governors'
Decision No. 09-14 in Docket Nos. MC2010-5 and CP2010-5. Id. at 1. The
Request has been assigned Docket No. MC2010-16.
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\1\ Request of the United States Postal Service to Add Express
Mail Contract 8 to Competitive Product List and Notice of Filing
(Under Seal) of Supporting Data, December 11, 2009 (Request).
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The Postal Service contemporaneously filed a contract related to
the proposed new product pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR
3015.5. The contract has been assigned Docket No. CP2010-16.
In support of its Request, the Postal Service filed the following
materials: (1) A redacted version of the Governors' Decision,
originally filed in Docket Nos. MC2010-5 and CP2010-5, authorizing
certain Express Mail contracts, and Certification of Governors'
Vote;\2\ (2) a redacted version of the contract, and Certification of
Governors' Vote;\3\ (3) a requested change in the Competitive Product
List;\4\ (4) a Statement of Supporting Justification as required by 39
CFR 3020.32;\5\ (5) a certification of compliance with 39 U.S.C.
3633(a);\6\ and (6) an application for non-public treatment of the
materials filed under seal.\7\
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\2\ Attachment A to the Request, reflecting Governors' Decision
No. 09-14, October 26, 2009.
\3\ Attachment B to the Request.
\4\ Attachment C to the Request.
\5\ Attachment D to the Request.
\6\ Attachment E to the Request.
\7\ Attachment F to the Request.
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In the Statement of Supporting Justification, Susan M. Plonkey,
Vice President, Sales, asserts that the service to be provided under
the contract will cover its attributable costs, make a positive
contribution to institutional costs, and increase contribution toward
the requisite 5.5 percent of the Postal Service's total institutional
costs. Id., Attachment D. Thus, Ms. Plonkey contends there will be no
issue of subsidization of competitive products by market dominant
products as a result of this contract. Id.
Express Mail Contract 8 is included with the Request. The contract
was entered into on May 28, 2009, and will become effective as a
Negotiated Service Agreement January 4, 2010. The contract provides
that the Postal Service may not increase rates until after May 27,
2010. The Postal Service represents that the contract is consistent
with 39 U.S.C. 3633(a). See id., Attachment D.
In its Request, the Postal Service maintains that the supporting
financial information, including the analyses that provide prices,
terms, conditions, cost data, and financial projections should remain
under seal. Id., Attachment D.
In Order No. 359, the Commission gave notice of the two dockets,
requested supplemental information, appointed a public representative,
and provided the public with an opportunity to comment.\8\ On December
18, 2009, the Postal Service provided its response to the Commission's
request for supplemental information.\9\ On December 23, 2009,
Chairman's Information Request No. 1 was issued for response by the
Postal Service by December 28, 2009.\10\ The Postal Service filed its
response on December 28, 2009.\11\
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\8\ Notice and Order Concerning Express Mail Contract 8
Negotiated Service Agreement, December 15, 2009 (Order No. 359).
\9\ Supplemental Information Provided by the United States
Postal Service in Response to Order No. 359, December 18, 2009.
\10\ Chairman's Information Request No. 1, December 23, 2009
(CHIR No. 1).
\11\ Responses of the United States Postal Service to Chairman's
Information Request No. 1, December 28, 2009.
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III. Comments
Comments were filed by the Public Representatives.\12\ No comments
were submitted by other interested parties.
[[Page 7952]]
The Public Representatives state that the Postal Service's filing meets
the pertinent provisions of title 39 and the relevant Commission rules.
Id. at 3. The Public Representatives also believe that the Postal
Service has provided appropriate justification for maintaining
confidentiality in this case. Id. However, the Public Representatives
assert that the Postal Service should have filed the instant contract
with the Commission when it was executed in May of 2009. Id. at 4. As a
result, the Public Representatives ask the Commission to ``direct the
Postal Service to file all existing Express Mail contracts which have
not been previously filed.'' Id. The Public Representatives also
request that the Commission encourage the Postal Service to submit all
materials referenced in the relevant enabling Governors' Decision. Id.
at 4-5.
