Revisions to the Requirements for Authority To Manufacture and Distribute Postage Evidencing Systems, 36498-36506 [06-5675]
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36498
Federal Register / Vol. 71, No. 123 / Tuesday, June 27, 2006 / Proposed Rules
supplemented with a direct source of good
lighting at intensity deemed appropriate by
the inspector. Inspection aids such as
mirrors, magnifying lenses, etc., may be used.
Surface cleaning and elaborate access
procedures may be required.’’
Related Investigative/Corrective Actions
(g) If any discrepancy is detected during
any inspection required by paragraph (f) of
this AD, before further flight: Do the related
investigative/corrective actions in accordance
with Part B or F of the Accomplishment
Instructions of Bombardier ASB A601R–32–
088, including Appendices A and C, dated
February 20, 2003; or Bombardier ASB
A601R–32–088, Revision A, dated June 16,
2005, including Appendices A, B, and C,
dated February 20, 2003. If an eddy current
inspection (a related investigative action
specified in Part B) is used to confirm the
detailed inspection findings, the next eddy
current required by paragraph (h) of this AD
must be conducted within 500 flight cycles
after the eddy current inspection specified in
this paragraph, and thereafter at intervals not
to exceed 500 flight cycles until paragraph (k)
of this AD is accomplished.
Eddy Current Inspection of Main Fittings of
the MLGs
(h) At the time specified in paragraph (f)
of this AD, do an eddy current inspection on
the main fittings of the MLGs to detect cracks
in accordance with Part B of the
Accomplishment Instructions of Bombardier
ASB A601R–32–088, including Appendix A,
dated February 20, 2003; or Bombardier ASB
A601R–32–088, Revision A, dated June 16,
2005, including Appendixes, A, B, and C,
dated February 20, 2003. Repeat the eddy
current inspection thereafter at intervals not
to exceed 500 flight cycles, until paragraph
(k) of this AD is accomplished. If any crack
is found, before further flight, replace the
affected main fittings of the MLGs with new
or serviceable fittings in accordance with
paragraph E.(5) of Part B of the
Accomplishment Instructions of the service
bulletin or in accordance with paragraph (k)
of this AD. If any crack is found after the
effective date of this AD, do the replacement
in accordance with paragraph (k) of this AD.
Servicing of Shock Struts
(i) Before the accumulation of 2,500 total
flight cycles on the MLGs, or within 500
flight cycles after August 13, 2004, whichever
occurs later, service the shock strut of the
MLGs in accordance with Part C or D, as
applicable, of the Accomplishment
Instructions of Bombardier ASB A601R–32–
088, including Appendix B, dated February
20, 2003; or Bombardier ASB A601R–32–088,
Revision A, dated June 16, 2005, including
Appendices A, B, and C, dated February 20,
2003.
Shock Strut Inspection
(j) Within 500 flight cycles after completing
the servicing required by paragraph (i) of this
AD, inspect the shock strut of the MLGs for
nitrogen pressure, visible chrome dimension,
and oil leakage in accordance with Part E of
the Accomplishment Instructions of
Bombardier ASB A601R–32–088, including
Appendix B, dated February 20, 2003; or
Bombardier ASB A601R–32–088, Revision A,
dated June 16, 2005, including Appendices
A, B, and C, dated February 20, 2003. Repeat
the inspection thereafter at intervals not to
exceed 500 flight cycles, until paragraph (k)
of this AD is accomplished. If the nitrogen
pressure and visible chrome dimensions are
found outside the limits (the service bulletin
refers to the airplane maintenance manual as
the source of defined limits) and/or oil
leakage is found, before further flight, service
the affected shock strut of the MLGs in
accordance with Part C or D, as applicable,
of the Accomplishment Instructions of the
service bulletin.
New Requirements of This AD
Replacement
(k) Within 39 months after the effective
date of this AD: Replace the main fittings of
the MLGs, P/Ns 601R85001–81 and
601R85001–82 (Messier Dowty Incorporated
P/Ns 17064–105 and 17064–106), with new
main fittings, P/Ns 601R85001–83 and
601R85001–84 (Messier Dowty Incorporated
P/Ns 17064–107 and 17064–108), in
accordance with the Accomplishment
Instructions of Bombardier Service Bulletin
601R–32–093, Revision B, dated July 14,
2005. Doing this replacement terminates all
requirements of paragraphs (f), (g), (h), (i),
and (j) of this AD.
Note 2: Bombardier Service Bulletin 601R–
32–093, Revision B, refers to Messier Dowty
M–DT Service Bulletin SB17002–32–25,
Revision 1, dated October 17, 2003, as an
additional source of service information for
replacing the main fittings.
Parts Installation
(l) As of the effective date of this AD, no
person may install a main fitting of the MLG,
P/Ns 601R85001–81 and 601R85001–82
(Messier Dowty Incorporated P/Ns 17064–
105 and 17064–106), on any airplane.
No Reporting Required
(m) Although the Accomplishment
Instructions of Bombardier ASB A601R–32–
088, dated February 20, 2003; and ASB
601R–32–088, Revision A, dated June 16,
2005; specify to report certain information to
the manufacturer, this AD does not include
that action.
Actions Accomplished in Accordance With
Previous Revisions of Service Bulletin
(n) Actions accomplished before the
effective date of this AD in accordance with
the service bulletins listed in Table 1 of this
AD are acceptable for compliance with the
actions in paragraph (k) of this AD.
TABLE 1.—PREVIOUS REVISIONS OF SERVICE BULLETIN
Bombardier Service Bulletin
Revision level
601R–32–093 .........................................................................................................................................
601R–32–093 .........................................................................................................................................
Original .............
A .......................
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Alternative Methods of Compliance
(AMOCs)
(o)(1) The Manager, New York Aircraft
Certification Office (ACO), FAA, has the
authority to approve AMOCs for this AD, if
requested in accordance with the procedures
found in 14 CFR 39.19.
(2) Before using any AMOC approved in
accordance with § 39.19 on any airplane to
which the AMOC applies, notify the
appropriate principal inspector in the FAA
Flight Standards Certificate Holding District
Office.
Issued in Renton, Washington, on June 5,
2006.
Kalene C. Yanamura,
Acting Manager, Transport Airplane
Directorate, Aircraft Certification Service.
[FR Doc. E6–10090 Filed 6–26–06; 8:45 am]
BILLING CODE 4910–13–P
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POSTAL SERVICE
39 CFR Part 501
Revisions to the Requirements for
Authority To Manufacture and
Distribute Postage Evidencing
Systems
ACTION:
Postal Service.
Proposed rule.
SUMMARY: In this proposed rule, the
Postal ServiceTM proposes to revise the
content of Title 39, Code of Federal
Regulations, Part 501 (39 CFR 501),
Authorization to Manufacture and
Distribute Postage Meters. This
(p) Canadian airworthiness directive CF–
2003–09R1, dated September 21, 2005, also
addresses the subject of this AD.
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October 17, 2003.
September 21, 2004.
AGENCY:
Related Information
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Federal Register / Vol. 71, No. 123 / Tuesday, June 27, 2006 / Proposed Rules
proposed revision includes updating the
regulations, removing obsolete text, and
incorporating pertinent portions of the
rules for postage meters (Postage
Evidencing Systems) formerly contained
in section P030 of the Domestic Mail
Manual (Issue 58). The proposed text for
39 CFR 501 would also rename Part 501
as ‘‘Authorization to Manufacture and
Distribute Postage Evidencing Systems’’
and integrate the requirements that
apply to the distribution and
manufacture of PC Postage products, a
type of Postage Evidencing System. In
addition, obsolete references to
requirements for manually reset and
mechanical meters are proposed to be
eliminated.
DATES: Submit comments on or before
July 27, 2006.
ADDRESSES: Mail or deliver written
comments to the Manager, Postage
Technology Management, U.S. Postal
Service, 1735 N. Lynn Street, Room
5011, Arlington, VA 22209–5011.
Written comments may also be
submitted via fax to 703–292–4073.
Copies of all written comments will be
available for inspection and
photocopying between 9 a.m. and 4
p.m., Monday through Friday, at the
Postage Technology Management office.
FOR FURTHER INFORMATION CONTACT:
Daniel J. Lord, Manager, Postage
Technology Management, U.S. Postal
Service, at 703–292–3692.
SUPPLEMENTARY INFORMATION: Postage
Evidencing Systems are devices or
systems of components that a customer
uses to print evidence that the prepaid
postage required for mailing has been
paid. They include, but are not limited
to, postage meters and PC Postage
systems. The Postal Service regulates
these systems and their use in order to
protect postal revenue. Only Postal
Service-authorized product service
providers may design, produce, and
distribute Postage Evidencing Systems.
Since 1995, the Postal Service has
been engaged in an ongoing effort to
ensure greater protection for postal
revenue and to help the mailing
industry transition to advanced postage
evidencing technology. During this
time, the Postal Service has continually
worked with postage evidencing system
providers and users to plan for and
implement the phasing out of certain
older style postage meters in favor of
more advanced and secure systems.
This effort, referred to as Meter
Decertification, is systematically
phasing out the use of less secure
postage meter technology.
As a result of the Postal Service’s
Meter Decertification efforts, this
proposed rule proposes to eliminate
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obsolete provisions related to manually
reset and mechanical meters that are no
longer authorized for distribution and
use by customers. In addition, this
proposed rule proposes a new section to
define a decertified Postage Evidencing
System and to codify the requirements
for their removal from the market.
Another result of the Postal Service’s
efforts to transition to more secure
technology was the introduction of PC
Postage products. PC Postage products
are commercially offered software or
online service products that customers
use to apply postage to their mailings
using a computer and desktop printer.
This proposed rule proposes to
incorporate the requirements for the
manufacturer and distribution of PC
Postage products into all relevant
sections of this rule and to outline the
Postal Service’s PC Postage payment
methodology.
This proposed rule proposes to
eliminate much of the detailed
requirements for processes such as
meter destruction, inspections, and lost
or stolen meter recovery. In lieu of these
detailed requirements, authorized
providers of Postage Evidencing
Systems will be given greater flexibility
to develop their own procedures and
submit them for Postal Service approval.
This proposed rule also proposes to
eliminate much of the detailed testing
and Postage Evidencing System
functionality requirements. In place of
these requirements, the Postal Service’s
published Product Submission
Procedures and Performance Criteria
have been incorporated by reference.
And finally, when the Postal Service
redesigned the Domestic Mail Manual
(DMM) in 2005, a small portion of the
overall project involved the removal of
most of the rules that apply to Postage
Evidencing System providers that were
previously contained in DMM P030
(Issue 58). The intent was to move the
bulk of these rules into 39 CFR 501,
since other federal requirements
concerning the manufacture and use of
Postage Evidencing Systems already
resided there. Therefore, through this
proposed rule the Postal Service
proposes to move some of the content
formerly contained in DMM P030 (Issue
58) into 39 CFR 501.
Although exempt from the notice and
comment requirements of the
Administrative Procedure Act [5 U.S.C.
410(a)], the Postal Service invites public
comment on the following proposed
revisions to the Code of Federal
Regulations (see 39 CFR part 501).
List of Subjects in 39 CFR Part 501
Postal Service.
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36499
Accordingly, 39 CFR Part 501 is
proposed to be amended as follows:
PART 501—AUTHORIZATION TO
MANUFACTURE AND DISTRIBUTE
POSTAGE EVIDENCING SYSTEMS
1. The authority citation for 39 CFR
Part 501 continues to read as follows:
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101,
401, 403, 404, 410, 2601, 2605, Inspector
General Act of 1978, as amended (Pub. L. 95–
452, as amended); 5 U.S.C. App. 3.
2. Part 501 is revised to read as
follows:
PART 501—AUTHORIZATION TO
MANUFACTURE AND DISTRIBUTE
POSTAGE EVIDENCING SYSTEMS
Sec.
501.1 Definitions.
501.2 Postage Evidencing System provider
authorization.
501.3 Postage Evidencing System provider
qualification.
501.4 Changes in ownership or control,
bankruptcy, or insolvency.
501.5 Burden of proof standard.
501.6 Suspension and revocation of
authorization.
501.7 Postage Evidencing System
requirements.
501.8 Postage Evidencing System test and
approval.
501.9 Demonstration or test Postage
Evidencing Systems.
