Administrative Practice and Procedure, Postal Service, 29284-29287 [E7-10095]
Download as PDF
<![CDATA[
29284
Federal Register / Vol. 72, No. 101 / Friday, May 25, 2007 / Proposed Rules
Compliance
POSTAL REGULATORY COMMISSION
(e) You are responsible for having the
actions required by this AD performed within
the compliance times specified, unless the
actions have already been done.
[Docket No. RM2007–1; Order No. 15]
Compliance Times
Administrative Practice and Procedure,
Postal Service
(f) At the later of the times specified in
paragraphs (f)(1) and (f)(2) of this AD, do the
actions specified in paragraph (g) of this AD,
in accordance with the Accomplishment
Instructions of Boeing Alert Service Bulletin
767–28A0095 or 767–28A0096; both dated
September 15, 2005; as applicable.
(1) Within 96 months since the date of
issuance of the original standard
airworthiness certificate or the date of
issuance of the original export certificate of
airworthiness, or before the accumulation of
40,000 total flight hours, whichever comes
first.
(2) Within 24 months after the effective
date of this AD.
Replacement of Fuel Boost Pump FeedThrough Connector
(g) At the compliance time specified in
paragraph (f) of this AD: Replace the feedthrough connector of each fuel boost pump
as described in paragraph (g)(1) or (g)(2) of
this AD. Repeat this replacement thereafter at
intervals not to exceed 40,000 flight hours or
96 months, whichever comes first.
(1) Replace the fuel boost pump with a new
fuel boost pump.
(2) Replace the fuel boost pump with a
modified and re-identified fuel boost pump
having a new feed-through connector
installed.
Note 1: Boeing Alert Service Bulletins 767–
28A0095 and 767–28A0096 refer to Hamilton
Sundstrand Alert Service Bulletin 5006003–
28–A4, dated May 9, 2005, as a source of
service information for replacing the feedthrough connector and re-identifying the fuel
boost pump.
Parts Installation
(h) As of the effective date of this AD, no
person may install a fuel boost pump on any
airplane, unless that pump meets the
requirements of paragraph (g) of this AD.
cprice-sewell on PROD1PC71 with PROPOSALS
Alternative Methods of Compliance
(AMOCs)
(i)(1) The Manager, Seattle Aircraft
Certification Office, 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 May 17,
2007.
Ali Bahrami,
Manager, Transport Airplane Directorate,
Aircraft Certification Service.
[FR Doc. E7–10105 Filed 5–24–07; 8:45 am]
BILLING CODE 4910–13–P
VerDate Aug<31>2005
15:35 May 24, 2007
Jkt 211001
39 CFR Part 3001
Postal Regulatory Commission.
Advance notice of proposed
rulemaking.
AGENCY:
ACTION:
SUMMARY: The Commission has received
general comments on the development
of regulations implementing new
statutory provisions pertaining to
market dominant and competitive postal
products. It now seeks more specific
comments on the same topic. The
Commission anticipates using these
comments as guidance for drafting
proposed regulations.
DATES: Initial comments due June 18,
2007; reply comments due July 3, 2007.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://www.
prc.gov.
FOR FURTHER INFORMATION CONTACT:
Stephen L. Sharfman, General Counsel,
202–789–6820 and
stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION:
Regulatory History
72 FR 5230 (February 5, 2007).
I. Introduction
Thirty sets of initial comments were
filed in response to Order No. 2, which
afforded interested persons an
opportunity to comment on how the
Commission can best fulfill its
responsibilities under the Postal
Accountability and Enhancement Act
(PAEA), Public Law 109–435, 120 Stat.
3198 (December 20, 2006), regarding
establishing rate regulation for market
dominant products and competitive
products.1 Twenty-one sets of reply
comments were also filed. The
Commission appreciates those
thoughtful and comprehensive
comments and has found them very
useful. For the most part, the comments
are general in nature, taking a more
global view of the type of regulations to
be implemented, e.g., endorsing a lighthanded approach, or advocating that
competitive products make the
maximum possible contribution to
institutional costs,2 rather than
1 PRC Order No. 2, Advance Notice of Proposed
Rulemaking on Regulations Establishing a System
of Ratemaking, Docket No. RM2007–1, January 30,
2007.