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\12\ Comments of Public Representatives in Response to PRC Order
No. 359, December 23, 2009.
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IV. Commission Analysis
The Commission has reviewed the Request, the contract, the
financial analysis provided under seal that accompanies it, responses
to CHIR No. 1, and the comments filed by the Public Representative.
Statutory requirements. The Commission's statutory responsibilities
in this instance entail assigning Express Mail Contract 8 to either the
Market Dominant Product List or to the Competitive Product List. 39
U.S.C. 3642. As part of this responsibility, the Commission also
reviews the proposal for compliance with the Postal Accountability and
Enhancement Act (PAEA) requirements. This includes, for proposed
competitive products, a review of the provisions applicable to rates
for competitive products. 39 U.S.C. 3633.
Product list assignment. In determining whether to assign Express
Mail Contract 8 as a product to the Market Dominant Product List or the
Competitive Product List, the Commission must consider whether
the Postal Service exercises sufficient market power that it can
effectively set the price of such product substantially above costs,
raise prices significantly, decrease quality, or decrease output,
without risk of losing a significant level of business to other
firms offering similar products.
39 U.S.C. 3642(b)(1). If so, the product will be categorized as market
dominant. The competitive category of products consists of all other
products.
The Commission is further required to consider the availability and
nature of enterprises in the private sector engaged in the delivery of
the product, the views of those who use the product, and the likely
impact on small business concerns. 39 U.S.C. 3642(b)(3).
The Postal Service asserts that its bargaining position is
constrained by the existence of other shippers who can provide similar
services, thus precluding it from taking unilateral action to increase
prices without the risk of losing volume to private companies. Request,
Attachment D, para. (d). The Postal Service also contends that it may
not decrease quality or output without risking the loss of business to
competitors that offer similar expedited delivery services. Id. It
further states that the contract partner supports the addition of the
contract to the Competitive Product List to effectuate the negotiated
contractual terms. Id., para. (g). Finally, the Postal Service states
that the market for expedited delivery services is highly competitive
and requires a substantial infrastructure to support a national
network. It indicates that large carriers serve this market.
Accordingly, the Postal Service states that it is unaware of any small
business concerns that could offer comparable service for this
customer. Id., para. (h).
No commenter opposes the proposed classification of Express Mail
Contract 8 as competitive. Having considered the statutory requirements
and the support offered by the Postal Service, the Commission finds
that Express Mail Contract 8 is appropriately classified as a
competitive product and should be added to the Competitive Product
List.
Cost considerations. The Postal Service presents a financial
analysis showing that Express Mail Contract 8 results in cost savings
while ensuring that the contract covers its attributable costs, does
not result in subsidization of competitive products by market dominant
products, and increases contribution from competitive products.
Based on the data submitted, the Commission finds that Express Mail
Contract 8 should cover its attributable costs (39 U.S.C. 3633(a)(2)),
should not lead to the subsidization of competitive products by market
dominant products (39 U.S.C. 3633(a)(1)), and should have a positive
effect on competitive products' contribution to institutional costs (39
U.S.C. 3633(a)(3)). Thus, an initial review of proposed Express Mail
Contract 8 indicates that it comports with the provisions applicable to
rates for competitive products.
Other considerations. The Commission agrees with the Public
Representatives that the instant contract could have been filed with
the Commission for approval at a much earlier date. The Commission also
shares the Public Representatives' concern that other, similar
contracts might exist. Accordingly, the Commission directs the Postal
Service to file, by January 15, 2010, any outstanding Express Mail
contract that may be categorized as a negotiated service agreement
because its prices are not subject to change with the general
competitive rate increase scheduled to take effect January 4, 2010.
In conclusion, the Commission approves Express Mail Contract 8 as a
new product. The revision to the Competitive Product List is shown
below the signature of this order and is effective upon issuance of
this order.
V. Ordering Paragraphs
It is ordered:
1. Express Mail Contract 8 (MC2010-16 and CP2010-16) is added to
the Competitive Product List as a new product under Negotiated Service
Agreements, Domestic.