501.10 Postage Evidencing System
modifications.
501.11 Reporting Postage Evidencing
System security weaknesses.
501.12 Administrative sanctions.
501.13 False representations of Postal
Service actions.
501.14 Postage Evidencing System
inventory control processes.
501.15 Computerized Meter Resetting
System.
501.16 PC Postage payment methodology.
501.17 Decertified Postage Evidencing
Systems.
501.18 Customer information and
authorization.
501.19 Intellectual property.
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101,
401, 403, 404, 410, 2601, 2605; Inspector
General Act of 1978, as amended (Pub. L. 95–
452, as amended); 5 U.S.C. App. 3.
§ 501.1
Definitions.
(a) Postage Evidencing Systems
regulated by Part 501 produce evidence
of prepayment of postage by any method
other than postage stamps and permit
imprints. A Postage Evidencing System
is a device or system of components that
a customer uses to print evidence that
postage required for mailing has been
paid. Postage Evidencing Systems print
indicia, such as meter imprints or
Information Based Indicia to indicate
postage payment. They include but are
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Federal Register / Vol. 71, No. 123 / Tuesday, June 27, 2006 / Proposed Rules
not limited to postage meters and PC
Postage systems.
(b) A postage meter is a Postal Service
approved Postage Evidencing System
that uses a device to account for postage
purchased and printed. The term meter
as used in this Part refers to a postage
meter.
(c) PC Postage products are Postal
Service approved Postage Evidencing
Systems that use a personal computer as
an integral part of the system. PC
Postage products may use the Internet to
download postage to a mailer’s
computer from which the postage
indicia may then be printed.
(d) A provider is a person or entity
authorized under this section to
manufacture and/or distribute Postage
Evidencing Systems to customers.
(e) A manufacturer of postage meters
produces postage meters.
(f) A distributor of postage meters may
be a manufacturer who leases postage
meters directly to end user customers or
may be an independent entity who
leases postage meters to end user
customers on behalf of the
manufacturer.
(g) A customer is a person or entity
authorized by the Postal Service to use
a Postage Evidencing System in
accordance with Domestic Mail Manual
604 Postage Payment Methods, 4.0
Postage Meters and PC Postage Products
(Postage Evidencing Systems).
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§ 501.2 Postage Evidencing System
provider authorization.
(a) The Postal Service considers
Postage Evidencing Systems and their
respective infrastructure to be essential
to the exercise of its specific powers to
prescribe postage and provide evidence
of payment of postage under 39 U.S.C.
404(a)(2) and (4).
(b) Due to the potential for adverse
impact upon Postal Service revenue, the
following activities may not be engaged
in by any person or entity without prior,
written approval of the Postal Service:
(1) Producing or distributing any
Postage Evidencing System that
generates U.S. postage.
(2) Repairing, distributing,
refurbishing, remanufacturing,
modifying, or destroying any
component of a Postage Evidencing
System that accounts for or authorizes
the printing of U.S. postage.
(3) Owning or operating an
infrastructure that maintains operating
data for the production of U.S. postage,
or accounts for U.S. postage purchased
for distribution through a Postage
Evidencing System.
(4) Owning or operating an
infrastructure that maintains operating
data that is used to facilitate registration
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with the Postal Service of customers of
a Postage Evidencing System.
(c) Any person or entity seeking
authorization to perform any activity
described in paragraph (b) of this
section, or to materially modify any
activity previously approved by the
Postal Service, must submit a request to
the Postal Service in person or in
writing. Decisions of the Postal Service
upon such requests are effective only if
in writing (including electronic mail).
(d) Approval shall be based upon
satisfactory evidence of the applicant’s
integrity and financial responsibility,
commitment to the security of the
Postage Evidencing System, and a
determination that disclosure to the
applicant of Postal Service customer,
financial, or other data of a commercial
nature necessary to perform the function
for which approval is sought would be
appropriate and consistent with good
business practices within the meaning
of 39 U.S.C. 410(c)(2). The Postal
Service may condition its approval
upon the applicant’s agreement to
undertakings that would give the Postal
Service appropriate assurance of the
applicant’s ability to meet its obligations
under this section, including but not
limited to the method and manner of
performing certain financial, security,
and servicing functions and the need to
maintain sufficient financial reserves to
guarantee uninterrupted performance of
not less than 3 months of operation.
(e) Qualification and approval may be
based upon additional conditions
agreed to by the Postal Service and the
applicant. The applicant is approved in
writing to engage in the function(s) for
which authorization was sought and
approved.
(f) To the extent that any provider
manufactures and/or distributes any PC
Postage product through any authorized
Postage Evidencing System, such
provider must adhere to the
requirements of these regulations.
(g) The Postal Service office
responsible for administration of this
Part 501 is the office of Postage
Technology Management (PTM) or
successor organization. All submissions
to the Postal Service required or invited
by this Part 501 are to be made to this
office in person or via mail to 1735 N.
Lynn Street, Room 5011, Arlington, VA
22209–6370.
Information updates may be found on
the Postal Service Web site at https://
www.usps.com/postagesolutions/
flash.htm.
§ 501.3 Postage Evidencing System
provider qualification.
Any person or entity seeking
authorization to manufacture and/or
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distribute Postage Evidencing Systems
must:
(a) Satisfy the Postal Service of its
integrity and financial responsibility.
(b) Obtain Postal Service approval
under this Part of at least one Postage
Evidencing System satisfying the
requirements of Postal Service
regulations.
(c) As a condition of obtaining
authorization under this section, the
Postage Evidencing System provider’s
facilities used for the manufacture,
distribution, storage, resetting, or
destruction of postage meters and all
facilities housing infrastructure
supporting Postage Evidencing Systems
will be subject to unannounced
inspection by representatives of the
Postal Service. If such facilities are
outside the continental United States,
the provider will be responsible for all
reasonable and necessary travel-related
costs incurred by the Postal Service to
conduct the inspections. Travel-related
costs are determined in accordance with
Postal Service Handbook F–15, Travel
and Relocation. At its discretion, the
Postal Service may continue to fund
routine inspections outside the
continental United States as it has in the
past, provided the costs are not
associated with particular security
issues related to a provider’s Postage
Evidencing System or supporting
infrastructure, or with the start-up or
implementation of a new plant or of a
new or substantially changed
manufacturing process.
(1) When conducting an inspection
outside the continental United States,
the Postal Service will make every effort
to combine the inspection with other
inspections in the same general
geographic area in order to enable
affected providers to share the costs.
The Postal Service team conducting
such inspections will be limited to the
minimum number necessary to conduct
the inspection. All air travel will be
contracted for at the rates for official
government business, when available,
under such rules respecting class of
travel as apply to those Postal Service
representatives inspecting the facility at
the time the travel occurs.
(2) If political or other impediments
prevent the Postal Service from
conducting security evaluations of
Postage Evidencing System facilities in
foreign countries, Postal Service
approval of the activities conducted in
such facilities may be suspended until
such time as satisfactory inspections
may be conducted.
(d) Have, or establish, and keep under
its active supervision and control
adequate facilities for the control,
distribution, and maintenance of
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Federal Register / Vol. 71, No. 123 / Tuesday, June 27, 2006 / Proposed Rules
Postage Evidencing Systems and their
replacement or secure disposal or
destruction when necessary and
appropriate.
§ 501.4 Changes in ownership or control,
bankruptcy, or insolvency.
(a) Any person or entity authorized
under § 501.2 must promptly notify the
Postal Service when it has a reasonable
expectation that there may be a change
in its ownership or control including
changes in the ownership of an affiliate
which exercises control over its Postage
Evidencing System operations in the
United States. A change of ownership or
control within the meaning of this
section includes entry into a strategic
alliance or other agreement whereby a
third party either
(1) Has access to data related to the
security of the system or
(2) Is a competitor to the Postal
Service. Any person or entity seeking to
acquire ownership or control of a person
or entity authorized under § 501.2 must
provide the Postal Service satisfactory
evidence that it satisfies the conditions
for approval stated in § 501.2. Early
notification of a proposed change in
ownership or control will facilitate
expeditious review of an application to
acquire ownership or control under this
section.
(b) Any person or entity authorized
under § 501.2 must promptly notify the
Postal Service when it has a reasonable
expectation that there may be a change
in the status of its financial condition
either through bankruptcy, insolvency,
assignment for the benefit of creditors,
or other similar financial action. Any
person or entity authorized under
§ 501.2 who experiences a change in the
status of its financial condition may, at
the discretion of the Postal Service, have
its authorization under § 501.2 modified
or terminated.
§ 501.5
Burden of proof standard.
The burden of proof is on the Postal
Service in administrative
determinations of suspension and
revocation under § 501.6 and
administrative sanctions under § 501.12.
Except as otherwise indicated in those
sections, the standard of proof shall be
the preponderance-of-evidence
standard.
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§ 501.6 Suspension and revocation of
authorization.
(a) The Postal Service may suspend
and/or revoke authorization to
manufacture and/or distribute any or all
of a provider’s approved Postage
Evidencing System(s) if the provider
engages in any unlawful scheme or
enterprise, fails to comply with any
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provision in this Part 501, fails to
implement instructions issued in
accordance with any final decision
issued by the Postal Service within its
authority over Postage Evidencing
Systems or if the Postage Evidencing
System or infrastructure of the provider
is determined to constitute an
unacceptable risk to Postal Service
revenues.
(b) The decision to suspend or revoke
pursuant to paragraph (a) of this section
shall be based upon the nature and
circumstances of the violation (e.g.,
whether the violation was willful,
whether the provider voluntarily
admitted to the violation, or cooperated
with the Postal Service, whether the
provider implemented successful
remedial measures) and on the
provider’s performance history. Before
determining that a provider’s
authorization to manufacture and/or
distribute Postage Evidencing Systems
should be suspended or revoked, the
procedures in paragraph (c) of this
section shall be followed.
(c) Suspension or revocation
procedures:
(1) Upon determination by the Postal
Service that a provider is in violation of
provisions of this Part 501, or that its
Postal Evidencing System poses an
unreasonable risk to postal revenue,
PTM, acting on behalf of the Postal
Service shall issue a written notice of
proposed suspension citing the specific
conditions or deficiencies for which
suspension of authorization to
manufacture and/or distribute a specific
Postage Evidencing System or class of
Postage Evidencing Systems may be
imposed. Except in cases of willful
violation, the provider shall be given an
opportunity to correct deficiencies and
achieve compliance with all
requirements within a time limit
corresponding to the potential revenue
risk to postal revenue.
(2) In cases of willful violation, or if
the Postal Service determines that the
provider has failed to correct cited
deficiencies within the specified time
limit, PTM shall issue a written notice
of suspension setting forth the facts and
reasons for the decision to suspend and
the effective date if a written defense is
not presented as provided in paragraph
(d) of this section.
(3) The notice shall also advise the
provider of its right to file a response
under paragraph (d) of this section. If a
written response is not presented in a
timely manner the suspension may go
into effect. The suspension shall remain
in effect for ninety (90) calendar days
unless revoked or modified by PTM.
(4) If, upon consideration of the
defense as provided in paragraph (d) of
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36501
this section, the Postal Service deems
that the suspension is warranted, the
suspension shall remain in effect for up
to 90 days unless withdrawn by the
Postal Service, as provided in paragraph
(c)(5)(iii) of this section.
(5) At the end of the ninety (90) day
suspension, the Postal Service may:
(i) Extend the suspension in order to
allow more time for investigation or to
allow the provider time to correct the
problem.
(ii) Make a determination to revoke
authorization to manufacture and/or
distribute a Postage Evidencing System
in part or in whole.
(iii) Withdraw the suspension based
on identification and implementation of
a satisfactory solution to the problem.
(d) The provider may present the
Postal Service with a written defense to
any suspension or revocation
determination within thirty (30)
calendar days of receiving the written
notice (unless a shorter period is
deemed necessary). The defense must
include all supporting evidence and
state with specificity the reasons why
the order should not be imposed.
(e) After receipt and consideration of
the defense, PTM shall advise the
provider of its decision and the facts
and reasons for it. The decision shall be
effective on receipt unless provided
otherwise. The decision shall also
advise the provider that it may be
appealed within thirty (30) calendar
days of receipt (unless a shorter time
frame is deemed necessary). If an appeal
is not filed in a timely manner, the
decision of PTM shall become a final
decision of the Postal Service. The
appeal may be filed with the Chief
Marketing Officer of the Postal Service
and must include all supporting
evidence and state with specificity the
reasons the provider believes that the
decision is erroneous. The decision of
the Chief Marketing Officer shall
constitute a final decision of the Postal
Service.
