[Federal Register Volume 75, Number 2 (Tuesday, January 5, 2010)]
[Notices]
[Pages 471-473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-31361]
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POSTAL REGULATORY COMMISSION
[Docket Nos. MC2010-17 and CP2010-18; Order No. 373]
New Postal Product
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is noticing a recently-filed Postal Service
request to add Global Direct Contracts 1 to the Competitive Product
List. The Postal Service has also filed a related contract. This notice
addresses procedural steps associated with these filings.
DATES: Comments are due: January 6, 2010.
[[Page 472]]
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 ``FOR
FURTHER INFORMATION CONTACT'' by telephone for advice on alternatives
to electronic filing.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 or [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
II. Notice of Filing
III. Ordering Paragraphs
I. Background
On December 23, 2009, the Postal Service filed a notice, pursuant
to 39 CFR 3015.5, announcing that it has entered into an additional
Global Direct contract, and seeks to add it as Global Direct Contracts
1 to the Competitive Product List.\1\ The Postal Service states that
the instant contract is functionally equivalent to previously submitted
Global Direct Contracts and is supported by Governors' Decision No. 08-
10, which establishes prices and classifications not of general
applicability for Global Direct Contracts.\2\ The Request has been
assigned Docket No. MC2010-17.
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\1\ Notice of the United States Postal Service of Filing of
Functionally Equivalent Global Direct Contracts Negotiated Service
Agreement, and Request to Add Global Direct Contracts 1 to the
Competitive Products List, December 23, 2009 (Notice).
\2\ Governors' Decision No. 08-10, July 16, 2008, filed in
Docket No. MC2008-7, establishes prices and classifications not of
general applicability for Global Direct and Global Bulk Economy
Contracts, as well as for Global Plus Contracts 2, which combines
Global Direct and Global Bulk Economy services. As part of
Governors' Decision No. 08-10, the Postal Service submitted a
description of Global Direct Contracts which it describes as
``contracts giving a rate for mail acceptance within the United
States and transportation to a receiving country with the addition
by the customer of appropriate foreign postage charged by the
receiving country.'' Notice, Attachment 4; see also id. at 2, n.3,
citing PRC Order No 153 at 9 (regarding indirect postage payment).
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The Postal Service contemporaneously filed a contract related to
the proposed competitive product classification pursuant to 39 U.S.C.
3632(b)(3) and 39 CFR 3015.5. The contract has been assigned Docket No.
CP2010-18. In Order No. 153, the Commission approved the individual
Global Direct Contracts in Docket Nos. MC2009-9, CP2009-10, and
CP2009.11.\3\ In Order No 166, the Commission confirmed that individual
Global Direct Contracts, such as Docket No. CP2009-18, are functionally
equivalent and should be included in the Global Direct Contracts
product on the Competitive Product List.\4\ The Postal Service also
urges that analysis under 39 U.S.C. 3642(b) is ``unnecessary here,
because such an exercise would merely replicate the Commission's
determination in Docket No. MC2009-9.'' Notice at 2-3.
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\3\ Docket Nos. MC2009-9, CP2009-10 and CP2009-11, Order
Concerning Global Direct Contracts Negotiated Service Agreements,
December 19, 2008 (Order No. 153).
\4\ See Notice at 2, n.3, citing Docket No. CP2009-18, Order
Concerning Additional Global Direct Contracts Negotiated Service
Agreement, January 9, 2009, at 5, 6 (Order No. 166).
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The instant contract. The Postal Service filed the instant contract
pursuant to 39 CFR 3015.5. The contract contemplates a rate for mail
acceptance within the United States and transportation to a receiving
country so as to enable a private mailer to directly use certain
mailing services of Canada Post for deposit in that country's domestic
mailstream for delivery to an ultimate destination outside of the
United States. The Notice urges that the instant agreement is
functionally equivalent to the previously submitted agreements, and
that it is the immediate successor to the agreement that the Commission
found to be functionally equivalent and eligible for inclusion in the
Global Direct Contracts product in Docket No. CP2009-11. Id. The
contract term is 1-year from the effective date and may be
automatically renewed unless the parties agree otherwise. Id. at 3-4.
Since the instant contracts take the place of its immediate predecessor
and one of the original baseline Global Direct Contracts, the contract
in Docket No. CP2009-11, the Postal Service requests that the instant
contract be treated as the baseline for future functional equivalency
comparisons. Id. at 2. It further requests that Global Direct Contracts
1 be added to the Competitive Product List, particularly as future
Global Direct contracts are more likely to resemble this contract. Id.
In support of its Notice, the Postal Service filed the following five
attachments:
1. Attachment 1--a redacted copy of the contract;
2. Attachment 2--a certified statement required by 39 CFR
3015.5(c)(2);
3. Attachment 3--an application for non-public treatment of
materials to maintain the contract and supporting documents under seal;
4. Attachment 4--a redacted copy of Governors' Decision No. 08-10,
which establishes prices and classifications for Global Direct, Global
Bulk Economy, and Global Plus Contracts; and
5. Attachment 5--a statement of supporting justification from
Docket No. CP2009-11, which is included by reference for the instant
contract to satisfy 39 CFR 3020.32.