2. The Commission directs the Postal Service to file, by January
15, 2010, any outstanding Express Mail contract that may be categorized
as having competitive rates not of general applicability because its
prices are not subject to change with the general competitive rate
increase scheduled to take effect January 4, 2010.
3. The Postal Service shall notify the Commission if termination
occurs prior to the scheduled termination date.
4. The Secretary shall arrange for the publication of this order in
the Federal Register.
List of Subjects in 39 CFR Part 3020
Administrative practice and procedure; Postal Service.
By the Commission.
Shoshana M. Grove,
Secretary.
0
For the reasons discussed in the preamble, the Postal Regulatory
Commission amends chapter III of title 39 of the Code of Federal
Regulations as follows:
PART 3020--PRODUCT LISTS
0
1. The authority citation for part 3020 continues to read as follows:
Authority: Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.
0
2. Revise Appendix A to Subpart A of Part 3020-Mail Classification
Schedule to read as follows:
Appendix A to Subpart A of Part 3020--Mail Classification Schedule
Part A--Market Dominant Products
1000 Market Dominant Product List
First-Class Mail
Single-Piece Letters/Postcards
Bulk Letters/Postcards
[[Page 7953]]
Flats
Parcels
Outbound Single-Piece First-Class Mail International
Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
High Density and Saturation Letters
High Density and Saturation Flats/Parcels
Carrier Route
Letters
Flats
Not Flat-Machinables (NFMs)/Parcels
Periodicals
Within County Periodicals
Outside County Periodicals
Package Services
Single-Piece Parcel Post
Inbound Surface Parcel Post (at UPU rates)
Bound Printed Matter Flats
Bound Printed Matter Parcels
Media Mail/Library Mail
Special Services
Ancillary Services
International Ancillary Services
Address List Services
Caller Service
Change-of-Address Credit Card Authentication
Confirm
International Reply Coupon Service
International Business Reply Mail Service
Money Orders
Post Office Box Service
Negotiated Service Agreements
HSBC North America Holdings Inc. Negotiated Service Agreement
Bookspan Negotiated Service Agreement
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Inbound International
Canada Post--United States Postal Service Contractual Bilateral
Agreement for Inbound Market Dominant Services (MC2010-12 and
R2010-2)
Market Dominant Product Descriptions
First-Class Mail
[Reserved for Class Description]
Single-Piece Letters/Postcards
[Reserved for Product Description]
Bulk Letters/Postcards
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Parcels
[Reserved for Product Description]
Outbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Inbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Standard Mail (Regular and Nonprofit)
[Reserved for Class Description]
High Density and Saturation Letters
[Reserved for Product Description]
High Density and Saturation Flats/Parcels
[Reserved for Product Description]
Carrier Route
[Reserved for Product Description]
Letters
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Not Flat-Machinables (NFMs)/Parcels
[Reserved for Product Description]
Periodicals
[Reserved for Class Description]
Within County Periodicals
[Reserved for Product Description]
Outside County Periodicals
[Reserved for Product Description]
Package Services
[Reserved for Class Description]
Single-Piece Parcel Post
[Reserved for Product Description]
Inbound Surface Parcel Post (at UPU rates)
[Reserved for Product Description]
Bound Printed Matter Flats
[Reserved for Product Description]
Bound Printed Matter Parcels
[Reserved for Product Description]
Media Mail/Library Mail
[Reserved for Product Description]
Special Services
[Reserved for Class Description]
Ancillary Services
[Reserved for Product Description]
Address Correction Service