2 See, e.g., Initial Comments of the United States
Postal Service, April 6, 2007, at 4–5; Comments of
PO 00000
Frm 00007
Fmt 4702
Sfmt 4702
suggesting specific proposals to
implement the PAEA.3
In considering the regulations to be
issued pursuant to sections 3622 and
3633 of the Postal Reorganization Act,
as amended by the PAEA, the
Commission concludes that the record
would be enhanced by affording
interested persons an opportunity to
comment more specifically on potential
ways to implement the statutory
language prior to issuing proposed
regulations. Therefore, the Commission
is issuing this second advance notice of
proposed rulemaking inviting interested
persons to comment on specific issues
central to implementing the necessary
regulations. Interested persons are
invited to comment on all (or any) of the
following issues. Parties are encouraged
to explain the basis for their position.
The explanation need not be lengthy but
should include whatever support the
commenter believes to be relevant.
Furthermore, although section III,
below, addresses competitive products,
persons primarily interested in market
dominant products may wish to
comment on common issues, e.g.,
section III, item 9, concerning the term
‘‘product.’’ Comments are due June 18,
2007. Reply comments are due July 3,
2007.
Following this round of comments,
the Commission intends to issue a
formal notice of proposed rulemaking
setting forth specific rules applicable to
rate changes for market dominant and
competitive products. Interested
persons will have an opportunity to
comment on those proposed rules. It is
the Commission’s current expectation
that the final rules on these topics will
be issued before the end of October,
2007.
II. Regulations Concerning Market
Dominant Products
1. In Appendix C of its reply
comments, the Postal Service provides a
series of examples to illustrate its
proposal for calculations that would
Alliance of Nonprofit Mailers, National Association
of Presort Mailers and National Postal Policy
Council on Advance Notice of Proposed
Rulemaking, April 6, 2007, at 4; Initial Comments
of Time Warner Inc. in Response to Commission
Order No. 2, April 6, 2007, at 9; Comments of
United Parcel Service in Response to Advance
Notice of Proposed Rulemaking on Regulations
Establishing a System of Ratemaking, April 6, 2007,
at 5.
3 Some commenters did suggest that provisions of
the PAEA be defined in certain ways. See, e.g.,
Reply Comments of the United States Postal
Service, May 7, 2007, at 3–10, and Appendix C;
Initial Comments of Pitney Bowes Inc. in Response
to Advance Notice of Proposed Rulemaking on
Regulations Establishing a System of Ratemaking,
April 6, 2007, at 3–4, 17–20, 35–36; and Comments
of the Parcel Shippers Association, April 6, 2007,
at 24–26.
E:\FR\FM\25MYP1.SGM
25MYP1
Federal Register / Vol. 72, No. 101 / Friday, May 25, 2007 / Proposed Rules
29285
reached by dividing the most recently
available monthly CPI by the monthly
CPI for the same month of the previous
year and then subtracting one from the
quotient.
This point-to-point approach may be
contrasted with an alternative that
would compare aggregated monthly CPI
figures instead of those of a single
month. For example, the most recently
available monthly CPI could be
averaged with the previous 11 monthly
CPI values. This 12-month average
could then be compared to the average
for the previous 12 months in the same
way that the single-month figures are in
the Postal Service’s proposal. Figures 1
and 2 show the cap as it would be
calculated under both methods for each
month in 2005 and 2006, respectively.
As the graphs show, the results of the
point-to-point method exhibit a greater
variation based on the month that is
selected. The parties are requested to
comment on the merits of each method
and may offer additional alternatives.
Please discuss how each method
conforms to the language in section
3622(d), as well as how each method
comports with the objectives in section
3622(b) and the factors in section
3622(c).
2. Appendix C of the Postal Service
reply comments provides a series of
examples to illustrate its proposal for
VerDate Aug<31>2005
15:35 May 24, 2007
Jkt 211001
PO 00000
Frm 00008
Fmt 4702
Sfmt 4702
E:\FR\FM\25MYP1.SGM
25MYP1
EP25MY07.001</GPH> EP25MY07.002</GPH>
cprice-sewell on PROD1PC71 with PROPOSALS
ensure compliance with the price cap
defined in sections 3622(d)(1)(A) and
(2)(A). In part C of the appendix, the
Postal Service describes its proposed
method of calculating the CPI cap
limitation. The cap would be equal to
the difference between the most recently
available monthly CPI and the monthly
CPI for the same month of the previous
year, divided by the monthly CPI for the
previous year. The same result is
cprice-sewell on PROD1PC71 with PROPOSALS
29286
Federal Register / Vol. 72, No. 101 / Friday, May 25, 2007 / Proposed Rules
calculations that would ensure
compliance with the price cap defined
in sections 3622(d)(1)(A) and (2)(A).