In the Statement of Supporting Justification, Frank Cebello,
Executive Director, Global Business Management, asserts that each
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. Notice, Attachment 5, at 2. Thus, Mr. Cebello contends there
will be no issue of subsidization of competitive products by market
dominant products as a result of these contracts. Id. The Postal
Service will notify the customer of the effective date of the contract
within 30 days after receiving all regulatory approvals. Id. at 3-4.
The related contract at issue under Docket No. CP2009-11 expires on
January 11, 2010. Notice at 2. The Postal Service also explains that a
redacted version of the supporting financial documentation is included
with this filing as a separate Excel file. Id. at 3.
Functional equivalency. The Postal Service asserts that the instant
Global Direct contract is functionally equivalent to Global Direct
Contracts previously submitted under Docket Nos. CP2009-10, CP2009-11,
CP2009-18 and CP2009-29 because it shares ``similar, if not the same,''
cost and market characteristics and therefore the contracts should be
classified as a single product. Id. at 5.\5\ Further, it contends that
the contract fits within the Mail Classification Schedule language for
Global Direct Contracts included with Governors' Decision No. 08-10,
since ``these agreements are `functionally equivalent in all pertinent
respects.''' Id. at 5, citing PRC Order No. 85 at 8.
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\5\ Global Direct services provide customers with a price for
mail acceptance within the United States and transportation to a
receiving country of mail that bears the receiving country's indicia
and meets the preparation requirements for that particular type of
mail established by the receiving country.
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In addition, the Postal Service contends that the contract is in
accordance with Order No. 153, which established the individual Global
Direct Contracts in Docket Nos. CP2009-10 and CP2009-11 as functionally
equivalent and added the contracts to the Competitive Product List as
one product under the Global Direct classification. It further asserts
that the ``instant Global Direct Contract is fundamentally similar to
that in Docket No. CP2009-11,'' except for differences relating to the
new array of offerings by Canada Post, national treatment as to
[[Page 473]]
preparation, the term, confidentiality, and price changes.\6\
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\6\ The Postal Service confirms that it ``is providing the
customer with price-based incentives to commit to large amounts of
mail volume or postage revenue for Global Direct, a competitive
service for delivery of Letter Post items bearing foreign postage
and indicia.'' Id. at 4; see also id., Attachment 5, at 2.
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Specifically, some of the distinctions reflected in the Notice
include (a) Allowing mailers to use Canada Post's domestic Incentive
Letter Mail Service if the requisite preparatory tasks are performed by
the mailer; (b) requiring notice to comply with confidentiality rules;
(c) modifying the term to a full year; (d) clarifying locations for
tendering qualifying items; and (e) reflecting the price changes of
Canada Post. Id. at 5. The Postal Service maintains that the
differences do not affect the fundamental service being offered or the
essential structure of the contracts. Id. Baseline treatment. The
Postal Service requests that the instant contract be considered the
baseline contract for future functional equivalency comparisons of
future Global Direct contracts ``[b]ecause the Postal Service expects
the text of any future Global Direct Contracts to resemble the instant
contract more closely than those in Docket No. CP2009-10 and CP2009-
11.'' Id. The Postal Service has made similar requests for a new
baseline contract in recent filings.\7\ The Commission intends to
address the issue in light of all distinct characteristics in a
subsequent order.
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\7\ See, e.g., Docket No. CP2009-50, Order Granting
Clarification and Adding Global Expedited Package Services 2 to the
Competitive Product List, August 28, 2009, at 3; Docket No. CP2009-
62, Order Concerning Inbound Direct Entry Contracts 1 Negotiated
Service Agreement, September 4, 2009, at 7.
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II. Notice of Filing
The Commission establishes Docket Nos. MC2010-17 and CP2010-18 for
consideration of the Notice pertaining to the proposed Global Direct
Contracts 1 Negotiated Service Agreement product and the related
contract, respectively. In keeping with practice, these dockets are
addressed on a consolidated basis for purposes of this order; however,
future filings should be made in the specific docket in which issues
being addressed pertain.
Interested persons may submit comments on whether the Postal
Service's filings in the captioned dockets are consistent with the
policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR
3020 subpart B. Comments are due no later than January 6, 2010. The
public portions of these filings can be accessed via the Commission's
Web site http://www.prc.gov.
The Commission appoints Jeremy Simmons to serve as Public
Representative in these dockets.
III. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket Nos. MC2010-17 and CP2010-18
for consideration of the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Jeremy Simmons is appointed to serve
as officer of the Commission (Public Representative) to represent the
interests of the general public in these proceedings.
3. Comments by interested persons in these proceedings are due no
later than January 6, 2010.
4. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. E9-31361 Filed 1-4-10; 8:45 am]
BILLING CODE 7710-FW-S