(f) An order or final decision under
this section does not preclude any other
criminal or civil statutory, common law,
or administrative remedy that is
available by law to the Postal Service,
the United States, or any other person
or entity.
§ 501.7 Postage Evidencing System
requirements.
(a) A Postage Evidencing System
submitted to the Postal Service for
approval must meet the requirements of
the Performance Criteria for
Information-based Indicia and Security
Architecture for Open IBI Postage
Evidencing Systems published by PTM.
The current version of the Performance
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Criteria may be found on the Postal
Service Web site at https://
www.usps.com/postagesolutions/
programdoc.html or requests for copies
may be submitted via mail to 1735 N.
Lynn Street, Room 5011, Arlington, VA
22209–6370.
(b) The provider must affix to all
meters a cautionary message providing
the meter user with basic reminders on
leasing and meter movement.
(1) The cautionary message must be
placed on all meters in a conspicuous
and highly visible location. PROPERTY
OF [NAME OF PROVIDER] as well as
the provider’s toll-free number must be
emphasized by capitalized bold type
and preferably printed in red. The
minimum width of the message should
be 3.25 inches, and the minimum height
should be 1.75 inches. The message
should read as follows:
RENTED POSTAGE METER—NOT FOR
SALE
PROPERTY OF [NAME OF PROVIDER]
(800) ###–####
Use of this meter is permissible only
under U.S. Postal Service authorization.
Call [Name of Provider] at (800) ###–
#### to relocate/return this meter.
WARNING! METER TAMPERING IS A
FEDERAL OFFENSE.
IF YOU SUSPECT METER
TAMPERING, CALL POSTAL
INSPECTORS AT (800) 372–8347
REWARD UP TO $50,000 for
information leading to the conviction of
any person who misuses postage meters
resulting in the Postal Service not
receiving correct postage payments.
(2) Exceptions to the formatting of the
required message are determined on a
case-by-case basis. Any deviation from
standardized meter message
requirements must be approved in
writing by the Postal Service.
(c) The provider must ensure that all
images to appear in the ad plate area of
an indicia are not obscene, deceptive, or
defamatory of any person, entity, or
group; do not advocate unlawful action;
do not emulate any form of valid
postage, government, or other official
indicia, or payment of postage; and do
not harm the public image, reputation,
or good will of the Postal Service.
Providers will also have full
responsibility for ensuring that a
customer acknowledges, agrees and
warrants in writing that it bears full
responsibility and liability for obtaining
authorization to reproduce and
otherwise use an image as proposed,
and that it, in fact, has the legal
authority to reproduce and otherwise
use the image as proposed.
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§ 501.8 Postage Evidencing System test
and approval.
(a) To receive Postal Service approval,
each Postage Evidencing System must
be submitted by the provider and
evaluated by the Postal Service in
accordance with the Postage Evidencing
Product Submission Procedures
published by PTM. The current version
of the Product Submission Procedures
may be found on the Postal Service Web
site at https://www.usps.com/
postagesolutions/programdoc.html or
requests for copies may be submitted via
mail to 1735 N. Lynn Street, Room 5011,
Arlington, VA 22209–6370. These
procedures apply to all proposed
Postage Evidencing Systems regardless
of whether the provider is currently
authorized by the Postal Service to
distribute Postage Evidencing Systems.
All testing required by the Postal
Service will be an expense of the
provider.
(b) As provided in § 501.11, the
provider has a duty to report security
weaknesses to the Postal Service to
ensure that each approved Postage
Evidencing System protects the Postal
Service against loss of revenue at all
times. A grant of approval of a system
does not constitute an irrevocable
determination that the Postal Service is
satisfied with the revenue-protection
capabilities of the system. After
approval is granted to manufacture and/
or distribute a Postage Evidencing
System, no change affecting its basic
features or safeguards may be made
except as authorized or ordered by the
Postal Service in writing.
§ 501.9 Demonstration or test Postage
Evidencing Systems.
(a) The following procedures must be
followed to implement controls over
demonstration or test Postage
Evidencing Systems:
(1) A demonstration or test Postage
Evidencing System may print only
specimen or test indicia. A specimen or
test indicia must clearly indicate that
the indicia does not represent valid
postage.
(2) A demonstration or test Postage
Evidencing System must be recorded as
such on internal provider inventory
records and must be tracked by model
number, serial number, and physical
location.
(3) A demonstration or test Postage
Evidencing System must remain under
the provider’s direct control. A
demonstration or test Postage
Evidencing System may not be left in
the possession of a customer under any
circumstance.
(b) All indicia printed by a
demonstration or test Postage
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Evidencing System must be collected
and destroyed daily.
§ 501.10 Postage Evidencing System
modifications.
(a) An authorized provider must
receive prior written approval from the
manager, PTM, of any and all changes
made to a previously approved Postage
Evidencing System. The notification
must include a summary of all changes
made and the provider’s assessment as
to the impact of those changes on the
security of the Postage Evidencing
System and postage funds. Upon receipt
of the notification, PTM will review the
summary of changes and make a
decision regarding the need for the
following:
(1) Additional documentation.
(2) Level of test and evaluation
required.
(3) Necessity for evaluation by a
laboratory accredited by the National
Institutes of Standards and Technology
(NIST) under the National Voluntary
Laboratory Accreditation Program
(NVLAP).
(b) Upon receipt and review of
additional documentation and/or test
results, PTM will issue a written
acknowledgement and/or approval of
the change to the provider.
§ 501.11 Reporting Postage Evidencing
System security weaknesses.
(a) For purposes of this section
provider refers to the Postage
Evidencing System provider authorized
under § 501.2 and its foreign affiliates,
if any, subsidiaries, assigns, dealers,
independent dealers, employees, and
parent corporations.
(b) Each authorized provider of a
Postage Evidencing System must notify
the Postal Service immediately upon
discovery of the following:
(1) All findings or results of any
testing known to the provider
concerning the security or revenue
protection features, capabilities, or
failings of any Postage Evidencing
System sold, leased, or distributed by it
that has been approved for sale, lease,
or distribution by the Postal Service or
any foreign postal administration; or has
been submitted for approval by the
provider to the Postal Service or other
foreign postal administration(s).
(2) All potential security weaknesses
or methods of tampering with the
Postage Evidencing Systems that the
provider distributes of which it knows
or should know and the Postage
Evidencing System model subject to
each such method. Potential security
weaknesses include but are not limited
to suspected equipment defects,
suspected abuse by a customer or
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provider employee, suspected security
breaches of the Computerized Meter
Resetting System (CMRS) or databases
housing confidential customer data
relating to the use of Postage Evidencing
Systems, occurrences outside normal
performance, or any repeatable
deviation from normal Postage
Evidencing System performance.
(c) Within a time limit corresponding
to the potential revenue risk to postal
revenue as determined by the Postal
Service, the provider must submit a
written report to the Postal Service. The
report must include the circumstances,
proposed investigative procedure, and
the anticipated completion date of the
investigation. The provider must also
provide periodic status reports to the
Postal Service during subsequent
investigation and, on completion, must
submit a summary of the investigative
findings.
(d) The provider must establish and
adhere to timely and efficient
procedures for internal reporting of
potential security weaknesses and shall
provide a copy of such internal
reporting procedures and instructions to
the Postal Service for review.
(e) Failure to comply with this section
may result in suspension of approval
under § 501.6 or the imposition of
sanctions under § 501.12.
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§ 501.12
Administrative sanctions.
(a) An authorized Postage Evidencing
System provider may be responsible to
the Postal Service for revenue losses
caused by failure to comply with
§ 501.11.
(b) The Postal Service shall determine
all costs and revenue losses measured
from the date that the provider knew, or
should have known, of a potential
security weakness, including, but not
limited to, administrative and
investigative costs and documented
revenue losses that result from any
Postage Evidencing System for which
the provider failed to comply with any
provision in § 501.11. The Postal
Service issues a written demand for
reimbursement of any and all such costs
and losses (net of any amount collected
by the Postal Service from the
customers) with interest. The demand
shall set forth the facts and reasons on
which it is based.
(c) The provider may present the
Postal Service with a written defense to
the proposed action within thirty (30)
calendar days of receipt. The defense
must include all supporting evidence
and state with specificity the reasons for
which the sanction should not be
imposed.
(d) After receipt and consideration of
the defense, the Postal Service shall
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advise the provider of the decision and
the facts and reasons for it; the decision
shall be effective on receipt unless it
provides otherwise. The decision shall
also advise the provider that it may,
within thirty (30) calendar days of
receiving written notice, appeal that
determination to the Chief Marketing
Officer of the Postal Service who shall
issue a written decision upon the appeal
which will constitute the final Postal
Service decision.
(e) The imposition of an
administrative sanction under this
section does not preclude any other
criminal or civil statutory, common law,
or administrative remedy that is
available by law to the Postal Service,
the United States, or any other person
or entity.
(f) An authorized Postage Evidencing
System provider, who without just
cause fails to follow any Postal Service
approved procedures, perform
adequately any of the Postal Service
approved controls or fails to obtain
approval of a required process in
§ 501.14 in a timely fashion, is subject
to an administrative sanction under this
provision § 501.12.
§ 501.13 False representations of Postal
Service actions.
Providers, their agents, and
employees must not intentionally
misrepresent to customers of the Postal
Service decisions, actions, or proposed
actions of the Postal Service respecting
its regulation of Postage Evidencing
Systems. The Postal Service reserves the
right to suspend and/or revoke the
authorization to manufacture or
distribute Postage Evidencing Systems
throughout the United States or any part
thereof pursuant to § 501.6 when it
determines that the provider, its agents
or employees failed to comply with this
section.
§ 501.14 Postage Evidencing System
inventory control processes.
(a) Each authorized provider of
Postage Evidencing Systems must
permanently hold title to all Postage
Evidencing Systems which it
manufactures or distributes except those
purchased by the Postal Service or
distributed outside the United States.
(b) An authorized provider must
maintain sufficient facilities for and
records of the distribution, control,
storage, maintenance, repair,
replacement, and destruction or
disposal of all Postage Evidencing
Systems and their components to enable
accurate accounting and location thereof
throughout the entire life cycle of each
Postage Evidencing System. A complete
record shall entail a list by serial
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number of all Postage Evidencing
Systems manufactured or distributed
showing all movements of each system
from the time that it is produced until
it is scrapped, and the reading of the
ascending register each time the system
is checked into or out of service. These
records must be available for inspection
by Postal Service officials at any time
during business hours.
(c) To ensure adequate control over
Postage Evidencing Systems, plans for
the following processes must be
submitted for prior approval, in writing,
to PTM:
(1) Check in to service procedures for
all Postage Evidencing Systems—the
procedures are to address the process to
be used for new Postage Evidencing
Systems as well as those previously
leased to another customer.
(2) Transportation and storage of
meters—procedures that provide
reasonable precautions to prevent use
by unauthorized individuals. Providers
must ship all meters by Postal Service
Registered Mail unless given written
permission by the Postal Service to use
another carrier. The provider must
demonstrate that the alternative delivery
carrier employs security procedures
equivalent to those for Registered Mail.
(3) Postage meter examination/
inspection procedures and schedule—
resetting transactions must not be
completed by the provider if a meter is
not examined by the due date. If
necessary, the Postal Service shall notify
the customer that the meter is to be
removed from service and the
authorization to use a meter revoked,
following the procedures for revocation
specified by regulation. The Postal
Service shall notify the provider to
remove the meter from the customer’s
location.
(4) Check out of service procedures
for a non-faulty Postage Evidencing
System when the system is to be
removed from service for any reason.
(5) Postage meter repair process—any
physical or electronic access to the
internal components of a postage meter,
as well as any access to software or
security parameters, must be conducted
within an approved facility under the
provider’s direct control and active
supervision. To prevent unauthorized
use, the provider or any third party
acting on its behalf must keep secure
any equipment or other component that
can be used to open or access the
internal, electronic, or secure
components of a meter.