Part B of the appendix describes the
Postal Service’s proposed method of
calculating the annual change in rates to
which the CPI cap shall be applied.
The discussion begins by proposing
principles (‘‘Standards 1 and 2’’) that
the measure of the change in rates
should satisfy. It concludes that any
fixed volume weighting system will
satisfy those principles. After explaining
the practical impediment to the use of
the ideal weights, it describes the
weaknesses of two potential methods of
measuring the base rates.
The Postal Service proposes to use the
most recent 12 months of available data
to establish the volume weights and to
recalculate average revenue per piece by
applying those weights to the current
rates. The result would be considered
the average base rate. The average new
rate would then be calculated by
applying the same weights to the new
set of rates. The percentage difference
between the average base (current) rate
and the average new rate would be
compared to the percentage change in
CPI.
Parties are requested to comment on
the method of calculating the annual
change in rates under section 3622(d).
Please discuss the strengths and
weaknesses of the methods described by
the Postal Service in Appendix C of its
reply comments (and alternative
methods, if desired) and how each
method comports with the objectives in
section 3622(b) and the factors in
section 3622(c). Please include a
discussion of how to treat an altered rate
design, for example, one for which
billing determinants do not exist, such
as the new rates to be applied to
Periodicals.
3. Section 3622(e) directs the
Commission to ‘‘ensure that workshare
discounts do not exceed the cost that
the Postal Service avoids as a result of
the workshare activity,’’ except in
certain specified situations. In the
context of a Notice of Rate Adjustment
for a class of mail—
a. What information and/or data are
needed to allow the Commission to
evaluate whether new workshare
discounts are consistent with this
standard?
b. What information and/or data are
needed to allow the Commission to
evaluate whether unchanged workshare
discounts remain consistent with this
standard?
c. What information and/or data are
needed to allow the Commission to
evaluate whether changed workshare
VerDate Aug<31>2005
15:35 May 24, 2007
Jkt 211001
discounts remain consistent with this
standard?
III. Regulations Concerning
Competitive Products
4. Subchapter II of title 39, 39 U.S.C.
3631–3634, sets forth the provisions
applicable to competitive products,
which initially are to consist of priority
mail, expedited mail, bulk parcel post,
bulk international mail, and mailgrams.
§ 3631(a).4 A procedure must be
established to allow for amending this
list of competitive products.
Regarding section 3631—
a. What current mail matter is
‘‘priority mail’’?
b. What current mail matter is
‘‘expedited mail’’?
c. What current mail matter is ‘‘bulk
parcel post’’?
d. What current mail matter is ‘‘bulk
international mail’’?
e. What, if any, current mail matter is
‘‘mailgrams’’?
f. To what does ‘‘mail classification
schedule,’’ as used in section 3631(c),
refer?
5. Section 3632 authorizes the
Governors to establish rates and classes
of mail for competitive products in
accordance with subchapter II of
chapter 36 and regulations promulgated
by the Commission under section 3633.
The rates and classes shall be
established in writing, accompanied by
a statement of explanation and
justification and the effective date of
each rate or class. § 3632(b)(1).
Regarding section 3632—
a. What information is needed to
support new rates of general
applicability?
b. What information is needed to
support new rates not of general
applicability?
c. Is the information needed to
support a rate decrease different from
that needed to support a rate increase?
Please elaborate.
d. What information is needed to
support new classes of general
applicability?
e. What information is needed to
support new classes not of general
applicability?
f. What criteria should be used to
determine whether a rate or class is of
general applicability or is not of general
applicability in the Nation as a whole?
g. How should ‘‘any substantial region
of the Nation’’ be defined?
6. Pursuant to section 3633(a), the
Commission is required to promulgate
4 Pursuant to section 3642, the Commission may
change the list of competitive products under
section 3631 and market dominant products under
section 3621 by adding new products to or
removing products from the lists, or transferring
products between the lists.