[Reserved for Product Description]
Applications and Mailing Permits
[Reserved for Product Description]
Business Reply Mail
[Reserved for Product Description]
Bulk Parcel Return Service
[Reserved for Product Description]
Certified Mail
[Reserved for Product Description]
Certificate of Mailing
[Reserved for Product Description]
Collect on Delivery
[Reserved for Product Description]
Delivery Confirmation
[Reserved for Product Description]
Insurance
[Reserved for Product Description]
Merchandise Return Service
[Reserved for Product Description]
Parcel Airlift (PAL)
[Reserved for Product Description]
Registered Mail
[Reserved for Product Description]
Return Receipt
[Reserved for Product Description]
Return Receipt for Merchandise
[Reserved for Product Description]
Restricted Delivery
[Reserved for Product Description]
Shipper-Paid Forward
[Reserved for Product Description]
Signature Confirmation
[Reserved for Product Description]
Special Handling
[Reserved for Product Description]
Stamped Envelopes
[Reserved for Product Description]
Stamped Cards
[Reserved for Product Description]
Premium Stamped Stationery
[Reserved for Product Description]
Premium Stamped Cards
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
Address List Services
[Reserved for Product Description]
Caller Service
[Reserved for Product Description]
Change-of-Address Credit Card Authentication
[Reserved for Product Description]
Confirm
[Reserved for Product Description]
International Reply Coupon Service
[Reserved for Product Description]
International Business Reply Mail Service
[Reserved for Product Description]
Money Orders
[Reserved for Product Description]
Post Office Box Service
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Class Description]
HSBC North America Holdings Inc. Negotiated Service Agreement
[Reserved for Product Description]
Bookspan Negotiated Service Agreement
[Reserved for Product Description]
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Part B--Competitive Products
2000 Competitive Product List
Express Mail
Express Mail
Outbound International Expedited Services
Inbound International Expedited Services
Inbound International Expedited Services 1 (CP2008-7)
Inbound International Expedited Services 2 (MC2009-10 and CP2009-
12)
Inbound International Expedited Services 3 (MC2010-13 and CP2010-
12)
Priority Mail
Priority Mail
Outbound Priority Mail International
Inbound Air Parcel Post (at non-UPU rates)
Royal Mail Group Inbound Air Parcel Post Agreement
Inbound Air Parcel Post (at UPU rates)
Parcel Select
Parcel Return Service
International
International Priority Airlift (IPA)
International Surface Airlift (ISAL)
International Direct Sacks--M--Bags
Global Customized Shipping Services
Inbound Surface Parcel Post (at non-UPU rates)
[[Page 7954]]
Canada Post--United States Postal Service Contractual Bilateral
Agreement for Inbound Competitive Services (MC2010-14 and
CP2010-13--Inbound Surface Parcel post at Non-UPU Rates and
Xpresspost-USA)
International Money Transfer Service
International Ancillary Services
Special Services
Premium Forwarding Service
Negotiated Service Agreements
Domestic
Express Mail Contract 1 (MC2008-5)
Express Mail Contract 2 (MC2009-3 and CP2009-4)
Express Mail Contract 3 (MC2009-15 and CP2009-21)
Express Mail Contract 4 (MC2009-34 and CP2009-45)
Express Mail Contract 5 (MC2010-5 and CP2010-5)
Express Mail Contract 6 (MC2010--6 and CP2010-6)
Express Mail Contract 7 (MC2010--7 and CP2010-7)
Express Mail Contract 8 (MC2010--16 and CP2010-16)
Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
14)
Express Mail & Priority Mail Contract 3 (MC2009-13 and CP2009-
17)
Express Mail & Priority Mail Contract 4 (MC2009-17 and CP2009-
24)
Express Mail & Priority Mail Contract 5 (MC2009-18 and CP2009-
25)
Express Mail & Priority Mail Contract 6 (MC2009-31 and CP2009-
42)
Express Mail & Priority Mail Contract 7 (MC2009-32 and CP2009-