(6) Faulty meter handling procedures,
including those that are inoperable, misregistering, have unreadable registers,
inaccurately reflect their current status,
show any evidence of possible
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tampering or abuse, and those for which
there is any indication that the meter
has some mechanical or electrical
malfunction of any critical security
component, such as any component the
improper operation of which could
adversely affect Postal Service revenues,
or of any memory component, or that
affects the accuracy of the registers or
the accuracy of the value printed.
(7) Lost or stolen meter procedures—
the provider must promptly report to
the Postal Service the loss or theft of any
meter or the recovery of any lost or
stolen meter. Such notification to the
Postal Service will be made by
completing and filing a standardized
lost and stolen meter incident report
within ten (10) calendar days of the
provider’s determination of a meter loss,
theft, or recovery.
(8) Postage meter destruction, when
required—the postage meter must be
rendered completely inoperable by the
destruction process and associated
postage-printing dies and components
must be destroyed. Manufacturers/
distributors of meters must submit the
proposed destruction method; a
schedule listing the postage meters to be
destroyed, by serial number and model;
and the proposed time and place of
destruction to PTM for approval prior to
any meter destruction. Providers must
record and retain the serial numbers of
the meters to be destroyed, and provide
a list of such serial numbers in
electronic form in accordance with
Postal Service requirements for meter
accounting and tracking systems.
Providers must give sufficient advance
notice of the destruction to allow PTM
to schedule observation by its
designated representative who shall
verify that the destruction is performed
in accordance with a Postal Serviceapproved method or process. These
requirements for meter destruction
apply to all postage meters, Postage
Evidencing Systems, and postal security
devices included as a component of a
Postage Evidencing System.
(d) If the provider uses a third party
to perform functions that may affect
Postage Evidencing System security,
including, but not limited to repair,
maintenance, and disposal of Postage
Evidencing Systems, PTM must be
advised in advance of all aspects of the
relationship, as they relate to the
custody and control of Postage
Evidencing Systems, and must
specifically authorize in writing the
proposed arrangement between the
parties.
(1) Postal Service authorization of a
third party relationship to perform
specific functions applies only to the
functions stated in the written
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authorization but may be amended to
embrace additional functions.
(2) No third-party relationship shall
compromise the security of the Postage
Evidencing System, or its components,
including, but not limited to, the
hardware, software, communications,
and security components, or of any
security-related system with which it
interfaces, including, but not limited to,
the resetting system, reporting systems,
and Postal Service support systems. The
functions of the third party with respect
to a Postage Evidencing System, its
components, and the systems with
which it interfaces are subject to the
same scrutiny as the equivalent
functions of the provider.
(3) Any authorized third party must
keep adequate facilities for and records
of Postage Evidencing Systems and their
components in accordance with
paragraph (b) of this section. All such
facilities and records are subject to
inspection by Postal Service
representatives, insofar as they are used
to distribute, control, store, maintain,
repair, replace, destroy, or dispose of
Postage Evidencing Systems.
(4) The provider must ensure that any
party acting in its behalf in any of the
functions described in paragraph (b) of
this section maintains adequate
facilities, records, and procedures for
the security of the Postage Evidencing
Systems. Deficiencies in the operations
of a third party relating to the custody
and control of Postage Evidencing
Systems, unless corrected in a timely
manner, can place at risk a provider’s
approval to manufacture and/or
distribute Postage Evidencing Systems.
(5) The Postal Service reserves the
right to review all aspects of any third
party relationship if it appears that the
relationship poses a threat to Postage
Evidencing System security and may
require the provider to take appropriate
corrective action.
§ 501.15 Computerized Meter Resetting
System.
(a) Description. The Computerized
Meter Resetting System (CMRS) permits
customers to reset their postage meters
at their places of business. Authorized
providers, who operate CMRS services,
are known as resetting companies (RC).
(b) A customer is required to have
funds available on deposit with the
Postal Service before resetting a Postage
Evidencing System or the provider may
opt to provide a funds advance in
accordance with paragraph (c) of this
section.
(c) If the RC chooses to offer
advancement of funds to customers, the
RC is required to maintain a deposit
with the Postal Service equal to at least
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one (1) day’s average funds advanced.
The total amount of funds advanced to
customers on any given day shall not
exceed the amount the provider has on
deposit with the Postal Service. The
Postal Service shall not be liable for any
payment made by the RC on behalf of
a customer that is not reimbursed by the
customer, since the RC is solely
responsible for the collection of
advances made by the RC.
(d) The CMRS customer is permitted
to make deposits in one of three ways:
Check, electronic funds transfer (or wire
transfer), or automated clearinghouse
(ACH) transfer. These deposits must be
remitted to the Postal Service’s
designated bank account.
(e) The RC must require each CMRS
customer that requests a meter resetting
to provide the meter serial number, the
CMRS account number and the meter’s
ascending and descending register
readings. The RC must verify that there
are sufficient funds in the customer’s
CMRS account to cover the postage
setting requested before proceeding with
the setting transaction (unless the RC
opts to provide the customer a funds
advance).
(f) The Postal Service requires that the
RC publicize to all CMRS customers the
following payment options (listed in
order of preference):
(1) Automated clearinghouse (ACH)
debits/credits.
(2) Electronic funds transfers (wire
transfers).
(3) Checks.
(g) Returned checks and ACH debits
are the responsibility of the Postal
Service. The RC must lock the customer
account immediately so that the
customer is unable to reset the meter
until the Postal Service receives
payment in full for the check returned.
(h) Refunds. The Postal Service issues
a refund to a customer for any unused
postage in a Postage Evidencing System.
(i) Security and Revenue Protection.
To receive Postal Service approval to
continue to operate systems in the
CMRS environment, the RC must submit
to a periodic audit of its system, to be
conducted by an independent systems
auditor, the frequency and scope of
which shall be determined by PTM. All
such audits will be an expense of the
provider.
(j) Inspection of records and facilities.
The RC must make its facilities that
handle the operation of the
computerized resetting system and all
records about the operation of the
system available for inspection by
representatives of the Postal Service at
all reasonable times.
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(k) The RC is required to incorporate
the following language into its meter
rental agreements:
Acknowledgment of Deposit Requirement—
Meters
By signing this meter rental agreement, you
the customer represent that you have read the
Acknowledgment of Deposit Requirement—
Meters and are familiar with its terms. You
agree that, upon execution of this agreement
with the RC, you will also be bound by all
terms and conditions of the Acknowledgment
of Deposit Requirement—Meters, as it may be
amended from time to time.
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§ 501.16 PC Postage payment
methodology.
(a) The PC Postage customer is
permitted to make payments for postage
in one of two ways: Automated
clearinghouse (ACH) transfer or credit
card.
(b) The provider must make payments
on behalf of the customer to the Postal
Service in accordance with contractual
and/or regulatory responsibilities.
(c) The Postal Service requires that
the provider publicize to all PC Postage
customers the following payment
options (listed in order of preference):
(1) Automated clearinghouse (ACH)
debits/credits.
(2) Credit cards.
(d) Returned ACH debits and credit
card returns are the responsibility of the
Postal Service. The RC must lock the
customer account immediately so that
the customer is unable to reset the
account until the Postal Service receives
payment in full.
(e) Refunds. The provider issues a
refund to a customer for any unused
postage in a Postage Evidencing System.
After verification by the Postal Service,
the provider will be reimbursed by the
Postal Service for the individual refunds
provided to customers by the provider.
(f) Security and revenue protection.
To receive Postal Service approval to
continue to operate PC Postage systems,
the provider must submit to a periodic
audit of its system, to be conducted by
an independent systems auditor, the
frequency and scope of which shall be
determined by PTM. All such audits
will be an expense of the provider.
(g) Inspection of records and facilities.
The provider must make its facilities,
which handle the operation of the PC
Postage system and all records about the
operation of the system, available for
inspection by representatives of the
Postal Service at all reasonable times.
(h) To the extent that the customer
maintains funds on deposit for the
payment of postage, the provider is
required to incorporate the following
language into its agreements with PC
Postage customers:
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Acknowledgment of Deposit Requirement—
PC Postage
By signing this agreement with the
provider, you represent that you have read
the Acknowledgment of Deposit
Requirement—PC Postage and are familiar
with its terms. You agree that, upon
execution of this agreement with the
provider, you will also be bound by all terms
and conditions of the Acknowledgment of
Deposit Requirement—PC Postage, as it may
be amended from time to time.
§ 501.17 Decertified Postage Evidencing
Systems.
(a) A Decertified Postage Evidencing
System is a device for which the
provider’s authority to distribute has
been withdrawn by the Postal Service as
a result of any retirement plan for a
given class of meters published by the
Postal Service in the Federal Register; a
suspension or revocation under § 501.6;
or a voluntary withdrawal undertaken
by the provider.
(b) A Decertified Postage Evidencing
System must be withdrawn from service
by the date agreed to by the Postal
Service and provider.
(c) To the extent postage meters are
involved, the provider must utilize the
approved procedures for lost and stolen
meters under § 501.14 (c)(7) to locate the
meter and remove it from service by the
agreed upon date.
(d) Decertified Postage Evidencing
Systems that are not submitted to the
Postal Service for refund within ninety
(90) days of the agreed upon withdrawal
from service date will not be eligible for
refund of unused postage.
(e) Postage indicia printed by
Decertified Postage Evidencing Systems
are no longer considered valid postage
six (6) months from the agreed upon
withdrawal from service date.
§ 501.18 Customer information and
authorization.
(a) Authorized providers must
electronically transmit the necessary
customer information to the designated
Postal Service central data processing
facility, in Postal Service-specified
format, in order for the Postal Service to
authorize a customer to use a Postage
Evidencing System. Postal Service
receipt and acceptance of the customer
information provides the customer with
the authorization to possess or use a
Postage Evidencing System in
accordance with Domestic Mail Manual
604 Postage Payment Methods, 4.0
Postage Meters and PC Postage
Products (Postage Evidencing Systems).
(b) The Postal Service may refuse to
issue a customer authorization to use a
Postage Evidencing System for the
following reasons:
(1) The customer submitted false or
fictitious information.
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(2) Within five years preceding
submission of the information, the
customer violated any standard for the
care or use of the Postage Evidencing
System that resulted in revocation of
that customer’s authorization.
(3) Or there is sufficient reason to
believe that the Postage Evidencing
System is to be used in violation of the
applicable standards.
(c) The Postal Service will notify the
provider of the revocation of a
customer’s authorization to use a
Postage Evidencing System. Within ten
(10) days of receipt of the notice of
revocation, the provider must cancel
any lease or other agreement and
remove the Postage Evidencing System
from service. A customer’s authorization
to use a Postage Evidencing system is
subject to revocation for any of the
following reasons:
(1) A Postage Evidencing System is
used for any illegal scheme or
enterprise.
(2) The customer’s Postage Evidencing
System is not used for twelve (12)
consecutive months.
(3) Sufficient control of a Postage
Evidencing System is not exercised or
the standards for its care or use are not
followed.
(4) The Postage Evidencing System is
kept or used outside the customs
territory of the United States or those
U.S. territories and possessions where
the Postal Service operates.
(5) The customer is in possession of
a Decertified Postage Evidencing
System.
(d) The provider must electronically
transmit any updates to the necessary
customer information to the designated
Postal Service central data processing
facility, in Postal Service-specified
format.
(e) No one other than an authorized
provider may possess a Postage
Evidencing System without a valid
rental or other agreement with the
provider. Other parties in possession of
a Postage Evidencing System must
immediately surrender it to the provider
or the Postal Service.
(f) The Postal Service may use
customer information consistent with
the Privacy Act and the Postal Service’s
privacy policies posted on https://
www.usps.com. Examples include the
following:
(1) Communication with customers
who may no longer be visiting a
traditional Postal Service retail outlet or
communication with customers through
any new retail channels.
(2) Issuance (including reauthorization, renewal, transfer,
revocation or denial, as applicable) of
authorization to use a Postage
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Evidencing System to a postal patron
that uses a Postage Evidencing System,
and communications with respect to the
status of such authorization.
(3) Disclosure to a meter manufacturer
of the identity of any meter required to
be removed from service by that meter
manufacturer, and any related customer
data, as the result of revocation of an
authorization to use a Postage
Evidencing System, questioned accurate
registration of that meter, or decertification by the Postal Service of any
particular class or model of postage
meter.