PO 00000
Frm 00009
Fmt 4702
Sfmt 4702
regulations applicable to rates for
competitive products to:
‘‘(1) prohibit the subsidization of
competitive products by marketdominant products;
(2) ensure that each competitive
product covers its costs attributable; and
(3) ensure that all competitive
products collectively cover what the
Commission determines to be an
appropriate share of the institutional
costs of the Postal Service.’’
Regarding section 3633—
a. What data should be filed
periodically with the Commission to
enable it to assess the Postal Service’s
compliance with subsection:
i. (a)(1),
ii. (a)(2), and
iii. (a)(3)?
b. How frequently, e.g., quarterly,
annually, should such data be filed with
the Commission?
c. Are existing data systems adequate
to enable the Commission to assess the
Postal Service’s compliance with
section 3633(a)? If not, what
modifications would be necessary?
d. What is the appropriate standard
for determining whether competitive
products are being subsidized by market
dominant products?
e. What standard should be applied to
determine the appropriate share of
institutional costs to be recovered
collectively from competitive products?
f. Over what period of time should the
standard identified in (e) be deemed
valid?
g. Should the standard identified in
(e) raise a rebuttable presumption of
validity?
h. If return on investment (or assets)
is used, what capital structure (assumed
or otherwise) should be used for the
Postal Service?
7. Section 3634 provides for an
annual, assumed Federal income tax on
the competitive products income. The
amount of the assumed tax is to be
transferred from the Competitive
Products Fund to the Postal Service
Fund.5
Regarding section 3634—
a. Is the assumed Federal income tax
amount appropriately classified as an
attributable cost?
b. On what basis should the assumed
Federal income tax amount be
reasonably assigned among competitive
products?
5 Pursuant to section 2011(h) the Secretary of the
Treasury is charged with developing
recommendations regarding, inter alia, rules for
determining the assumed Federal income tax on
competitive products income for any year.
Following receipt of those recommendations, which
are due not earlier than June 20, 2007 or later than
December 19, 2007, the Commission will provide
interested persons an opportunity to comment on
the recommendations.
E:\FR\FM\25MYP1.SGM
25MYP1
Federal Register / Vol. 72, No. 101 / Friday, May 25, 2007 / Proposed Rules
8. Section 3633(a)(2) requires each
competitive product to cover its ‘‘costs
attributable,’’ which are defined as ‘‘the
direct and indirect postal costs
attributable to such product through
reliably identified causal relationships.’’
§ 3631(b). The Commission has
historically used attributable costs to
develop recommended rates under the
Postal Reorganization Act. Enactment of
the PAEA raises issues concerning the
need, if any, to modify the
Commission’s historic approach as well
as the classification of costs arising
under the PAEA.
Regarding the term ‘‘costs
attributable’’—
a. Identify any costs currently
classified as attributable that, in light of
PAEA, should be classified as
institutional. The rationale for the
proposed change should be explained.
b. Identify any costs currently
classified as institutional that, in light of
PAEA, should be classified as
attributable. The rationale for the
proposed change should be explained.
c. How should Retiree Health Benefit
costs be classified?
9. The PAEA establishes a rate floor
for each competitive product, i.e., each
competitive product must cover its
attributable costs. § 3633(a)(2). Product
is defined as ‘‘a postal service with a
distinct cost or market characteristic for
which a rate or rates are, or may
reasonably be, applied[.]’’ § 102(6).
Regarding the term ‘‘product’’—
a. Is each International Customized
Agreement a competitive product?
b. Is each Negotiated Service
Agreement a product?
c. Is each special classification a
product?
d. Is each class not of general
applicability a product?
IV. Ordering Paragraphs
cprice-sewell on PROD1PC71 with PROPOSALS
It is ordered:
1. Interested persons may submit
comments on the questions contained
herein on or before June 18, 2007.
2. Reply comments are due on or
before July 3, 2007.
3. The Secretary shall arrange for
publication of this Advance Notice in
the Federal Register.
By the Commission.
Issued May 17, 2007.
Signed May 21, 2007.
Steven W. Williams,
Secretary.