43)
Express Mail & Priority Mail Contract 8 (MC2009-33 and CP2009-
44)
Parcel Select & Parcel Return Service Contract 1 (MC2009-11 and
CP2009-13)
Parcel Select & Parcel Return Service Contract 2 (MC2009-40 and
CP2009-61)
Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
Priority Mail Contract 1 (MC2008-8 and CP2008-26)
Priority Mail Contract 2 (MC2009-2 and CP2009-3)
Priority Mail Contract 3 (MC2009-4 and CP2009-5)
Priority Mail Contract 4 (MC2009-5 and CP2009-6)
Priority Mail Contract 5 (MC2009-21 and CP2009-26)
Priority Mail Contract 6 (MC2009-25 and CP2009-30)
Priority Mail Contract 7 (MC2009-25 and CP2009-31)
Priority Mail Contract 8 (MC2009-25 and CP2009-32)
Priority Mail Contract 9 (MC2009-25 and CP2009-33)
Priority Mail Contract 10 (MC2009-25 and CP2009-34)
Priority Mail Contract 11 (MC2009-27 and CP2009-37)
Priority Mail Contract 12 (MC2009-28 and CP2009-38)
Priority Mail Contract 13 (MC2009-29 and CP2009-39)
Priority Mail Contract 14 (MC2009-30 and CP2009-40)
Priority Mail Contract 15 (MC2009-35 and CP2009-54)
Priority Mail Contract 16 (MC2009-36 and CP2009-55)
Priority Mail Contract 17 (MC2009-37 and CP2009-56)
Priority Mail Contract 18 (MC2009-42 and CP2009-63)
Priority Mail Contract 19 (MC2010-1 and CP2010-1)
Priority Mail Contract 20 (MC2010-2 and CP2010-2)
Priority Mail Contract 21 (MC2010-3 and CP2010-3)
Priority Mail Contract 22 (MC2010-4 and CP2010-4)
Priority Mail Contract 23 (MC2010-9 and CP2010-9)
Priority Mail Contract 24 (MC2010-15 and CP2010-15)
Outbound International
Direct Entry Parcels Contracts
Direct Entry Parcels 1 (MC2009-26 and CP2009-36)
Global Direct Contracts (MC2009-9, CP2009-10, and CP2009-11)
Global Expedited Package Services (GEPS) Contracts
GEPS 1 (CP2008-5, CP2008-11, CP2008-12, CP2008-13, CP2008-
18, CP2008-19, CP2008-20, CP2008-21, CP2008-22, CP2008-23,
and CP2008-24)
Global Expedited Package Services 2 (CP2009-50)
Global Plus Contracts
Global Plus 1 (CP2008-8, CP2008-46 and CP2009-47)
Global Plus 2 (MC2008-7, CP2008-48 and CP2008-49)
Inbound International
Inbound Direct Entry Contracts with Foreign Postal
Administrations
Inbound Direct Entry Contracts with Foreign Postal
Administrations (MC2008-6, CP2008-14 and MC2008-15)
Inbound Direct Entry Contracts with Foreign Postal
Administrations 1 (MC2008-6 and CP2009-62)
International Business Reply Service Competitive Contract 1
(MC2009-14 and CP2009-20)
Competitive Product Descriptions
Express Mail
[Reserved for Group Description]
Express Mail
[Reserved for Product Description]
Outbound International Expedited Services
[Reserved for Product Description]
Inbound International Expedited Services
[Reserved for Product Description]
Priority
[Reserved for Product Description]
Priority Mail
[Reserved for Product Description]
Outbound Priority Mail International
[Reserved for Product Description]
Inbound Air Parcel Post
[Reserved for Product Description]
Parcel Select
[Reserved for Group Description]
Parcel Return Service
[Reserved for Group Description]
International
[Reserved for Group Description]
International Priority Airlift (IPA)
[Reserved for Product Description]
International Surface Airlift (ISAL)
[Reserved for Prduct Description]
International Direct Sacks--M-Bags
[Reserved for Product Description]
Global Customized Shipping Services
[Reserved for Product Description]
International Money Transfer Service
[Reserved for Product Description]
Inbound Surface Parcel Post (at non-UPU rates)
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
International Insurance
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Group Description]
Domestic
[Reserved for Product Description]
Outbound International
[Reserved for Group Description]
Part C--Glossary of Terms and Conditions [Reserved]
Part D--Country Price Lists for International Mail [Reserved]
[FR Doc. 2010-3475 Filed 2-22-10; 8:45 am]
BILLING CODE 7710-FW-S