(4) Tracking the movement of meters
between a meter manufacturer and its
customers and communications to a
meter manufacturer (but not to any third
party other than the customer)
concerning such movement. The term,
meter manufacturer, includes a meter
manufacturer’s dealers and agents.
(5) To transmit general information to
all Postage Evidencing System
customers concerning rate and rate
category changes implemented or
proposed for implementation by the
Postal Service.
(6) To advertise Postal Service
services relating to the acceptance,
processing and delivery of, or postage
payment for, metered mail.
(7) To allow the Postal Service to
communicate with Postal Service
customers on products, services and
other information otherwise available to
Postal Service customers through
traditional retail outlets.
(8) Any internal use by Postal Service
personnel, including identification and
monitoring activities relating to Postage
Evidencing Systems, provided that such
use does not result in the disclosure of
applicant information to any third party
or will not enable any third party to use
applicant information for its own
purposes; except that the applicant
information may be disclosed to other
governmental agencies for law
enforcement purposes as provided by
law.
(9) Identification of authorized
Postage Evidencing System providers or
announcement of the de-authorization
of an authorized provider, or provision
of currently available public
information, where an authorized
provider is identified.
(10) To promote and encourage the
use of Postage Evidencing Systems as a
form of postage payment, provided that
the same information is provided to all
Postage Evidencing System customers
and no particular Postage Evidencing
System provider will be recommended
by the Postal Service.
(11) To contact customers in cases of
revenue fraud or revenue security.
VerDate Aug<31>2005
16:04 Jun 26, 2006
Jkt 208001
(12) Disclosure to a Postage
Evidencing System provider of
applicant information pertaining to that
provider’s customers that the Postal
Service views as necessary to enable the
Postal Service to carry out its duties and
purposes.
(13) To transmit to a Postage
Evidencing System provider all
applicant and system information
pertaining to that provider’s customers
and systems that may be necessary to
permit such provider to synchronize its
computer databases with information
contained in the computer files of the
Postal Service.
(14) Subject to the conditions stated
herein, to communicate in oral or
written form with any or all applicants
any information that the Postal Service
views as necessary to enable the Postal
Service to carry out its duties and
purposes under part 501.
§ 501.19
Intellectual property.
Providers submitting Postage
Evidencing Systems to the Postal
Service for approval are responsible for
obtaining all intellectual property
licenses that may be required to
distribute their product in commerce
and to allow the Postal Service to
process mail bearing the indicia
produced by the Postage Evidencing
System. To the extent approval is
granted and the Postage Evidencing
System is capable of being used in
commerce, the provider shall indemnify
the Postal Service for use of such
intellectual property in both the use of
the Postage Evidencing System and the
processing of mail bearing indicia
produced by the Postage Evidencing
System.
Neva R. Watson,
Attorney, Legislative.
[FR Doc. 06–5675 Filed 6–26–06; 8:45 am]
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 660
[Docket No.060609159–01; I.D. 060606A]
RIN 0648–AU12
Fisheries Off West Coast States;
Pacific Coast Groundfish Fishery;
Amendment 18
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
AGENCY:
Frm 00014
Fmt 4702
SUMMARY: NMFS issues this proposed
rule to implement Amendment 18 to the
Pacific Coast Groundfish Fishery
Management Plan (FMP). Amendment
18 is intended to respond to a court
order by setting the Pacific Fishery
Management Council’s (Council’s)
bycatch minimization policies and
requirements into the FMP. This rule
would implement new standardized
bycatch reporting methodology and
bycatch minimization requirements for
groundfish fisheries off the U.S. West
Coast.
DATES: Comments on this proposed rule
must be received on or before August 8,
2006.
ADDRESSES: Amendment 18 is available
on the Council’s website at: http//
www.nwr.noaa.gov/Groundfish-Halibut/
Groundfish-Fishery Management/NEPADocuments/Progammatic-EIS.cfm.
You may submit comments, identified
by I.D. number 060606A by any of the
following methods:
• E-mail:
Amendment18.nwr@noaa.gov. Include
the I.D. number 060606A in the subject
line of the message.
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 206–526–6736, Attn: Yvonne
deReynier.
• Mail: D. Robert Lohn,
Administrator, Northwest Region,
NMFS, Attn: Yvonne deReynier, 7600
Sand Point Way NE, Seattle, WA 98115–
0070.
FOR FURTHER INFORMATION CONTACT:
Yvonne deReynier (Northwest Region,
NMFS), phone: 206–526–6140; fax: 206–
526–6736; and e-mail:
yvonne.dereynier@noaa.gov.
SUPPLEMENTARY INFORMATION:
BILLING CODE 7710–12–P
PO 00000
Proposed rule; request for
comments.
ACTION:
Sfmt 4702
Electronic Access
This Federal Register document is
also accessible via the internet at the
website of the Office of the Federal
Register: www.gpoaccess.gov/fr/
index.html.
NMFS is proposing this rule to
implement Amendment 18 to the FMP,
which is intended to set the Council’s
bycatch minimization polices and
requirements into the FMP. Amendment
18 is intended to respond to court
orders in Pacific Marine Conservation
Council v. Evans, 200 F.Supp.2d 1194
(N.D. Calif. 2002) [hereinafter PMCC v.
Evans]. The regulations to implement
Amendment 18 would: require that
groundfish fishery management
measures take into account the co-
E:\FR\FM\27JNP1.SGM
27JNP1
Agencies
[Federal Register Volume 71, Number 123 (Tuesday, June 27, 2006)]
[Proposed Rules]
[Pages 36498-36506]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-5675]
=======================================================================
-----------------------------------------------------------------------
POSTAL SERVICE
39 CFR Part 501
Revisions to the Requirements for Authority To Manufacture and
Distribute Postage Evidencing Systems
AGENCY: Postal Service.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this proposed rule, the Postal ServiceTM
proposes to revise the content of Title 39, Code of Federal
Regulations, Part 501 (39 CFR 501), Authorization to Manufacture and
Distribute Postage Meters. This
[[Page 36499]]
proposed revision includes updating the regulations, removing obsolete
text, and incorporating pertinent portions of the rules for postage
meters (Postage Evidencing Systems) formerly contained in section P030
of the Domestic Mail Manual (Issue 58). The proposed text for 39 CFR
501 would also rename Part 501 as ``Authorization to Manufacture and
Distribute Postage Evidencing Systems'' and integrate the requirements
that apply to the distribution and manufacture of PC Postage[supreg]
products, a type of Postage Evidencing System. In addition, obsolete
references to requirements for manually reset and mechanical meters are
proposed to be eliminated.
DATES: Submit comments on or before July 27, 2006.
ADDRESSES: Mail or deliver written comments to the Manager, Postage
Technology Management, U.S. Postal Service, 1735 N. Lynn Street, Room
5011, Arlington, VA 22209-5011. Written comments may also be submitted
via fax to 703-292-4073. Copies of all written comments will be
available for inspection and photocopying between 9 a.m. and 4 p.m.,
Monday through Friday, at the Postage Technology Management office.
FOR FURTHER INFORMATION CONTACT: Daniel J. Lord, Manager, Postage
Technology Management, U.S. Postal Service, at 703-292-3692.
SUPPLEMENTARY INFORMATION: Postage Evidencing Systems are devices or
systems of components that a customer uses to print evidence that the
prepaid postage required for mailing has been paid. They include, but
are not limited to, postage meters and PC Postage[supreg] systems. The
Postal Service regulates these systems and their use in order to
protect postal revenue. Only Postal Service-authorized product service
providers may design, produce, and distribute Postage Evidencing
Systems.
Since 1995, the Postal Service has been engaged in an ongoing
effort to ensure greater protection for postal revenue and to help the
mailing industry transition to advanced postage evidencing technology.
During this time, the Postal Service has continually worked with
postage evidencing system providers and users to plan for and implement
the phasing out of certain older style postage meters in favor of more
advanced and secure systems. This effort, referred to as Meter
Decertification, is systematically phasing out the use of less secure
postage meter technology.
As a result of the Postal Service's Meter Decertification efforts,
this proposed rule proposes to eliminate obsolete provisions related to
manually reset and mechanical meters that are no longer authorized for
distribution and use by customers. In addition, this proposed rule
proposes a new section to define a decertified Postage Evidencing
System and to codify the requirements for their removal from the
market.
Another result of the Postal Service's efforts to transition to
more secure technology was the introduction of PC Postage products. PC
Postage products are commercially offered software or online service
products that customers use to apply postage to their mailings using a
computer and desktop printer. This proposed rule proposes to
incorporate the requirements for the manufacturer and distribution of
PC Postage products into all relevant sections of this rule and to
outline the Postal Service's PC Postage payment methodology.
This proposed rule proposes to eliminate much of the detailed
requirements for processes such as meter destruction, inspections, and
lost or stolen meter recovery. In lieu of these detailed requirements,
authorized providers of Postage Evidencing Systems will be given
greater flexibility to develop their own procedures and submit them for
Postal Service approval.
This proposed rule also proposes to eliminate much of the detailed
testing and Postage Evidencing System functionality requirements. In
place of these requirements, the Postal Service's published Product
Submission Procedures and Performance Criteria have been incorporated
by reference.
And finally, when the Postal Service redesigned the Domestic Mail
Manual (DMM) in 2005, a small portion of the overall project involved
the removal of most of the rules that apply to Postage Evidencing
System providers that were previously contained in DMM P030 (Issue 58).
The intent was to move the bulk of these rules into 39 CFR 501, since
other federal requirements concerning the manufacture and use of
Postage Evidencing Systems already resided there. Therefore, through
this proposed rule the Postal Service proposes to move some of the
content formerly contained in DMM P030 (Issue 58) into 39 CFR 501.
Although exempt from the notice and comment requirements of the
Administrative Procedure Act [5 U.S.C. 410(a)], the Postal Service
invites public comment on the following proposed revisions to the Code
of Federal Regulations (see 39 CFR part 501).
List of Subjects in 39 CFR Part 501
Postal Service.
Accordingly, 39 CFR Part 501 is proposed to be amended as follows:
PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE
EVIDENCING SYSTEMS
1. The authority citation for 39 CFR Part 501 continues to read as
follows:
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410,
2601, 2605, Inspector General Act of 1978, as amended (Pub. L. 95-
452, as amended); 5 U.S.C. App. 3.
2. Part 501 is revised to read as follows:
PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE
EVIDENCING SYSTEMS
Sec.
501.1 Definitions.
501.2 Postage Evidencing System provider authorization.
501.3 Postage Evidencing System provider qualification.
501.4 Changes in ownership or control, bankruptcy, or insolvency.
501.5 Burden of proof standard.
501.6 Suspension and revocation of authorization.
501.7 Postage Evidencing System requirements.
501.8 Postage Evidencing System test and approval.
501.9 Demonstration or test Postage Evidencing Systems.
501.10 Postage Evidencing System modifications.
501.11 Reporting Postage Evidencing System security weaknesses.
501.12 Administrative sanctions.
501.13 False representations of Postal Service actions.
501.14 Postage Evidencing System inventory control processes.
501.15 Computerized Meter Resetting System.
501.16 PC Postage payment methodology.
501.17 Decertified Postage Evidencing Systems.
501.18 Customer information and authorization.
501.19 Intellectual property.
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410,
2601, 2605; Inspector General Act of 1978, as amended (Pub. L. 95-
452, as amended); 5 U.S.C. App. 3.
Sec. 501.1 Definitions.
(a) Postage Evidencing Systems regulated by Part 501 produce
evidence of prepayment of postage by any method other than postage
stamps and permit imprints. A Postage Evidencing System is a device or
system of components that a customer uses to print evidence that
postage required for mailing has been paid. Postage Evidencing Systems
print indicia, such as meter imprints or Information Based Indicia to
indicate postage payment. They include but are
[[Page 36500]]
not limited to postage meters and PC Postage[supreg] systems.
(b) A postage meter is a Postal Service approved Postage Evidencing
System that uses a device to account for postage purchased and printed.
The term meter as used in this Part refers to a postage meter.
(c) PC Postage products are Postal Service approved Postage
Evidencing Systems that use a personal computer as an integral part of
the system. PC Postage products may use the Internet to download
postage to a mailer's computer from which the postage indicia may then
be printed.