[FR Doc. E7–10095 Filed 5–24–07; 8:45 am]
BILLING CODE 7710–FW–P
VerDate Aug<31>2005
15:35 May 24, 2007
Jkt 211001
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R04–OAR–2006–0130–200714(b);
FRL–8317–7]
Approval and Promulgation of
Implementation Plans: State of Florida;
Prevention of Significant Deterioration
Requirements for Power Plants
Subject to the Florida Power Plant
Siting Act
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
SUMMARY: On February 3, 2006, the State
of Florida, through a State
Implementation Plan (SIP) submittal
addressing New Source Review Reform
(NSR) requirements, requested that EPA
grant it full approval to implement the
State’s Clean Air Act (CAA or Act)
Prevention of Significant Deterioration
program for electric power plants
subject to the Florida Electrical Power
Plant Siting Act. EPA is proposing to
approve this specific request under
section 110 of the Act. EPA intends to
take action on all other portions of
Florida’s February 3, 2006, NSR Reform
SIP submittal in a future rulemaking. In
the Final Rules section of this Federal
Register, EPA is approving the State’s
request as a direct final rule without
prior proposal because the Agency
views this as a noncontroversial action
and anticipates no adverse comments. A
detailed rationale for the approval is set
forth in the direct final rule. If no
adverse comments are received in
response to this rule, no further activity
is contemplated. If EPA receives adverse
comments, the direct final rule will be
withdrawn and all public comments
received will be addressed in a
subsequent final rule based on this
proposed rule. EPA will not institute a
second comment period on this
document. Any parties interested in
commenting on this document should
do so at this time.
DATES: Written comments must be
received on or before June 25, 2007.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R04–
OAR–2006–0130, by one of the
following methods:
1. www.regulations.gov: Follow the
on-line instructions for submitting
comments.
2. E-mail: Fortin.Kelly@EPA.gov.
3. Fax: 404–562–9066.
4. Mail: ‘‘EPA–R04–OAR–2006–
0130’’, Air Permits Section, Air
Planning Branch, Air, Pesticides and
Toxics Management Division, U.S.
PO 00000
Frm 00010
Fmt 4702
Sfmt 4702
29287
Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303–8960.
5. Hand Delivery or Courier: Ms. Kelly
Fortin, Air Permits Section, Air
Planning Branch, Air, Pesticides and
Toxics Management Division, U.S.
Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303–8960. Such
deliveries are only accepted during the
Regional Office’s normal hours of
operation. The Regional Office’s official
hours of business are Monday through
Friday, 8:30 to 4:30, excluding federal
holidays.
Please see the direct final rule which
is located in the Rules section of this
Federal Register for detailed
instructions on how to submit
comments.
Ms.
Kelly Fortin, Air Permits Section, Air
Planning Branch, Air, Pesticides and
Toxics Management Division, U.S.
Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303–8960. The
telephone number is (404) 562–9117.
Ms. Fortin can also be reached via
electronic mail at fortin.kelly@epa.gov.
SUPPLEMENTARY INFORMATION: For
additional information see the direct
final rule which is published in the
Rules section of this Federal Register.
FOR FURTHER INFORMATION CONTACT:
Dated: May 16, 2007.
Russell L. Wright, Jr.,
Acting Regional Administrator, Region 4.
[FR Doc. E7–10063 Filed 5–24–07; 8:45 am]
BILLING CODE 6560–50–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 63
[EPA–HQ–OAR–2006–0859; FRL–8318–5]
RIN 2060–AN85
Risk and Technology Review, Phase II,
Group 2
Environmental Protection
Agency (EPA).
ACTION: Advanced Notice of Proposed
Rulemaking (ANPRM); extension of
public comment period.
AGENCY:
SUMMARY: EPA is announcing that the
comment period for the advanced notice
for proposed rulemaking for the Risk
and Technology Review, Phase II, Group
2 published on March 29, 2007, is being
extended until June 29, 2007, for all
source categories except Petroleum
Refineries.
E:\FR\FM\25MYP1.SGM
25MYP1
]]>Agencies
[Federal Register Volume 72, Number 101 (Friday, May 25, 2007)]
[Proposed Rules]
[Pages 29284-29287]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-10095]
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
[Docket No. RM2007-1; Order No. 15]
39 CFR Part 3001
Administrative Practice and Procedure, Postal Service
AGENCY: Postal Regulatory Commission.
ACTION: Advance notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Commission has received general comments on the
development of regulations implementing new statutory provisions
pertaining to market dominant and competitive postal products. It now
seeks more specific comments on the same topic. The Commission
anticipates using these comments as guidance for drafting proposed
regulations.
DATES: Initial comments due June 18, 2007; reply comments due July 3,
2007.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at https://www.prc.gov.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 and stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION:
Regulatory History
72 FR 5230 (February 5, 2007).
I. Introduction
Thirty sets of initial comments were filed in response to Order No.
2, which afforded interested persons an opportunity to comment on how
the Commission can best fulfill its responsibilities under the Postal
Accountability and Enhancement Act (PAEA), Public Law 109-435, 120
Stat. 3198 (December 20, 2006), regarding establishing rate regulation
for market dominant products and competitive products.\1\ Twenty-one
sets of reply comments were also filed. The Commission appreciates
those thoughtful and comprehensive comments and has found them very
useful. For the most part, the comments are general in nature, taking a
more global view of the type of regulations to be implemented, e.g.,
endorsing a light-handed approach, or advocating that competitive
products make the maximum possible contribution to institutional
costs,\2\ rather than suggesting specific proposals to implement the
PAEA.\3\
---------------------------------------------------------------------------
\1\ PRC Order No. 2, Advance Notice of Proposed Rulemaking on
Regulations Establishing a System of Ratemaking, Docket No. RM2007-
1, January 30, 2007.
\2\ See, e.g., Initial Comments of the United States Postal
Service, April 6, 2007, at 4-5; Comments of Alliance of Nonprofit
Mailers, National Association of Presort Mailers and National Postal
Policy Council on Advance Notice of Proposed Rulemaking, April 6,
2007, at 4; Initial Comments of Time Warner Inc. in Response to
Commission Order No. 2, April 6, 2007, at 9; Comments of United
Parcel Service in Response to Advance Notice of Proposed Rulemaking
on Regulations Establishing a System of Ratemaking, April 6, 2007,
at 5.
\3\ Some commenters did suggest that provisions of the PAEA be
defined in certain ways. See, e.g., Reply Comments of the United
States Postal Service, May 7, 2007, at 3-10, and Appendix C; Initial
Comments of Pitney Bowes Inc. in Response to Advance Notice of
Proposed Rulemaking on Regulations Establishing a System of
Ratemaking, April 6, 2007, at 3-4, 17-20, 35-36; and Comments of the
Parcel Shippers Association, April 6, 2007, at 24-26.
---------------------------------------------------------------------------
In considering the regulations to be issued pursuant to sections
3622 and 3633 of the Postal Reorganization Act, as amended by the PAEA,
the Commission concludes that the record would be enhanced by affording
interested persons an opportunity to comment more specifically on
potential ways to implement the statutory language prior to issuing
proposed regulations. Therefore, the Commission is issuing this second
advance notice of proposed rulemaking inviting interested persons to
comment on specific issues central to implementing the necessary
regulations. Interested persons are invited to comment on all (or any)
of the following issues. Parties are encouraged to explain the basis
for their position. The explanation need not be lengthy but should
include whatever support the commenter believes to be relevant.
Furthermore, although section III, below, addresses competitive
products, persons primarily interested in market dominant products may
wish to comment on common issues, e.g., section III, item 9, concerning
the term ``product.'' Comments are due June 18, 2007. Reply comments
are due July 3, 2007.
Following this round of comments, the Commission intends to issue a
formal notice of proposed rulemaking setting forth specific rules
applicable to rate changes for market dominant and competitive
products. Interested persons will have an opportunity to comment on
those proposed rules. It is the Commission's current expectation that
the final rules on these topics will be issued before the end of
October, 2007.
II. Regulations Concerning Market Dominant Products
1. In Appendix C of its reply comments, the Postal Service provides
a series of examples to illustrate its proposal for calculations that
would
[[Page 29285]]
ensure compliance with the price cap defined in sections 3622(d)(1)(A)
and (2)(A). In part C of the appendix, the Postal Service describes its
proposed method of calculating the CPI cap limitation. The cap would be
equal to the difference between the most recently available monthly CPI
and the monthly CPI for the same month of the previous year, divided by
the monthly CPI for the previous year. The same result is reached by
dividing the most recently available monthly CPI by the monthly CPI for
the same month of the previous year and then subtracting one from the
quotient.