(d) A provider is a person or entity authorized under this section
to manufacture and/or distribute Postage Evidencing Systems to
customers.
(e) A manufacturer of postage meters produces postage meters.
(f) A distributor of postage meters may be a manufacturer who
leases postage meters directly to end user customers or may be an
independent entity who leases postage meters to end user customers on
behalf of the manufacturer.
(g) A customer is a person or entity authorized by the Postal
Service to use a Postage Evidencing System in accordance with Domestic
Mail Manual 604 Postage Payment Methods, 4.0 Postage Meters and PC
Postage Products (Postage Evidencing Systems).
Sec. 501.2 Postage Evidencing System provider authorization.
(a) The Postal Service considers Postage Evidencing Systems and
their respective infrastructure to be essential to the exercise of its
specific powers to prescribe postage and provide evidence of payment of
postage under 39 U.S.C. 404(a)(2) and (4).
(b) Due to the potential for adverse impact upon Postal Service
revenue, the following activities may not be engaged in by any person
or entity without prior, written approval of the Postal Service:
(1) Producing or distributing any Postage Evidencing System that
generates U.S. postage.
(2) Repairing, distributing, refurbishing, remanufacturing,
modifying, or destroying any component of a Postage Evidencing System
that accounts for or authorizes the printing of U.S. postage.
(3) Owning or operating an infrastructure that maintains operating
data for the production of U.S. postage, or accounts for U.S. postage
purchased for distribution through a Postage Evidencing System.
(4) Owning or operating an infrastructure that maintains operating
data that is used to facilitate registration with the Postal Service of
customers of a Postage Evidencing System.
(c) Any person or entity seeking authorization to perform any
activity described in paragraph (b) of this section, or to materially
modify any activity previously approved by the Postal Service, must
submit a request to the Postal Service in person or in writing.
Decisions of the Postal Service upon such requests are effective only
if in writing (including electronic mail).
(d) Approval shall be based upon satisfactory evidence of the
applicant's integrity and financial responsibility, commitment to the
security of the Postage Evidencing System, and a determination that
disclosure to the applicant of Postal Service customer, financial, or
other data of a commercial nature necessary to perform the function for
which approval is sought would be appropriate and consistent with good
business practices within the meaning of 39 U.S.C. 410(c)(2). The
Postal Service may condition its approval upon the applicant's
agreement to undertakings that would give the Postal Service
appropriate assurance of the applicant's ability to meet its
obligations under this section, including but not limited to the method
and manner of performing certain financial, security, and servicing
functions and the need to maintain sufficient financial reserves to
guarantee uninterrupted performance of not less than 3 months of
operation.
(e) Qualification and approval may be based upon additional
conditions agreed to by the Postal Service and the applicant. The
applicant is approved in writing to engage in the function(s) for which
authorization was sought and approved.
(f) To the extent that any provider manufactures and/or distributes
any PC Postage product through any authorized Postage Evidencing
System, such provider must adhere to the requirements of these
regulations.
(g) The Postal Service office responsible for administration of
this Part 501 is the office of Postage Technology Management (PTM) or
successor organization. All submissions to the Postal Service required
or invited by this Part 501 are to be made to this office in person or
via mail to 1735 N. Lynn Street, Room 5011, Arlington, VA 22209-6370.
Information updates may be found on the Postal Service Web site at
https://www.usps.com/postagesolutions/flash.htm.
Sec. 501.3 Postage Evidencing System provider qualification.
Any person or entity seeking authorization to manufacture and/or
distribute Postage Evidencing Systems must:
(a) Satisfy the Postal Service of its integrity and financial
responsibility.
(b) Obtain Postal Service approval under this Part of at least one
Postage Evidencing System satisfying the requirements of Postal Service
regulations.
(c) As a condition of obtaining authorization under this section,
the Postage Evidencing System provider's facilities used for the
manufacture, distribution, storage, resetting, or destruction of
postage meters and all facilities housing infrastructure supporting
Postage Evidencing Systems will be subject to unannounced inspection by
representatives of the Postal Service. If such facilities are outside
the continental United States, the provider will be responsible for all
reasonable and necessary travel-related costs incurred by the Postal
Service to conduct the inspections. Travel-related costs are determined
in accordance with Postal Service Handbook F-15, Travel and Relocation.
At its discretion, the Postal Service may continue to fund routine
inspections outside the continental United States as it has in the
past, provided the costs are not associated with particular security
issues related to a provider's Postage Evidencing System or supporting
infrastructure, or with the start-up or implementation of a new plant
or of a new or substantially changed manufacturing process.
(1) When conducting an inspection outside the continental United
States, the Postal Service will make every effort to combine the
inspection with other inspections in the same general geographic area
in order to enable affected providers to share the costs. The Postal
Service team conducting such inspections will be limited to the minimum
number necessary to conduct the inspection. All air travel will be
contracted for at the rates for official government business, when
available, under such rules respecting class of travel as apply to
those Postal Service representatives inspecting the facility at the
time the travel occurs.
(2) If political or other impediments prevent the Postal Service
from conducting security evaluations of Postage Evidencing System
facilities in foreign countries, Postal Service approval of the
activities conducted in such facilities may be suspended until such
time as satisfactory inspections may be conducted.
(d) Have, or establish, and keep under its active supervision and
control adequate facilities for the control, distribution, and
maintenance of
[[Page 36501]]
Postage Evidencing Systems and their replacement or secure disposal or
destruction when necessary and appropriate.
Sec. 501.4 Changes in ownership or control, bankruptcy, or
insolvency.
(a) Any person or entity authorized under Sec. 501.2 must promptly
notify the Postal Service when it has a reasonable expectation that
there may be a change in its ownership or control including changes in
the ownership of an affiliate which exercises control over its Postage
Evidencing System operations in the United States. A change of
ownership or control within the meaning of this section includes entry
into a strategic alliance or other agreement whereby a third party
either
(1) Has access to data related to the security of the system or
(2) Is a competitor to the Postal Service. Any person or entity
seeking to acquire ownership or control of a person or entity
authorized under Sec. 501.2 must provide the Postal Service
satisfactory evidence that it satisfies the conditions for approval
stated in Sec. 501.2. Early notification of a proposed change in
ownership or control will facilitate expeditious review of an
application to acquire ownership or control under this section.
(b) Any person or entity authorized under Sec. 501.2 must promptly
notify the Postal Service when it has a reasonable expectation that
there may be a change in the status of its financial condition either
through bankruptcy, insolvency, assignment for the benefit of
creditors, or other similar financial action. Any person or entity
authorized under Sec. 501.2 who experiences a change in the status of
its financial condition may, at the discretion of the Postal Service,
have its authorization under Sec. 501.2 modified or terminated.
Sec. 501.5 Burden of proof standard.
The burden of proof is on the Postal Service in administrative
determinations of suspension and revocation under Sec. 501.6 and
administrative sanctions under Sec. 501.12. Except as otherwise
indicated in those sections, the standard of proof shall be the
preponderance-of-evidence standard.
Sec. 501.6 Suspension and revocation of authorization.
(a) The Postal Service may suspend and/or revoke authorization to
manufacture and/or distribute any or all of a provider's approved
Postage Evidencing System(s) if the provider engages in any unlawful
scheme or enterprise, fails to comply with any provision in this Part
501, fails to implement instructions issued in accordance with any
final decision issued by the Postal Service within its authority over
Postage Evidencing Systems or if the Postage Evidencing System or
infrastructure of the provider is determined to constitute an
unacceptable risk to Postal Service revenues.
(b) The decision to suspend or revoke pursuant to paragraph (a) of
this section shall be based upon the nature and circumstances of the
violation (e.g., whether the violation was willful, whether the
provider voluntarily admitted to the violation, or cooperated with the
Postal Service, whether the provider implemented successful remedial
measures) and on the provider's performance history. Before determining
that a provider's authorization to manufacture and/or distribute
Postage Evidencing Systems should be suspended or revoked, the
procedures in paragraph (c) of this section shall be followed.
(c) Suspension or revocation procedures:
(1) Upon determination by the Postal Service that a provider is in
violation of provisions of this Part 501, or that its Postal Evidencing
System poses an unreasonable risk to postal revenue, PTM, acting on
behalf of the Postal Service shall issue a written notice of proposed
suspension citing the specific conditions or deficiencies for which
suspension of authorization to manufacture and/or distribute a specific
Postage Evidencing System or class of Postage Evidencing Systems may be
imposed. Except in cases of willful violation, the provider shall be
given an opportunity to correct deficiencies and achieve compliance
with all requirements within a time limit corresponding to the
potential revenue risk to postal revenue.
(2) In cases of willful violation, or if the Postal Service
determines that the provider has failed to correct cited deficiencies
within the specified time limit, PTM shall issue a written notice of
suspension setting forth the facts and reasons for the decision to
suspend and the effective date if a written defense is not presented as
provided in paragraph (d) of this section.
(3) The notice shall also advise the provider of its right to file
a response under paragraph (d) of this section. If a written response
is not presented in a timely manner the suspension may go into effect.
The suspension shall remain in effect for ninety (90) calendar days
unless revoked or modified by PTM.
(4) If, upon consideration of the defense as provided in paragraph
(d) of this section, the Postal Service deems that the suspension is
warranted, the suspension shall remain in effect for up to 90 days
unless withdrawn by the Postal Service, as provided in paragraph
(c)(5)(iii) of this section.
(5) At the end of the ninety (90) day suspension, the Postal
Service may:
(i) Extend the suspension in order to allow more time for
investigation or to allow the provider time to correct the problem.
(ii) Make a determination to revoke authorization to manufacture
and/or distribute a Postage Evidencing System in part or in whole.
(iii) Withdraw the suspension based on identification and
implementation of a satisfactory solution to the problem.
(d) The provider may present the Postal Service with a written
defense to any suspension or revocation determination within thirty
(30) calendar days of receiving the written notice (unless a shorter
period is deemed necessary). The defense must include all supporting
evidence and state with specificity the reasons why the order should
not be imposed.
(e) After receipt and consideration of the defense, PTM shall
advise the provider of its decision and the facts and reasons for it.
The decision shall be effective on receipt unless provided otherwise.
The decision shall also advise the provider that it may be appealed
within thirty (30) calendar days of receipt (unless a shorter time
frame is deemed necessary). If an appeal is not filed in a timely
manner, the decision of PTM shall become a final decision of the Postal
Service. The appeal may be filed with the Chief Marketing Officer of
the Postal Service and must include all supporting evidence and state
with specificity the reasons the provider believes that the decision is
erroneous. The decision of the Chief Marketing Officer shall constitute
a final decision of the Postal Service.
(f) An order or final decision under this section does not preclude
any other criminal or civil statutory, common law, or administrative
remedy that is available by law to the Postal Service, the United
States, or any other person or entity.
Sec. 501.7 Postage Evidencing System requirements.
(a) A Postage Evidencing System submitted to the Postal Service for
approval must meet the requirements of the Performance Criteria for
Information-based Indicia and Security Architecture for Open IBI
Postage Evidencing Systems published by PTM. The current version of the
Performance
[[Page 36502]]
Criteria may be found on the Postal Service Web site at https://
www.usps.com/postagesolutions/programdoc.html or requests for copies
may be submitted via mail to 1735 N. Lynn Street, Room 5011, Arlington,
VA 22209-6370.
(b) The provider must affix to all meters a cautionary message
providing the meter user with basic reminders on leasing and meter
movement.
(1) The cautionary message must be placed on all meters in a
conspicuous and highly visible location. PROPERTY OF [NAME OF PROVIDER]
as well as the provider's toll-free number must be emphasized by
capitalized bold type and preferably printed in red. The minimum width
of the message should be 3.25 inches, and the minimum height should be
1.75 inches. The message should read as follows:
RENTED POSTAGE METER--NOT FOR SALE
PROPERTY OF [NAME OF PROVIDER]
(800) -
Use of this meter is permissible only under U.S. Postal Service
authorization. Call [Name of Provider] at (800)
- to
relocate/return this meter.
WARNING! METER TAMPERING IS A FEDERAL OFFENSE.
IF YOU SUSPECT METER TAMPERING, CALL POSTAL INSPECTORS AT (800) 372-
8347
REWARD UP TO $50,000 for information leading to the conviction of
any person who misuses postage meters resulting in the Postal Service
not receiving correct postage payments.