This point-to-point approach may be contrasted with an alternative
that would compare aggregated monthly CPI figures instead of those of a
single month. For example, the most recently available monthly CPI
could be averaged with the previous 11 monthly CPI values. This 12-
month average could then be compared to the average for the previous 12
months in the same way that the single-month figures are in the Postal
Service's proposal. Figures 1 and 2 show the cap as it would be
calculated under both methods for each month in 2005 and 2006,
respectively.
[GRAPHIC] [TIFF OMITTED] TP25MY07.001
[GRAPHIC] [TIFF OMITTED] TP25MY07.002
As the graphs show, the results of the point-to-point method
exhibit a greater variation based on the month that is selected. The
parties are requested to comment on the merits of each method and may
offer additional alternatives. Please discuss how each method conforms
to the language in section 3622(d), as well as how each method comports
with the objectives in section 3622(b) and the factors in section
3622(c).
2. Appendix C of the Postal Service reply comments provides a
series of examples to illustrate its proposal for
[[Page 29286]]
calculations that would ensure compliance with the price cap defined in
sections 3622(d)(1)(A) and (2)(A). Part B of the appendix describes the
Postal Service's proposed method of calculating the annual change in
rates to which the CPI cap shall be applied.
The discussion begins by proposing principles (``Standards 1 and
2'') that the measure of the change in rates should satisfy. It
concludes that any fixed volume weighting system will satisfy those
principles. After explaining the practical impediment to the use of the
ideal weights, it describes the weaknesses of two potential methods of
measuring the base rates.
The Postal Service proposes to use the most recent 12 months of
available data to establish the volume weights and to recalculate
average revenue per piece by applying those weights to the current
rates. The result would be considered the average base rate. The
average new rate would then be calculated by applying the same weights
to the new set of rates. The percentage difference between the average
base (current) rate and the average new rate would be compared to the
percentage change in CPI.
Parties are requested to comment on the method of calculating the
annual change in rates under section 3622(d). Please discuss the
strengths and weaknesses of the methods described by the Postal Service
in Appendix C of its reply comments (and alternative methods, if
desired) and how each method comports with the objectives in section
3622(b) and the factors in section 3622(c). Please include a discussion
of how to treat an altered rate design, for example, one for which
billing determinants do not exist, such as the new rates to be applied
to Periodicals.
3. Section 3622(e) directs the Commission to ``ensure that
workshare discounts do not exceed the cost that the Postal Service
avoids as a result of the workshare activity,'' except in certain
specified situations. In the context of a Notice of Rate Adjustment for
a class of mail--
a. What information and/or data are needed to allow the Commission
to evaluate whether new workshare discounts are consistent with this
standard?
b. What information and/or data are needed to allow the Commission
to evaluate whether unchanged workshare discounts remain consistent
with this standard?
c. What information and/or data are needed to allow the Commission
to evaluate whether changed workshare discounts remain consistent with
this standard?
III. Regulations Concerning Competitive Products
4. Subchapter II of title 39, 39 U.S.C. 3631-3634, sets forth the
provisions applicable to competitive products, which initially are to
consist of priority mail, expedited mail, bulk parcel post, bulk
international mail, and mailgrams. Sec. 3631(a).\4\ A procedure must
be established to allow for amending this list of competitive products.
---------------------------------------------------------------------------
\4\ Pursuant to section 3642, the Commission may change the list
of competitive products under section 3631 and market dominant
products under section 3621 by adding new products to or removing
products from the lists, or transferring products between the lists.
---------------------------------------------------------------------------
Regarding section 3631--
a. What current mail matter is ``priority mail''?
b. What current mail matter is ``expedited mail''?
c. What current mail matter is ``bulk parcel post''?
d. What current mail matter is ``bulk international mail''?
e. What, if any, current mail matter is ``mailgrams''?
f. To what does ``mail classification schedule,'' as used in
section 3631(c), refer?
5. Section 3632 authorizes the Governors to establish rates and
classes of mail for competitive products in accordance with subchapter
II of chapter 36 and regulations promulgated by the Commission under
section 3633. The rates and classes shall be established in writing,
accompanied by a statement of explanation and justification and the
effective date of each rate or class. Sec. 3632(b)(1).
Regarding section 3632--
a. What information is needed to support new rates of general
applicability?
b. What information is needed to support new rates not of general
applicability?
c. Is the information needed to support a rate decrease different
from that needed to support a rate increase? Please elaborate.
d. What information is needed to support new classes of general
applicability?
e. What information is needed to support new classes not of general
applicability?
f. What criteria should be used to determine whether a rate or
class is of general applicability or is not of general applicability in
the Nation as a whole?
g. How should ``any substantial region of the Nation'' be defined?
6. Pursuant to section 3633(a), the Commission is required to
promulgate regulations applicable to rates for competitive products to:
``(1) prohibit the subsidization of competitive products by market-
dominant products;
(2) ensure that each competitive product covers its costs
attributable; and
(3) ensure that all competitive products collectively cover what
the Commission determines to be an appropriate share of the
institutional costs of the Postal Service.''
Regarding section 3633--
a. What data should be filed periodically with the Commission to
enable it to assess the Postal Service's compliance with subsection:
i. (a)(1),
ii. (a)(2), and
iii. (a)(3)?
b. How frequently, e.g., quarterly, annually, should such data be
filed with the Commission?
c. Are existing data systems adequate to enable the Commission to
assess the Postal Service's compliance with section 3633(a)? If not,
what modifications would be necessary?
d. What is the appropriate standard for determining whether
competitive products are being subsidized by market dominant products?
e. What standard should be applied to determine the appropriate
share of institutional costs to be recovered collectively from
competitive products?
f. Over what period of time should the standard identified in (e)
be deemed valid?
g. Should the standard identified in (e) raise a rebuttable
presumption of validity?
h. If return on investment (or assets) is used, what capital
structure (assumed or otherwise) should be used for the Postal Service?
7. Section 3634 provides for an annual, assumed Federal income tax
on the competitive products income. The amount of the assumed tax is to
be transferred from the Competitive Products Fund to the Postal Service
Fund.\5\
---------------------------------------------------------------------------
\5\ Pursuant to section 2011(h) the Secretary of the Treasury is
charged with developing recommendations regarding, inter alia, rules
for determining the assumed Federal income tax on competitive
products income for any year. Following receipt of those
recommendations, which are due not earlier than June 20, 2007 or
later than December 19, 2007, the Commission will provide interested
persons an opportunity to comment on the recommendations.
---------------------------------------------------------------------------
Regarding section 3634--
a. Is the assumed Federal income tax amount appropriately
classified as an attributable cost?
b. On what basis should the assumed Federal income tax amount be
reasonably assigned among competitive products?
[[Page 29287]]
8. Section 3633(a)(2) requires each competitive product to cover
its ``costs attributable,'' which are defined as ``the direct and
indirect postal costs attributable to such product through reliably
identified causal relationships.'' Sec. 3631(b). The Commission has
historically used attributable costs to develop recommended rates under
the Postal Reorganization Act. Enactment of the PAEA raises issues
concerning the need, if any, to modify the Commission's historic
approach as well as the classification of costs arising under the PAEA.
Regarding the term ``costs attributable''--
a. Identify any costs currently classified as attributable that, in
light of PAEA, should be classified as institutional. The rationale for
the proposed change should be explained.
b. Identify any costs currently classified as institutional that,
in light of PAEA, should be classified as attributable. The rationale
for the proposed change should be explained.
c. How should Retiree Health Benefit costs be classified?
9. The PAEA establishes a rate floor for each competitive product,
i.e., each competitive product must cover its attributable costs. Sec.
3633(a)(2). Product is defined as ``a postal service with a distinct
cost or market characteristic for which a rate or rates are, or may
reasonably be, applied[.]'' Sec. 102(6).
Regarding the term ``product''--
a. Is each International Customized Agreement a competitive
product?
b. Is each Negotiated Service Agreement a product?
c. Is each special classification a product?
d. Is each class not of general applicability a product?
IV. Ordering Paragraphs
It is ordered:
1. Interested persons may submit comments on the questions
contained herein on or before June 18, 2007.
2. Reply comments are due on or before July 3, 2007.
3. The Secretary shall arrange for publication of this Advance
Notice in the Federal Register.
By the Commission.
Issued May 17, 2007.
Signed May 21, 2007.
Steven W. Williams,
Secretary.
[FR Doc. E7-10095 Filed 5-24-07; 8:45 am]
BILLING CODE 7710-FW-P