(2) Exceptions to the formatting of the required message are
determined on a case-by-case basis. Any deviation from standardized
meter message requirements must be approved in writing by the Postal
Service.
(c) The provider must ensure that all images to appear in the ad
plate area of an indicia are not obscene, deceptive, or defamatory of
any person, entity, or group; do not advocate unlawful action; do not
emulate any form of valid postage, government, or other official
indicia, or payment of postage; and do not harm the public image,
reputation, or good will of the Postal Service. Providers will also
have full responsibility for ensuring that a customer acknowledges,
agrees and warrants in writing that it bears full responsibility and
liability for obtaining authorization to reproduce and otherwise use an
image as proposed, and that it, in fact, has the legal authority to
reproduce and otherwise use the image as proposed.
Sec. 501.8 Postage Evidencing System test and approval.
(a) To receive Postal Service approval, each Postage Evidencing
System must be submitted by the provider and evaluated by the Postal
Service in accordance with the Postage Evidencing Product Submission
Procedures published by PTM. The current version of the Product
Submission Procedures may be found on the Postal Service Web site at
https://www.usps.com/postagesolutions/programdoc.html or requests for
copies may be submitted via mail to 1735 N. Lynn Street, Room 5011,
Arlington, VA 22209-6370. These procedures apply to all proposed
Postage Evidencing Systems regardless of whether the provider is
currently authorized by the Postal Service to distribute Postage
Evidencing Systems. All testing required by the Postal Service will be
an expense of the provider.
(b) As provided in Sec. 501.11, the provider has a duty to report
security weaknesses to the Postal Service to ensure that each approved
Postage Evidencing System protects the Postal Service against loss of
revenue at all times. A grant of approval of a system does not
constitute an irrevocable determination that the Postal Service is
satisfied with the revenue-protection capabilities of the system. After
approval is granted to manufacture and/or distribute a Postage
Evidencing System, no change affecting its basic features or safeguards
may be made except as authorized or ordered by the Postal Service in
writing.
Sec. 501.9 Demonstration or test Postage Evidencing Systems.
(a) The following procedures must be followed to implement controls
over demonstration or test Postage Evidencing Systems:
(1) A demonstration or test Postage Evidencing System may print
only specimen or test indicia. A specimen or test indicia must clearly
indicate that the indicia does not represent valid postage.
(2) A demonstration or test Postage Evidencing System must be
recorded as such on internal provider inventory records and must be
tracked by model number, serial number, and physical location.
(3) A demonstration or test Postage Evidencing System must remain
under the provider's direct control. A demonstration or test Postage
Evidencing System may not be left in the possession of a customer under
any circumstance.
(b) All indicia printed by a demonstration or test Postage
Evidencing System must be collected and destroyed daily.
Sec. 501.10 Postage Evidencing System modifications.
(a) An authorized provider must receive prior written approval from
the manager, PTM, of any and all changes made to a previously approved
Postage Evidencing System. The notification must include a summary of
all changes made and the provider's assessment as to the impact of
those changes on the security of the Postage Evidencing System and
postage funds. Upon receipt of the notification, PTM will review the
summary of changes and make a decision regarding the need for the
following:
(1) Additional documentation.
(2) Level of test and evaluation required.
(3) Necessity for evaluation by a laboratory accredited by the
National Institutes of Standards and Technology (NIST) under the
National Voluntary Laboratory Accreditation Program (NVLAP).
(b) Upon receipt and review of additional documentation and/or test
results, PTM will issue a written acknowledgement and/or approval of
the change to the provider.
Sec. 501.11 Reporting Postage Evidencing System security weaknesses.
(a) For purposes of this section provider refers to the Postage
Evidencing System provider authorized under Sec. 501.2 and its foreign
affiliates, if any, subsidiaries, assigns, dealers, independent
dealers, employees, and parent corporations.
(b) Each authorized provider of a Postage Evidencing System must
notify the Postal Service immediately upon discovery of the following:
(1) All findings or results of any testing known to the provider
concerning the security or revenue protection features, capabilities,
or failings of any Postage Evidencing System sold, leased, or
distributed by it that has been approved for sale, lease, or
distribution by the Postal Service or any foreign postal
administration; or has been submitted for approval by the provider to
the Postal Service or other foreign postal administration(s).
(2) All potential security weaknesses or methods of tampering with
the Postage Evidencing Systems that the provider distributes of which
it knows or should know and the Postage Evidencing System model subject
to each such method. Potential security weaknesses include but are not
limited to suspected equipment defects, suspected abuse by a customer
or
[[Page 36503]]
provider employee, suspected security breaches of the Computerized
Meter Resetting System (CMRS) or databases housing confidential
customer data relating to the use of Postage Evidencing Systems,
occurrences outside normal performance, or any repeatable deviation
from normal Postage Evidencing System performance.
(c) Within a time limit corresponding to the potential revenue risk
to postal revenue as determined by the Postal Service, the provider
must submit a written report to the Postal Service. The report must
include the circumstances, proposed investigative procedure, and the
anticipated completion date of the investigation. The provider must
also provide periodic status reports to the Postal Service during
subsequent investigation and, on completion, must submit a summary of
the investigative findings.
(d) The provider must establish and adhere to timely and efficient
procedures for internal reporting of potential security weaknesses and
shall provide a copy of such internal reporting procedures and
instructions to the Postal Service for review.
(e) Failure to comply with this section may result in suspension of
approval under Sec. 501.6 or the imposition of sanctions under Sec.
501.12.
Sec. 501.12 Administrative sanctions.
(a) An authorized Postage Evidencing System provider may be
responsible to the Postal Service for revenue losses caused by failure
to comply with Sec. 501.11.
(b) The Postal Service shall determine all costs and revenue losses
measured from the date that the provider knew, or should have known, of
a potential security weakness, including, but not limited to,
administrative and investigative costs and documented revenue losses
that result from any Postage Evidencing System for which the provider
failed to comply with any provision in Sec. 501.11. The Postal Service
issues a written demand for reimbursement of any and all such costs and
losses (net of any amount collected by the Postal Service from the
customers) with interest. The demand shall set forth the facts and
reasons on which it is based.
(c) The provider may present the Postal Service with a written
defense to the proposed action within thirty (30) calendar days of
receipt. The defense must include all supporting evidence and state
with specificity the reasons for which the sanction should not be
imposed.
(d) After receipt and consideration of the defense, the Postal
Service shall advise the provider of the decision and the facts and
reasons for it; the decision shall be effective on receipt unless it
provides otherwise. The decision shall also advise the provider that it
may, within thirty (30) calendar days of receiving written notice,
appeal that determination to the Chief Marketing Officer of the Postal
Service who shall issue a written decision upon the appeal which will
constitute the final Postal Service decision.
(e) The imposition of an administrative sanction under this section
does not preclude any other criminal or civil statutory, common law, or
administrative remedy that is available by law to the Postal Service,
the United States, or any other person or entity.
(f) An authorized Postage Evidencing System provider, who without
just cause fails to follow any Postal Service approved procedures,
perform adequately any of the Postal Service approved controls or fails
to obtain approval of a required process in Sec. 501.14 in a timely
fashion, is subject to an administrative sanction under this provision
Sec. 501.12.
Sec. 501.13 False representations of Postal Service actions.
Providers, their agents, and employees must not intentionally
misrepresent to customers of the Postal Service decisions, actions, or
proposed actions of the Postal Service respecting its regulation of
Postage Evidencing Systems. The Postal Service reserves the right to
suspend and/or revoke the authorization to manufacture or distribute
Postage Evidencing Systems throughout the United States or any part
thereof pursuant to Sec. 501.6 when it determines that the provider,
its agents or employees failed to comply with this section.
Sec. 501.14 Postage Evidencing System inventory control processes.
(a) Each authorized provider of Postage Evidencing Systems must
permanently hold title to all Postage Evidencing Systems which it
manufactures or distributes except those purchased by the Postal
Service or distributed outside the United States.
(b) An authorized provider must maintain sufficient facilities for
and records of the distribution, control, storage, maintenance, repair,
replacement, and destruction or disposal of all Postage Evidencing
Systems and their components to enable accurate accounting and location
thereof throughout the entire life cycle of each Postage Evidencing
System. A complete record shall entail a list by serial number of all
Postage Evidencing Systems manufactured or distributed showing all
movements of each system from the time that it is produced until it is
scrapped, and the reading of the ascending register each time the
system is checked into or out of service. These records must be
available for inspection by Postal Service officials at any time during
business hours.
(c) To ensure adequate control over Postage Evidencing Systems,
plans for the following processes must be submitted for prior approval,
in writing, to PTM:
(1) Check in to service procedures for all Postage Evidencing
Systems--the procedures are to address the process to be used for new
Postage Evidencing Systems as well as those previously leased to
another customer.
(2) Transportation and storage of meters--procedures that provide
reasonable precautions to prevent use by unauthorized individuals.
Providers must ship all meters by Postal Service Registered Mail unless
given written permission by the Postal Service to use another carrier.
The provider must demonstrate that the alternative delivery carrier
employs security procedures equivalent to those for Registered Mail.
(3) Postage meter examination/inspection procedures and schedule--
resetting transactions must not be completed by the provider if a meter
is not examined by the due date. If necessary, the Postal Service shall
notify the customer that the meter is to be removed from service and
the authorization to use a meter revoked, following the procedures for
revocation specified by regulation. The Postal Service shall notify the
provider to remove the meter from the customer's location.
(4) Check out of service procedures for a non-faulty Postage
Evidencing System when the system is to be removed from service for any
reason.
(5) Postage meter repair process--any physical or electronic access
to the internal components of a postage meter, as well as any access to
software or security parameters, must be conducted within an approved
facility under the provider's direct control and active supervision. To
prevent unauthorized use, the provider or any third party acting on its
behalf must keep secure any equipment or other component that can be
used to open or access the internal, electronic, or secure components
of a meter.
(6) Faulty meter handling procedures, including those that are
inoperable, mis-registering, have unreadable registers, inaccurately
reflect their current status, show any evidence of possible
[[Page 36504]]
tampering or abuse, and those for which there is any indication that
the meter has some mechanical or electrical malfunction of any critical
security component, such as any component the improper operation of
which could adversely affect Postal Service revenues, or of any memory
component, or that affects the accuracy of the registers or the
accuracy of the value printed.
(7) Lost or stolen meter procedures--the provider must promptly
report to the Postal Service the loss or theft of any meter or the
recovery of any lost or stolen meter. Such notification to the Postal
Service will be made by completing and filing a standardized lost and
stolen meter incident report within ten (10) calendar days of the
provider's determination of a meter loss, theft, or recovery.
(8) Postage meter destruction, when required--the postage meter
must be rendered completely inoperable by the destruction process and
associated postage-printing dies and components must be destroyed.
Manufacturers/distributors of meters must submit the proposed
destruction method; a schedule listing the postage meters to be
destroyed, by serial number and model; and the proposed time and place
of destruction to PTM for approval prior to any meter destruction.
Providers must record and retain the serial numbers of the meters to be
destroyed, and provide a list of such serial numbers in electronic form
in accordance with Postal Service requirements for meter accounting and
tracking systems. Providers must give sufficient advance notice of the
destruction to allow PTM to schedule observation by its designated
representative who shall verify that the destruction is performed in
accordance with a Postal Service-approved method or process. These
requirements for meter destruction apply to all postage meters, Postage
Evidencing Systems, and postal security devices included as a component
of a Postage Evidencing System.
(d) If the provider uses a third party to perform functions that
may affect Postage Evidencing System security, including, but not
limited to repair, maintenance, and disposal of Postage Evidencing
Systems, PTM must be advised in advance of all aspects of the
relationship, as they relate to the custody and control of Postage
Evidencing Systems, and must specifically authorize in writing the
proposed arrangement between the parties.
(1) Postal Service authorization of a third party relationship to
perform specific functions applies only to the functions stated in the
written authorization but may be amended to embrace additional
functions.
(2) No third-party relationship shall compromise the security of
the Postage Evidencing System, or its components, including, but not
limited to, the hardware, software, communications, and security
components, or of any security-related system with which it interfaces,
including, but not limited to, the resetting system, reporting systems,
and Postal Service support systems. The functions of the third party
with respect to a Postage Evidencing System, its components, and the
systems with which it interfaces are subject to the same scrutiny as
the equivalent functions of the provider.
(3) Any authorized third party must keep adequate facilities for
and records of Postage Evidencing Systems and their components in
accordance with paragraph (b) of this section. All such facilities and
records are subject to inspection by Postal Service representatives,
insofar as they are used to distribute, control, store, maintain,
repair, replace, destroy, or dispose of Postage Evidencing Systems.
(4) The provider must ensure that any party acting in its behalf in
any of the functions described in paragraph (b) of this section
maintains adequate facilities, records, and procedures for the security
of the Postage Evidencing Systems. Deficiencies in the operations of a
third party relating to the custody and control of Postage Evidencing
Systems, unless corrected in a timely manner, can place at risk a
provider's approval to manufacture and/or distribute Postage Evidencing
Systems.
(5) The Postal Service reserves the right to review all aspects of
any third party relationship if it appears that the relationship poses
a threat to Postage Evidencing System security and may require the
provider to take appropriate corrective action.
Sec. 501.15 Computerized Meter Resetting System.
(a) Description. The Computerized Meter Resetting System (CMRS)
permits customers to reset their postage meters at their places of
business. Authorized providers, who operate CMRS services, are known as
resetting companies (RC).
(b) A customer is required to have funds available on deposit with
the Postal Service before resetting a Postage Evidencing System or the
provider may opt to provide a funds advance in accordance with
paragraph (c) of this section.
(c) If the RC chooses to offer advancement of funds to customers,
the RC is required to maintain a deposit with the Postal Service equal
to at least one (1) day's average funds advanced. The total amount of
funds advanced to customers on any given day shall not exceed the
amount the provider has on deposit with the Postal Service. The Postal
Service shall not be liable for any payment made by the RC on behalf of
a customer that is not reimbursed by the customer, since the RC is
solely responsible for the collection of advances made by the RC.
(d) The CMRS customer is permitted to make deposits in one of three
ways: Check, electronic funds transfer (or wire transfer), or automated
clearinghouse (ACH) transfer. These deposits must be remitted to the
Postal Service's designated bank account.
(e) The RC must require each CMRS customer that requests a meter
resetting to provide the meter serial number, the CMRS account number
and the meter's ascending and descending register readings. The RC must
verify that there are sufficient funds in the customer's CMRS account
to cover the postage setting requested before proceeding with the
setting transaction (unless the RC opts to provide the customer a funds
advance).
(f) The Postal Service requires that the RC publicize to all CMRS
customers the following payment options (listed in order of
preference):
(1) Automated clearinghouse (ACH) debits/credits.
(2) Electronic funds transfers (wire transfers).
(3) Checks.
(g) Returned checks and ACH debits are the responsibility of the
Postal Service. The RC must lock the customer account immediately so
that the customer is unable to reset the meter until the Postal Service
receives payment in full for the check returned.
(h) Refunds. The Postal Service issues a refund to a customer for
any unused postage in a Postage Evidencing System.
(i) Security and Revenue Protection. To receive Postal Service
approval to continue to operate systems in the CMRS environment, the RC
must submit to a periodic audit of its system, to be conducted by an
independent systems auditor, the frequency and scope of which shall be
determined by PTM. All such audits will be an expense of the provider.
(j) Inspection of records and facilities. The RC must make its
facilities that handle the operation of the computerized resetting
system and all records about the operation of the system available for
inspection by representatives of the Postal Service at all reasonable
times.
[[Page 36505]]
(k) The RC is required to incorporate the following language into
its meter rental agreements:
Acknowledgment of Deposit Requirement--Meters
By signing this meter rental agreement, you the customer
represent that you have read the Acknowledgment of Deposit
Requirement--Meters and are familiar with its terms. You agree that,
upon execution of this agreement with the RC, you will also be bound
by all terms and conditions of the Acknowledgment of Deposit
Requirement--Meters, as it may be amended from time to time.
Sec. 501.16 PC Postage payment methodology.
(a) The PC Postage customer is permitted to make payments for
postage in one of two ways: Automated clearinghouse (ACH) transfer or
credit card.
(b) The provider must make payments on behalf of the customer to
the Postal Service in accordance with contractual and/or regulatory
responsibilities.
(c) The Postal Service requires that the provider publicize to all
PC Postage customers the following payment options (listed in order of
preference):
(1) Automated clearinghouse (ACH) debits/credits.
(2) Credit cards.
(d) Returned ACH debits and credit card returns are the
responsibility of the Postal Service. The RC must lock the customer
account immediately so that the customer is unable to reset the account
until the Postal Service receives payment in full.
(e) Refunds. The provider issues a refund to a customer for any
unused postage in a Postage Evidencing System. After verification by
the Postal Service, the provider will be reimbursed by the Postal
Service for the individual refunds provided to customers by the
provider.
(f) Security and revenue protection. To receive Postal Service
approval to continue to operate PC Postage systems, the provider must
submit to a periodic audit of its system, to be conducted by an
independent systems auditor, the frequency and scope of which shall be
determined by PTM. All such audits will be an expense of the provider.
(g) Inspection of records and facilities. The provider must make
its facilities, which handle the operation of the PC Postage system and
all records about the operation of the system, available for inspection
by representatives of the Postal Service at all reasonable times.
(h) To the extent that the customer maintains funds on deposit for
the payment of postage, the provider is required to incorporate the
following language into its agreements with PC Postage customers:
Acknowledgment of Deposit Requirement--PC Postage
By signing this agreement with the provider, you represent that
you have read the Acknowledgment of Deposit Requirement--PC Postage
and are familiar with its terms. You agree that, upon execution of
this agreement with the provider, you will also be bound by all
terms and conditions of the Acknowledgment of Deposit Requirement--
PC Postage, as it may be amended from time to time.
Sec. 501.17 Decertified Postage Evidencing Systems.
(a) A Decertified Postage Evidencing System is a device for which
the provider's authority to distribute has been withdrawn by the Postal
Service as a result of any retirement plan for a given class of meters
published by the Postal Service in the Federal Register; a suspension
or revocation under Sec. 501.6; or a voluntary withdrawal undertaken
by the provider.
(b) A Decertified Postage Evidencing System must be withdrawn from
service by the date agreed to by the Postal Service and provider.
(c) To the extent postage meters are involved, the provider must
utilize the approved procedures for lost and stolen meters under Sec.
501.14 (c)(7) to locate the meter and remove it from service by the
agreed upon date.
(d) Decertified Postage Evidencing Systems that are not submitted
to the Postal Service for refund within ninety (90) days of the agreed
upon withdrawal from service date will not be eligible for refund of
unused postage.
(e) Postage indicia printed by Decertified Postage Evidencing
Systems are no longer considered valid postage six (6) months from the
agreed upon withdrawal from service date.
Sec. 501.18 Customer information and authorization.
(a) Authorized providers must electronically transmit the necessary
customer information to the designated Postal Service central data
processing facility, in Postal Service-specified format, in order for
the Postal Service to authorize a customer to use a Postage Evidencing
System. Postal Service receipt and acceptance of the customer
information provides the customer with the authorization to possess or
use a Postage Evidencing System in accordance with Domestic Mail Manual
604 Postage Payment Methods, 4.0 Postage Meters and PC Postage[supreg]
Products (Postage Evidencing Systems).
(b) The Postal Service may refuse to issue a customer authorization
to use a Postage Evidencing System for the following reasons:
(1) The customer submitted false or fictitious information.
(2) Within five years preceding submission of the information, the
customer violated any standard for the care or use of the Postage
Evidencing System that resulted in revocation of that customer's
authorization.
(3) Or there is sufficient reason to believe that the Postage
Evidencing System is to be used in violation of the applicable
standards.
(c) The Postal Service will notify the provider of the revocation
of a customer's authorization to use a Postage Evidencing System.
Within ten (10) days of receipt of the notice of revocation, the
provider must cancel any lease or other agreement and remove the
Postage Evidencing System from service. A customer's authorization to
use a Postage Evidencing system is subject to revocation for any of the
following reasons:
(1) A Postage Evidencing System is used for any illegal scheme or
enterprise.
(2) The customer's Postage Evidencing System is not used for twelve
(12) consecutive months.
(3) Sufficient control of a Postage Evidencing System is not
exercised or the standards for its care or use are not followed.
(4) The Postage Evidencing System is kept or used outside the
customs territory of the United States or those U.S. territories and
possessions where the Postal Service operates.
(5) The customer is in possession of a Decertified Postage
Evidencing System.
(d) The provider must electronically transmit any updates to the
necessary customer information to the designated Postal Service central
data processing facility, in Postal Service-specified format.
(e) No one other than an authorized provider may possess a Postage
Evidencing System without a valid rental or other agreement with the
provider. Other parties in possession of a Postage Evidencing System
must immediately surrender it to the provider or the Postal Service.
(f) The Postal Service may use customer information consistent with
the Privacy Act and the Postal Service's privacy policies posted on
https://www.usps.com. Examples include the following:
(1) Communication with customers who may no longer be visiting a
traditional Postal Service retail outlet or communication with
customers through any new retail channels.
(2) Issuance (including re-authorization, renewal, transfer,
revocation or denial, as applicable) of authorization to use a Postage
[[Page 36506]]
Evidencing System to a postal patron that uses a Postage Evidencing
System, and communications with respect to the status of such
authorization.
(3) Disclosure to a meter manufacturer of the identity of any meter
required to be removed from service by that meter manufacturer, and any
related customer data, as the result of revocation of an authorization
to use a Postage Evidencing System, questioned accurate registration of
that meter, or de-certification by the Postal Service of any particular
class or model of postage meter.
(4) Tracking the movement of meters between a meter manufacturer
and its customers and communications to a meter manufacturer (but not
to any third party other than the customer) concerning such movement.
The term, meter manufacturer, includes a meter manufacturer's dealers
and agents.
(5) To transmit general information to all Postage Evidencing
System customers concerning rate and rate category changes implemented
or proposed for implementation by the Postal Service.
(6) To advertise Postal Service services relating to the
acceptance, processing and delivery of, or postage payment for, metered
mail.
(7) To allow the Postal Service to communicate with Postal Service
customers on products, services and other information otherwise
available to Postal Service customers through traditional retail
outlets.
(8) Any internal use by Postal Service personnel, including
identification and monitoring activities relating to Postage Evidencing
Systems, provided that such use does not result in the disclosure of
applicant information to any third party or will not enable any third
party to use applicant information for its own purposes; except that
the applicant information may be disclosed to other governmental
agencies for law enforcement purposes as provided by law.
(9) Identification of authorized Postage Evidencing System
providers or announcement of the de-authorization of an authorized
provider, or provision of currently available public information, where
an authorized provider is identified.
(10) To promote and encourage the use of Postage Evidencing Systems
as a form of postage payment, provided that the same information is
provided to all Postage Evidencing System customers and no particular
Postage Evidencing System provider will be recommended by the Postal
Service.
(11) To contact customers in cases of revenue fraud or revenue
security.
(12) Disclosure to a Postage Evidencing System provider of
applicant information pertaining to that provider's customers that the
Postal Service views as necessary to enable the Postal Service to carry
out its duties and purposes.
(13) To transmit to a Postage Evidencing System provider all
applicant and system information pertaining to that provider's
customers and systems that may be necessary to permit such provider to
synchronize its computer databases with information contained in the
computer files of the Postal Service.
(14) Subject to the conditions stated herein, to communicate in
oral or written form with any or all applicants any information that
the Postal Service views as necessary to enable the Postal Service to
carry out its duties and purposes under part 501.
Sec. 501.19 Intellectual property.
Providers submitting Postage Evidencing Systems to the Postal
Service for approval are responsible for obtaining all intellectual
property licenses that may be required to distribute their product in
commerce and to allow the Postal Service to process mail bearing the
indicia produced by the Postage Evidencing System. To the extent
approval is granted and the Postage Evidencing System is capable of
being used in commerce, the provider shall indemnify the Postal Service
for use of such intellectual property in both the use of the Postage
Evidencing System and the processing of mail bearing indicia produced
by the Postage Evidencing System.
Neva R. Watson,
Attorney, Legislative.
[FR Doc. 06-5675 Filed 6-26-06; 8:45 am]
BILLING CODE 7710-12-P